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NSW inquiry calls for building reform

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SYDNEY, Jan 28 AAP

January 28 2013, 11:19AM

A NSW government inquiry into the building sector has recommended construction trusts become mandatory for all projects valued at $1 million or more.

The reform is one of 44 recommended by Bruce Collins, QC, who led a three-month probe into the industry after a string of high-profile construction firms collapsed and left suppliers and sub-contractors out of pocket to the tune of $1 billion.

Mr Collins also called for the creation of a single statutory body, the NSW Building and Construction Authority.

Releasing the Collins report on Monday, Finance Minister Greg Pearce conceded there were "no easy solutions to the insolvency issue".

"We now need to carefully work through the reforms in consultation with (industry) stakeholders and the public," Mr Pearce said in a statement.

Other recommendations included in the report include the establishment of a licensing system for all commercial builders and contractors that would limit participation to projects that could demonstrate financial backing and licensed accreditation, as well as a strengthened security of payments scheme.

In February last year, building company Kell and Rigby announced it was closing its doors, leaving 500 workers without a job, and hundreds of associated businesses millions of dollars out of pocket.

In the same month, it emerged that Reed Construction was in financial difficulty and unable to pay millions of dollars to more than 50 subcontractors.

Two months later, St Hilliers Ararat, an arm of St Hilliers Construction, went into voluntary administration costing hundreds of jobs and leaving many sub-contractors unpaid.

The Collins report will be open for public consultation until February 21.