Probuild collapsed and now Condev Construction are preparing for liquidation
The finger-pointing of responsibility as to who and how this issue should be resolved points to the unworkable federated model of governance of this country which has struck again, just like COVID, automatic mutual recognition, payroll tax, consumer rights, and unfair contract laws.
Security of Payment for subcontractors has been a perennial issue in the contracting industry. Subcontractors of all trades need to get paid by builders.
What is incredulous is the State and Federal Government’s inaction to help improve the industry. In one case, the Western Australian state government held an inquiry over 18 months, came up with recommendations, and then forgot to implement them until after another significant builder in that State had collapsed. This resulted in multi-million-dollar losses and an untold toll on local contractors and employees from all trades.
The construction industry has 25- 30 per cent of all corporate insolvencies every year. This is fact.
Deemed Statutory Trusts are the industry’s best opportunity to ensure subbies are paid for the work they have completed in the event of liquidation. Money given by developers to builders is for the work of subbies on projects, it is not money that should be paid to liquidators to pay for builders poor practices of buying jobs, poor tender processes, or poor risk allocation. The Statutory Trusts process has commenced implementation in Queensland (also recommended by the Federal Governments Murray Review in 2018). It is the only beacon of light in a dark sea of unpaid invoices, broken businesses and families that have been left behind.
In my view, a Security of Payment process of Deemed Statutory Trusts is a law of order and good government in relation to trade and trading corporation, formed within this country. Governments need to view Australia as having one economy, not eight different fiefdoms feeding crumbs of rights to hard-working and law-abiding business owners and their staff. There are 1.18 million people in the construction industry and 4.5 million people in small business. Small business is actually big business and big voting blocks in this country and it’s about time subbies vote with their feet. We need to back government parties who take action to make this country better and not perpetuate the status quo.
If you work with a builder and are owed any money or any retentions are being held please join the MEA webinar on Thursday 17 March 2022 at midday (AEST).
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