It’s the loophole letting construction companies get away with not paying out hundreds of millions of dollars.

Construction companies are being accused of declaring themselves insolvent to avoid paying their debts, including to subcontractors.

For example, around 50 building companies have collapsed since 2013 in Queensland alone, leaving unsecured creditors around $500 million out of pocket.

Construction expert David Chandler tells Chris Smith the companies are then giving false statements that they are paying their suppliers.

“We’ve got to start treating it as fraud,” Mr Chandler said.

“Last year, the construction industry had the highest number of insolvencies out of all industries in Australia.

“Over 1350 firms became insolvent. That leaves a lot of unpaid people in its wake.

“I would watch this space, because I don’t think it’s going to be a get-out-of-jail-free card as everybody thinks it’s been in the past.”

Chris says it’s as worthy of a Royal Commission as the conduct of the banks.

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Image: Joel Carrett / AAP