Scrutiny on WA Building Commissioner

Greg Roberts

There are calls for an investigation in to WA's Building Commission after it emerged it had failed to detect that Perth construction company BuiltonCorp was in financial trouble when it audited the group only weeks before it went bust.

Building Commissioner Peter Gow has confirmed the body audited Builton in November last year.

Work stopped on more than 100 home building sites around Perth when the company went into administration a fortnight ago, reportedly owing $33 million and leaving 38 staff unemployed and about 350 unsecured creditors.

"We had a look at them in November last year ... there was no indications they were in financial difficulty," Mr Gow told ABC radio.

"This has come as a bit of a rush for everyone."

Many creditors that attended a meeting last week are angry nothing was noticed and the commission has admitted it did not do a "comprehensive examination of the company's financial situation".

One of those, Anstey Cabinets owner Dennis te Wierik is owed about $1 million, has had to cut staff and his company is vulnerable. He said the commission should have greater power to take enforcement action including penalties against companies.

Labor's commerce and small business spokeswoman Kate Doust said she had been fielding complaints and trying to help frustrated subcontractors and home buyers/builders for years who had been unable to get the help they wanted from the Building Commission.

There had been repeated examples of WA building companies collapsing over the years, leaving subcontractors millions of dollars out of pocket and people with homes unbuilt, that the commission had not picked up on, she said.

Ms Doust said it was incredible that Mr Gow had said during a radio interview that social media and the press were key sources of information for the commission when trying to monitor the industry.

"I would have thought forensic accounting and auditing processes would be in place and they would be actually speaking to people in the industry," she said.

"Given the experiences we've had and the number of people coming to us, there does need to be a good look at how the commission functions and its structure.

"We need to have a look at the legislation and give it more teeth."

The commission's compliance director Sandy Randall defended its role, saying the body monitored the data bases of credit rating agencies in "real time, minute by minute".

"When a company falls in to cashflow problems it invariably happens very quickly," she said.