'Silent Victims': When Developers Go Bust, Subcontractors Stand To Lose Everything

There are around one million building subcontractors in Australia. Together, they make up around 80 percent of the construction industry's workforce.

But despite this overwhelming majority, they remain one of the most vulnerable groups in the building industry, when it comes to big builders and developers who go bust.

Subcontractors often wait months and sometimes even a year to be paid for big jobs at commercial building sites. In that time workers and small subcontracting businesses will work long hours, including weekends, for the builder or developer with the promise of a big payout at the end.

But increasingly, subcontractors are being left out of pocket, and in some cases completely bankrupt, forced to sell all their personal belongings when the developer suddenly goes into liquidation at the end of a project and refuses to pay-out.

PHOTO: The Sunday Project

For some of Australia's one million subcontractors, it's left them not only out of pocket but out of business, and even out of their own homes.

Beau Hartshorn is just one of those workers. Hartshorn used to run his own landscaping company in Queensland, which after years of hard work saw him pick up one of his biggest jobs of all -- working on the construction of a shopping centre.

"We had all the staff on-site, working long days, weekends," Hartshorn told The Sunday Project.

But right at the end of the construction, the developer suddenly went into liquidation, refusing to pay what Hartshorn was owed, a fee he estimates to be at around $538,000.

Hartshorn was forced to pack up his business and even sell his family home.

Beau Hartshorn. PHOTO: The Sunday Project

"I had to tell my wife, first of all, that we lost pretty much everything," he recalled.

"The big ones always seem to get away with it and the little companies always seemed to get screwed over and left with nothing."

Scott and Karen Wildman also faced a similar issue. The couple, who owned a plumbing company for about 15 years, was working on a number of residential buildings when their developer went broke.

The Wildmans were owed $100,000 which they didn't recieve. They would later spend another $20,000 on legal fees to try and recover their money, to no avail.

"I couldn't sleep you know," Karen told The Sunday Project.

"The stress of it is the money going to come in."

Karen Wildman. PHOTO: The Sunday Project

Subcontractors like Hartshorn and the Wildmans around Australia lose around $2 billion a year because of liquidations, a 2015 Senate Report into the issue found.

It costs the economy as a whole around $3 billion annually with nearly one-quarter of insolvencies in Australia every year coming from the construction industry.

Les Williams, a former subcontractor who now runs a group fighting for their rights, said subcontractors are the "silent victims" in the building and construction industry.

Nobody wants to talk about it -- and nothing is done about it.

According to Williams, every state has a building services authority tasked with acting on behalf of subcontractors but says in reality that's not being done.

Part of the issue is that every state and territory has different laws and different regulators.

"They're just letting us down," Williams said.

"Building regulators, I just don't think they're worth a squirt to put it quite bluntly."

Catch the full interview on The Sunday Project from 6:30pm on 10. 

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