Pavey Says Subcontractors Owed Millions is a 'Heartbreaking Story'

See Comments From Question Time

Pavey Says Subcontractors Owed Millions is a 'Heartbreaking Story'

A 'heartbreaking story', that is how NSW Roads and Maritime Minister Melinda Pavey described the situation that 23 small businesses on the Coffs Coast are faced with following the collapse of Ostwald Brothers.

The company was contracted by the Roads and Maritime Service to upgrade the Ballina to Woolgoolga section of the Pacific Highway, however went into liquidation in late 2017.

In late November, Triple M spoke with Jo Franklin, one of those left short from the collapse who said that subcontractors were owed more than $7 million.

"We're talking about mum and dad businesses, some of us are third generation earth movers who went into government contracts so we could have some protection" Ms Franklin told Moffee.

During Question Time in NSW State Parliament today, Ms Pavey said that it concerned her that many of the subcontractors had not signed up to the security of payments legislation.

She said, "It was of concern to me, that that said they feared that they might not get other work if they signed up to that".

Triple M received information last year that the matter had been raised with RMS in June last year, which Ms Franklin said in November was the reason for the investigation.

"The first time I spoke to Bob (RMS) and Melinda was at an RMS Industry event in Lismore" Ms Franklin said. 

When asking for help on the matter, she claims that her response from Bob Higgins was, "Subbies need to come to us earlier with what's happening".

The Roads and Maritime Minister said in Question Time that "it was some 5 to 8 months after Ostwald's had not paid, that it came to our attention in terms of government understanding there were issues. And as soon as that happened Ostwald's went into receivership".

While devastating for the families who are owed money, Ms Pavey said that government also need to keep the taxpayer in mind, and they are not a government that just throws money around like confetti.

"We have to be respectful of the taxpayer in every step of the process" Ms Pavey said.

"We want them to be paid, we have not walked away from these subcontractors".