Master Electricians Australia (MEA) has called on major building companies to stop blaming the victims of financial collapses, and to get behind payment security reforms for the building sector.

MEA Chief Executive Officer Malcolm Richards said every day was like a game of Russian Roulette for small business tradespeople, wondering which project was going to be killed off leaving them out of pocket.

He lashed the bosses of failed building companies for trying to blame contractors for their own mismanagement and failure to properly plan for the risks and fluctuations in the industry.

“Building industry collapses are not a new phenomenon. And they certainly haven’t suddenly arisen because of the actions of sub-contractors,” Mr Richards said.

“If we had proper trust accounts for each project, builders would be prevented from switching money between jobs. They’d be forced to plan their cash flow and expenses better, and sub-contractors would not be at risk of building company collapses.”

Mr Richards said the statutory trust account model introduced by the Queensland Government for major public projects in the state had worked well, and he called for it to be extended to cover lower value and private projects as well.

Other states and territories should also follow the Queensland lead to protect sub-contractors and clients from major company collapses.

“Since trust accounts were implemented in Queensland, we haven’t seen a single tradie left out of pocket from the collapse of a major project, where these arrangements have been in place,” Mr Richards said.

“We have feedback that It is helping change culture in the industry, and having an effect on the old process of builders shuffling money between jobs and trying to cover their expenses until the whole house of cards collapses.  Money paid for one job should not be used to top up a deficit elsewhere.

“Instead of trying to shuffle blame for their failures, it would be good to see major builders getting behind this concept for the whole sector. It would benefit customers and tradies, as well as rewarding those builders who already do the right thing.”

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Malcolm Richards is available for interview via the SAS Group on 07 3221 9222 or 0467 792 013.

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