Carnage: the top Qld building firm collapses of 2021

Corporate collapses in Queensland’s building sector have cost more than $100m so far and the bloodbath is set to continue. We reveal the top industry failures of 2021.

The past year has been a rocky one for Queensland’s building industry with the collapse of scores of construction firms leaving more than $100m in debt and creating havoc for hundreds of homeowners.

Pandemic induced shortages of everything from timber to bathroom fixtures have forced prices to skyrocket creating a perfect storm for builders trying to fulfil contracts.

Master Builders Queensland deputy chief executive Paul Bidwell said there would be more collapses on the way as builders continued to face hefty hikes in building materials.

“There are a lot of nervous builders out there and the first quarter of next year will be telling,” said Mr Bidwell.

“These supply chain issues could even run into 2023.”

He said some builders were choosing to complete projects they have on their books and then permanently shut their doors. He said a majority of building materials such as timber had to be imported but faced extensive cost increases.

The Association of Professional Builders estimates that more than half of Queensland’s $48bn building sector is insolvent with some firms losing up to $40,000 on each job. 

Andrew Fielding, BDO’s national leader for business restructuring, said he was already noticing a slight uptick in company failures.

Hervey Bay couple Nikki and Dan Jacobson who are $30,000 out of pocket after the collapse of the Privium Group. Picture: Paul Beutel

Following the release of scathing finds by the royal commission into the banking and wider financial services sector, Mr Fielding said banks and the ATO frequently held off pursuing legal action over debts.

“There’s been no appetite to go after anyone. Because of the publicity and reputational issues, the banks would rather walk away from the debt than pursue it,’’ he said.

“It’s okay for the ATO to go after overpayments of JobKeeper but not go after companies hit by the pandemic. They’re just not taking action.’’

But with pressure growing from the prudential regulator to pursue defaulters early in the new year, Mr Fielding believes the ATO will ramp up activity after the federal election by targeting dormant “zombie’’ companies.

He also tipped a continued wave of building companies going out of business as cost hikes and supply chain issues exact a growing toll. “More builders go bust in a boom than in a bust,’’ Mr Fielding said.

The spate of building company collapses this year has left the home ownership dream of hundreds of people in tatters. Hervey Bay couple Nikki and Dan Jacobson are $30,000 out of pocket after Privium downed tools on their block in November leaving a pile of timber on their acreage property.

The couple is now trying to line up a new builder but will probably have to live in a caravan on site while there home is being built.

TOP QLD BUILDING INSOLVENCIES OF 2021

PRIVIUM (IN LIQUIDATION, NOVEMBER)

One of the country’s top residential builders Brisbane-based Privium has estimated losses of $80m with about 2000 homeowners affected across the country. The company was founded in the 1990s by a former Tasmanian carpenter Rob Harder.

BA MURPHY CONSTRUCTIONS (IN LIQUIDATION DECEMBER)

The Sunshine Coast firm, operated by third-generation builder Ben Murphy, has left behind debts of about $3m and impacted about 290 customers.

PLANBUILD (IN LIQUIDATION APRIL)

The award-winning builder collapsed with total debts of $3.7m and more than 80 unfinished homes around the city. The Queensland Building and Construction Commission (QBCC) said it had received a total of 88 claims from customers of Kedron-based PlanBuild under its Queensland Home Warranty Scheme.

FUTURE PROPERTY SOLUTION GROUP (IN LIQUIDATION JULY)

The Brisbane construction firm specialising in roofing repairs went to the wall owing about $1m. The firm launched in 2015.

GW CIVIL CONTRACTING (IN LIQUIDATION MARCH)

The civil construction company owed creditors $3.1m after Covid-19 delayed projects and it lost its JobKeeper eligibility. The company faced competitive pressure from larger companies that squeezed margins and projects became less profitable.

TACOMA PLUMBING AND DRAINAGE (IN ADMINISTRATION DECEMBER)

The major trade subcontractor collapsed after rising labour and material costs due to Covid-19 savaged its bottom line. The Pinkenba-based firm established in 1996 had worked for some of the state’s biggest building companies including Hutchinsons, Lendlease and McNab.

The firm was working on the Ambrose project at Milton for Hutchinson Builders, Silk One at Woolloongabba for Tomkins and six other sites around southeast Queensland.

JWM CONTRACTING (IN LIQUIDATION DECEMBER)

The major Queensland civil construction company that had worked on the Wellcamp Airport and Kingsford Smith Drive upgrade owed creditors almost $4m. Administrators were appointed after the firm racked up millions of dollars in trading losses in the past two years.