In March 2020, we reported on the upcoming amendments to Queensland’s Project Trusts Account regime scheduled to roll out in four phases in accordance with the Building Industry Fairness (Security of Payment) and other Legislation Amendment Bill 2020 (Qld) (BIFA Amendment Bill).
In light of the situation arising from COVID-19 posing challenges to the construction industry, the Palaszczuk Government has tentatively postponed the scheduled releases of the four phases; with extensions ranging from 6 months up to a year to their original release dates.
At this stage, it is intended the original phases will be implemented in the following way (subject to how Queensland continues to manage the pandemic):
- From 1 July 2021, Project Trusts will apply to eligible government and Health and Hospital Services’ building contracts of $1 million or more.
- From 1 January 2022, Project Trusts will be extended to the private sector and local government for eligible building contracts valued at $10 million or more. This and the next phase will also include statutory authorities, local government and government owned corporations.
- From 1 July 2022, Project Trusts will cover eligible building contracts worth $3 million or more.
- From 1 January 2023, Project Trusts will be required for all eligible building contracts, be they government or private, valued at $1 million or more.
These proposed phases represent fundamental and significant changes to the Queensland construction industry. In particular, the proposal to apply project trusts to private sector contracts above $1 million is radical. The question to be asked is whether the BIFA Amendment Bill will survive a change in government on 31 October 2020.
If you have any questions about the BIFA Amendment Bill or Project Trusts, please contact us.
Andrew Kelly | Partner | +61 7 3338 7550 | [email protected]