Page 2762 - Week 10 - Tuesday, 14 August 1990
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PUBLIC WORKS CONTRACTING
Discussion of Matter of Public Importance
MR ACTING SPEAKER: I have received a letter from Mr Connolly proposing that a matter of public importance be submitted to the Assembly for discussion, namely:
The failure of the Government to properly manage public works contracting in the ACT.
MR CONNOLLY (3.21): Mr Acting Speaker, the matters to be raised in this matter of public importance this afternoon are of fundamental importance. They are of such importance that the Opposition has, this afternoon, decided to give them precedence over our overriding concerns on the fate of the education system in this Territory. The charge, as laid out in the matter of public importance, is the incompetence and mismanagement of public works contracting in this Territory. We say that the consequence of that incompetence and mismanagement is that up to $7m is owed subcontractors on public works contracts flowing from the R and G Shelley group collapse. We say that the cost of this incompetence and mismanagement will be disaster for many small subcontractors in the ACT and their families, and a body blow for the ACT building industry.
Mr Acting Speaker, the particulars of this matter are, in our argument, that the ACT Government, knowing of the financial position of the R and G Shelley group, continued to award contracts to that group and acted in such a manner as to encourage some contractors to continue to deal with Shelleys. We allege that the ACT Government, in its public statements and its conduct, in effect encouraged subcontractors to believe that the Shelley group was sound. We will say and we will prove that the ACT Government said that it would audit and investigate the conduct of Shelleys and it failed to do so.
Mr Acting Speaker, the R and G Shelley group was placed into provisional liquidation on 25 July 1990. At the time, Shelleys owed approximately $10m; $7m of that to unsecured subcontractors and trade creditors. From public statements its wind-up value, however, is expected to be only in the order of $3.4m. By the time the secured creditors, the Commissioner of Taxation and certain employee guarantees are paid, that means, in fact, that the $7m of debts owing to unsecured subcontractors will be met with a very paltry sum. The subcontractors will be looking at a 10 cents in the dollar return. At the time of the collapse Shelleys had some 23 contracts from the ACT Government valued at about $12m, with the cost of uncompleted work in the order of $4.3m.
Mr Acting Speaker, the tragedy of this matter is that the major losers will be the subcontractors who may receive, as I have said before, as little as 10 cents in the dollar for work already done. We hear a lot in public debate in Australia about the irresponsibility of unions. In
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