Business

High-profile business collapse fuels payment law push

Family First Party Senator Bob Day of South Australia has quit parliament to deal with problems with his housing business group.
Family First Party Senator Bob Day of South Australia has quit parliament to deal with problems with his housing business group. MICK TSIKAS

THE collapse of Senator Bob Day's Home Australia Group bears uncanny similarities with the Walton Construction group of companies in 2013.

The latest in a series of construction industry collapses totalling billions of dollars has renewed calls for improved national security of payment legislation to protect subcontractors.

South Australian Senator Nick Xenophon has tied his support for the Australian Building and Construction Commission, which was passed by the House of Representatives this week, to the delivery of payment security for the industry.

The Turnbull Government is still to respond to the findings of the 2015 Senate joint-party report into construction insolvency which totals $3 billion a year including $680 for each of the past three years owed the ATO.

The report recommended project trusts to isolate money from clients to the work it was meant to pay.

Evidence given by ASIC to the inquiry suggested an emerging business model of planned insolvency.

Les Williams, head of the Subcontractors Alliance formed after the Walton collapse, has renewed calls for construction trusts to be introduced as the centre piece of security of payment legislation.

"The Prime Minister is talking about the rule of law with unions and I can't argue with that,'' Mr Williams said.

"But there should be a rule of law for everyone in the construction industry.''

He said project bank accounts operated by third parties would deliver payment security before anything and "take a lot out of the game".

"If everyone played by the rules, you wouldn't need a referee," Mr Williams said.

"But that doesn't happen".

Like Walton, the financial position of the Home Australia Group went downhill rapidly over the past two to three years of its life.

Mr Williams said the reason for decline was either poor business practice or potentially asset stripping.

As was the case with the Walton collapse Senator Day has blamed his non-performing NSW division for dragging down the finances of the group.

In an email to Home Australia staff informing them the company would be liquidated, Senator Day expressed sorrow for the pain and suffering that would be caused.

"While four members of the group all posted a profit in 2015/16, problems and losses associated with Huxley Homes ... has seriously undermined the group's balance sheet and ability to continue trading," the email stated.

Similarly Walton's NSW division's poor performance was blamed for putting pressure on Walton Queensland eventually leading to subcontractors who worked on the Nambour Coles project losing $3million for work done and materials supplied.

Mr Williams said in both company collapses payments to subcontractors and suppliers became problematic in the months leading up to default.

Walton Construction sole director Craig Walton and Senator Day also both claimed to have been let down by a White Knight investor.

In the case of Walton it was the late builder Frank Pellicano who was alleged not to have followed through with a deal.

Before his death Mr Pellicano denied any commitment.

Senator Day said he had looked to the sale of 75% of his business to Philippine company Goshen Capital Resources and that those funds would have provided the liquidity for it to trade out of difficulties with forward orders of more than $100 million.

That deal also didn't eventuate.

In 2013 an independent auditor's report found Home Australia Group's liabilities exceeded its assets by $31million. In the same year Deloittes, which had been engaged by NAB to assess Walton's financial state, found the company had negligible tangible assets and was using subcontractor retentions to fund the business.

And finally the NAB was a significant secured creditor to both businesses with more than $24million in exposure to Home Group Australia and was able to retrieve $20million owed by Walton in the months leading up to its demise in October, 2013.

Topics:  nick xenophon payment legislation senator bob day subcontractors subcontractors alliance walton collapse



Science Festival seriously awesome

CALLING everyone who wants to see, hear and be a part of something totally cool: this is where you need to be this March.

Drink where the cool kids do this summer

There are a bunch of new bars open in Brisbane, make sure you're there!

CHECK out these new funky bars.

Discover Brisbane’s laneway gems

Brisbane's laneways will surprise you.

NOT all of Brisbane City is as it seems…

Top five things to experience this summer in Brisbane

Tangalooma is amazing if you're keen for a dive, kayak or swim.

THIS summer get out and explore your capital city.

Don’t go chasing waterfalls…find them on these drives!

The Scenic Rim is just one place nearby that you'll love.

BRISBANE isn’t all bright lights and city slickers.

Your boots are made for walking these tours

Brisbane Greeters tours are a great way to learn the local history of the city.

YOU don’t need a bike or bus for a seriously good tour of Brisbane.

Is Brisbane the new arts and culture capital?

Check out GOMA's latest exhibition - it's all about hair! GOMA 10 Ambassador Patience Hodgson visits Nervescape V 2016 by Icelandic artist Hrafnhildur Arnardóttir (aka Shoplifter), commissioned for ‘Sugar Spin: you, me, art and everything’ at the Gallery of Modern Art, Brisbane. 
Photograph: Natasha Harth, QAGOMA

THE rest of the world should be envious of this line-up!

Teen charged: 42 offences including string of H'bay breaks

CHARGED: Hervey Bay detectives charge an 18-year-old over recent break-ins in the area.

The 18-year-old man has been charged with 42 offences.

Parents need to raise thousands to get air-con at school

Torquay State School students Crystal Prior, Zoey and Jack Murray said school had become a lot more fun ever since their classrooms had air-conditioning installed. However, there are still many more classrooms at the school that don't have air-conditioning and the P&C Association is fundraising.

Fraser Coast is out the government-funded zone for air-conditioning.

Gillespie brings Peter Allen's hits to the Brolga

Simon Gillespie Sings Peter Allen - at the Brolga Theatre this Thursday.

The performance runs from 11am Thursday.

Local Partners

LIVE COVERAGE: Global superstar to rock Mackay in 2017

Premier Annastacia Palaszczuk will be joining Mackay Mayor Greg Williamson and Cairns Mayor Bob Manning to announce the superstar guest.

Robert Irwin introduces Jimmy Fallon to wild guests

Robert Irwin introduces Tonight Show host Jimmy Fallon to a cuddly sloth.

ROBERT Irwin continues Steve's legacy.

MOVIE REVIEW: Trespass Against Us a 'tender' crime film

Michael Fassbender and Brendan Gleeson in a scene from the movie Trespass Against Us.

Tough British film about criminal clan proves touching

Crocodile, hippo fears as I'm A Celeb filming hit by flooding

Flooding hits the set of I'm A Celebrity ... Get Me Out Of Here!

Fears crocodiles and hippos could infiltrate I'm A Celeb camp

Small screen users make switch to smaller screens

In this photo taken Oct. 16, 2013, a girl plays Supercelll's Hay Day game on an iPad. The Finnish 'Clash of Clans' mobile game maker Supercell said Wednesday, Feb. 12, 2014, it plans to launch its third game next month on a tide of soaring revenues and profits. The new game, 'Boom Beach,' will be launched in March. It's been tested in Canada and Australia, ranking fifth in both countries' iPhone app store lists, according to the company. (AP Photo/Lehtikuva, Milla Takala)  FINLAND OUT

The digital age generation makes the switch

Nadia visits Coast to escape Married At First Sight drama

Married At First Sight's Nadia Stamp takes a breather from the show's drama at Mooloolaba.

MAFS bride unwinds on the Coast ahead of commitment ceremony

‘I didn’t stuff it up like you have’: Plibersek on Q&A

“I didn’t stuff it up the way you have stuffed it up, George”: Tanya Plibersek.

Plibersek lashed out at Brandis to plenty of applause

Popular island resort sells to loaded international investor

OUR PICK: Chris Foey's colourful shot of one of Gladstone's great tourism hot spots, Heron Island.

International investor snaps up piece of Gladstone paradise.

Expert: Why renters, home buyers may struggle

Matusik Property Insights director Michael Matusik.

What's next for the city's housing market

Massive seaside development of 3200 lots

DESIRABLE LIFESTYLE: The masterplan for the proposed Elliott Heads Estate.

"There's nothing else left along the coastline of Queensland now"

Potential home buyers punished for doing the 'right thing'

Should I go to university or buy a house?

50 more high rise buildings planned for Brisbane CBD

Height limits have been scrapped for Brisbane CBD

800,000 more people expected to work in city over next 20 years

Ready to SELL your property?

Post Your Ad Here!