Blog Layout

QBCC Minimum Financial Requirements Changes
Liz Gibbs • January 22, 2019

Minimum financial requirements for licensees

As part of the Queensland Government's building industry fairness reforms, new laws that strengthen the minimum financial requirements (MFR) for licensing commenced on 1 January 2019. 

The   Building Industry Fairness (Security of Payment) Act 2017   (BIF Act) allows for the MFR to be prescribed in a regulation, which is a step towards making the provisions more transparent. 

Why changes are needed 

In 2014, the reporting requirements for licensees were reduced. However, since then, numerous high-profile insolvencies have demonstrated that the   Queensland Building and Construction Commission (QBCC)   must be able to: 

  • better monitor licensees' financial situations 
  • take appropriate action where a licensee may not be operating a financially sustainable business. 

In September 2018, the QBCC released a discussion paper (PDF, 664KB)   seeking feedback from industry and the community on the proposed new financial reporting laws.  

These laws will benefit industry and the community by: 

  • providing more transparency 
  • enabling the QBCC to better detect and mitigate the impact of potential insolvencies and corporate collapses. 

Time frame for changes 

As a result of this consultation, changes to the requirements are happening in 2 phases: 

Phase 1   began on 1 January 2019 through the new   Queensland Building and Construction Commission (Minimum Financial Requirements) Regulation 2018   and: 

  • re-introduced mandatory annual reporting for all contractor licensees 
  • required more stringent reporting of decreases in the assets of higher-risk licensees 
  • clarified how assets are treated. 

Phase 2   will begin on 1 April 2019 and will introduce higher reporting standards for category 4–7 licensees (larger, higher risk licensees), along with the rest of the reforms.  

This phase will also involve repealing the existing MFR Board Policy and placing its provisions in a regulation. 

Summary of changes 

Stronger reporting requirements 

Licensees will need to: 

  • provide financial information to the QBCC annually 
  • report significant decreases in net tangible assets (20% for categories 4–7; 30% for other licensees) 
  • provide additional and more detailed financial information (for higher revenue licensees). 

Additionally, the upper revenue limit for self-certifying licensees will increase from $600,000 to $800,000. 

Inclusions for calculating a licensee's assets and revenue 

  • Personal recreational and unregistered vehicles will no longer be used to meet minimum asset thresholds. 
  • Clarification about when money in project bank accounts can be classed as an asset or revenue. 

Improved data quality and availability for the QBCC 

  • QBCC will better be able to get independent verification of an MFR report and recover costs. 
  • If an accountant makes 'material changes' to an MFR report, they'll need to clearly identify them and support with updated financial information. 
  • If a licensee relies on a deed of covenant and assurance, they'll need to give the QBCC detailed financial information about the covenantor to show they can honour their agreement. 
  • Similar requirements will be introduced for related entity loans, so the QBCC can assess whether these loans will be collectable. 

Penalties for non-compliance 

The enforcement framework is also being improved, including new penalties and offences for failing to comply with the requirements, such as failing to provide financial information annually. The new regulation outlines these penalties. 

Existing penalties continue to apply. Under the BIF Act, the QBCC can place conditions on a licence, or take steps to suspend or cancel the licence. 

Penalties also apply for providing false or misleading information, or refusing to supply financial information at the QBCC's request. 

The enforcement provisions will be further strengthened as part of Phase 2, including executive officer liability and escalating penalties, to help motivate all parties involved in running a licensed company to meet the new MFR. 

More info

Read more information about financial requirements for licensees on the  QBCC website .

Call us at Robert Goodman Accountants on 07 3289 1700 or email us at 
reception@rgoodman.com.au .  Source: Qld Government Department of Housing and Public Works 23 January 2019. 
Brought to you by Robert Goodman Accountants. 
Office open
By Liz Gibbs March 10, 2025
With thanks to all Energex and Emergency services Crew, our electricity has been reconnected and our office is open from today 11 March. We hope you and your loved ones are safe and well following cyclone Alfred. These past few days have been challenging for many, and our thoughts are with everyone affected.
By Liz Gibbs March 10, 2025
Due to a power outage affecting the entire Samford area, the RGA Practice will be operating remotely today, 10 March, until electricity is restored. Please be assured that our team remains available and can be reached at 07 3289 1700. We appreciate your understanding and support during this time. Stay safe, and we look forward to seeing you soon.
Cyclone Alfred
By Liz Gibbs March 5, 2025
As Tropical Cyclone Alfred approaches, we want to remind everyone to take necessary precautions and ensure their safety. We have received some important information that we believe is crucial to share with you to help you prepare for the severe weather conditions ahead.
Work Health and Safety (Sexual Harassment) Amendment Regulation 2024
By Liz Gibbs February 26, 2025
In a significant move to combat workplace sexual harassment, Amendments to the Work Health and Safety Regulation 2011 (as per the Work Health and Safety (Sexual Harassment) Amendment Regulation 2024) will soon commence on 1 March 2025.
By Liz Gibbs February 25, 2025
The amount of money that can be transferred to a tax-free retirement account will increase to $2m on 1 July 2025.
What happens to your super when you die?
By Liz Gibbs February 25, 2025
The Government has announced its intention to introduce mandatory standards for large superannuation funds to, amongst other things, deliver timely and compassionate handling of death benefits. Do we have a problem with paying out super when a member dies?
By Liz Gibbs February 25, 2025
If credit card surcharges are banned in other countries, why not Australia? We look at the surcharge debate and the payment system complexity that has brought us to this point. In the United Kingdom, consumer credit and debit card surcharges have been banned since 2018. In Europe, all except American Express and Diners Club consumer surcharges are banned. And in Australia, there is a push to follow suit. But, is the issue as simple as it seems?
Babyboomer wealth
By Liz Gibbs February 25, 2025
“Succession planning, and the tax risks associated with it, is our number one focus in 2025. In recent years we’ve observed an increase in reorganisations that appear to be connected to succession planning.” ATO Private Wealth Deputy Commissioner Louise Clarke.
Penalty for False R&D claims
By Liz Gibbs February 25, 2025
A joint investigation involving the ATO found that, between 2014 and 2017, a Sydney business coach promoted unlawful tax schemes encouraging clients to lodge over-inflated, inaccurate or unsubstantiated research and development ('R&D') tax incentive claims
SMSF lodgement due dates
By Liz Gibbs February 25, 2025
All trustees of SMSFs with assets (including super contributions or any other investments) as at 30 June 2024 need to lodge an SMSF annual return ('SAR') for the 2023/24 financial year.
More Posts
Share by: