Senate to investigate building industry phoenixing harm to tradies

Senate to investigate building industry phoenixing harm to tradies
Jonathan ChancellorDecember 7, 2020

Senator Sam Dastyari, the chair of the Senate Economics References Committee, will be undertaking an inquiry into how tradies have been affected by insolvency in the construction industry.

"In the latter half of this year, the Senate Economics Committee will make recommendations to the Abbott government," he said.

He claimed the legal and regulatory framework continued to be manipulated with many insolvencies that involved "no more than a simple refusal to pay bills".

"It is often alleged that head contractors have used their subcontractors as cash flow while a project is being built and then refuse to pay on completion," said Dastyari.

"And then there is the practice of phoenixing, where the assets of an insolvent company are transferred to a new company that has the same directors.

"To an outsider, it seems that our legal system often serves to protect the bad guys, and it comes as no surprise that unscrupulous means are used to recover debts, further damaging the reputation of the industry.

"We want to hear from everyone who has ideas about what we, in the parliament, can do to help, whether they are developers or suppliers, lead contractors or sub-contractors.

"We will be seeking the advice of lenders, insurers, and lawyers involved in debt recovery, and of course, insolvency practitioners."

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.
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