Government short changes subcontractors again

Article written by Lethal 20-03-2023

Subbies have been screwed yet again.

The final stage of Project Bank Accounts were to commence on 1 April 2023.

The government has just announced that the final stage is to be delayed for two years. This means they will not be introduced until after the next state election in October 2024.

The government has cited two reasons for this delay.

The first is the effects of Covid and the current economic factors. The second is the alleged lack of fit for purpose software.

Let us look at the second reason first.

Software for use by law firms and real estate agents to manage their trust accounts has been in use for decades. Given the strict regime imposed on those professions we can only assume that the software is fit for purpose.

If there is any complaint about the cost of that software, you should be aware the legislation specifically provides that the builder gets to keep the interest on the trust accounts for the very purpose of compensating them for setting up the trust accounts and managing them including the capital costs of acquiring the software.

In any event, prior to the software in use today, law firms used pen and paper systems to administer trust accounts and it is easily doable.

Therefore, minister de Brennie’s reason in that regard is at best specious. There is no doubt that he is treating subcontractors as gullible.

As to the first reason being covid and current economic factors, this is an outright insult to subcontractors. The government is saying it is OK for builders to have the benefit of subcontractors’ monies without giving due consideration to the needs of those that are actually supplying the materials and labour. As our friends over at Whojungle say, it is the subcontractors who fund a project and not the developers.

The introduction of the final phase of project bank accounts was not going to affect that army of small builders doing every day mum and dad houses because those projects are under $3 million. It was only going to affect those doing larger project even in the commercial sector.

The reality is that the process involves the money being held in a trust account and not the builder’s own bank account. They are still getting the interest on it. They simply cannot use it for their own ends which they should not be doing anyway.

Therefore, there is no valid reason for delaying the implementation of the final phase of project trust accounts. The reality is while a lot of publicity focuses on the passing parade of builders going into liquidation, there has not been any focus on the even greater number of trade contractors who are surrendering licences or going into liquidation themselves because of the burden or retention monies, money lost to insolvent builders and preferential payment claims.

This government has lost sight of the fact that there are way more subcontractors out in the electorate than there are builders, we vote and there is an election coming up.

However, that is not the end of this sorry tale. Minister de Brenni claims to have consulted peak bodies. That in effect means the Queensland Master Builder and the trade associations.

SubbiesUnited was not consulted and neither were The Subcontractors Alliance.

In that light, any member of a trade association needs to ask serious questions about the extent to which their trade association is acting in their interests such as:

1. Did they agree to the deferment;

• If they did not agree to the deferment, did they vote against it; and

• did they attend the meeting at all.

We have been reliably informed by people who have attended those meetings that it is most disheartening to attend the meetings where government propositions are put to the associations where the association attendees have little if any understanding of the legal or technical issues. In one particular case the person the association sent was the girl Friday. Despite some attendees voting no, they are swamped by a yes vote on issues that are clearly not in trade contractors’ interests.

The ministers reference to peak bodies on this issue is a clear example of that unfortunate process in operation, so ask your association the relevant questions and hold them to account. Make your membership worth something!

As to the actions of the government, make your role as a constituent count.

Subbies add a level of protection to your business and join SubbiesUnited and make use of our private members forum for up to date information but a warning, do not join if you are NOT a subcontractor, we will weed you out, you are not welcome.