The Queensland Building and Construction Commission has demanded urgent answers from a number of large licensed companies which appear to be operating with inadequate financial assets.
The action comes after the first annual reporting deadline passed following new minimum financial requirement and mandatory reporting laws that came into effect this year.
Companies with a turnover of more than $30 million per year were required to submit their financial reports to the QBCC by the end of March.
The state’s building industry watchdog has been scouring through the reports and this week issued show-cause notices to 18 companies.
The show-cause notices require the companies to demonstrate to the QBCC that they can improve their financial health within 21 days, otherwise they risk having their licences suspended.
Some of the companies hadn’t provided the QBCC with financial reports in more than five years.
QBCC commissioner Brett Bassett said it was important those companies moved swiftly to meet the financial requirements.
“These companies that were required to meet the first financial reporting deadline have significant turnover and, in many cases, significant workforces,” Mr Bassett said.
“There would be hundreds of Queenslanders relying on these companies for work either as employees, sub-contractors or suppliers.”
Mr Bassett said the companies had been identified because their financial reports showed that the entity didn’t comply with the legislated financial requirements.
“The licensee with the highest risk appears to be operating with an asset base of more than $250 million less than where it needs to be to support its annual turnover,” he said.
“While our investigations into these companies are in the early stages, this sort of balance sheet is a recipe for disaster.
“The minimum financial requirements help us identify licensees who are at risk of financial trouble.”
Mr Bassett said that while there was cause for concern for the directors of those companies, at this stage there was no evidence they owed money to sub-contractors or suppliers or that workers would lose their jobs.
“The message is clear to licensees – get your books in order as required by the law, or we will be taking further action,” he said.