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Thursday, 15 March 1973
Page: 618

Mr HANSEN (Wide Bay) - I refer my friend, the honourable member for Maranoa (Mr Corbett), who extended an invitation to honourable members to join the Australian Country Party, to that elder statesman of former years of this Parliament, the late Billy Hughes. He had been a member of a number of political parties. He was once asked: 'Mr Hughes, you have been a member of a number of parties but you have never been a member of the Country Party.' He said: 'Cripes! You have to draw the line somewhere.' I know that the Country Party has had differences with the Liberal Party in the past and is looking for new partners. Perhaps it might get on a little better with, and I wish it well on its projected amalgamation with, the Australian Democratic Labor Party.

I rise today because of some comment in the Parliament last week about the method of awarding contracts to various firms. In fact, this issue was raised as a matter of public importance, as a censure against this Government, but it fell very flat. I wish to refer to a contract which was let by the Queensland State Government to a certain company in Queensland. Because a Government contract was awarded to this company, creditors accepted its bona fides in good faith. They believed that the firm which received the tender was in good standing. The firm was given credit by an airline company, oil companies and motel owners. The sub-contractors who worked for the firm believed that they would be certain of receiving payment for their work and the wage earners thought that they would face no problems in this regard.

However, this company was a flop. I should like the Attorney-General (Senator Murphy) to confer with State Ministers to guard against companies registering in a State when they have debts and face insolvency in another State. This was the case with the company I mentioned, Blastrite Pty Ltd. It was established initially under that name in Western Australia on 5th June 1969. The principals of the company were Mr Shapland his wife who was a partner and 2 other partners who subsequently resigned. His son later joined the firm.

After numerous operations, about mid-1972 the company shifted from Western Australia where it was running into financial difficulties. I am not quite clear on all financial aspects of the company's dealings in Western Australia but I know that the firm is in the hands of a receiver. It is estimated that the firm's creditors will be lucky to receive 50c in the dollar. On 22nd June 1972 the company registered in Queensland as Blastright Queensland Pty Ltd with a paid up capital of SI 00 - exactly the same paid up capital with which it was registered in Western Australia.

The principals of the company registering in Queensland were of the same name and the same family as those I mentioned as principals in the Western Australian firm.

The firm carried out a number of jobs, one as a sub-contractor. On 22nd September 1972, the firm was awarded a contract by the Queensland Department of Harbours and Marine to build a rock wall as part of the Urangan boat harbour. My friend Mr Jim Blake, who is the member for Isis in the Queensland State Parliament, asked questions in the State Parliament about this contract. The facts in this case are confirmed by the answers received from Mr Hewitt, the Minister for Conservation, Marine and Aboriginal Affairs. The State Minister stated that a security deposit of $3,235.44 was lodged in the name of the Department by the ANZ Bank, Brunswick Street, Brisbane. Representatives of the company were interviewed and it was established that the company possessed the necessary technical ability to carry out the work which included the quarrying and carting of rock for the building of the wall. The bankers for the company were approached by the Department and they confirmed that the company was financially sound and in their opinion capable of carrying out the contract on the projected progress payments that would be received.

This company was formed on 22nd June 1972 and by the second week in December it had a debt of $163,000, with accumulated credits. The company drew one progress payment of $34,000. The day it drew that payment some of the sub-contractors, who were mostly truckies, travelled nearly 200 miles to Brisbane to ensure that they would be paid because they had some doubts as to whether they would be paid. First of all they were told the cheque had not been received and then they were told that it had not been presented. The next time they went back to the office it was locked. They found that the assets of the company were all in the hands of hire purchase companies. The heavy equipment was under hire purchase. The company did not even own the typewriter in the office or the table on which it sat. The company's affairs have been placed in the hands of the receiver. I believe that the Queensland Department of Harbours and Marine did a disservice to a number of people by not correctly investigating this company. The company's debt includes an amount of $120,000 for trade creditors and $29,000 for subcontractors. The majority of these subcontractors were truck owner-drivers. I know one of them. He is a young married man who mortgaged his home to buy a truck. He thought he would be on good money. Within 6 weeks his truck wore out a set of tyres. He had all the expense of running the truck in that time and aU he has received for it is experience. It is true that an amount of money was withheld by the Department as a guarantee. That amount of $8,000 might just cover the wages and salaries of the employees. It is quite obvious by the way that the people in this company were operating and the way in which they had operated previously in Western Australia that they had no intention of meeting any of their debts. They drew the first progress payment and disappeared from the scene.

I ask the Minister representing the AttorneyGeneral whether it is sufficient for a government department to accept from a bank, as it normally should be, an assurance that the financial position of a company is sound. We know that money can be withdrawn on the day it is paid in. There was no trouble in cashing a cheque for $34,000 and drawing it out immediately. I believe that there should be greater safeguards or closer co-operation between the States and the Commonwealth if necessary. I would like the Attorney-General to have a look at this matter to see in what way there can be co-operation so that the credentials of a company that is operating in another State can be investigated before people are let down in a shameful and shocking manner as were the people I have mentioned, on the eve of Christmas. The young married man to whom I referred has a young family. He had nothing for Christmas. I think he was given $10 to buy a Christmas present for his family, or to buy a ham. That amount of money would not buy much more than a ham.

This episode illustrates the cavalier attitude of these people. Before the progress payment was made the contractor had to submit a statutory declaration before a justice of the peace certifying that the wages and claims of the workmen employed on the work had been paid in full up to the date covered by the progress payment. The statutory declaration was received but there remains owing an amount of $163,000. I believe that there is a need for a tightening up in the procedures to be carried out on contract work and that there is a need for greater co-operation between States when companies are able to set up business with an initial capital of $100. I believe that the experience which I have outlined should never be repeated.

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