Project Bank Accounts Relating to Builders

In an attempt to protect subcontractors from the ripple effect of major corporate collapses, the government has decided to implement Project Bank Accounts in every construction project worth more than $1 million in Queensland, by the beginning of 2019.

In order to support the transition, the government has further expressed its support by planning to introduce the scheme to all government projects by 2018. This will apply to all projects amounting to $1 million and $10 million.

According to Premier Anastacia Palaszczuk, there has been evidence showing a fault in contractor/subcontractor contracts and that increased protection for subcontractors is badly needed.

“What’s been clear from listening to subcontractors is that some more unscrupulous operators in the industry are using non-payment as a business model,” Palaszczuk said.

“Too many families have been torn apart because of this issue, and too many tradies have lost their businesses and even their homes” she added.

Project Bank Accounts (trust accounts) will hold the money from principals (paid directly into the account) instead of passing through a head contractor’s bank account. The trust account is operated by the head contractor, but provides protection for subcontractors because of the trust status. It is a consequential requirement for the accounts to be operated according to the deed of trust.

The call for greater subcontractor protection has become a resounding cry throughout Queensland over recent years following corporate collapses, which saw subcontractors go unpaid. As an example, about 1,000 subcontractors were denied payment after the Walton Group collapsed in 2013.

The government believes that the implementation of subcontractor protection will provide more benefits to workers, subcontractors, and the state as a whole.