In the past year alone, over 3,000 businesses in the building and construction industry have collapsed, and those are just the formal insolvencies. The real number, including informal restructures and business closures, is likely much higher.
Therefore we were delighted when the Master Builders Association asked us to present for their members, to help them better understand how to prepare for challenges ahead. This is Part 1 of a special three-part series, addressing the sharp rise in insolvency across the building and construction sector, and what you can do to better protect yourself, whether you are in the building and construction industry or just a small business owner in another industry… the advice is the same.
Most importantly, if you have any specific concerns, please reach out to us before it’s too late. With anything, preventative steps can help you get through these challenges. Asking for help when it’s all too late means the outcome will be very different, and probably not what you desire.
“Building and construction has always been a tough game—but right now, we’re seeing pressures we haven’t seen in decades. My goal with this series is to give business owners the tools to protect themselves, their families, and their teams before it’s too late.”
Liam Bailey
Managing Partner at O’Brien Palmer
Part 1 of 3: What’s Really Happening in your Business – And How to Protect Yourself
Building and construction traditionally accounts for around 15% of all insolvency events in Australia. Right now, that figure has surged to over 30%.
Why? A combination of:
- Fixed-price contracts against soaring material costs
- Supply chain issues
- Interest rate rises and finance stress
- Labour shortages
- Delays in payment from large developers
- Increasing government regulation
These issues don’t just cause cash flow headaches, they’re pushing viable businesses into formal insolvency every single week.
The Director Penalty Notice Trap
One of the most critical risks for company directors is the Director Penalty Notice (DPN) issued by the ATO.
🛠️ If your company fails to lodge PAYG, GST or Super statements within 3 months of their due date, you could become personally liable for the tax debt—even if you haven’t received the notice yet.
🛠️ These penalties can be issued years later and are increasingly being used as backdoor personal guarantees by the ATO.
🛠️ And once issued, they’re hard to reverse—especially if you haven’t lodged on time.
Your best protection? Always lodge your BAS and superannuation reports, even if you’re not in a position to pay the debt immediately. Lodging keeps options open, including restructuring or formal administration, without triggering personal liability.
The Industry Needs Support, Not Silence
When I recently spoke at an informal builder’s group, it was clear… too many people are struggling alone, afraid to speak up.
At O’Brien Palmer, we believe in early intervention, plain advice, and compassionate support. Our aim isn’t to liquidate businesses—it’s to save them wherever possible.
We’re here to be your sounding board, whether you’re already in distress or just want to make sure you’re on the right track.
📺 Watch Part 1 of the series now, and stay tuned for Parts 2 and 3 coming soon.
Need a second chance or just want to explore your options?
Contact Liam and the O’Brien Palmer team today.
📞 Need advice? Call us at (61) 2 9232 3322 for a confidential chat.
📩 Email us at: obp1@obp.com.au
At O’Brien Palmer, we’ve been receiving a lot of questions about Director Penalty Notices (DPNs) – and for good reason. A DPN can make directors personally liable for company tax debts, and ignoring one can have severe financial consequences.
The Australian Taxation Office (ATO) issued 26,702 DPN’s in the 23/24 financial year, a figure which is expected to significantly increase this year.
“If you receive a Director Penalty Notice, the worst thing you can do is ignore it. You have options, but the clock starts ticking the moment it’s issued, not when you receive it. That’s why taking immediate action is critical.”
Liam Bailey
Managing Partner at O’Brien Palmer
Here we explain what a DPN is, what it means for you as a director, and how to protect yourself from personal liability.
