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In a move to “reduce red tape and building costs” for new government construction projects, the state has temporarily suspended the use of Best Practice Industry Conditions (BPICs) ahead of an upcoming review of the Queensland building industry.
This pause announced yesterday, 14 November 2024, will apply to new projects and those that have not yet reached the procurement stage, with the state government noting that existing projects may be able to “improve productivity with the suspension”.
The announcement comes as part of the state government’s recent election commitment to introduce legislation to re-establish the Queensland Productivity Commission (QPC) by the end of 2024, after the commission previously transitioned into the Queensland Treasury in 2021.
The state government said that the new QPC’s first order of business would be a review of Queensland’s building industry, noting that the use of BPICs will be paused until the review is complete and the government has issued its response.
Unpacking this decision, the state’s government highlighted recent Treasury modelling showing that the continued usage of BPICs in their current form would see Queenslanders pay an additional 7 per cent rent over the next years and result in 22,000 homes not being built across the state.
Queensland Deputy Premier Jarrod Bleijie said that “BPICs have had a significant impact on productivity and labour capacity and have resulted in delays on government-funded major projects”.
“We need to urgently control the cost blow-outs of government-funded construction projects, which ultimately hits the hip pockets of Queensland families and businesses,” Deputy Premier Bleijie said.
Best Practice Industry Conditions have applied to government construction projects costing over $100 million and set specific conditions on employment terms.
Industry critics have argued that BPICs add “extra red tape”, interfere with procurement processes, and drive increased costs for government construction projects while limiting competition in the sector.
Independent economic modelling from the Queensland Treasury over 2024–30 has estimated that BPICs could inflate project costs by up to 25 per cent and create a net economic cost of up to $17.1 billion.
The Queensland government also highlighted that BPICs mandate the prequalification of contractors and subcontracts before they can begin work on major government projects, therefore “limiting the pool of available contractors and subcontractors”.
Nevertheless, the state government emphasised that “safety outcomes will not be compromised”, stating that “best practice workplace health and safety systems and standards and best practice commitment to apprentices and trainees will continue to remain in force”.
Deputy Premier Bleijie said the decision would “give subcontractors, 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”.
“Queenslanders shouldn’t have to bear the brunt of this which is why we’ve ordered this pause and review”, he said.
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