The Queensland Government has paused the use of Best Practice Industry Conditions on new government-funded construction projects in a move it says will boost productivity.
Promised during its election campaign, the government said it would introduce legislation to re-establish the Queensland Productivity Commission (QPC) by the end of this year.
Its first order of business will be a review of the Queensland building industry.
“Until the review has occurred, and the government has responded, Best Practice Industry Conditions (BPICs) will be paused, stemming budget blowouts and the flow-on impacts to the broader construction market in Queensland, and ultimately the cost of living for homeowners and renters,” the government said in a statement.
“This follows revelations from Treasury modelling that if BPIC continued in its current form, Queenslanders would pay an additional 7 per cent rent over the next five years and 22,000 homes would not be built across the state.”
“The pause will apply to new projects and those that have not yet reached procurement stage. There may be opportunities for existing projects to improve productivity with the suspension.”
BPICs have applied to government construction projects costing more than $100 million and set conditions on employment terms. They require the prequalification of contractors and subcontractors before being able to undertake major government project work, limiting the pool of available contractors and sub-contractors.
According to the government, industry critics say BPICs create extra red tape and distorts procurement outcomes, contributing to increased costs and reduced market competition.
“The pause aims to lower the cost of doing business in Queensland. Safety outcomes will not be compromised,” it said.
“Best practice workplace health and safety systems and standards and best practice commitment to apprentices and trainees will continue to remain in force.
“Independent economic modelling by Queensland Treasury over 2024-30 estimates BPICs are likely to increase project costs by up to 25 per cent and create a net economic cost of up to $17.1 billion.”
As well as major general infrastructure projects such as hospitals, roads and rail, BPICs were also extended over future renewable energy projects.
Deputy premier Jarrod Bleijie said BPICs have had a significant impact on productivity and labour capacity and have resulted in delays on government-funded major projects.
“It will also give sub-contractors, especially small and family businesses and regional firms, a greater chance of securing work on government projects, without all the costs and time involved in having to gain unnecessary prequalification.”
The Australian Constructors Association (ACA) welcomed the decision.
The ACA said it had long advocated for a focus on improving productivity to ensure it can deliver the infrastructure Queensland needs, when it needs it and at a price it can afford.
“The BPIC pause does not mean we lose sight of the critical importance of safety and training. Our workers are our greatest asset, and they stand to benefit significantly from enhanced productivity,” ACA chief executive Jon Davies said,
The ACA said the re-establishment of the Queensland Productivity Commission singalled the government’s commitment to a productivity-focused agenda for the state.
“We are committed to working alongside the Queensland Government and the broader industry to realise the $10.93 billion annual productivity potential this pause and an increased focus on efficiency offers to Queensland,” Davies said.
