Business owners' simple fix to 'stop the rot' in industry
A TEAM of business owners who battled to rebuild for months after a building company collapsed say the key to fixing the industry lies with the Queensland Building and Construction Commission.
Tru-Flow Services directors Matt Ostrofski and Dan Brassel were left about $100,000 out-of-pocket when Cullens Group collapsed days before Christmas in 2016.
Their insurance eventually covered half the loss after a long and drawn-out process.
The Ipswich business was dealt a second major blow just one month after Cullens, when Betair Constructions folded.
Two builders going bust on either side of Christmas left the business partners fighting to secure cash flow.
"It was bad and it took a long time to recover," Mr Ostrofski said.
"It takes 12 to 18 months to get out of that hurt."
The directors now pay insurance for every contract, but say a lot more can be done to improve building law enforcement.
Mr Brassel said the Queensland Building and Constriction Commission needed more grunt to investigate and prosecute builders who failed to pay subbies.
"The QBCC is all we have as a regulatory body to keep us safe from builders," he said.
"That's where it starts and finishes with the power we have."
Mr Ostrofski said red flags of a builder in trouble needed to be raised earlier.
He said tougher penalties should also be introduced for people who fudged legal documents, like statutory declarations.
"There are no repercussions at the moment," Mr Ostrofski said.
"We need QBCC to support us more.
"Either increase their powers or increase their investigation skills or tighten up the financial requirements."
He said more frequent auditing of finances would go a long way to help "stop the rot".
"There's a couple of reports QBCC should be asking for; creditors debtors and an Australian Tax Office portal," he said.
"That gives you a pretty good snapshot of your business and you can't run from it.
"An ATO portal, you can't fudge that."
Tru-Flow Plumbing has grown to about 65 employees and now regularly supports community events and sporting teams.
Mr Ostrofski said the flow-on effect from the Cullens collapse continued; with his company cautiously accepting work from all new clients.
"Other builders get penalised because we start looking at them and say you know what boys, you stink like Cullen, we can't work for you," he said.
It was mid-2016 when Tru-Flow took on its first job with Cullens and things were looking positive.
"The building was going, they had all this work on so everyone said just relax," Mr Ostrofski said.
Then the rumours started.
"We heard one whisper, then you heard four," Mr Brassel said.
Cullens was going under but promised to pay Tru-Flow when the project was signed off.
The directors, who would usually hold-off on the certification until they were paid, took a gamble and signed off.
"He fooled us," Mr Ostrofski said.
"We gave him the paper out of goodwill and never got the money."
In the ten years since the directors founded Tru-Flow, the QBCC has transformed from an independent auditing agency to a self-certifiable one; meaning builders submit their finances to the QBCC, which then decides whether to audit.
"It's gotten worse," Mr Brassel said of the QBCC.
"If I rang QBCC and said someone owes me $10,000 they'd say, take it up with them."
The insurance on every building contract for Tru-Flow comes at a significant cost to the business.
It's a cost the directors are required to pay for a little piece of mind.
"Call it crystal ball stuff, the first cheque is our mortgage and second is the insurance," Mr Brassel said.
"That's why we're still here."