Queensland pauses rollout of Project Trust Accounts – what builders need to know

The Queensland Government has paused the further rollout of Project Trust Accounts for major construction projects in the state from 31 January 2025.

The delay means it is unclear when the scheme will be fully implemented and enforced.

Project Trust Accounts

The Building Industry Fairness (Security of Payment) Act 2017 was amended in 2021 to establish mandatory trust accounts for construction projects.

Under the regime, project payments must be received and paid into a trust account managed by the head contractor, and allows for subcontractors to be paid through the trust account itself rather than from the Head Contractor or Principal.

The enforcement of this requirement was staggered to allow for the industry to prepare for its implementation.

Currently, the regime applies to:

• construction contracts with the State Government and Hospital/Health Services valued $1 million and above, and;
• construction contracts with local government and private industry valued $10 million and above.

Implementation

The rollout of the Project Trust Accounts regime was previously paused in March 2023 for two years.

It was expected that all construction contracts valued $3 million or above would be subject to the regime by 1 March 2025, and all construction contracts valued $1 million and above would be subject by 1 October 2025.

The Queensland Government's recent decision has indefinitely delayed its enforcement, and has not provided a specific timetable for the future.

Implications

It is unknown when the rollout of Project Trust Accounts is intended to resume.

The Proclamation made by Parliament pausing the rollout stated the reasons for its decision included the vulnerability of the construction industry, the ongoing risk of insolvency, the lack of available software and the need to improve awareness of the regulatory regime.

This decision provides participants in construction projects with more time to adapt and inform themselves of these oncoming changes.

The State Government indicates that time will be allowed for the incoming Queensland Productivity Commission to undertake a review of the construction industry prior to the new dates for the rollout to take effect.

For more information, please contact the Construction and Infrastructure team in our Brisbane office.

Authors

Andrew Kelly | Partner | +61 7 3338 7550 | akelly@tglaw.com.au

Stuart Brown | Lawyer