NSW building company EQ Construction collapses owing $50 million

It’s also the second the buckle in the space of just weeks.

Co-founder of the Association of Professional Builders (APB) Russ Stephens said the issue “all stems from a lack of financial education for both builders and accountants”.

“That is resulting in incorrect financial statements being submitted to the licensing authorities and consequently those licensing authorities continuing to issue licences to building companies that are effectively operating with negative equity,” he said on Today.

Stephens explained that “from the experience we have seen” of building companies collapsing, it’s unlikely creditors will see a significant amount, if any, of the millions owed by fallen builders.

“This is all because building companies are being allowed to trade unprofitably for way too long, rather than having their licences revoked earlier,” he said.

“In terms of both consumers and subcontractors, they need to be protected through greater visibly of a builder’s accounts.

“It’s why we’ve been calling for a builder’s accounts to be a matter of public record, at least give these companies and consumers the opportunity to understand the risk they are taking when they choose the builder with the lowest price.”

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Builder Ryan Stannard from Stannard Family Homes agreed with Stephens’ notion and said he’d be “definitely happy to show his financials”.

“If you’ve got nothing to hide, you’ve got nothing to hide,” he said.

“The problem with builders (is that) they trade for too long not making any money and it’s not shown.

“So the education behind a builder and their financials needs to be more. So I think they need to step in.

“The Government needs to step in and make sure that the education for builders is highlighted.”