Subbies in cashflow crisis

THOUSANDS of construction subcontractors are facing a cash flow crisis after several firms doing major government contracts failed in the past two months.

Reed Constructions, the Hastie Group, St Hillier's Construction and the Aegis consortium have stopped work on projects, with tens of millions of dollars owed to their subcontractors.

In the construction industry the impact of corporate failure spreads far and wide, with changes to industry work practices in recent years seeing subcontractors replacing employees.

Debt recovery specialist Glen Bower says thousands of subcontractors are vulnerable and that many are small, family-run businesses that depend on a cash flow.

"There are less and less employees and more subcontractors and lot of those subcontractors go from one day being an employee to being a subcontractor," he told Background Briefing.

Read more at ABC news online.


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