5 April 2024

Another Canberra builder goes to the wall as industry looks to government for relief

| Ian Bushnell
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render of development

Voyager Projects’ $57 million apartment and townhouse development in Googong. Image: DNA Architects.

Another Canberra builder has gone under, the second in two weeks to call in administrators.

According to ASIC, family-owned and operated Voyager Projects resolved last week to wind the company up and appointed Michael Slaven of Slaven Torline as liquidator.

Since 2010, the Naylor family’s Voyager Projects has been building residential developments, delivering commercial fit-outs and refurbishments, and managing projects in and around Canberra.

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Last year, it lodged plans with the Queanbeyan Palerang Regional Council for a $57 million, six-building residential complex of 138 dwellings in Googong, within walking distance of the future Town Centre.

It is not known how many projects may be affected and the liquidator has not issued any statement detailing the number of creditors or amount owed or responded to Region questions.

Voyager’s managing director is Peter Naylor, Brett Naylor is general manager and Aaron Naylor construction manager.

Company records show that sole directors and shareholders are Peter William Naylor and Julie Anne Naylor of Macarthur.

The company has not issued any statement, and its website has been taken down.

Voyager’s demise follows that of 50-year-old Project Coordination whose directors called in administrators after failing to secure finance despite a strong pipeline of work.

Project Coordination faced escalating labour, material and borrowing costs while working on fixed-price contracts.

Tighter lending policies have exacerbated the environment in which builders and developers are operating.

An ACT Government spokesperson said Chief Minister Andrew Barr would meet with Master Builder ACT representatives next week after CEO Michael Hopkins wrote to him on Tuesday requesting an urgent meeting.

The spokesperson said the best thing the government could do was provide certainty in the market by having a healthy pipeline of work.

However, on Friday, Mr Hopkins told Region that government regulation was not helping in the current challenging economic environment.

“Our industry is currently experiencing an unprecedented economic and regulatory environment, which is adding considerable stress to small local building and construction businesses,” he said.

“We have been reminding governments at all levels about the pressures being experienced by our industry since COVID lockdowns ended; however, we are concerned that the ACT Government’s reform program, which was determined before these conditions emerged, hasn’t responded to industry feedback.”

Mr Hopkins said one example was the new ACT security of payments laws, which commenced this month.

He said they were unworkable, out of step with other jurisdictions and introduced without industry consultation.

“Even the ACT Government’s own Directorates aren’t complying with new payment timeframes,” he said.

“Every new regulation adds cost, impacts productivity and adds to the stress that small local businesses are currently feeling.

“We hope that all governments will listen to our feedback and engage more closely with those businesses impacted by new regulations before they are finalised.”

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Mr Hopkins said ASIC data released this week showed that there has been a 54.5 per cent increase in ACT building and construction companies entering external administration over the year to February 2024.

“Every time a company enters administration it is the staff, subcontractors and suppliers who feel the most pain,” he said.

“Any subcontractor or supplier impacted by the most recent business closures should contact the administrators for guidance. The MBA will be assisting and supporting all of our members through this difficult trading period.”

The Property Council has also said that the proposed developer licensing bill, as it stands, would only worsen the industry’s situation.

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Capital Retro12:03 pm 25 Mar 24

Since pre-COVID times, the cost of building materials has generally doubled and some items are very difficult to procure. Steel and timber are the standout items.

A lot of builders have been caught out with fixed-price contracts they had entered into.

Interest rates are currently relatively cheap compared to periods when there were other “clusters” of building company failures.

Some very large builders have funded their operations off-shore so they are also exposed to currency risks.

Interesting times ahead, especially for Canberra.

I will be watching how this pans out with interest. It is not before time that banks are enforcing tighter lending practices on not only construction companies but those who take on more than they can chew. Businesses that become too greedy for their own good, borrowing more than they can afford and going into liquidation owing millions in debts. It was only just recently that two Canberra businesses, one in Braddon and another in Pialligo were trading and taking money for services not performed shortly before permanently closing their doors owing staff and customers many hundreds of thousands of dollars

Now another Canberra business in the construction industry has gone bankrupt calling in the administrators because of their shoddy business practices. With debts of millions of dollars which are unlikely ever to be repaid. Blaming the government for their own shortcomings and the laws which have been enacted to control their rampant and unscrupulous behaviour.

The serial offending building industry is now complaining about the Security of Payment Act amongst others and demanding an urgent meeting with Andrew Barr. This Act protects and provides a debt-recovery process for any person, company or subcontractor who is employed in the construction sector who has undertaken work or provided their services under a contract, ensuring they are paid on time and when payments become due. These are the small family businesses, the sparkies, brickies, carpenters, plumbers, concreters, scaffolders and many others who do work and are owed money which is unlikely to ever be repaid. Each state and territory have their own SOP’s to protect workers.

I hope Andrew Barr and his government stand firm. This includes strengthening our current laws even further to protect citizens from shoddy building practices and those who are owed money by unscrupulous and rogue companies who go bankrupt!

I’ve worked for a few commercial builders in Canberra, I’ve yet to see any of them leave money in the bank for a rainy day or in case a job goes bad. If a job makes a lot of money, the directors are pulling the cash out of the bank as dividends. I don’t feel sorry for them. These businesses go bust and the directors walk away untouched, all of their assets are in wifey’s name so their lifestyle continues. To a certain extent the subbies aren’t much better, some of them don’t even know how much they have left to claim on a job. They charge a huge hourly rate and leave a lot of defects behind. Having said that, I’m sure there are some builders out there who are not like this.

Capital Retro12:50 pm 25 Mar 24

Name me two builders in the latter group.

David Lee (David Lee)2:23 pm 24 Mar 24

Build the buildings to the Australian construction standards first. Defects everywhere. Less dispute, more profit.

Audrey Gilrain5:19 am 25 Mar 24

Completely agree. Every new build has so many issues and the builders just don’t respond to get them fixed.

Martin Keast1:23 pm 24 Mar 24

At a time when costs are surging, the ACT government is adding to costs and delays through regulations increasing. In addition to the ones mentioned here, the bushfire regulations have also greatly increased building costs through the compliance overhead rather than allowing people to make their own assessment of risks.

Audrey Gilrain5:22 am 25 Mar 24

There is a need for some specialist knowledge when assessing risk and its too easy, when looking somewhere to cut costs, to self assess risk as too low and then suffer the consequences later. If there was spot checking of self assessment it might work.

What a cop out. If builders were doing the right thing to begin with, then your argument might have some validity.

But the amount of horrendously shoddy output out there says they are clearly not. Regulation should be increased if the industry can’t do what it should be doing by default in the first place.

As Audrey said – very easy for self-assessment, especially in this sector, to lead to even worse outcomes on critical matters.

If the sector was doing the right thing, it would have some sympathy. But far too many by default don’t do the right thing.

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