QLD leads the way on construction changes
The roll-out of Project Trust Accounts in Queensland will force major changes in the building and construction industry in that state, and building and construction fair payment advocate Louise Stewart is urging other state and territory governments to follow suit.
“I applaud the Palaszczuk government for its Building Industry Fairness Bill,” says Louise, who is a former Chair of a leading Australian subcontractors’ association and creator of the award-winning ProjectPay payments platform.
“This is a huge step forward, and combined with technology, trust accounts will be hugely beneficial in transforming and protecting payments in the industry, which will benefit everyone down the supply chain.”
She has long campaigned for cascading trusts or Project Bank Accounts (PBAs) to be introduced in Australia, following a federal government review and recommendation by industry veteran John Murray AM that trust accounts should be legislated on all projects across Australia. She says it’s now even more important than ever for builders to embrace new technology to help facilitate the requirements of cascading trusts and PBAs, designed to address the delayed and non-payments issue plaguing the construction industry.
“To overcome the barriers of use, such as high levels of manual administration, the combination of technology and trust legislation that cascades down the supply chain is the answer,” she says.
“Real estate agents have adjusted to using trust accounts – and the construction industry now needs to do the same.”
The ProjectPay platform has been purpose built to comply with the requirements of cascading trusts and PBAs. It is Australia’s only construction payment system designed for subcontractors, builders and project owners on commercial and residential projects. ProjectPay is undertaking an education campaign for SME subcontractors about how they can use the platform to comply with new trust requirements across public and private projects. ProjectPay is also currently working with Findex Australia to provide a cashflow finance offer for SME businesses, that will disrupt supply chain finance and reverse factoring, which has recently attracted negative publicity.
“Construction businesses should pay on time – and not rely on supply chain finance that the SME pays for in order to get paid on time,” says Louise.
“However, we recognise that the implementation of trust accounts will constrain access to working capital for the industry. That’s why a new type of cashflow finance is vital, so it can be provided to the industry as a result of new supporting trust legislation. This enables ProjectPay to de-risk payments for users, which allows for working capital shortage (well known for causing high rates of business insolvency) to be addressed.”