But, on reading this report, I am deeply and increasingly grateful for the money NRW has laid by, for both the security and the opportunities this cash represents, and for the money it has enabled me to lay by.
Kim MacdonaldThe West Australian
Wed, 11 September 2024 2:00AM
Apartment projects belonging to Mercedes Construction which have gone bankrupt. Pictured is 101/110 Marine Parade, Cottesloe. Credit: Riley Churchman/The West Australian
About 15 WA construction companies collapse with millions of dollars in debt every month, and nearly 30 more are teetering with huge tax debts, a sign of the sector’s struggles.
Shocking new data from CreditorWatch reveals the full extent of challenges in the embattled sector. Over the past six months, 93 local construction companies—including subcontractors, builders, and related services—have collapsed.
This is equivalent to 15.5 companies being deregistered, liquidated, bankrupted, or struck off by the Australian Securities and Investments Commission every month.
Many more are teetering on the verge of collapse, with 257 WA construction firms failing to pay individual tax debts of at least $100,000 within three months.
This is equivalent to about 10 businesses failing to pay their six-figure tax bills every single week.
CreditorWatch chief executive Patrick Coghlan said it was likely the tip of the iceberg, with the Australian Taxation Office only reporting the businesses with tax bills that crossed the six-figure threshold and were more than 90 days late.
The ATO began reporting on the matter in October last year, so it is not possible to compare last month’s results with those from another period.
The figures do not capture the whole problem, with many struggling with tax bills worth tens of thousands or failing to pay other bills — such as to suppliers — that were not reportable to the ATO.
“The problem will continue, if not worsen,” Mr Coghlan said.
“There is still a significant number of (construction) businesses that have not yet been reported, and the economy will not get better.
“In fact, it is likely to get worse, particularly for small businesses.”
The massive number of closures is equivalent to a 36 per cent failure rate for businesses that are unable to pay six-figure tax bills within three months. Apartment project belonging to Mercedes Construction, which is one of the builders to go bankrupt this financial year. Credit: Riley Churchman/The West Australian
Mr Coghlan said the challenge of fixed-price contracts had largely passed, but skyrocketing costs had continued to squeeze slim margins.
He said companies owed taxes ranging from $100,000 to millions, and forgone payments undermined government services and projects, including infrastructure and transport.
“Every single person in Australia pays the price, but in particular anyone who pays tax,” he said.
“The tax office is owed $55 billion, which is double what it was owed pre-COVID.
“Everyone pays the price when companies go under.”
The State regulator, Building and Energy, said 32 registered building contractors had gone through an insolvency event in the last financial year.
The State regulator, Building and Energy, said 32 registered builders alone — excluding subcontractors and related services — had experienced an insolvency event in the last financial year.
Already in 2024-25, Ausglobal Construction, Schearar Developments and Mercedes Construction had collapsed.
cheers and thank you again Jules for your strategic leadership!
NWH Price at posting:
$3.34 Sentiment: None Disclosure: Held
(20min delay)