Since the carefully planned insolvency of Walton Construction Queensland in October 2013, about 50 Queensland construction companies have become insolvent with losses totalling about $500 million.
Since the carefully planned insolvency of Walton Construction Queensland in October 2013, about 50 Queensland construction companies have become insolvent with losses totalling about $500 million.

Downs subbie believes liquidations, losses on the rise

>>RELATED: Darling Downs businesses caught up in big business collapses

MICHAEL Marschall believes that in the last two years, he has seen more businesses go into liquidation and has lost more money as a result than in his previous quarter of a century in the construction industry. 

The Chronicle today launched an investigative series into the collapse of some dozens of building companies who owe subcontractors hundreds of millions.

Among them was Cullen Group, a Brisbane-based construction company that went into liquidation in December 2016 owing $18 million.

Among the list of creditors was Mr Marschall's Goondiwindi-based family-owned business, Mann's Logan Crane Hire.

More than two years later, Mr Marschall is yet to see a cent of the $22,400 owed to his business. 

"The collapse of a builder affects cash flow, it impacts us immensely as it stifles our ability to meet our commitments, grow the business and create further opportunities," he said.

"In almost all cases the liquidator retains any money that derived from the liquidation for their cost in carrying it out.

"In 25 years, I could count on one hand dividends paid to creditors.

"I would suggest that in the last two years we have seen more liquidations and have lost more money than we have over the last 25 years." 

Mr Marschall said there were several factors putting the squeeze on subcontractors.

"The margins that the legitimate builders are working on has decreased and the cost of compliance with workplace health and safety, and financial management has increased," he said. 

"The margin that the builders work on does not allow for contingency as they are competing for the same work as a shonky builder who gets the job based on price."

He also said the readiness of principal contractors to litigate against subcontractors rather than pay them or resolve an issue added pressure. 

 

 

"The Queensland Building and Construction Commission needs to act and do what they are there for. Be proactive instead of reactive and not do anything at all," he said. 

Click here to access The Chronicle's exclusive investigation, and much more, through our $1 for 28 days introductory digital subscription offer.

Subcontractors: Lance O'Brien from Nautical Roofing supports the State Government plan to ensure all subcontractors get paid.