Qld Builders to Face Tougher Financial Regulations
28th August 2019
Queensland builders will be required to comply with new reporting requirements from the end of this year, in sweeping changes implemented by the Queensland Building and Construction Commission.
The changes will affect more than 70,000 builders across the state, which will require businesses with an annual turnover of less than $30million to provide financial information to the QBCC.
New regulations require licensees to have an adequate financial safety net to support their turnover. "This is part of a suite of reforms to improve the sustainability of the building and construction sector,” QBCC Commissioner, Brett Bassett explained. “Experience tells us that companies which operate without the appropriate asset base to support their turnover are at higher risk of facing insolvency."
The changes are designed to reduce the number of builders going into liquidation, with more than 1400 Queensland construction companies entering administration in the past five years, including high-profile collapses such as Cullen Group, J.M. Kelly Group, CRCG-Rimfire and Trac.
Tighter lending requirements from financial institutions, as a result of the Financial Services Royal Commission, has seen the construction industry contend with a bank-induced recession. There is an increasing number of contractors with increasing debt margins, with the mood in the construction industry feeling that the State is experiencing a downturn.
The statistics provided by the Queensland Government Statistician’s Office echo this sentiment, with the number of new dwelling approvals across the state having fallen 27.4% compared to June last year.
The QBCC expects to be inundated with financial reports as the December 31 deadline nears, and has launched a new online portal to enable businesses to lodge reports online.
Failure to comply will see the business risk suspension or cancellation of their QBCC license.