The Australian Subcontractors Association has sent out a warning that slow, and non-payments, are seriously putting at risk the solvency of a number of small to medium sized construction businesses.
Louise Stewart of the Australian Subcontractors Association has said that:
“The root of all evil in the industry is chronic non-payment for jobs. Subcontractors that are small to medium businesses are suffering absolutely through eroded margins,”
Data from the Australian Securities and Investments Commission (ASIC) has shown that the construction sector has been one of the three sectors hardest hit by insolvencies over the past three years, with late payments and cashflow issues being some of the largest contributing factors.
According to ASIC’s 2017-18 report into corporate insolvencies, in the 2017-18 financial year construction companies made up 22 per cent of all businesses placed in external administration.
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