The Queensland Government has hit pause on Best Practice Industry Conditions (BPICs) for new government-funded projects, aiming to curb budget blowouts, protect housing supply, and ease cost-of-living pressures for renters and homeowners.
The move comes as Treasury modeling revealed that continuing BPICs could have driven rents up by 7 per cent over five years and left 22,000 homes unbuilt across the state.
In a bid to address these challenges, the government will reestablish the Queensland Productivity Commission (QPC) by the end of 2024, with its first task being a comprehensive review of the building industry.
Until the review is completed and recommendations are implemented, the pause on BPICs will help stabilise the construction market and prevent further strain on Queensland’s housing sector.
The pause will apply to new projects and those not yet at the procurement stage, with opportunities to enhance productivity even in some existing projects.
BPICs, which have been criticised for adding red tape and limiting contractor competition, have been linked to increased project costs and reduced market efficiency.
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.
“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,” Mr Bleijie said.
“Queenslanders shouldn’t have to bear the brunt of this which is why we’ve ordered this pause and review.
“It will also 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.”
Minister for Housing and Public Works Sam O’Connor said not only would BPICs impact housing, but they would also impact energy projects.
“Independent Treasury modelling shows Queenslanders will pay more to rent a home and there will be fewer homes built in our state under the current BPIC conditions, it would be irresponsible to ignore this advice in the face of a housing crisis,” Mr O’Connor said.
“If BPICs were to continue, they would also apply to energy and storage projects implemented by Government Owned Corporations, placing upward pressure on electricity prices and household cost-of-living.”
