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Created Wed 5/02/2014, Last Updated Wed 5/02/2014

Liberal ‘mate’ collapses owing subbies $30 million

A builder who donated $200,000 to the Liberal Party last year has gone into administration owing sub-contractors and suppliers an estimated $30 million.

The collapse affects five building sites in Lindfield, St Leonards, Roseville and Gordon where apartment blocks are being constructed for developer, the Ralan Group.

The company’s collapse could have a domino effect on the sub-contractors involved with some of the small family businesses owed more than $2 million.

The Construction Forestry Mining and Energy Union NSW Construction Branch President Rita Mallia says it seems extraordinary that a builder can donate $200,000 to the Liberal Party - $150,000 of that directly to the NSW division - but not pay sub-contractors’ bills.

Mallia says it also puts a new perspective on the Liberal Premier Barry O’Farrell’s failure to move on the central recommendations of the Collins inquiry he established that called for mandatory trust funds for all developments projects over $1 million.

“This problem has now come to Premier O’Farrell’s doorstep,” says Mallia.

“A year after Bruce Collins QC made his recommendations on how to protect workers and sub-contractors caught in company collapses, the Government has yet to act on any major recommendations.

“Now we know why – the builders and developers who don’t want this legislation passed are lining the coffers of the Liberal Party.”

The collapse affects about 200 workers and their families who are also set to lose wages and entitlements as a result of Nolan’s failure to pay.

Steve Nolan Constructions had failed to pay sub-contractors on the sites for the past few months.

She says the Ralan Group is telling subbies to write off the money they are owed and they will pay them to just finish the job.

“It is morally corrupt for the Ralan Group to ask these family-owned businesses take a $2 million loss while it is sitting pretty to reap millions in profit from Sydney’s housing boom.

Mallia says the CFMEU is calling on the Ralan Group to pay the debts that are owed and local MP, Premier Barry O’Farrell, to step in and help these small business owners.

Anthony Maroun of the Earthworks Group is owed $2.5 million.

He says he is now working with accountants to keep his company going and is lucky he has work on other jobs to give him the cash flow to stay afloat.

“I was working up until last week and they kept promising the money was coming and in good faith I kept working,” he says.

“We definitely can’t write off $2.4 million.”