The Victorian domestic building industry is in crisis with disputes at an all-time high coupled with training at rock bottom, creating total misery for the participants of a dispute, and leaving the industry's reputation and its confidence in tatters.
In Victoria, there is no avenue to settle a dispute other than to enter the legal arena, which is fraught with danger, as the VCAT system has become so expensive it now has the ability to deliver financial ruin to many without satisfactorily resolving the dispute for either party.
The current dispute procedure is determined by the Domestic Building Insurance regime (DBI), better known as Builders Warranty Insurance (BWI). Back in 2002, VCAT was established as a means of self-representation that aimed to deliver cost effective dispute and resolution, but over time this concept has been captured by the legal profession and self-representation is a thing of the past.
This public policy failure has again become the focus of an investigation by the Victorian Auditor General, who will report to the Government this month. Keep in mind that this will be VAGO’s third investigation in this area and if its findings are similar to the 2011 report, we can expect this month’s findings to be more robust, and even more scathing of the regime that has been in place since 2002.
It is also hopeful their findings will expose why such a failed regime has remained in place over such a long period when it has been so blatantly obvious to so many in the industry that this is a failed policy and should have been removed long ago.
The change in 2002 to a Corporations act has enabled secrecy surrounding the performance of the builders warranty regime by those who support and sell the product, and without formal data to measure performance, Government have been loath to remove the controversial product as much scuttlebutt is spread by the supporters in terms of its benefit to consumers and the need for the industry to provide a safety net to consumers.
Those who support the retention of Builders Warranty Insurance are those select few who benefit financially from the regime without considering the consequences to the intended recipients (the consumers), the builders or the industry itself.
It is these few that have successfully stalled every Government attempt to reform the management of our industry and provide consumer protection that most might find acceptable.
This regime has enabled questionable builders to operate freely and without accountability, as is the case for many in the allied professions and those such as non-regulated building consultants and the like.
The era of genuine four-year apprenticeships appears to be lost to the competing registered training organisations (RTOs) that now offer the chance to become a builder for a dollar fee and a number of hours and it appears time on a building site is not a requirement to achieve licensing.
Many long-term builders are openly discouraging our young people from entering into a trade’s qualification in the building industry due to the risks and the draconian regime of Builders Warranty Insurance that sees the builder and his personal assets exposed to the extent he can be financially ruined overnight and his livelihood removed with the stroke of a pen.
Governments have a responsibility to ensure our industry is managed appropriately and they must not abrogate their responsibility to private enterprises that see the industry as a cash cow when elements are mandated.
Governments are beginning to address the issues as the failures are now at extreme levels with confidence at the lowest ebb in the building industry history.
When one considers that the building industry is the barometer of the nation’s fiscal performance, it is hard to believe we can sink to such levels of despair in terms of our consumers and our builders.
While the top volume builders find the current arrangements tolerable, the vast majority of silent registered builders that make up the registrar of builders despair in light of the current circumstances and are unable to speak out for fear of losing their ability to operate.
Governments must find the courage to embrace total reform and the strength to resist the outcry from those who would insist on the status quo that gives them hold over the builders of the industry.
The building industry must be returned to its once proud status, confidence must be restored to the wider industry and our young must be encouraged to enter a profession that was once held in esteem.
Enough is enough!