SHAME: Ian Witten from Kawana Hardware and Garden Centre says subbies get hit hard by major builders either failing to pay them on time or at all.
SHAME: Ian Witten from Kawana Hardware and Garden Centre says subbies get hit hard by major builders either failing to pay them on time or at all. Patrick Woods

'Meat in the sandwich': Supplier laments subbie squeeze

ONE of the Coast's longest running hardware suppliers says he feels for local subcontractors who have become the "meat in the sandwich" and forced into closure through no fault of their own.

Kawana Hardware and Garden Centre owner Ian Witten has been supplying local tradies for more than 20 years.

In that time he'd seen countless subcontractors go "to the wall" as a result of big builders either failing to or delaying making payments to the smaller operators.

"All the subbies seem to get squeezed all the time," Mr Witten said.

Speaking from their new premises at 12 Commerce Ave, Warana, having shifted from their prominent Nicklin Way location recently, Mr Witten said the squeeze kept everyone, including suppliers like him, under pressure.

"They're (subbies) in a no-win situation," he said.

Mr Witten said they currently had 389 tradies who operated accounts with his business, but that figure was constantly changing.

Ian Witten from Kawana Hardware and Garden Centre speaks about the damage he sees with subbies being hit hard by major builders not paying debts.
Ian Witten from Kawana Hardware and Garden Centre. Patrick Woods

He estimated they'd closed about 20 accounts in the last 12 months, either due to a lack of activity on the account or subcontractors going broke and being unable to pay their bills.

The accounts ranged in value, from $800 to $9000.

"Sometimes they come in and say 'I'm in trouble'," Mr Witten said.

"Once they stop answering the phone you know you're in trouble.

"You don't want to add it all up."

Mr Witten said they'd closed three or four accounts in November alone.

"Some of those are very nice people and they're doing their best and for whatever reason, they're going to the wall," he said.

"We're trying to get tighter down on them (accounts) now.

"It's hard. They're just the meat in the sandwich."

Mr Witten said it was difficult to say no to tradies when they sought products.

"What do you do? They need product to keep working," he said.

He said he'd heard of major builders waiting until days before they were due to pay subbies for work before picking out extremely minor defects or issues and forcing subbies to 'fix' the problem, in doing so delaying the payment.

He knew of one subbie recently who'd gone insolvent, but had been owed $1.2million in payments from builders.

"It's been like it for as long as I can remember," Mr Witten said.

For Mr Witten, at times the job means becoming part private eye and a strong trust in gut instinct was needed to know when to either open a line of credit or shut one down.

"The longer I've done it the less I know (how he's survived so long in the industry)," he said.

"You just try and trust your gut instinct on some of them."

He said one tradie who currently owed them $9000 was spotted on TV in Noosa, so they passed his details onto their debt collectors, who they turned to when other avenues failed.

Mr Witten a change of government and changes to negative gearing could stem the flow on new building in southern states.

When the construction industry slowed down south, he said it drove a new wave of subbies to the Coast who came here looking to make cash quickly, often forcing local tradies out of business.

Mr Witten said it was common for some southerners to open accounts with suppliers then leave with a debt.

From March1 this year project bank accounts were established on building and construction projects (excluding engineering projects) tendered by the State Government between $1million and $10million in value, as part of reforms made to better protect subbies.

The accounts were hoped to ensure subbies were paid on-time and retention and disputed money was protected, as was account money owed to them in the event of a contract termination or bankruptcy.

Following the successful roll-out of the project bank accounts on major public projects the model was to be applied to private sector projects worth more than $1million, but not before March1, 2019.