The New South Wales Government has announced the formation of an inquiry into construction industry insolvency to help safeguard the interests of sub-contractors in the sector.

 

State Minister for Finance and Services Greg Pearce said the fragility of the sector was exacting a growing toll on workers and sub-contractors in the economy.

 

“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, 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.

 

The State has appointed Bruce Collins QC as the chair of the new inquiry, which will be tasked with examining the extent and causes of insolvency in the construction industry.

 

The terms of reference for the inquiry include how initiatives such as insurance schemes, trust arrangements or mutual funds could help secure subcontractors.

 

Mr Pearce said the Government will also establish a taskforce to ensure government agencies are managing construction risks.