• Construction industry should support payment security reforms
    Construction industry should support payment security reforms
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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 out at 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,” 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.”

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, he said.

“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” 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.”

The federal government has a 10-year infrastructure investment pipeline totalling a record $120 billion.

In this year’s budget alone $81 billion was committed to ongoing infrastructure projects over the next four years, including a step-up in annual investment to $23.9 billion in 2023-2024.

However, the construction industry continues to struggle with labour shortages and increased building costs.

New figures from the Australian Refrigeration Council (ARC) show the industry’s acute labour shortage has improved. 

Australia’s total number of ARCTick licensed refrigeration and air conditioning technicians and authorised refrigerant trading businesses recently exceeded 120,000, an increase of almost eight per cent year-on-year.

At the end of March 2022, there were 96,070 refrigerant handling licences (RHLs) and 23,967 refrigerant trading authorisations (RTAs), for a combined total of 120,037.

Compared with the end of March 2021, these figures were up by 8.2 per cent year-on-year for RHLs, 6.1 per cent for RTAs and 7.8 per cent overall.

In the first three quarters of 2021-22, total RHL and RTA numbers were up by 6,546, while Australian Refrigeration Council  conducted 3,515 permit checks and took 49,212 phone enquiries.

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