Public Works Minister Mick de Brenni refuses to rule out levy

The state government has refused to rule out a new levy which would result in soaring construction costs for new apartments, hotels, shops and warehouses.

Embattled Public Works Minister Mick de Brenni has refused to rule out slugging the building

industry with a new levy which could result in skyrocketing construction costs for new apartments, hotels, motels, shops and warehouses.

The controversial new levy has been recommended by former bureaucrat Jim Varghese to boost the finances of the beleaguered Queensland Building and Construction Commission, which Mr Varghese reviewed at the behest of Mr de Brenni.

The Palaszczuk Government is already under fire for breaking its 2020 election promise to impose no new or increased taxes this term - by hitting big business with three taxes in June’s state budget.

Public Works minister Mick de Brenni. Picture: NCA NewsWire / Dan Peled

In his report, Dr Varghese said “annual financial reporting indicates the QBCC has been operating at a deficit since its inception in 2013” – and he recommended “priority be given to establishing a sustainable funding model” for the QBCC that “includes activity-based funding and fixed revenue base e.g. levy and licensing fees”.

Dr Varghese highlighted research into the funding models of other Australian building regulators showing “Queensland is the only mainland state that does not charge a building levy”.

“In other states, levies imposed on builders fund different parts of the regulatory system. A

comparable regulator to Queensland is Victoria which uses the building levy as the primary source of funding for the Victorian Building Authority.”

In Victoria, the building permit levy is currently set at 0.128c for every dollar where the value of building works exceeds $10,000. While stand-alone homes and government buildings are exempt, the impost could potentially add millions of dollars to the QBCC’s coffers if introduced here.

When specifically asked to rule out any new levy by the LNP during last week’s parliamentary estimates hearings, Mr de Brenni baulked by stating the government “did not have a firm position”.

“The work around the financial sustainability of the Queensland Building and Construction

Commission progresses,” Mr de Brenni said.

The QBCC Action Group, made of up homeowners, builders and current and former commission staff, seized on Mr de Brenni’s response, claiming “Queenslanders shouldn’t have to pay to dig the QBCC and its incompetent minister out of a financial hole”.

Jim Varghese has recommended a levy like those implemented in other states.

“Perhaps Mr de Brenni should have stepped in to stop the QBCC board green-lighting a $1m-plus advertising blitz,” a spokesman said.

“And they could have better utilised the millions of dollars in contracts being handed out to private consultants and companies”.

Meanwhile, the Palaszczuk Government has revealed Dr Varghese’s seven-month review into the QBCC cost taxpayers more than $380,000.

Department of Energy and Public Works Director-General, Paul Martyn, revealed during estimates that Dr Varghese was paid $198,000.

Another $126,000 went to the Australian New Zealand School of Government; $44,000 to QUT while “a couple of other minor pieces of work” amounted to $12,000.

Dr Varghese was appointed last November following a series of damning stories in The Courier-Mail highlighting poor governance and dysfunction within the QBCC.

His report included 17 recommendations to improve transparency and minimise conflicts of interest.