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Wednesday, 16 August 2017
Page: 5898


Senator WATT (Queensland) (19:24): I'm afraid the purpose of my speech tonight is to advise the Senate of yet another building firm collapse on the Gold Coast and the trail of wreckage that is being left behind in the form of subbies, suppliers and building workers who have been left owed millions of dollars by what appears to be the actions of a rogue building company owner.

Over the last few months, unfortunately, the Gold Coast has had a number of high-profile building firms collapse. It has involved companies such as the Cullen Group. The former Senator Bob Day's very own Newstart Homes is another example of a company which has been shut down while owing millions of dollars to suppliers, building workers, subcontractors, and home buyers who have paid deposits, never to see that money again. These building companies get shut down, often in very strange and dubious circumstances where, conveniently, just before the company is shut down owing millions of dollars, the assets of the company are moved into a different company, only to see the owners of the former company bob up running the new one in a few months time. That kind of activity has become known as phoenixing, where companies are shut down and the ashes are there as people are left owing millions of dollars in unpaid wages or bills. Just like a phoenix, a new company arises from the ashes, going on to do business and, in some cases, yet again to fail and to repeat those actions of ripping people off while the business owners get away scot-free.

As I said, there have been a number of examples of this on the Gold Coast in recent months. I was very disturbed to read today in the Gold Coast Bulletin of another example of this. A company called Queensland One Homes was put into liquidation last month. It appears that the collapse of this company has left 133 tradies and staff out of pocket by about $3.4 million. There are 35 would-be homeowners who paid deposits for their homes and have been left in limbo. It's very disturbing to see this happen again. It's very disturbing to see it happen over and over again with no action being taken by the federal government to fix our laws in ways that could prevent these collapses from happening and prevent these good, honest people from getting ripped off.

What was even more concerning in this report in the Gold Coast Bulletin was that there is a related company involved with the same directors. It is a company called Empire Constructions Pty Ltd, which is under investigation for suspected illegal phoenixing activity. The Queensland Building and Construction Commission has confirmed that it is investigating Empire Constructions and has received allegations of illegal phoenix activity. The connection here is that a particular director of Queensland One Homes, Mr Paul Callender, is also a previous director of Empire Constructions. While this obviously does need to be investigated, it does seem to be another example on the Gold Coast of this phoenix activity where companies are run into the ground, bills are racked up and people are duped into preforming work and providing services and supplies to a company, never to be paid, while the directors of those companies get away scot-free and then go and set up a new business down the road and go on making lots of money only to, in many cases, do it all again.

For months now, Labor has been calling for action to be taken on this issue to crack down on phoenix activity. We have put forward a number of policies which could be picked up by this government to try to stop this sort of thing from happening. Some of the things that we've proposed include simply lifting the penalties on people who are repeat offenders in phoenix activity.

One particular proposal we've put forward is to require all company directors to have an ID number. Part of the problem here is that people can't keep track of these serial offenders—these directors of companies who, over and over again, set up companies, close them down while owing money and then go down the road and set up a new one. If you're a supplier to a building company, if you're a building worker or if you're a subbie, you've got no way of knowing whether the company that you've signed up to work with has a history in ripping people off and not paying its bills on time. By moving towards requiring all directors in Australian companies to have that kind of an ID number people would be able to keep track of that sort of activity; our regulators would be able to keep track of people who do this kind of thing over and over again and take action against them; and people who supply their services or their labour to the building industry would have some confidence, when taking on a particular job, that they might actually be paid.

Now, it's remarkable to see that in Australia at the moment it is actually easier to become a company director than it is to open a bank account. We've all opened bank accounts over the years, and these days there is a system where you have to come forward with 100 identification points. You've got to put forward your drivers licence, your credit card and a range of other identifying documents in order to open a bank account. There are none of those requirements to become a company director in Australia, and that's why it is so easy for these people to do the wrong thing and to be able to move from company to company with no-one actually keeping tabs on what they do.

There are a range of organisations in the community that have supported Labor's proposal to require directors of companies to have an ID number. And, no, it is not only building unions—even though they are supportive. There are actually some surprising groups who have endorsed this policy. There is the Productivity Commission, which is not known as a radical left-wing organisation, and it has also been endorsed by the Australian Institute of Company Directors. The very group that represents company directors thinks this is a good thing and that it would hold up the reputation of company directors.

So, really, we've got a situation where the Turnbull government and its LNP members on the Gold Coast are left isolated. They are the one group who are holding out and refusing to take up this proposal from Labor to require directors of companies to have an identification number so that people can keep track of the rogue operators who are going to rip them off. Surely now, after yet another collapse by a Gold Coast building company, just one of the federal Gold Coast members of parliament—there are five of them; federally, there are five LNP members of parliament who represent the Gold Coast in this place—could come out and support Labor's proposal to increase penalties on people who engage in phoenix activity and to require directors to have an ID number. We would be able to stop these tragedies from happening in the future; we would be able to stop building suppliers, subbies and building workers from getting ripped off.

Construction is one of the main industries on the Gold Coast, and we will keep seeing these kinds of collapses and these kinds of rip-offs happening if we don't start taking some action. I really do wonder how many building firm collapses and how many millions of dollars will have to be lost by people on the Gold Coast before just one of the five federal LNP members stands up and backs in their local workers and their local small businesses? Time after time in this place we hear the Liberal Party representatives get up and say they are the guardians of small business and that they are the group who are out there fighting for small business. Here, again, we have many small businesses who are losing millions of dollars through no fault of their own—through actually doing the right thing by turning up and delivering building services and delivering their labour, and getting nothing out of it in return.

It's time for the LNP to put their money where their mouth is. If they really are the friends of small business then they will back in Labor's proposal to try to stop these sorts of things happening again. I don't want to wake up and see more headlines, like those I read this morning, about more building firms going under and owing millions of dollars. We can actually take action to fix this sort of thing. It doesn't really take a lot of effort. All it takes is for the federal LNP members to pick up Labor's proposal and we can stop this from happening in the future.