The Palaszczuk Government has announced several policies which will impact the construction industry in Queensland over the government's next term.
Cross River Rail
On 13 June 2017, the ALP government announced that it would fully fund the $5.4 billion Cross River Rail project with early work starting this year.
The project is significant in scale. It involves the construction of a 10.2 kilometre rail line in inner city Brisbane including 5.9 kilometres of tunnel under the Brisbane River and the CBD.
The project's proposed route is connected with the Brisbane local government's major infrastructure initiative; the Brisbane Metro project. Together, the two projects would represent a major upgrade in Brisbane's public transport infrastructure.
The ALP victory means that Cross River Rail is now almost certain to move forward in this term of Government.
Reforms to security of payment legislation
Just prior to calling the election the Building Industry Fairness (Security of Payment) Act 2017 (Act) was passed in parliament (which we reported on here and here). Although ultimately obtaining bi-partisan support, the Act was the culmination of a large-scale review of security of payment laws initiated early in the ALP's first term of government and the LNP indicated that it would likely take a different approach to rolling out certain features of the Act after the election.
The Act introduces measures aimed at improving security of payment for subcontractors effected by insolvencies in the industry. One of the key features of the Act is the introduction of project bank accounts (PBAs) for government projects of a certain value in January 2018 and then more broadly across private sector projects in January 2019.
PBAs will change the way that payments are made on projects by requiring head contractors to establish and administer PBAs for the processing of subcontractor payments. Payments under a head contract will no longer be made directly to the head contractor but will be made into a PBA from which the money will then be distributed directly to subcontractors in accordance with their certified claims.
Given the ALP's success, it is now very likely that PBAs will be rolled out industry wide from 2019 on all private sector projects valued at greater than $1 million subject to certain exceptions depending on the type of work being undertaken under the head contract.
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