Senate debates

Tuesday, 12 February 2019


Building and Construction Industry

9:30 pm

Photo of Murray WattMurray Watt (Queensland, Australian Labor Party) Share this | | Hansard source

I've spoken before in this place about the very great problem experienced by many small businesses, particularly in the building industry, in the form of phoenix companies. This involves the deliberate burning of companies by company directors in order to avoid paying debts to their creditors. It's particularly rife in the building industry and even more so on the Gold Coast, where my electorate office is based. This is an issue I've pursued vigorously in the Senate in estimates and in the public domain—particularly on the Gold Coast because we've seen far too many company collapses on the Gold Coast, where innocent building subcontractors and suppliers have been left with tens of thousands and hundreds of thousands of dollars in bills unpaid. Not surprisingly, on many occasions, that leaves the subcontractors themselves facing bankruptcy.

I've met families who have been literally been broken up by the unpaid debts of developers and building companies who choose to burn their companies and send them insolvent rather than pay their debts, only to go and set up in another company form down the track to do it all over again, which is exactly why they're referred to as phoenix companies. Some of the most prominent examples on the Gold Coast have involved the Cullen Group, Q1 Homes and many other examples. Unfortunately this is a problem we're seeing well beyond the Gold Coast. Late last year we saw the collapse of a large building company based in Rockhampton, JN Kelly. We've even seen this form of phoenixing and corporate misconduct inflict pain on building subcontractors on Commonwealth-funded projects—for example, the Toowoomba Second Range Crossing Road and the Amberley air base redevelopment.

I want to pay tribute to the efforts of a number of groups, including building trade unions and Subbies United, who have done a lot of work to recover monies owed to subcontractors and to put this issue on the agenda. It's largely as a result of the work that those groups have done that many of the regional papers in Queensland over the last week or so have been giving this issue the coverage that it deserves.

As I said, this is an issue I've raised in this chamber before, and also at Senate estimates. Last year I asked a number of questions of ASIC executives to try to get to the bottom of what they've actually done about this problem, and I have to say that I found their evidence very underwhelming. It was clear that they haven't taken this issue seriously. Unfortunately, we can put this alongside the misconduct we've seen in the banking industry; it's another area where ASIC dropped the ball and innocent people have felt the consequences.

I welcome the attention this issue is now getting from media outlets in Queensland. I also welcome action that the state Labor government, Annastacia Palaszczuk's government, has taken to try to protect the interests of subbies, particularly in relation to projects funded by the state government. In doing so, they had to reverse a lot of changes that had been made by the Newman LNP government which opened the door to building subbies and other suppliers being done over in this manner.

Unfortunately, the one group that is not taking action, despite all of this publicity and all of these corporate collapses we're seeing, is this LNP federal government. I want to particularly call out the lack of action by the LNP members of parliament on the Gold Coast. Every single federal seat on the Gold Coast is held by the LNP. We hear day in and day out how they care about small businesses on the Gold Coast and across Australia. Here is a good example of an issue where small businesses are actually being hurt by larger businesses, and the LNP is doing nothing about it. Over the last 12 months, Labor has outlined a range of commitments, after consultation with the industry, that we believe will make a significant difference to the lives these building subbies, ranging from requiring company directors to obtain director ID numbers so that they can be tracked to prevent this kind of phoenixing, to increasing the penalties that are imposed on phoenix companies and their directors. These are sensible proposals that we have being calling on the government to follow us on for months now. Yet we are still waiting, and therefore we are still seeing subbies go to the wall. It's time that the LNP actually delivered on their claims that they care about small business. Stand with Labor and protect these subbies from going under.

Senate adjourned at 21 : 35