Master Builders Queenland say project bank accounts will not work on any level

Master Builders Queensland recently delivered our response to the Queensland Building Plan, which contains some dramatic changes proposed by the state government to shake up the industry.

Despite what the Queensland Government is promising, Project Bank Accounts aren’t going to work and they won't guarantee payment for subbies or builders. It’s a rush job that’s too complex and the details aren’t complete. 

In its current form, the initiative will create more red tape, restrict cash flow, make payment terms longer, increase costs to builders and subcontractors and make housing and construction more expensive.

Worse still, Project Bank Accounts won’t cover the entire building chain, leaving many businesses, like suppliers and sub-subcontractors completely exposed.

The administrative burden will be significant and the entire industry will be required to change their payment mechanisms for no protection of subcontractors or anybody else. There is no independent party assessing if the right payments are made out of the Project Bank Account because the builder is the only party determining who gets paid and how much.

They also won’t be of any assistance if payments are in dispute or if owners don’t pay money into the Project Bank Account.

Project Bank Accounts are the wrong regulatory response – they’ll cost the industry and taxpayers money and will not help anyone in the industry to get paid.

We all agree something needs to be done to ensure fair, more reliable payment for builders, subcontractors, sub-subcontractors and suppliers. Any proposed solution must help everyone in the contractual chain and we can’t weed out bad payers in our industry by imposing a straightjacket on payments. We’ve offered some clear alternative reforms that focus on improving and enforcing mechanisms that are already in place.

Government should work with industry to explore a range of solutions

We recognise there isn't one single fix, which is why we're recommending a multi-pronged approach that proposes a range of alternative solutions that benefit EVERYONE (including subbies) in the contractual chain. 

Our recommendations range from reintroducing reporting on Minimum Financial Requirements, simplifying the available dispute resolution mechanisms so they are fairer and easier to use, through to providing resources and better education to contractors and enforcing existing requirements, such as the use of written contracts. 

Reporting on financial requirements 
  • Reintroduce annual reporting on Minimum Financial Requirements for contractors
  • Allow the QBCC to perform regular and thorough checks on the financial viability of licensed builders and subcontractors
  • Clarify maximum retentions to be held and identify when retention moneys are to be released
  • Penalise licensees who don't release retentions when required to do so.
Improved dispute resolution
  • Improve the dispute resolution mechanism (currently the BCIPA legislation) so that it is fairer for everyone and easy to use
  • Allow adjudicators to order the release of retentions in the form of bank guarantees under the BCIPA legislation
  • Simplify the Subcontractors Charges Act and make it easier and less expensive to use.
Enforced contracts and payments
  • Enforce existing legislation which voids payment terms under a subcontract that exceed 25 business days
  • Enforce the requirement that builders and subcontractors must use written contracts 
  • Investigate more efficient and less costly ways to reduce the risk of late payment in the industry, including mechanisms such as Trade Credit Insurance.
Better education and resources
  • Help the industry understand the existing mechanisms available to recover moneys owed
  • Mandatory education program for QBCC licensees that ensures everyone has the financial and contract management skills to run profitable businesses.


Grant Galvin is Executive Director of Master Builders Queensland. Master Builders Queensland are campaigning with other building, contruction and property industry peak bodies against project bank accounts being introduced by the Queensland Government.

Grant Galvin

Executive Director Master Builders Queensland

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