Subbies have come out swinging against the Queensland State Government’s decision to pause the future rollout of the Project Trust Account program.
Phase 3 of the program, which was expected to commence on 1 March 2025, was going to require public or private projects with a value of $3 million or more to have a Project Trust Account, as opposed to the current threshold of $10 million.
Les Williams, the retired Sunshine Coast building contractor who lost nearly $700,000 when Walton Construction collapsed in 2015 has attacked the changes which will see the delay of the rollout of Project Trust Accounts for projects under $10m, and a reduction in financial reporting for more than 50,000 builders.
“I think they’re atrocious,” Mr Williams said.
“They’re a sellout of every subcontractor in the state.”
After the Walton Construction collapse, Mr Williams led the fight for compensation through the courts to try and retrieve the $100 million the company owed to subcontractors.
He was also front and centre in the fight to get new laws to safeguard builders from the same thing happening again, which were introduced by the Palaszczuk Government in 2018.
“We fought very hard to get those introduced and now they’ve been scrapped,” he said, “It’s bad enough out there as it is getting paid.”
“I think it’ll have a big effect, because it’s financial reporting that establish the bona fides of the builder, isn’t it?”
John Goddard, the founder of the popular Subbies United website said he’s disappointed but not surprised by the changes.
“It’s a disgrace,” Mr Goddard said, “But then again, it’s par of the course.”
“It’s weak. I don’t think it’ll do anything to help the housing industry. It’s going to cause a lot more financial pain for subcontractors down the track.”
Earlier this week the state government announced Building Reg Reno, to reduce paperwork and financial burdens for builders.
Minister for Housing and Public Works Sam O’Connor said the initiative removes the financial reporting requirements and reduces red tape for 50,000 licensees.
“We want Queensland to be the building capital of the nation but at the moment our construction sites are the least productive in Australia,” he said.
The Minister didn’t respond to the comments by subcontractors that the changes are a “disgrace” and “atrocious”, instead referring the questions to his department.
A spokesperson for Housing and Public Works said the current framework for Project Trust Accounts remains the same and it is incorrect to characterise it as a removal.
“Project Trust Accounts have only been paused for the rollout of the remaining tranches to projects of less than $10 million,” the spokesperson said.
“Trust Accounts are still required for Government projects over $1 million and private sector projects over $10 million. This includes for more than 450 builders who already operate trust accounts on more than 1800 projects statewide.
“Pausing of the rollout of trust accounts gives more time to educate builders and subcontractors on these payment and contract protections.”
“Subcontractors should take steps to ensure they are using written contracts, know how and when to make payment claims and understand the range of options available to resolve any payment disputes.
“The scrapping of annual financial reporting for self-certifying, individual licensees will ease the administrative burden for subbies and sole traders.”
Goddard from Subbies United said the delay to the changes to trust accounts will leave subbies vulnerable.
“Builders still control all the money, and you can see what a mess they’ve made of that over the years,” Mr Goddard said.
“The money goes from the developer to the builder, they’ll dole it out if they see fit, quite often they don’t, and then they liquidate, owing in some cases $100 million.
“And where’s that leave the subbie? It leaves the sub in a mess.”
“It’s not hard to report your finances to the QBCC – it’s caught a lot of builders early, builders that didn’t have any money just closed down, it’s not a huge impost.
“It means more builders are going to take advantage of the situation and borrow from the next job to pay for the last one. It’s like a Ponzi scheme. It just doesn’t work.”
CEO of Master Builders Paul Bidwell said slashing red tape is crucial to unlocking construction in Queensland.
“By hitting pause on the looming Project Trust Account expansion, scrapping additional financial reporting, and setting a new direction for the QBCC, the state government is better empowering our industry, particularly thousands of small businesses, to get on with the job,” Mr Bidwell said.
Coincidentally the announcement of the changes comes just weeks before a Federal Court decision in a class action brought against Walton Construction’s bank, the NAB.
Les Williams is the lead applicant in the case.
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