Senator Bob Day resigns from Parliament after collapse of his Home Australia business
FAMILY First senator Bob Day has announced he will resign from Federal Parliament following the collapse of his building company, Home Australia. Analysis | Two mistakes led to collapse | Angry tradies descend on offices
- ANALYSIS: How this will affect the Senate
- THE SENATE: Bob’s exit a shock, so what now?
- THE VICTIMS: Angry tradies descend on office
- THE COLLAPSE: Two mistakes led to bankruptcy
FAMILY First senator Bob Day has announced he will resign from Federal Parliament following the collapse of his building company, Home Australia.
The South Australian property developer made his announcement as his Home Australia Group — which includes Homestead Homes (SA), Collier Homes (WA), Newstart Homes (Qld), Ashford Homes (Vic) and Huxley Homes (NSW) — was placed in liquidation.
The collapse of Home Australia affects the construction of 207 homes across Australia, including 48 in South Australia.
In a statement, Senator Day said he would lose his family home as a result of the liquidation of the building empire, with McGrathNicol appointed liquidator.
McGrathNicol has urged clients with homes under construction with insurance to contact their insurers or, if they were not insured, to contact Home Australia.
Senator Day has repeatedly been granted leave of absence from the Senate for “personal reasons”, only attending Parliament for three of the 11 sitting days since the federal election in July.
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Senator Day said he was devastated by what had happened to his company.
“Having been in business for over 40 years, I am naturally devastated by what has happened and will do whatever I can now to assist those affected by this closure,” he said.
Senator Day said all homes under construction were covered by warranty.
“As I have always agreed to sign personal guarantees to creditors, this closure also has serious implications for me and my family,” he said.
“Creditor liabilities greatly exceed our assets so we will also lose our family home.
“As for my role as a Senator, I will of course resign.
“I am incredibly sorry for the pain, stress and suffering I know this will cause.’’
His statement — and resignation — has confirmed speculation he has been experiencing serious problems with Home Australia for several months.
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Long-term Family First staffer Rikki Lambert has confirmed to The Advertiser that he will put his name forward to replace Senator Day.
Mr Lambert — who used to work for state Family First MP Robert Brokenshire before becoming Mr Day’s chief of staff — said it could take some time to confirm a replacement.
“I am nominating as the candidate for the seat that will ultimately fall vacant,” he said.
“Obviously the senator hasn’t nominated a date but naturally when that seat becomes available I’ll be a candidate for it.”
In his statement, Senator Day blamed the failure of a rescue deal with a Phillipines company, Goshen Capital Resources, for the collapse of Home Australia.
“I entered politics in 2013 but in 2015 returned to assist the business and its advisers to either sell it or take on board an equity partner to recapitalise the company,” he said.
“Since then I have considered a number of proposals from local, national and international groups which culminated in the signing of a contract to sell a 75 per cent stake in Home Australia to Goshen Capital Resources, a company based in the Philippines.
“Home Australia was one of a number of Melbourne-based deals worth approximately $200 million in total by Goshen.
“The funds from Goshen would have provided the Home Australia Group with enough liquidity to trade out of its current difficulties given the more than $100 million in forward orders Home Australia has in its pipeline.
“The funds to invest in Home Australia should have been transferred last week but each day there was a different excuse.
“I had based all creditor payment plans and commitments on this deal going ahead.
“Given the strict ‘trading while insolvent’ rules that apply in Australia, it would not be possible now for the business to continue operating until another buyer is found.’’
McGrathNicol said its priority was to work with insurance companies and clients to get replacement builders to complete houses still under construction.
“We will communicate with customers in writing in the coming days,” it said.
The financial affairs of Home Australia would be investigated, with the results to be sent to the Australian Securities and Investment Commission.
Creditors meetings for each of the five Home Australia companies would be convened for November 4, or possibly earlier.