An Australia-first licencing scheme that would crack down on developers avoiding debts and defect bills by requiring increased transparency is being considered by the ACT Government.
A resolution passed by the ACT Labor conference over the weekend called for the introduction of a developer licencing scheme, which would ascribe a number of conditions to developers working in Canberra. It would require developers to demonstrate they have the financial and operating capacity to fully complete proposed projects, including being able to address any defects that arise after construction is complete.
They would be required to disclose how developments are funded, making it more difficult for companies to go into liquidation in order to avoid debts, only to re-emerge as a new company — a practice commonly known as phoenixing and set up trust accounts to ensure contractors and subcontractors are still paid if a developer goes into liquidation.
The motion was brought by the CFMEU, whose ACT branch secretary, Jason O'Mara, said developers had thus far avoided the scrutiny placed on other parts of the industry.