Yesterday the NSW Government announced an inquiry into ?construction industry insolvency?. The inquiry comes in the wake of a spate of construction company insolvencies in the state. NSW Minister for Finance and Services, Greg Pearce provided some telling statistics on point. The Minister said ?Between 2009 and 2011, hundreds of companies in NSW collapsed owing billions of dollars, slamming the brakes on vital projects and investment?.Up to 24,000 unsecured creditors, including suppliers and sub-contractors, have been left out-of-pocket, some by millions of dollars.?? Furthermore the construction industry in NSW accounts for 15% of business in NSW but 30% of the companies that are going into administration. The Minister attested to the need for a government inquiry into this problematic scenario stating the fragility of the construction industry was taking a toll on workers, the economy and the community.
The inquiry will be chaired by Mr. Bruce Collins QC, who has extensive experience in commercial law, engineering and construction law. The inquiry will focus on assessing the causes of insolvency in the construction industry and the current payment practices affecting sub contractors. The full terms of reference for the inquiry have been published by the NSW government and include a list of legislative and policy considerations that the inquiry will consider pertaining to the payment framework of sub contractors. To access the full terms of reference or media release from the NSW government please click here.
The NSW government has stated that they wish to hear from all interested parties in particular contractors and sub contractors. Please click here if you wish to make a submission and be forwarded to the NSW Government website. The consultation period will close on Friday the 14th of September.
Written by Jarrod Gutsa, Legal Researcher Lovegrove Solicitors.
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