Construction sector financial reporting requirements to be stiffened.
Construction sector financial reporting requirements to be stiffened. Erle Levey

Angry building regulator moves to strengthen powers

A REVIEW has been launched into the financial-reporting requirements for Queensland Building and Construction Commission licensees in the face of harsh criticism that existing policies have weakened the industry regulator's effectiveness.

Queensland Building and Construction Board chair, Dick Williams, said the Minimum Financial Requirements (MFR) Policy introduced by the previous board had significant flaws that decreased protection for home owners and industry members against the financial failure of licensees, and building company collapses.

Mr Williams said the policy failed to provide the Queensland Building and Construction Commission (QBCC) with a strong, proactive regulatory tool to deal with potential financial failures and related offences.

The new board would immediately review the MFR Policy, and had already started the process of restructuring the QBCC's Financial Investigations Unit to ensure it had the capability and capacity to investigate and act on financial irregularities and reported payment issues in the building industry.

"The QBCC, even with an improved MFR Policy, cannot prevent builders from going bust due to bad management, too-thin margins or other matters out of its control," Mr Williams said.

"What it will assist with is providing the QBCC with another tool to combat the shonky practices that have been allowed to flourish under the current inadequate MFR provisions.

Mr Williams said he had been gobsmacked the current policy had placed the onus on building industry members to provide the QBCC with information about non-payment of debts and other serious financial issues before the QBCC can investigate these concerns.

"This is a policy that had no proactive regulatory component in it for the QBCC to use, which is mind-boggling," he said.

Mr Williams said a significant failing of the MFR Policy was the removal of the requirement for audited financial accounts to be provided to the QBCC when licences are renewed.

He said it raised concerns about the accuracy of the information available to the QBCC about the financial well-being of licensees.

"All those decisions greatly weakened the MFR Policy, and this was compounded by the lack of resourcing provided to the QBCC Financial Investigations Unit to implement the policy and to act on any financial issues it uncovered.," Mr Williams said.

"The QBCC was given a half-baked, reactive policy and insufficient resourcing to implement it, creating a system with inadequate regulatory, monitoring and investigative powers.

"This policy just isn't working as it should be, but my board is going to ensure that it does, by providing proactive powers and appropriate resources to the QBCC so that it can better protect home owners."

Subcontractors' Alliance spokesman Les Williams of Coolum said in excess of 3500 small business subcontractors had been impacted by insolvencies totalling more than $200 million since the MFR policy was introduced in 2014 with considerably more damaged through non payment issues.

While he is delighted with the review announced by the QBC chair he said it was also important to uncover who influenced the changes in the first place and allowed them to occur.      

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