BEECHWOOD HOMES
Page: 8325
Mr RICHARD AMERY: My question is to the Minister for Fair Trading. Will the Minister update the House on what action the Government is taking to assist consumers affected by the collapse of Beechwood Homes?
Ms LINDA BURNEY: I am profoundly aware of the stress that Beechwood home owners are experiencing while they await a resolution to this situation, particularly in this worsening weather. Beechwood's collapse on 13 May affected around 350 families whose homes are in various stages of construction in Sydney, the Hunter and the South Coast. A further 580 people paid Beechwood to draw up plans and lodge them with council. Tradespeople, suppliers and employees are among the other victims of this collapse. In fact, just before I came into the Chamber I was advised that a number of Beechwood employees might well receive termination notices today.
This terrible news for the staff and their families underlines the personal toll incurred when a major company such as this folds. I understand that more information about this issue will be available later today from the receiver. I will update the House on progress for the homeowners affected by this collapse. Since 13 May the Office of Fair Trading has been in frequent contact with the administrator, Armstrong Wily, the receivers and managers, Chris Campbell and David Lombe of Deloitte, and the insurer, Vero. I am receiving daily updates and I have regular meetings with all relevant parties. The Office of Fair Trading is doing everything in its power to protect the interests of homeowners.
The SPEAKER: Order! The Leader of the Opposition will resume his seat.
Ms LINDA BURNEY: While Fair Trading has no capacity to step inside a company in receivership, in my capacity as Minister we are asking the receiver to work as quickly as possible to achieve a positive outcome for all, including suppliers, tradespeople and employees. To date, more than 320 people have approached Fair Trading for advice about the Home Warranty Insurance Scheme and how the process will unfold in getting their homes completed. As I have said, this is a difficult and stressful time, but a process is underway and it is crucial that we let it run its course. We must also be methodical. The receiver is endeavouring to find a buyer, or buyers, to take over the building contracts. Expressions of interest were due on 23 May. There was considerable interest and a number of expressions of interest were accepted after the due date. Deloitte is working through the due diligence process as quickly as possible.
The SPEAKER: Order! There is still too much audible conversation in the Chamber. This is a very important matter.
Ms LINDA BURNEY: As I said earlier, expressions of interest were due on 23 May. Regardless of the outcome of that process, customers should immediately lodge an insurance claim with Vero. This will avoid delays should consumers need to fall back on their insurance. The current version of the Home Warranty Insurance Scheme was established in 2002. In recent weeks much of the criticism of the scheme has been ill informed and unhelpful. If a builder becomes insolvent consumers can recover their deposit, complete construction of a half-built home, or rectify defective work. Last night I met with senior representatives of the insurer Vero. They have written to Beechwood homeowners who have been in contact providing them with a claim form and a letter explaining what they should do. Claim forms are coming in at around 20 to 30 each day.
Homeowners who are worried about the potential for exposed building sites to be damaged have been advised by Vero that it will work with the receiver to gain access to sites so that adequate protection can be provided. Vero is also working with the receiver to complete a number of homes that are almost finished. This morning the receiver advised me that work has already resumed on 10 properties. I am advised that some families will move into their new homes by the end of the week.
I also advise the House that I have written to the Chairman of the Australian Securities and Investment Commission [ASIC] and suggested that the Beechwood collapse warrants further investigation. In particular, I have drawn the attention of ASIC to information that has recently come to light that one of the directors of the Beechwood companies ceased to be a director only two weeks prior to the collapse. Fair Trading has moved to prohibit Mr Larry King, Beechwood's owner, from being granted a further licence for three years. Once we receive the report from the administrator and receiver Fair Trading will determine whether further disciplinary action should be taken against Mr King and former directors. This situation has a way to go before it is resolved, but progress is being made. I am monitoring the situation on a day-to-day basis. I assure all affected parties that the Iemma Government will do, and is doing, everything it can to assist them through a very difficult time.