Finance Minister Sean L'Estrange has launched the roll-out of project bank accounts across construction projects delivered by the Department of Finance's Building Management and Works.
"The Liberal National Government has led the way with this important initiative. Western Australia was the first jurisdiction in Australia to trial project bank accounts, and now it will be the first to roll them out more broadly," Mr L'Estrange said.
"Project bank accounts will play an important role in addressing the security of payment concerns of subcontractors working on Government-funded projects, and complement recently announced changes to the Construction Contracts Act 2004."
There has been a concerted effort to ensure the adoption of project bank accounts does not impose unnecessary red tape for industry.
"Engagement with industry has formed an important part of the policy formulation process, using feedback received from trial participants and consulting further with subcontractors over the last few months to refine the project bank account model," the Minister said.
The broader use of project bank accounts is expected to benefit a significant number of small and local businesses. Project bank accounts will be applied to projects tendered by Building Management and Works from September 30, 2016, with a construction value of more than $1.5 million and involving one or more subcontractors.
"The State Government is taking action to ensure subcontractors are paid for the work they do on a project," Mr L'Estrange said.
By June 30, 2017, it is expected that up to 30 contracts incorporating the use of project bank accounts will have been awarded with a combined value of about $220 million
The roll-out will start with projects that use an Australian Standard (AS2124) form of contract, but will be extended to other forms of contract used by the Department of Finance in 2017
The first project to use the simplified model is expected to be the Rapids Landing primary school in Margaret River, which has an estimated value of $12.8 million
For more details on how project bank accounts work, visit the Department of Finance website
Minister's office - 6552 6900