Major projects and construction: 5 Minute Fix 05

Start date for Project Bank Accounts regime in Queensland

From 1 March 2018, Project Bank Accounts (PBAs) must be used on State Government head contracts involving building work with a contract sum of between $1 million and $10 million dollars where more than 50% of that price is for building work. Contracts tendered before the start date are exempt.

The framework for the operation of the PBAs is laid out in the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (the BIF Act) and is intended to improve security of payment for subcontractors by providing for payment from principals through a trust account.

The Building Industry Fairness (Security of Payment) Regulation 2018 (BIF Regulation), which is critical to the scope and operation of the PBAs regime, will also commence on 1 March 2018.

Initially, the PBA regime applies only to the State Government and to those State agencies who choose to opt in. However, the BIF Act anticipates an expansion of the PBAs regime after the completion of a review of how it has performed for the first category of contracts.

WA Government responds to subcontractor security of payment concerns

The WA Government announced on 23 February 2018 the establishment of an Industry Advisory Group (IAG), chaired by barrister John Fiocco, to conduct a review into security of payment for subcontractors in the building and construction industry .

The IAG will hold its first meeting with industry stakeholders on March 26, 2018. Its Terms of Reference include considering:

• whether the Building Services (Registration) Act 2011 should be amended to, among other things, impose sanctions on registered builders that do not pay debts owed to subcontractors and suppliers in a timely manner or attempt to dissuade subcontractors or suppliers from enforcing rights under security of payment legislation;
• the need for new or amended legislation to provide fairer contracting practices in the industry, such as:
• mandating processes for dealing with retention amounts and calculating deductions from payment claims;
• mandating the use of standard form construction contracts; and
• prohibiting unfair terms; and
• the introduction of statutory trust arrangements to protect monies owed to subcontractors should a head contractor experience financial difficulty.

Amendments to ACT building product legislation

On 22 February 2018, the ACT Legislative Assembly passed the Building and Construction Legislation Amendment Act 2017 (ACT).

The Act introduces amendments to the Construction Occupations (Licensing) Act 2004 (ACT), which expand the existing information sharing powers between public safety agencies by allowing an ACT public safety agency to share information with public safety agencies in other jurisdictions. The amendments are intended to help facilitate the national sharing of public safety information relating to unsafe building or construction products, materials or systems.

The Explanatory Statement notes that, in response to concerns about building products failing to conform to required standards, there is an increasing need for inter-jurisdictional information sharing on compliance and enforcement issues.

Infrastructure Australia releases new paper on population growth

Infrastructure Australia has published a new paper, “Future Cities: Planning for our growing population”. The paper recognises that in the next 30 years the size of the Australian population will grow substantially and provides advice on how to respond to the challenges and opportunities of growth.

The paper assesses the performance of long-term growth scenarios for Melbourne and Sydney across a range of indicators (including the performance of the transport network, access to jobs, environmental performance of the road network, access to and demand for social infrastructure, and access to and demand for green space ).

Infrastructure Australia’s publication is supported by interactive maps which visually demonstrate the trade-offs between different versions of the future for Melbourne and Sydney.

Addendum to NCC 2019 released for public comment

On 20 February 2018, the Australian Building Codes Board (ABCB) released an addendum to the National Construction Code 2019 (NCC 2019) for public comment. The addendum includes an overview of the proposed change related to bonded laminated materials in the NCC 2019.

The current National Construction Code contains a concession which allows certain materials, although combustible or containing combustible fibres, to be used wherever a non-combustible material is required on the basis that they are relatively low-risk and unlikely to present a fire safety hazard. One of the permitted materials is a bonded laminated material.

Given concerns that the concession for bonded laminated materials has the potential to be misused to allow products that present a hazard if used as external cladding on high rise buildings, the ABCB has proposed the removal of the concession from the public comment draft of the NCC 2019.

For comments to be considered, they must be submitted by Friday, 13 April 2018.

Federal Government response to Senate Inquiry into Non-Conforming Building Products

The Federal Government released its response to the Interim Report of the Senate Economics References Committee's Inquiry into Non-Conforming Building Products on 14 February.

In its response, the Federal Government:

• does not support the proposed total ban on the importation, sale and use of Polyethylene core aluminum composite panels on the basis that such a ban would not be effective or practical;
• supports the recommendation that further consideration is given to introducing nationally consistent measures to increase accountability for participants across the supply chain;
• in-principle supports the recommendation that all Australian Standards and codes are made freely available; and
• in-principle support of the intent of the recommendation that State and Territory governments work together to develop a nationally consistent statutory duty of care protection for end users in the residential strata sector (noting that the most appropriate mechanism for implementing this would be through legislative reform of existing State and Territory strata laws).

The Senate Economics References Committee's Final Report is due on 30 April 2018.