Report

Inquiry into construction industry insolvency in NSW

18 Oct 2012
Description

The New South Wales Government has established this Inquiry to help safeguard the interests of subcontractors in the building industry.

The terms of reference for the inquiry include how initiatives such as insurance schemes, trust arrangements, compulsory contract provisions or other mechanisms, could help to safeguard the interests of subcontractors in the sector.

Beginning more than two decades ago, there has been a growing trend of builders gravitating to a role best described as project management rather than overseeing their labour force working on a construction site.

This trend has resulted in those who are ‘building’, are not typically those entities that have a direct contractual relationship with the client. In fact they are the subcontractors engaged by the head contractor, the subcontractors engaged by subcontractors and so on.

The need to consider payment practices in the construction industry which have changed at least in part due to the change in the way the work is contracted, is clearly set out in the Terms of Reference. As part of this analysis, the management, allocation and avoidance of risk is of fundamental importance to understanding how the industry operates. The Final Report of the Inquiry will go into greater detail on the question of risk recognition, allocation and pricing.

Discussion and Issues Paper (pdf) (1 MB)
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Published year only: 
2012
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