Page 956 - Week 03 - Thursday, 14 March 1991
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That type of insurance is well known in the community. It has been established by the Housing Industry Association through a consortium of underwriters to provide a degree of protection for home buyers in this Territory. That system works very well to the satisfaction of all concerned, and it is not particularly expensive. It is also of note that, where you have a major collapse like the Hunt Boilers situation, some people, of course, do have this form of insurance. It is not uncommon for some suppliers to arrange this type of insurance privately, and the head contractor is often unaware of the fact that they are actually paying for this insurance by way of a slight mark-up on the goods, perhaps. In the Hunt Boilers dispute one of the major suppliers which was owed a considerable debt was, in fact, in the fortunate position of having this form of insurance, and it merely had to move to put the company into liquidation in order to be able to claim on that insurance contract.
So, this type of insurance is presently in the industry, privately arranged for the benefit of suppliers. The trade union movement is presently looking at the viability of privately arranging this for the benefit of individual subcontractors, but it would be a positive move for the Government to take the initiative here and look at requiring a form of compulsory insurance as a condition of getting public works contracts. Of course, that would lower the overall cost of this insurance to all concerned. A potential problem with individual subcontractors seeking to get this insurance is that the premiums could be fairly high, because the insurance industry would consider that perhaps it was only contractors at risk that would seek the insurance. If it was an industry standard and required as a matter of course, the premiums would inevitably be lower. As I say, it is a system that has been proven to be effective in the housing industry.
So, Mr Speaker, there are things that the Government can do to solve this problem. The Government is not helpless; it can act, and it must act. Mere assurances are not sufficient. We were told when Shelleys collapsed that it would not happen again, because we were told that the project management technique was far more efficient. We were told that there was a problem with simple contracts to provide work, because there was no control over who the subcontractors were and what occurred. We were told that, with project management, the project manager would parcel the job up into small segments to be performed by different subcontractors and would monitor the payments.
The circumstances of the Hunt Boilers dispute lead to a concern that that process is being subverted. What happened there was that, although it was a job ostensibly undertaken by way of project management, the project management consisted, in effect, of giving one contract to Hunt Boilers to do the whole job. In effect, it was a simple contract for building rather than a project management technique. Hunts then, itself being a
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