New minimum financial requirements for Queensland’s building and construction industry, to be introduced from 1 January next year, are expected to help safeguard the industry from the financial impact of insolvencies and corporate collapse.
Under a new framework being introduced by the State’s building regulator, the Queensland Building and Construction Commission (QBCC), licensees will be required to report and provide financial information to the QBCC annually.
Garland Waddington Solicitors partner Brendan Bathersby said the strengthened reporting requirements would provide greater transparency, help the regulator detect any potential insolvencies and help industry participants ensure the financial health of the business.
“As well as existing licensees, anyone applying for a building licence must also provide this information to ensure they can operate a financially sustainable business,” Mr Bathersby said.
The new requirements will provide greater clarity about calculating a licensee’s assets and revenue, and will restrict accountants from making material changes to reports. Licensees with large revenues will be required to report decreases in Net Tangible Assets of 20 per cent or more, to provide earlier warning of any financial instability.
Mr Bathersby said additional reforms to raise the standard of financial reporting, particularly for higher risk licensees, would be introduced from 1 April 2019.The Phase 2 reforms include stronger enforcement provisions for those not complying with the minimum financial requirements.
“Penalties will apply for providing false or misleading information or refusing to supply financial information to QBCC. QBCC can also place conditions on a licence or take steps to suspend or cancel a licence if the reporting requirements are not met,” he said.
More information about the reforms can be found at www.hpw.qld.gov.au/construction/BuildingPlumbing/Building/SecurityOfPayment/Pages/MinimumFinancialRequirements.aspx
Builders requiring help to understand the new licensing laws are invited to contact Brendan Bathersby on (07) 5443 4866.