Sustainable businesses need to be paid enough to cover all expenses and overheads and make sufficient profit to sustain their businesses in the face of a very challenging environment. Builders need adequate cashflow, certainty of overhead costs, and predictable labour and material costs.
The vast majority of businesses in the construction industry are small or family businesses. Healthy profit margins, fair risk allocations, and sufficient skilled labour to enable timely builds are critical for this segment. Often these need to be to be managed in fixed-price contracts.
Standard industry contracts are placing too much risk on contractors, which cannot be adequately priced up front. Some tendering practices drive a ‘race to the bottom’ resulting in insufficient contingency, cash flow, and profit. What is needed are fair and reasonable contract conditions.
A clear pipeline of work enables better business planning and resourcing.
What we are going to work to deliver
Advocacy with government:
- 1. Fair and reasonable contract terms, risk allocation, tendering processes and contract administration in Queensland Government contracts.
- 2. Increase the deposit received under domestic building projects to 10 per cent, supporting contractors’ ability to properly fund the necessary up-front construction work and to manage cash flow.
- 3. Queensland Government has a rolling 10-year infrastructure program which provides a coordinated and sustainable pipeline of work for small, medium, and large contractors.
- 4. Grants for small-to-medium enterprises in the building industry to adopt business improvement software solutions.
Master Builders-led initiative:
- Develop and maintain industry template contracts which include fair and reasonable payment terms.
Major Sponsors
