Calls to reform outdated building contracts after many building firms collapse

The construction industry is facing a crisis caused by the collapse of several major building companies in recent months. Labor shortages and rising material prices were named as major factors of that collapse. However, there are also calls to reform current building contracts, which some industry experts say are out of date.

A builder works a on a construction site during lockdown due to the continuing spread of the coronavirus in Melbourne, Thursday, Aug. 6, 2020. Victoria state, Australia's coronavirus hot spot, announced on Monday that businesses will be closed and scaled down in a bid to curb the spread of the virus. (AP Photo/Andy Brownbill) Source: AP / Andy Brownbill/AP

The building industry has been hit in recent months, with the collapse of several major companies including one of Australia's largest building firms, Porter Davis.

It came just hours before infrastructure company Lloyd Group, which specialises in state and local government projects, also collapsed.

The collapse of Porter Davis left 1,700 properties in jeopardy across Victoria and Queensland, while the status of more than 50 projects under Lloyd Group remains unclear.

Data from the Australian Securities and Investments Commission ((ASIC)) shows so far in the financial year 2022 to 2023 there have been almost 1,500 ((1495)) companies in the construction sector that have been liquidated, under the management of curators, or administration.

This compares with a total of 1,284 for the entire financial year 2021-22.

A number of factors are to blame for repeated collapses, but what does it mean for those who have unfinished projects under this company?

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