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As per our previous alerts, the changes to the Building Industry Fairness (Security of Payment) Act 2017 (Qld) requires Head Contractors to open a Project Trust Account within 20 business days of entering the eligible contract (including variations) and must only be opened with an approved financial institution, among other requirements.
The revised timeline confirms commencement of Phase 3 (contracts above $3M) will now be pushed out to April 2023, and Phase 4 (all contracts over $1M) will now commence on 1 October 2023.
The 9 month reprieve will enable private commercial builders a little more time to prepare their working capital requirements and internal processes for the implementation of Project Trust Accounts. Recent high profile collapses in the sector suggest the deferral will be welcomed by the industry where working capital and administrative resources are already stretched dealing with inflation, supply chain constraints and adverse weather.
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Project Trust Account phase |
Application |
Commencement date |
|
|
In Place: |
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|
Phase 1 |
• Queensland government contracts valued between $1M & $10M |
1 March 2021 |
|
|
Phase 2 |
• private sector, government-owned corporations and local government contracts valued at $10M or more |
1 January 2022 |
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|
Deferred: |
Previous | Revised | |
|
Phase 3 |
• Expands to contracts valued at $3M or more |
1 July 2022 |
1 Apr 2023 |
|
Phase 4 |
• Expands to all building and construction contracts valued at $1M or more |
1 January 2023 |
1 Oct 2023 |
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Builders with projects in Queensland who are impacted by the requirement to operate PTAs on each project they undertake should be preparing their business for the administrative burden of managing this additional regulatory compliance.
Builders undertaking projects in Queensland should ensure that they are compliant with two significant regulatory requirements that fall due over the New Year period: 1) The roll-out of the Project Trust Account regime to commercial projects; and 2) Annual Financial Reporting to QBCC demonstrating compliance with the Minimum Financial Requirements.