For the Building & Construction industry, the beginning of 2019 has been an eventful period, with the Queensland Building & Construction Commission (QBCC) introducing their new Minimum Financial Requirements Framework.
Originally announced in November 2018, the Framework has been introduced to minimise the number of corporate collapses within the sector. These new Requirements aim to ensure licensees remain financially viable and to establish security of payment initiatives within the industry - having been reduced in 2014.
The implementation of these changes occurred through a two-stage roll-out, with the first Phase commencing in January 2019 and the second Phase commencing in April 2019.
Summary of the Changes Introduced
Under Phase One (January 2019), the QBCC implemented the following changes:
- The re-introduction of mandatory annual reporting for all Licensees,
- Clarity about what can be included with calculating a Licensee's revenue and assets; and
- Requirements for Licensee's to report decreases in Net Tangible Assets of more than 20%.
Under Phase Two (April 2019), the Commission introduced further changes with aims to:
- Improve the Reporting Standards - particularly for larger, high-risk Licensees in Categories 4 -7,
- Provide additional information to substantiate Deeds or related Party Loans; and
- Introduce stronger penalties and enforcement action for Licensees that don't comply with the new Requirements.
New Reporting Requirements for Each Financial Category
The below table highlights the new Reporting Requirements and Submission Dates for each Financial Category, with both phases having now been fully introduced:
|Financial Category||Maximum Revenue||Net Tangible Assets||Required Information||Reporting Date|
|Self-Certification (SC1)||Up to $200,000||$12,000||Declare revenue and net tangible assets via QBCC Portal||At time of Licence Renewal or by 21 Dec 2019|
|Self-Certification (SC2)||Up to $600,000 & after 1 April 2019: $800,000||$36,000||As Above||As Above|
|Category 1 to Category 3||$800k to $30 million||$36,001 - $1,200,000||
Provide the following reports:
|31 Dec 2019|
|Category 4 to Category 7||Exceeding $30 million||$1,200,001 to $240,000,000||
Signed Financial Statements:
|31 March 2019|
As part of the new changes introduced, Licensees will be required to lodge their financial information for the most recent reporting year, either on or before, the annual submission date.
The Reporting Year will generally be the Financial Year ending 30 June, unless a different date has been agreed between the Licensee and the QBCC.
As part of the Framework, the QBCC has introduced their new 'myQBCC' online portal - allowing Licensees to access various forms and upload their reports & documentation.
Alternatively, if you are required to prepare annual reports for ASIC or ASX, a copy of these reports may be lodged to the Commission to satisfy this annual reporting requirement.
What happens if your business is not compliant with the Framework?
Penalties for not complying with the MFR Framework have been included in the new regulation. Under the Act, the QBCC can place conditions on a licence, or take steps to suspend or cancel a licence.
For More Information
For more information on the Queensland Building & Construction Commission's introduced changes or for further assistance in guiding you through these changes, please contact Smiljan Jankovic - Director at Archer Gowland on (07) 3002 2699 or via email (email@example.com).
The information contained in this article is of a general nature and does not take into account personal circumstances. Before making any decisions based on the factual information contained in this document, please consult with your financial adviser.