Palaszczuk to act on payment security in construction sector
THE Queensland Government is set to announce legislation for a new secure payment system before Christmas to ensure contractors in the building and construction industry get paid in full and on-time.
Minister for Housing and Public Works Mick de Brenni said on-going payment problems within the sector had held Queensland's small business sector back for far too long.
"There is an urgent need for wholesale reform," the Minister said.
"I've been saying for a long time now that the current payment system is flawed, leaving too many subbies out in the cold."
The State Government-commissioned Deloitte analysis has quantified the economic impact of contractors not having secure payment in the construction industry.
Late payments, non-payments and insolvencies are systemic and widespread and impact badly on subcontractors, who usually rely on contractors above them for payment.
Premier Annastacia Palaszczuk said the Deloitte's analysis revealed a litany of problems sub-contractors encountered far too often.
"We made an election commitment to review and consult widely on the security of payment our subbies face," she said.
"We've done that. Now the economic evidence is in. The community expects us to act and we will."
The construction sector contributed about $44 billion in 2015-2016 to the state's economy and currently provides around 220,000 jobs.
Mr de Brenni is now finalising a new security payment system.
"I've heard from countless subbies across the state that non-payment or delayed payment is killing small business confidence," he said.
"It wrecks their business, it tears apart families; some people are losing everything and this impacts on suppliers and the wider community.
"I won't stand to hear another story of a suicide or a busted-up marriage because this issue remains unresolved."
Consultation has revealed that "what was once considered poor business practice is a standard operating model in the industry".
"These shonky practices must be stopped,'' Mr de Brenni said.
"Many subbies are being used as pseudo overdraft facilities.
"I want to give our subcontractors clarity of what the government intends and where we are all going before Christmas,'' he said.