70,000 builders at risk of breaching new regulations
MORE than 70,000 builders across Queensland have been put to comply with new landmark financial reporting or risk the suspension or cancellation of their license.
The second phase of the State Government's minimum financial requirements laws will take effect on December 31.
It requires Queensland Building and Construction Commission licensees with a maximum allowable annual turnover below $30 million to provide information to the watchdog by December 31.
About 70,000 small and mid-sized companies, many of them family-owned, will be caught in the net, which is designed to reduce the number of builders going into liquidation.
"The law requires licensees to have an adequate asset base to support their turnover, and is part of a suite of reforms to improve the sustainability of the building and construction sector," Commissioner Brett Bassett said.
"Experience tells us that companies which operate without the appropriate asset base to support their turnover are at higher risk of facing insolvency.
"While there is no law that can provide an iron-clad guarantee against business failure or financial mismanagement, people who invest in Queensland and workers who establish their career in Queensland need to be given the highest possible security that Queensland has a strong, stable building industry."
About 800 builders have already provided the required financial information.
Mark Paterson is the managing director of NPS Commercial, a mid-range construction company with an annual turnover between $1 million and $1.5 million.
Mr Paterson, a 39-year veteran of the industry, must comply with the new financial reporting requirements before December 31.
"I don't think it will make much difference to myself but it might for other people who relied on a quicker cash turnover, they might struggle," he said.
Mr Paterson said the new QBCC-enforced regulations would improve the operation of the industry.
"They're getting tougher, no doubt about it," he said of the building watchdog.
"But no matter how good the system is there's always one dodgy bloke who's going to squeeze through."
More than 1400 companies in the state's construction sector have entered administration in the past five years, including high-profile collapses such as Cullen Group, J.M. Kelly Group, CRCG-Rimfire and Trac.
The QBCC expects to be inundated with financial reports as the December 31 deadline nears.
A new online portal has been built on its website for people to lodge reports.
"We're confident that both small and large companies will be able to make use of the online lodgement process," Mr Bassett said.
"Information about how to lodge has been provided to licensees, and the QBCC will continue to provide reminders and more information as the deadline approaches."
Mr Paterson said tighter lending requirements meant the construction industry was suffering through a "bank-induced recession".
"The debtor figures at the moment are not real good," he said of the sector.
"There's a long list of people who owe money for all sorts of things."
Mr Paterson said colleagues in the industry were describing it as one of the "worst downturns in living memory".
"I don't really know if we've turned the corner yet," he said.
"If you can't borrow money you can't do a lot."
The number of new dwelling approvals across the state has fallen 27.4 per cent compared to June last year, according to the Queensland Government Statistician's Office.
Mr Paterson said access to information through the internet was also making builders' lives more difficult.
"People's expectations seem to be a lot higher these days considering they can clock into doctor Google and find out how to do things," he said.
"Homeowners are more educated.
"There are very few people these days who sit back and look at the builder as a professional."
Earlier this year the state's largest building companies, those with an annual turnover of more than $30 million, were forced to reveal their financial statements.