Pressure Grows Over Unpaid WA Subbies

Wednesday, July 6th, 2016
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The West Australian government has been accused of abandoning the state’s small businesses as increasing numbers of subcontractors complain about not being paid for work on government projects.

Many subcontractors on the government’s multi-billion dollar Elizabeth Quay development on the Swan River have not been paid by CPB Contractors and ordered not to complain publicly if they wanted payment, Labor opposition commerce spokesman Kate Doust says.

The claims add to a growing list of government and private projects, including the new children’s hospital and airport expansion, marred by subcontractor complaints that they’re not being paid.

Doubts have been raised about the government’s checks on the financial health of the companies it awards tenders.

Building company CPD, which went bankrupt last month, had been given a clean bill of financial health by the government last August.

It reportedly had 17 government contracts worth $17.6 billion but was in difficulty before last Christmas.

The building of Perth’s new children’s hospital has been marked by complaints from subcontractors that builder John Holland owed tens of millions of dollars in alleged late and non-payments.

WA auditor general Colin Murphy criticised the state government last month over a process that had failed to confirm that John Holland was actually paying subcontractors.

The most notorious case was raised by Opposition Leader Mark McGowan in parliament last week of well-known Perth businessman Ross McGinn, who took his own life last year.

His family said he was struggling to pay employees because John Holland had withheld $2 million in progress payments.

Ms Doust criticised the government and the construction industry – saying the former had ignored the recommendations of the recent Eaton inquiry including better practices to ensure people are actually paid for the work they do.

“They forget these are West Australian businesses, small business, people with families, people with a range of employees they want to look after,” she told reporters.

Max Hannah, who owns landscaping business Frogmat, had to sell his family home and two investment properties in 2012 when he was unable to pay back the bank because he was owed $450,000 by builders that went bust on Building the Education Revolution school projects.

His business is again owed money this year by CPD over the CPD collapse and he has set up Subcontractors for Fair Treatment group to lobby for compensation and government action for small businesspeople who were not paid.

Comment was sought from the government.

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