Michaela Whitbourn

NSW Finance Minister Greg Pearce will today announce the inquiry, which will investigate legal and policy reforms to minimise the effect of the insolvencies on jobs and major projects in the state.

“Between 2009 and 2011, hundreds of companies in NSW collapsed owing billions of dollars, slamming the brakes on vital projects and investment,” Mr Pearce said.

“Up to 24,000 unsecured creditors in the building & construction industry, including suppliers and subcontractors, have been left out of pocket, some by millions of dollars.”

Mr Collins, an experienced commercial and construction lawyer and a former assistant commissioner of the state’s Independent Commission Against Corruption, will chair the inquiry.

He will consider the extent and causes of insolvency in the NSW construction industry and ways to shield building subcontractors from its effects, including by using insurance schemes or trust arrangements to ensure their debts are paid, and how to strengthen the Security of Payments Act a stronger tool in support of Contractors Debt Recovery..

Mr Pearce has been a vocal critic of building companies such as the Sydney-based St Hilliers Group, which put the construction arm of its business into administration in May after it was unable to secure additional funding for a prison expansion project in Victoria.

St Hilliers Constructions said it was the “only prudent” course of action but Mr Pearce said in Parliament that the group was trying “to avoid paying their creditors”, including subcontractors.

The group’s collapse was one of a string of building & construction company failures this year. Reed Construction Australia, which has been locked in a dispute with the NSW government over payments for schools and roads projects, went into administration in June.

Mr Pearce said the Coalition would also set up a taskforce to ensure government agencies were managing construction risks better in the future.

The Australian Financial Review