COAST NEEDS A PROPER FIX
IN a breathtaking display of what many might see as brazen opportunism, those behind a new company that uses the word “phoenix’’ in its name have shown more front than a rat with a gold tooth.
Shrugging off the connotations of the word when it is applied in general to the building industry and an unfortunate history of creditors being burned by construction company collapses on the Gold Coast, the people running Phoenix Rural Fencing and Landscaping have – like the mythical bird – risen from the ashes of the collapse last year of Queensland One Homes, which left debts of $6 million.
Of course, the business and its new name have angered subbies and customers stung by that collapse. The Supreme Court froze $7.1 million in assets owned by the couple behind Queensland One and other companies, Paul and Amber Callender. While the Callenders have denied wrongdoing, allegations of phoenix activities have been referred to the corporate regulator, ASIC. The case is just one of many that have hurt tradies, suppliers and ordinary mums and dads who have engaged builders to deliver their dream home, only for that dream to be shattered.
This sort of situation is not new. It has been going on for decades and has been debated over and again in state and federal parliaments, but still companies go under, customers are hurt, subbies go to the wall, labourers are put out of work and creditors cop a loss – only for directors to re-emerge with new companies.
Waiting for legislation to deal with this effectively is like watching molasses drip. Back in 2002, for example, legislation was introduced by the then state housing minister, Rob Schwarten, which he said would provide greater protection for Queenslanders from phoenix companies, yet it has remained a problem. In the past year the Palaszczuk Government has introduced project bank account laws, which apply to government contracts in the short term and will be widened to private contracts next year, but this ensures subbies are paid when builders collapse. Phoenix companies can be another matter.
The Turnbull Government announced in its Budget on Tuesday night that $40 million would be spent “across forward estimates’’ to “target those who conduct or facilitate illegal phoenixing’’.
Grim experience suggests that Gold Coasters should not hold their breath.
To date, the state building industry regulator, QBCC, has been able to refer allegations of phoenix or other illegal activities to ASIC and police.
As the Bulletin reports today, ASIC – the corporate regulator – also relies on liquidators to report illegal phoenix activity.
But it does not help individuals recover lost money, and will only act if it thinks it can benefit the public broadly and result in “greater market impact’’.
It all sounds very vague.
Unless Canberra and the State Government are serious about beefing up legislation and giving their agencies some teeth, illegal phoenixing operators will keep bobbing up. The next federal election will be fought on the battleground of tax cuts, we are told. It is surely in the Gold Coast’s interests for a proper crackdown on phoenix activities to be a poll issue.