Builders support industry reforms

Builders and the construction union have welcomed proposed reforms to the construction industry announced yesterday.

Finance Minister Greg Pearce released recommendations to reform the building industry in the wake of the collapse of several companies, including Perle Construction, Reed Constructions, Kell and Rigby, Southern Cross Constructions and St Hilliers Construction.

Forty-four recommendations were made by Bruce Collins, QC, who headed a three-month inquiry into the extent and causes of insolvency within the industry and what reforms were needed to protect subcontractors.

Mr Pearce said the proposed industry reforms would include a requirement for construction trusts to be established on building projects worth more than $1 million; a strengthened security of payments scheme; the creation of a new statutory body called the NSW Building and Construction Authority; and a licensing system for all commercial builders and construction contractors that would limit participation to projects with demonstrated financial backing and licensed accreditation.

Former Southern Highlands builder Michael Ryan was left almost $1 million out of pocket as a subcontractor for two companies that collapsed.

He has since been forced to move his company, Eastwick Country Homes, to Sydney.

He said requiring construction companies to establish trusts was a good idea and something he did on domestic projects, even though it had cost him some potential jobs.

"Now when I turn up for work on Monday, I know I'm going to get paid for working Monday," he said.

Most of Mr Ryan's work is on domestic projects worth less than $1 million that would not be affected by the proposed reforms.

"I would want to know are you protected the same way if you are working on something worth $500,000 to $1 million?" he said.

Construction, Forestry, Mining and Energy Union Wollongong organiser Mick Lane said the reforms were similar to those he had been calling for for some time.

"Particularly the stiffening up of the security of payments act and the lodgement of some sort of deposit or surety," he said.

"Any improvement will be welcome and long overdue.

The report will be available for public comment at until February 21.

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