03 Apr 2014

Changes to the QLeave Scheme from 1 July 2014

by Frazer Moss, Paul Burton

The threshold at which Queensland building and construction work become leviable has changed.

Are you engaged in building and construction work in Queensland? If so, the Construction and Tourism (Red Tape Reduction) and Other Legislation Amendment Bill 2014 is relevant to you.

Introduced into the Queensland Parliament on 18 March 2014, the Bill proposes amendments to the Building and Construction Industry (Portable Long Service Leave) Act 1991 (Qld) which, since 1992, has imposed a number of levies on the undertaking of building and construction work in Queensland.

At present, persons for whom building and construction work is done, are liable to pay levies totalling 0.525% of the total cost of work where the cost is expected to exceed $80,000. These levies are:

  • building and construction industry training levy of 0.1%;
  • long service leave levy of 0.3%; and
  • work health and safety levy of 0.125%.

One of the objectives of the Bill is to reduce red tape and regulatory complexity for employers in the construction industry. These reforms arise following a recent review of the QLeave Scheme and extensive consultation between the Government and industry representatives.

Changes to what is included in the cost of building and construction work

In relation to the current QLeave Scheme, the most significant changes relate to the calculation of the relevant cost of building and construction work on which the levies are imposed. From 1 July 2014 the leviable cost of building and construction work for a project will:

  • not include any GST that is paid or payable on building and construction work; and
  • not include the costs that relate directly or indirectly to the preparation of environmental impact statements and feasibility studies relating to the project.

The Bill also clarifies that the total leviable cost of building and construction work for a project includes the direct and indirect cost of all materials that are used for work in Queensland but which might have been manufactured, purchased, acquired or sourced from outside Queensland (ie. interstate or overseas).

Changes to the rate of the levies payable on building and construction work

The Government has also announced changes to rate of the levies imposed on building and construction work. At present the rate of the long service leave levy is 0.3%. From 1 July 2014 this will be reduced to 0.25%.

In addition, the current threshold of $80,00 at which liability for paying the levies arises will be increased to $150,000.

Finally, for projects over $1 billion, a tiered levy rate will apply.

These proposed changes to the rates and liability threshold are not set out in the Bill, but will be made by regulation which will amend the current Building and Construction industry (Portable Long Service Leave) Regulation 2013 (Qld).

The proposed amendments to the QLeave Scheme do not purport to have any retrospective application. This means that existing notifications of building and construction work will not be affected. Rather, once the legislation is passed, the changes will apply to all projects notified to QLeave on or after 1 July 2014.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.