Minister for finance and services Greg Pearce said the fragility of the construction industry was taking a toll on workers and the economy. “Between 2009 and 2011, hundreds of companies in NSW collapsed owing billions of dollars, slamming the brakes on vital projects and investment,” he said. “Up to 24,000 unsecured creditors, including suppliers and sub-contractors, have been left out-of-pocket, some by millions of dollars. The Commonwealth regulates insolvency and company practices, but the NSW Government won’t walk away from its responsibility to address this issue,” he said.
Bruce Collins QC had been appointed to chair the inquiry. “Mr Collins will look at the extent and causes of insolvency in the NSW construction industry and what reforms are needed to minimise the adverse effects on subcontractors,” said Pearce. “The inquiry will look at how to resolve these issues in the absence of effective policy direction from the Commonwealth.
“The NSW Government has outlined an infrastructure program to get the state moving again, but this relies on a strong construction industry,” Mr Pearce said. The terms of reference for the inquiry include how initiatives such as insurance schemes, trust arrangements or mutual funds could help secure subcontractors.
The NSW government will also establish a taskforce to ensure government agencies are managing construction risks.