❓ Ms. Freeman questions the Minister for Finance regarding the allocation of remaining funds from the Construction Subcontractor Financial Assistance Scheme after payouts to subcontractors impacted by builder collapses. The Minister defends the scheme's management and payout criteria.
AnsweredQoN 918Legislative Assembly
QuestionView source ↗
CONSTRUCTION SUBCONTRACTOR FINANCIAL ASSISTANCE
SCHEME
918. Ms J.M. FREEMAN to the Minister for
Finance:
I refer to the
information that approximately $3.8 million of $5 million that was set aside as
financial assistance for subcontractors impacted by the collapse of builders
conducting projects for Building Management and Works will be paid.
(1) What will happen with the approximately
$1.2 million left over in the ex gratia payment fund for subcontractors?
(2) Given these workers got less than 50c in
the dollar, will the minister distribute the remaining amount equally among the
successful applicants; and, if not, why not?
SCHEME
918. Ms J.M. FREEMAN to the Minister for
Finance:
I refer to the
information that approximately $3.8 million of $5 million that was set aside as
financial assistance for subcontractors impacted by the collapse of builders
conducting projects for Building Management and Works will be paid.
(1) What will happen with the approximately
$1.2 million left over in the ex gratia payment fund for subcontractors?
(2) Given these workers got less than 50c in
the dollar, will the minister distribute the remaining amount equally among the
successful applicants; and, if not, why not?
AnswerView source ↗
I thank the member
for the question.
(1)–(2) After receiving the report of the Small Business
Commissioner, the government set up a fund of up to $5 million to provide ex gratia
payments for the subcontractors who had not been paid by bankrupt contractors.
The conditions were threefold. They had to be a subbie to one of the seven bankrupt
head contractors for Building Management and Works projects that were
identified in the report and they had to provide adequate information. We then
sent the applications to RiskCover for assessment. RiskCover went through the
applications in detail and many of the subbies, not all, were very quick and
responded in full and were very cooperative, but some were slow for a variety
of reasons, so we gave them an extension. We made sure that the criterion for
the payment was met; that is, they had to be a subbie to one of the seven
bankrupt contractors working on a BMW project. It has taken some time and, as I
announced a week or so ago, we have sent out indications of payments. Anybody
who met those criteria has received an offer of 50 per cent. We received over
400 claims. Many of those claims did not relate to Building Management and
Works projects, many did not even relate to government projects, and many did
not relate to invoices relating to bills at all—they were for legal
costs and other things. There were claims that did not meet the criteria and we
did not pay those out. Members opposite may want us to do that. We said that we
would make an ex gratia payment of 50 per cent of the payment that those
subcontractors should have received from the seven bankrupt head contractors.
That is what we have done. That is called good management. When we came out
with the estimate, the Small Business Commissioner said that he thought—he
had not gone into it in great detail—that the total payment would be
about $8 million. We set up a fund of up to $5 million with a 50 per cent
payout. We did not know exactly how much would come out of that fund. We have
spent $3.7 million, or $1.2 million less than the aggregate sum, but we did not
say that we would pay out $5 million. We paid out at a level of 50 per cent to
those subbies that met the criteria. That is called good management. This has
been a sorry saga, but, importantly, we have put in place a range of processes
to improve the situation going forward.
for the question.
(1)–(2) After receiving the report of the Small Business
Commissioner, the government set up a fund of up to $5 million to provide ex gratia
payments for the subcontractors who had not been paid by bankrupt contractors.
The conditions were threefold. They had to be a subbie to one of the seven bankrupt
head contractors for Building Management and Works projects that were
identified in the report and they had to provide adequate information. We then
sent the applications to RiskCover for assessment. RiskCover went through the
applications in detail and many of the subbies, not all, were very quick and
responded in full and were very cooperative, but some were slow for a variety
of reasons, so we gave them an extension. We made sure that the criterion for
the payment was met; that is, they had to be a subbie to one of the seven
bankrupt contractors working on a BMW project. It has taken some time and, as I
announced a week or so ago, we have sent out indications of payments. Anybody
who met those criteria has received an offer of 50 per cent. We received over
400 claims. Many of those claims did not relate to Building Management and
Works projects, many did not even relate to government projects, and many did
not relate to invoices relating to bills at all—they were for legal
costs and other things. There were claims that did not meet the criteria and we
did not pay those out. Members opposite may want us to do that. We said that we
would make an ex gratia payment of 50 per cent of the payment that those
subcontractors should have received from the seven bankrupt head contractors.
That is what we have done. That is called good management. When we came out
with the estimate, the Small Business Commissioner said that he thought—he
had not gone into it in great detail—that the total payment would be
about $8 million. We set up a fund of up to $5 million with a 50 per cent
payout. We did not know exactly how much would come out of that fund. We have
spent $3.7 million, or $1.2 million less than the aggregate sum, but we did not
say that we would pay out $5 million. We paid out at a level of 50 per cent to
those subbies that met the criteria. That is called good management. This has
been a sorry saga, but, importantly, we have put in place a range of processes
to improve the situation going forward.
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