Subcontractors throughout Queensland could lose up to half a million following amid the latest building company collapse, the state’s housing and public works minister says.
In his latest statement, Queensland Minister for Housing and Public Works Mick de Brenni indicated that losses associated with the collapse of Brisbane based apart construction companies CMF Projects would impact subcontractors to the tune of at least $500,000, and said reform was necessary in order to better protect subcontractors.
“I’m informed that plumbing companies alone have lost at least $500k in this latest collapse,” de Brenni said.
“Indications are that the overall cost to subcontractors will be much higher.
“I’m sick of family run small businesses being forced to bear the brunt of these situations. That’s why we are determined to get the industry on the level.”
Based in Brisbane, CMF build high-rise apartments in inner city suburbs including Woolloongabby, Newstead and Bulimba.
The company has also undertaken public sector building projects including school halls, resource centres, classrooms and covered outdoor learning centres.
The collapse of CMF follows earlier collapses of Newstead-based CKP and Brisbane base Blooomer Constructions, both of whom according to media reports have racked up debts of more than $3 million and an estimated $15 million respectively.
The latest moves also come amid a reform process being implemented by the government to improve security of payment protection for subcontractors.
Last year, the government announced the introduction of project bank accounts for all government projects worth between $1 million and $10 million by 2018 and on all construction projects (public or private) over and above $1 million by 2019.
Other measures being developed include increase demerit points for non-payment, a more transparent and simplified payment adjudication system, the removal of the second chance rule for builders and an easy method for lodging subcontractor charges.
de Brenni says protections for subcontractors has been weakened following the removal of a requirement for builders to report annually to the Queensland Building and Construction Commission – a move he said left the regulator blind to the true financial position of licensed builders and left subcontractors with no line of sight regarding who they do business with.
He said the need for better subcontractor protection was clear.
“Plumbers, electricians, block layers and carpenters are all crying out for protection. We owe it to them to put the industry on the level and that’s exactly what we will do.”