Project bank accounts
August 03, 2020
What’s the history with this?
Project Bank Accounts (PBAs) were originally introduced in Queensland in 2017. They were to be trialed on government projects (between $1-10 million) before being rolled out to the private sector.
In 2019 an independent panel reviewed how project bank accounts were working on the few projects that were affected (all government jobs). You can read what the panel had to say in our previous regional news article here.
The government introduced the Building Industry Fairness (Security of Payment) and Other Legislation Amendment Bill 2020 (‘the Bill’) to parliament on the 5 February 2020. The Bill amended six different pieces of legislation and entirely rewrites the legislative provisions in relation to PBAs (now known as Project Trust Accounts ‘PTAs’). The Bill passed the Queensland parliament on the 15 July 2020.
When will the roll-out now occur?
The implementation of Project Trust Accounts (PTAs) (including the requirement to establish a separate trust account for retention money if retentions are held) will be phased in over a number of stages.
The following is the current indicative timing of when the stages will occur:
From 1 March 2021: PTAs and retention trust accounts will be required for government projects between $1-$10 million.
From 1 July 2021: PTAs and retention trust accounts will be required for state government and hospital and health services’ building contracts worth $1 million or more.
From 1 January 2022: PTAs and retention trust accounts will be required on all private sector building and construction contracts worth $10 million or more. This phase (and further phases) will also include statutory authorities, local government and government owned corporations.
From 1 July 2022: PTAs and retention trust accounts will be required for all building contracts worth $3 million or more.
1 January 2023: PTAs and retention trust accounts will apply to all eligible building contracts, be they government or private, of $1 million or more.
Note: All values are exclusive of GST.
What projects will be affected?
Building projects that meet the monetary threshold (indicated above) will require PTAs. Civil construction projects are not captured by the PTA regime.
PTAs will not apply where the contract is for the construction of less than 3 living units (regardless of value). This exemption will cover many HIA members who are only building (or renovating) a single detached dwelling (1 living unit) or a duplex (2 living units).
How many trust accounts must be established?
The requirement to establish 3 trust accounts for each job has been removed and replaced with a requirement that there be one PTA for each construction job (that meets the threshold). All payments for the job will flow through the PTA.
Where retention money is held, the head contractor must establish a PTA. This PTA can be used for all retention amounts on all projects, they do not need to be project specific.
The administrative requirements and trust recording keeping requirements for PTAs will be significant. HIA will be producing a range of information sheets about these over the coming months.
HIA Workplace Adviser
1300 650 620
or email firstname.lastname@example.org