Work has ceased on Citro apartments in Victoria St West End while the developer looks for a builder.
Work has ceased on Citro apartments in Victoria St West End while the developer looks for a builder.

Why our builders are going broke

ANOTHER day, another Queensland building company collapse. Queensland subcontractors - from bricklayers and plasterers to electricians and tilers - continue to lose millions as struggling building companies close their doors with heartbreaking regularity.

Subbies United spokesman John Goddard predicts a further "tidal wave" of builder liquidations on the horizon as building industry conditions deteriorate.

Mr Goddard said many builders are struggling due to diminishing margins, poor management, falling unit sales and under-quoting to win work.

More than 1400 companies in the state's construction sector have entered administration in the past five years, with losses totalling an estimated $390 million.

Australian Securities and Investments Commission data shows 303 building companies entered administration in 2016-17 following a further 328 in 2015-16.

The Queensland Building and Construction Commission said an increasing number of construction firms were getting in over their heads, taking on work they did not have the financial capacity to complete.

The industry watchdog has cancelled 12 building licences in the past financial year, including seven builders who were more than 200 per cent over their maximum revenue limit.

For long-suffering subbies, a building firm collapse means their pay day never arrives.

Among the major players in the industry biting the dust this year were:

 

Sommer and Staff Constructions was started by Walter Sommer in 1974. His daughter Natasha Sommer-Burley is now the company’s commercial director. Picture: Brianna Beggs
Sommer and Staff Constructions was started by Walter Sommer in 1974. His daughter Natasha Sommer-Burley is now the company’s commercial director. Picture: Brianna Beggs

Sommer and Staff Constructions - debts $5 million

Founded by industry stalwart Walter H. Sommer in 1974, the company was a well-respected name in Queensland. Mr Sommer's daughter Natasha Sommer-Burley is now the company's commercial director, overseeing projects that have included high-rise apartments, public hospitals and shopping centres.

Troubles at the company started to surface a year ago as subbies complained about slow or non payment. That culminated with the QBCC suspending its licence earlier this month and administrators being called in a week later. A creditors meeting was held on Wednesday to examine whether the company can be restructured.

Cleary Group - debts more than $3 million

Sunshine Coast-based Cleary Group called in liquidators in August, owing more than $3 million. The group's collapse rivals the 2013 Walton Queensland liquidation in terms of its impact on Sunshine Coast subcontractors, who make up the majority of the 50-plus creditors left out of pocket. The liquidator's initial report to liquidators showed the builder had no assets, no cash at bank and only $45,076 in money owed to it. Earthmover Dave Daniels, who was left $13,500 out of pocket.

 

The collapse of Metro Builders in central Queensland left 15 homes incomplete in Rockhampton and Yeppoon. Picture: Supplied
The collapse of Metro Builders in central Queensland left 15 homes incomplete in Rockhampton and Yeppoon. Picture: Supplied

Metro Builders - debts $2.4 million

Rockhampton-based Metro Builders entered voluntary administration in June, leaving subcontractors, suppliers and homeowners more than $2 million. The only explanation was a note displayed on the office door and an email to workers that advised the company had gone into liquidation. The company had 15 incomplete residential homes in Rockhampton and Yeppoon. Earlier this month, director and sole shareholder Glen Finning declared personal bankruptcy.

Queensland One Homes - debts more than $5.9 million

Gold Coast-based Queensland One Homes collapsed in July 2017 with more than $5.9 million estimated to be owed to 100 small business owners, financiers and the Australian Taxation Office. A Supreme Court judge later froze the assets of director Paul Callender and wife Amber.

Rimfire Constructions Qld - debts $6 million

Rimfire called in voluntary administrators in September last year as its losses on various building jobs around southeast Queensland mounted. Six months earlier it had transferred two of its projects to a joint venture with giant Chinese construction firm, China Railway Construction Group. Money promised from the Chinese firm never eventuated, former Rimfire director Cameron Kirkwood told a public examination by the liquidator.

CRCG-Rimfire - debts $41 million

The joint venture between Chinese Government-owned China Railway Construction Group and Brisbane builder Rimfire collapsed in November last year with debts to developers, subcontractors and others of up to $41 million. The creditors later shared less than $8 million between them after the liquidator used a casting vote to accept a deed of company arrangement from the failed firm.

Auzmet - debts $2.5 million

Liquidators examining the collapse of Gold Coast-based Auzmet, run by a family of famous drag car racers, claims the company owes almost $2.5 million. Auzmet Panels Pty Ltd and Auzmet Pty Ltd, two of a group of companies linked to father and son Rob and Shane Tucker, went into liquidation in May, with the QBBC cancelling their licences a month later. A report by liquidator Christopher Baskerville claims unfair preference payments may have been made to some creditors, including the tax office, and that the company was trading while insolvent.

Future Urban Residential - debts $1.38 million

The Varsity Lakes-based firm went into liquidation in February, leaving homes unfinished and owing $1.37 million to 79 creditors, mostly small subcontractors. Among the claimants is Beenleigh Interior Linings, a family business which was owed more than $100,000.

 

with reporting by Kathleen Skene, Bill Hoffmann, Christine McKee, Alister Thomson