Queensland building and construction companies have improved their equity by more than a billion dollars since the building watchdog’s annual reporting regime began.
The latest action from last month saw two companies issue shares and raise a total of $57 million between them, taking the total working capital injected into Queensland building and construction companies up to $1.366 billion.
The annual reporting laws administered by the Queensland Building and Construction Commission (QBCC) require all building and construction licensees to operate financially viable companies.
The laws, introduced by the State Government in January 2019, are part of a suite of reforms that work to improve security of payment in the industry.
QBCC Commissioner Brett Bassett said that ensuring companies were financially viable meant a sustainable industry.
“When a homeowner enters a contract with a builder for a renovation or new build, they expect that the builder is financially viable to finish the project,” Mr Bassett said.
“When a sub-contractor issues an invoice after months of hard yakka, they expect the builder to be able to pay the amount,” he said.
“In the past we’ve seen too many incidents of insolvency in the building and construction industry, and the annual reporting laws give the QBCC insight to help prevent these.
“If licensees want to operate in this industry, they must be able to remain financially sustainable and financially healthy.”
Mr Bassett said the asset improvements included cash injections, share issuances and reductions in related entity loans.
“The two latest companies to increase capital, takes the total to 16 companies which have increased their working capital by more than $10 million,” he said.
“While there is no law that can provide an iron clad guarantee against business failure or financial mismanagement, people who invest in Queensland and workers who establish their career in Queensland need to be given the highest possible security that Queensland has a strong, stable building industry.”
For licensees with an annual allowable turnover of more than $30 million, as at 30 June 2021, 100 per cent have lodged their annual financial information with the QBCC.
The QBCC issued 42 show cause notices for suspected non-compliance with minimum financial requirements, two licence suspensions and no licence cancellations.
The QBCC also imposed licence conditions on nine licensees in this financial category, for failure to lodge the required financial information on time.
For licensees with a turnover between $800,001 and $30 million, 99.9 per cent had lodged their annual financial information as at 30 June 2021.
The QBCC issued 48 show cause notices for suspected non-compliance with minimum financial requirements, and suspended two licensees in this bracket for non-compliance.
The QBCC also imposed licence conditions on 664 licensees in these categories for failure to lodge the required financial information on time, resulting in 147 licences being suspended and 83 being cancelled.
For the licensees with allowable turnover of up to $800,000, approximately 83 per cent had lodged their annual financial information as at 30 June 2021. As at the 1 August 2021, this now up to 85 per cent.
Licensees who are still yet to lodge the required information are in breach of the law and may find themselves facing regulatory action.