RIPPLES: Just some of the faces and images from the fallout of the collapse of Gympie builder Stirling Homes, which went into liquidation last October.
RIPPLES: Just some of the faces and images from the fallout of the collapse of Gympie builder Stirling Homes, which went into liquidation last October.

SUBBIES: LNP wants inquiry, Labor jumps straight to plan

SUBCONTRACTORS working on Federal Government projects would be protected against non-payment by dodgy builders under a scheme to be introduced if Labor won office.

And a Shorten Labor Government would create a $4.5million Subbies Income Fund to ensure subbies were not left penniless when builders liquidated.

It would also create a $7million Tradie Litigation Fund to allow the Australian Securities and Investments Commission to run more difficult court cases without draining the corporate watchdog's resources.

The announcement comes a day after the LNP Opposition in Queensland committed to a Commission of Inquiry into the construction industry if it were to win a state election due in October 2020.

 

Tradie generic
Subbies are often left out in the cold by collapsed building companies. Brett Wortman

Gympie MP Tony Perrett said such a move would "draw a line in the sand" after years of legislative "fiddling".

And the region was not immune, Mr Perrett said.

The latest has been the collapse of Stirling Homes, which went under last October owing up to $6 million to more than a 100 businesses.

"Its impact ripples throughout the community," Mr Perrett said.

"It adversely affects local subbies, workers, families, and small local businesses which have provided goods and services to the builder.

 

Toowoomba: tradie laying cement
Photo Bev Lacey / The Chronicle
Governments on all levels are fighting to find the best way to protect subbies. Bev Lacey

"Through no fault of their own they are often left to carry the can with no ability to absorb additional costs and losses."

"This proposal is about looking after hard-working, decent family based businesses who have acted in good faith.

"Clearly something needs to be done.

"This would give a chance for people to have their voices heard."

Andrew Leigh, Federal Labor's shadow assistant treasurer and spokesman for competition and productivity, said a Shorten Government would move quickly to implement the commitments.

 

Shadown Assistant Treasurer Andrew Leigh at the Rockhampton Library with ALP candidate Leisa Neaton.     Photo: Chris Ison / The Morning Bulletin
Shadown Assistant Treasurer Andrew Leigh. Chris Ison ROK040416cneaton4

Mr Leigh said it would also go a "significant way" to implement recommendations from the Murray Review into the construction sector.

"The last thing we want to see is taxpayers' money lining the pockets of dodgy phoenix operators," he said.

Mr Leigh said Labor would also quickly introduce Director Identification Numbers so operators of failed businesses could not re-register companies under different names.

Labor has identified a $5billion annual cost to the economy due to dodgy directors deliberately burning companies in an attempt to avoid their obligations to employees, government and other creditors.

 

Crestwood Estate Norman Gardens.
Housing estate. Chris Ison ROK250717ccrestwood3

Mr Leigh said Queensland was at the epicentre of a huge national problem which had had Sunshine Coast and Gold Coast subbies particularly ripped off.

He said in 2014 the corporate regulator, the Australian Securities and Investments Commission, had resources ripped from it.

And he said even after the Financial Services Royal Commission the resources were not there to get matters to court.

 

Builder handyman with construction tools. House renovation background.
Builder collapses have a ripple effect.

In a release, Labor said people who deliberately burned their companies to avoid debt should be subject to the full consequences for failing directors' duties, including being liable for compensation, fines of up to $200,000 or five years behind bars.

Labor said the $4.5million Subbies Income Fund would be used to develop and implement a national scheme to ensure no sub-contractors or small businesses were left out of pocket as a result of dodgy "phoenix activity".

Its scheme would require large Commonwealth projects to have project bank accounts which used cascading statutory trusts, to ensure all businesses involved were paid on time.

Labor would work with the states and territories to harmonise security of payment schemes across the country.