In recent news for the construction industry, the rollout of the Project Trust Account (PTA) framework has been extended.
The framework is being rolled out over several years to give the industry time to adapt to the significant changes and this extension has been announced by the Queensland Government in stated “recognition of the need to balance continued protections for tradies with a suitable software solution for smaller builders feeling the strain of an at-capacity industry”.
Since 1 January 2022, PTA’s are required for all eligible contracts valued at over $10 million; as well as eligible State Government and Hospital and Health Service contracts valued over $1 million.
Extension of the Roll Out
The Queensland Government has passed Regulations delaying the rollout of PTA requirements by two years. As such:
- Eligible private sector and local government, statutory authorities and government-owned corporations’ contracts valued at $3 million or more – scheduled to start 1 April 2023 – now starts 1 March 2025; and
- All eligible contracts valued at $1 million or more (full implementation) – scheduled to start 1 October 2023 – now starts 1 October 2025.
Why the Extension?
The extension to the rollout comes as a relief to many in the construction industry. While the new framework was curated to strengthen the security of payment for subcontractors it has received criticism from industry bodies including Master Builders Queensland because of the increased administrative burden for contractors as a result of the new software and compliance requirements.
It seems that these administrative issues, and their interrelation with other industry-wide challenges such as supply and labour shortages and upward cost pressures, are the key drivers of the extension.
What it Means for Private Companies
The extension provides a grace period for contractors who engage in contracts valued less than $10 million, meaning they have 2 years to come to terms with the implementation of new software and the range of reporting and financial obligations which will require compliance and will be enforced by the building regulator once these new provisions come into force.
If you would like assistance in understanding PTAs or preparing for their continued rollout don’t hesitate to get in touch with our Construction Team.
For further information please contact Kylie Howell, Section Head-Construction.