Dodgy builders who rack up debts and re-emerge under new company names will be locked out of Tasmania’s construction industry under proposed new laws.
The state government has released draft legislation targeting “phoenixing” – the practice of building companies collapsing to avoid paying creditors, then starting again with a clean slate.
Small Business Minister Guy Barnett said the behaviour left consumers, subcontractors and workers unable to recover lost money.
“One of the key issues being addressed is phoenixing, where building companies unfairly avoid paying debts, only to reappear under a new name,” he said.
Under the Occupational Licensing Amendment Bill 2026, anyone who goes bankrupt – or who was a director, secretary or key decision-maker of a failed construction company – will be banned from holding a building licence for three years.
The exclusion applies to anyone in those roles at the time of insolvency or in the two years leading up to it.
Repeat offenders caught twice within five years will face a permanent ban.
Companies that hire excluded individuals will face fines of up to 400 penalty units, while banned individuals who remain in senior roles could be fined up to 200 penalty units.
The regulator will also gain new powers to publish the names, aliases and business addresses of excluded persons online.
Barnett said most builders did the right thing but a few bad actors caused significant harm.
“While Tasmania has a fantastic building industry with the vast majority of the industry doing the right thing, a small number of dodgy operators can cause major pain,” he said.
“Importantly these reforms are designed to ensure Tasmanians can have greater confidence in the integrity of the building industry.”
The bill will also remove disciplinary panels from the licensing system, giving the administrator direct power to take action against licence holders.
The changes will only apply to insolvencies that occur after the laws commence, meaning past failures will not trigger automatic bans.
Master Builders Tasmania (MBT) CEO Jenna Cairney said the organisation did not want to see a “wholesale copy and paste” of interstate models.
“These laws must be targeted, proportionate and fair,” she said.
“Illegal phoenixing hurts Tasmanians who want to build their dream and also drags our industry down as a whole. It’s got to end.”
The reform appears to have already won the support of Labor, so long as it “delivers real outcomes” for Tasmanians impacted by the practice.
“It has taken three years and three different ministers for the government to finally move. While the action is long overdue, it is better late than never,” shadow building and construction minister Shane Broad said.
“What matters now is making sure these measures actually deliver real protection for people who have been left exposed when builders collapse, walk away from projects or reappear under new company names.”
