Regulator targets 18 major building companies
THE Queensland construction regulator has issued show-cause notices to 18 large building companies with turnovers in excess of $30million because of concerns about their financial capacity.
One has been found to be operating with an asset base that was more than $250million less than required to support its annual turnover.
"While our investigations into these companies are in the early stages, this sort of balance sheet is a recipe for disaster," Queensland Building and Construction Commission Commissioner Brett Bassett said.
QBCC has demanded urgent answers from the 18 companies which it believed to be operating with inadequate financial assets.
The action has come in the wake of the first annual reporting deadline at midnight last Sunday under new minimum financial requirement and mandatory reporting laws that came into effect this year.
Housing and Public Works Minister Mick de Brenni said the State Government had worked closely with the building industry to develop the new reporting rules to ensure construction companies operating in Queensland were financially sound.
"Importantly, the new system is supported by both the peak bodies for big builders and subcontractors and tradies," Mr de Brenni said.
"The Palaszczuk Labor Government is committed to restoring fairness and confidence to our building industry - confidence for investors, tradies and homebuyers.
"We are creating a level playing field for a $46 billion industry that employs over 230,000 Queenslanders.
"Those who don't play by the rules should not get to play. The risks are just too significant."
The QBCC has spent this week scouring through nearly 500 reports it had received by the deadline, with more than 200 companies failing to comply.
The show-cause notices required the 18 companies to demonstrate to the QBCC that they could improve their financial health within 21 days, or risk having their licences suspended.
Mr Bassett said it was important these companies moved swiftly to meet the financial requirements.
"These companies that were required to meet the first financial reporting deadline have significant turnover and, in many cases, significant workforces," he said.
"There would be hundreds of Queenslanders relying on these companies for work, either as employees, sub-contractors or suppliers."
Mr Bassett said the companies had been identified because their financial reports showed that the entity didn't comply with the legislated financial requirements.
"The minimum financial requirements help us identify licensees who are at risk of financial trouble," he said.
The Commissioner said that while there was cause for concern for the directors of those companies, at this stage there was no evidence they owed money to sub-contractors or suppliers or that workers would lose their jobs.
"The message is clear to licensees: get your books in order as required by the law, or we will be taking further action," Mr Bassett said.
Since the deadline expired at the end of March, of the 855 companies required to submit their updated financial reports, there are 231 outstanding.
A total of 81 of the companies have already been downgraded into lower categories.
"While I commend the companies which have already submitted their reports, I am concerned about the businesses that are late with their reports and we will be taking the appropriate enforcement action," Mr Bassett said.
"This may include fines, licence suspension and possibly cancellation."
Following last week's deadline for category 4 to 7 licensees, all other licensees would be required to submit their financial reports by the end of December.