Further delays to the rollout of the Project Trust Account regime
Who should read this
All principals, head contractors and subcontractors performing building and construction work in Queensland.
Project Trust Account (PTA) regime
The implementation of the PTA regime has again been delayed.
Phase 3 (eligible contracts valued over $3 million) and Phase 4 (eligible contracts over $1 million) were to commence on 1 April 2023 and 1 October 2023 respectively. However, there has been a further proclamation to the commencement dates, extending the date for Phase 3 to commence on 1 March 2025 and Phase 4 to commence on 1 October 2025.
What is a PTA and why are they being delayed again?
The PTA regime under the BIF Act requires a head contractor to establish a trust account for each ‘eligible contract’ for ‘project trust work’, along with a separate single trust account for any retention monies held across all of the head contractor’s eligible contracts. The principal under the eligible contract then pays any monies payable to the head contractor directly into that trust account, and first tier subcontractors are then paid directly from the trust account before the head contractor can pay itself.
The significant extension to the commencement of Phase 3 and Phase 4 of the PTA provides smaller operators in the building industry with further relief given the current industry climate. A media release by the Honourable Mick De Brenni on 19 March 2023 stated that, ‘In 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, the Queensland Government has extended the commencement of the remaining phases of the PTA framework.’ The Honourable Mick De Brenni went further to say that a steering committee will be engaging a specialist to ensure a reasonably priced and fit-for-purpose solution is available, especially for smaller companies.
You can read more of this media release here.
Where to from here?
The added delays to the smaller contracts under the PTA regime are quite significant and provide an additional two years of preparation time to ensure compliance. However, head contractors should not ‘wait out’ the two years before considering how they will adapt these future changes in their current financial and project administration procedures.