🧱 The Broken Construction Industry Business Model: Why We're Stuck in a Cycle of Failure
Australia’s broken construction industry is in crisis, defined by builder collapses, unpaid subcontractors, and a business model that punishes quality and rewards corner-cutting.
At Whywait Plumbing, we’ve seen this dysfunction firsthand. After three builders left us unpaid and unaccountable within four months, we decided to stop working with builders entirely. This blog explains why the construction model is broken, how it impacts everyone down the line, and why real reform is urgently needed.
🚨 What If the Whole System Is the Problem?
Construction failures have been attributed to delays, shortages, or bad luck for decades. However, a deeper examination reveals the true culprit: the industry’s deeply flawed business model. Urgent and immediate reform is needed to break this cycle of failure.
Despite being a $170 billion sector, Australian construction remains plagued by:
📉 Systemic budget blowouts
🏚️ Endemic quality failures
🏢 High-profile corporate collapses
🧱 Widespread subcontractor exploitation
😩 Chronic worker burnout and insolvency
Yet the industry continues to operate under outdated and harmful practices:
✅ Fixed-price contracts
💰 Lowest-cost tendering
⏱️ Compressed project timelines
💸 Razor-thin margins
🔍 This edition of Constructive Conversations pulls no punches because the stakes have never been higher based on insights by Dr Stephen Gardner.
⛏️ A Race to the Bottom: Why Cheapest Rarely Means Best
In Australia’s broken construction industry, success is often defined by one factor: price. Contracts are awarded to the lowest bidder, not the most capable. This has created a downward spiral:
💸 Builders take on projects with unsustainable margins
✂️ Corners are cut to maintain profitability
🧱 Subcontractors are pressured until they collapse
🚧 Defects increase, and trust erodes
😠 Clients end up disappointed and over budget
📌 The pursuit of low cost has ironically created a high-cost industry.
🔄 Projects Aren't Failing Randomly—They're Built to Fail
The Productivity Commission (2022) found that over 40% of major Australian infrastructure projects exceed their original budget by 20% or more. Why?
Because projects are structured to fail:
🧾 Underbidding to win
📉 Deliberate under-scoping during procurement
🏃 Insufficient time for design and planning
🎯 Shifting risk onto subcontractors and site teams
📌 “The industry doesn’t fail because people don’t care. It fails because they’re forced to work within a model that punishes care.” – Gardner, 2024
📦 The Myth of the "Fixed Price" Contract
Fixed-price contracts are often pitched to provide cost certainty. But in reality, they serve as a trap for builders:
📈 Builders absorb all material price inflation
🧾 Bear the cost of design changes and overruns
📉 Carry risk for scheduling and supply issues
✂️ Are incentivised to cut corners
🏚️ This model has driven collapses at companies like Probuild, PBS Building, and Porter Davis, often leaving subcontractors unpaid and clients stranded.
💥 The Human Cost: Burnout by Design
In this failing model, it’s not just projects that suffer—it’s people:
⏳ Impossible delivery timelines
🕐 Extended unpaid hours
😤 Blame for systemic issues pushed onto individuals
💔 The human cost of this broken system is immense. It’s not just projects that suffer—it’s people. Burnout, stress, and broken businesses are the actual casualties of this failing model.
📌 “The system is designed to extract maximum output until collapse—and then move on to the next body.” – Gardner, 2024
🛑 The Turning Point: Whywait Plumbing's Final Straw
At Whywait Plumbing, our decision to stop working for builders wasn’t sudden—it was forged through years of hard-earned experience. We’ve weathered multiple builder collapses and insolvencies, each one leaving a trail of unpaid invoices, increased bank overdraft fees, an increased mortgage on our home, updated personal bank guarantees and broken trust.
Time after time, we watched court-appointed receivers and liquidators strip what little remained, often pocketing excessive fees, while subcontractors like us were left with crumbs. We were “lucky” to recover five cents on the dollar on rare occasions. It became clear: the system doesn’t protect those who do the work—it exploits them.
The final straw occurred over ten years ago now when, within just four months between October and January, we experienced:
⚠️ Three builders going into liquidation
🔁 All three were back in operation almost immediately
🧾 No meaningful action from the QBCC, the regulatory body responsible for overseeing the Queensland building and construction industry.
We turned to the regulator for help, only to be told:
“We lack the resources to investigate.”
That was our moment of clarity. A broken model, enabled by weak oversight, was risking our business, our home and our family.
That was the final straw.
We realised the system isn’t just broken, but designed to allow this kind of abuse. Builders can collapse, discard their debts, and reboot, while subcontractors like us are left with the bill.
📌 This wasn’t a risk we were willing to take anymore.
We drew a line: No more working for builders.
💭 A Personal Realisation: The System My Father Wouldn't Recognise
After reading an article by Dr Stephen Gardner on LinkedIn, the final pieces clicked into place.
He described exactly what we were experiencing:
A broken system, sustained and manipulated by banks and risk transfer.
Reading a LinkedIn article by Dr Stephen Gardner titled “The Construction Industry’s Broken Business Model” crystallised this decision for me.
His words were a mirror to our reality. Brutally honest and painfully accurate, he described exactly what we had been living through.
📉 “The model is broken—and much of the rot starts with the banks.”
That resonated deeply.
I was born into this industry. My father, William Mays, was a genuine Master Builder of the old school. He was a craftsman, a man of his word, someone who valued:
🤝 Relationships over transactions
🏗️ Quality over speed
💼 Pride in every finished job
His way of doing business wasn’t just admirable—it was sustainable, human, and honourable.
Today’s industry?
Balance sheets, legal loopholes, and risk dumping rule it. My father wouldn’t recognise it—and wouldn’t survive it.
👉 This isn’t just a business risk anymore.
It’s a betrayal of the principles that once made construction a proud, reliable profession.
That way of building—the way I was raised to respect—is nearly extinct in today’s market.
🚫 Why Whywait Plumbing Doesn't Work for Builders
With 48 years of experience, Whywait Plumbing has seen the writing on the wall for the broken construction industry model that fails everyone.
We choose not to work for builders because:
💸 Builders operate with high insolvency risk
📉 Subcontractors like us are the last to be paid, if at all
⚠️ Fixed-price contracts increase our exposure, not our rewards
🛠️ We refuse to compromise on quality to stay solvent
Instead, we work directly with clients to guarantee:
📃 Transparent, fair contracts
💵 Predictable cash flow
🧰 Workmanship we’re proud to stand behind
😊 Healthy employees who love what they do
📌 At Whywait Plumbing, we’ve chosen integrity over illusion—and we believe that’s the only sustainable way forward.
💸 Bad Debts: When Highly Skilled Plumbers and Sparkies Become Easy Targets and Cannon Fodder
In today’s construction landscape, plumbers and electricians are increasingly treated as fair game for non-payment by builders and end consumers.
Here’s the brutal truth:
🧾 Many clients—builders and homeowners alike—know there’s little risk in refusing to pay.
⚖️ The cost, complexity, and time involved in chasing small-to-medium debts mean many businesses simply walk away.
🛑 The QBCC has become a passive enabler instead of protecting building trade businesses.
Friends, online forums, or even consultants often tell consumers that “you don’t need to pay until you’re completely satisfied,” weaponising subjectivity as a stall tactic—even when the work is fully completed and compliant. The reality is these consumers will never be satisfied as they’ve learnt to work the system.
And when trades try to enforce payment?
📬 They’re met with silence, excuses, or trivial complaints filed with the QBCC to delay the process further.
🧑⚖️ Regulators rarely intervene meaningfully, often citing “lack of resources” or deeming it a “civil matter.”
This culture creates a green light for dishonesty, sending a clear message to consumers:
“If you want to avoid paying your plumber or electrician, you probably can—and no one will stop you.”
It’s a system that not only fails to uphold contracts but actually rewards those who exploit the skilled tradesmen they rely on.
📌 At Whywait Plumbing, we’ve seen this pattern play out too many times. It’s one more reason we’ve restructured our business to work directly with clients who value integrity and pay what’s agreed upon on time.
🧭 The Way Forward: Rebuilding the Model
Change is possible. If the Queensland Government is bold enough to admit the current model is broken.
Here’s what needs to happen:
🛑 End lowest-price tendering
Value-based procurement focusing on long-term value
🤝 Stop risk dumping
Collaborative contracts that fairly allocate risk
🏗️ Fund proper planning
Design and feasibility must come before construction.
👷♂️ Prioritise people
Protect worker health, safety, and compensation.
🔒 Protect subcontractors
Legally ring-fence deposits and improve payment laws
💡 Transform culture
It’s time to transform the construction industry’s culture from adversarial to collaborative at every level. This shift is not just desirable, it’s necessary for the industry’s survival.
🧨 Conclusion: Stop Blaming Builders—Blame the Model
Every time a builder collapses or a project fails, we act surprised.
But it’s not a bug. It’s a feature.
💥 The scandal isn’t the failure—it’s the fact that we keep pretending the system works.
It’s time to stop patching the cracks.
It’s time to demolish and rebuild the model on integrity, collaboration, and long-term thinking.
💧 Whywait Plumbing stands apart because we've learned from experience.
At Whywait Plumbing, we protect our business, employees, and clients because, in this industry, doing the right thing should never be a risky choice.
Our employees are our greatest asset. Without skilled, trusted employees, there is no business. And if we’re not committed to training for the future, then we’re accepting a future without one.
💬 What do you think? Are we finally ready to break the cycle? Or will the construction industry continue to burn through people and money—until there’s nothing left but rubble?
