Bill Shorten promises to stop builders ripping off tradies

Opposition Leader Bill Shorten will unveil a “tradie pay guarantee” to end the illegal “phoenix activities” in which builders avoid paying debts.

CONSTRUCTION companies would have to lock away subcontractors’ pay in trust accounts to win Commonwealth projects under a federal Labor plan to protect tradies.

Corporate regulator ASIC would also get a $7 million war chest to fund cases against dodgy firms that rip off small businesses by going insolvent under a Labor government.

Subbies $500 million non-payment scandal should be subject of inquiry: LNP

Tycoon reveals vision for $200m luxury resort at Port Douglas

Claims of payments owed to subbies on Daydream Island

Opposition Leader Bill Shorten will today promise a “tradie pay guarantee” if he wins the election, saying he wants to stop illegal “phoenix activities” where businesses avoid paying debts.

It is the second win in as many days for The Courier-Mail’s Back Our Subbies campaign, which is aimed at stemming the tide of building company collapses which have left more than 7000 subbies owed more than $500 million since 2013.

Yesterday, the state LNP pledged to hold a commission of inquiry into the issue.

Promising to clean up shoddy practices in the building industry, Mr Shorten said he would use the government’s infrastructure spending power to force construction companies to ring-fence amounts owed to subcontractors.

Opposition Leader Bill Shorten is getting tough on construction companies that leave subbies unpaid. Picture: Zak Simmonds

Under the plan, builders on Commonwealth projects would have to set up trust accounts to quarantine pay and other debts owed to ensure workers and businesses down the chain are paid on time.

The proposed rules would affect companies bidding for any project receiving federal funding, ranging from major public transport works like Brisbane’s Cross River Rail to road upgrades such as Bruce Highway extensions and tourism developments such as on Great Keppel Island.

A future Labor government would also push to extend these rules to other projects, promising to work with the states and territories to impose a nationwide crackdown on rip-offs of subcontractors.

The promised $7 million “tradie litigation fund” would arm ASIC with resources to enforce laws against phoenix activity which is estimated to cost the economy more than $5 billion per year.

“My message to subbies and their families is if Labor wins government we will make sure you get what you are owed. And that the rip-offs stop,” Mr Shorten said.

“I congratulate The Courier-Mail in bringing this shocking behaviour out into the light.”

Originally published as Bill Shorten promises to stop builders ripping off tradies