Our government agencies are always keen to show that they are up for a challenge when it comes to flexing statutory muscle, and there are few better headlines than this favourite: Fair Trading Hammers Dodgy Builders.

Every reputable builder and anxious homeowner will be cheering them on.

NSW Fair Trading claimed disciplinary action taken against 78 separate offenders of the Home Building Act 1989 had netted them just over $421,583 in fines between January and March this year, up from $275,244 in the previous quarter. It went on to quote the Fair Trading Commissioner, Rod Stowe as saying “Offences continuing to plague the home building industry include unlicensed contracting, demanding excessive deposits and failing to comply with rectification orders. While our investigators and complaint handling services can call dodgy builders to account, the best consumer defence is always thorough research. Check your builder’s bona fides online before any contract is signed or any money changes hand.”

Unfortunately, Fair Trading NSW and each one of the equivalent state and territory building licence regulators around Australia are fighting with one hand firmly tied behind their backs.

At first glance, the report would appear to be a good news story. If those quarterly figures are interpolated correctly, we could expect the annual report to total 312 prosecutions and collect almost $1.7 million in fines for offences by the time we hit December 2016. Yes, I know that’s far too simplistic. The story is meant to act as a deterrent and its strategic purpose is to attempt to reduce the incidence of future infringements. Just like capital punishment doesn’t actually stop heinous crimes being committed, it is a wholly discredited strategy.

Stowe’s own view that “Offences continue to plague the home building industry” merely confirms that the system itself is comprehensively flawed. Persons who aren’t trained or equipped with the necessary level of professional skills and requisite knowledge to manage complex building construction work aren’t going to be put off by the suggestion of a crackdown.

But there is a far worse problem now embedded in the system. Just like a rusty piece of N16 reinforcing bar that is progressively weakening and eventually failing the concrete structure, the rapid growth now undermining all builder licensing regulations is the accelerated training schemes to obtain builder qualifications where the situation is almost out of control. If NSW Fair Trading is basing its performance on catching ‘dodgy’ builders who perform ‘dodgy’ building work then I would strongly recommend that Commissioner Stowe had better start hiring many more investigators, lawyers and complaint handling staff because there is an avalanche of work heading their way.

The implementation of a functionally unregulated and open training market within the Vocational Education and Training sector has facilitated an enormous increase in the number of training providers that can call themselves ‘colleges’ or ‘institutes’ or any other assorted educational jargon they choose. Many will offer ‘fast track’ training delivery to issue a nationally recognised industry qualification to participants within a few hours, days or weeks of having them signed up.

The most virulent aspect of this particular market is the fact that the less time spent on delivering actual training and performing valid assessments, the more profitable it is for the business to operate. The logic would seem self evident and is anchored as historical fact that in order to train and assess people properly, it will cost more and take more time in order to provide them with significant and reliable levels of skill and knowledge. But that type of logic doesn’t fit with recent government thinking that has allowed such a systemic erosion of long held training standards to eventuate.

Unfortunately for Stowe and every consumer of home building work in NSW, the building construction training sector is extremely well targeted in this respect. The rise of ‘quickie brickie,’ ‘fast chippie’ and ‘instant builder’ qualifications is now deeply entrenched and heavily promoted by many private RTOs.

That’s because current regulations allow them to be conducted in this manner. The technical name given to the process is ‘Recognition of Prior Learning’ or ‘RPL.’ It basically means that any RTO can give you a qualification if you can convince their assessor that you have previously gained an acceptable level of ‘competence’ within the respective units or subject areas of the courses being offered. Put very simply, you pay them to ‘assess’ any previous ‘work’ experience. The ambiguities that currently exist within the national training package performance descriptors facilitate the acceptance of very low levels of demonstrated competency. This naturally generates a great potential for serious conflicts of interest to arise.

If, for example, an RTO required a very high degree of ‘evidence’ to convince them of the legitimacy of an applicant’s previous ‘experience’ combined with a stringent assessment which then resulted in, say, nine out of every 10 applicants being rejected after having paid several thousand dollars in fees, I strongly suspect that type of training provider would not be operating as an RTO business for very long due to a serious lack of clientele.

On the other hand, if the RTO’s applicants were quickly awarded a qualification based merely on the evidence of a few suspicious testimonials from unreliable sources combined with some mock-up photos of their work ‘participation’ and a lacklustre short quiz or two to fill any ‘gap’ training requirements, I suspect that particular type of RTO would be likely doing a brisk business in its promotion and use of RPL.

I have spoken with several people who are extremely reticent about how they obtained qualifications from private RTOs and have subsequently been issued a licence by NSW OFT. These people tell me they didn’t actually learn anything relating to the qualifications they were issued. One told me their ‘assessor’ was a visiting overseas backpacker who worked for the RTO. The assessor was neither qualified nor experienced in building construction and had absolutely zero knowledge of the local construction industry or any of the significant regulations pertaining to it. He was merely employed to collect the applicants’ fees and tick off the boxes on a standard form template to create a formal record that an RPL procedure had been carried out and that the assessment result had been determined with a ‘competent’ ticked in each related subject area.

And that is indeed all that the national VET regulator, ASQA, will require. The big problem is that the VET system is structured to allow this to happen. That backpacker need only have a TAE40110 Certificate IV in Training and Assessment qualification to perform the assessing task. He doesn’t need to know anything about building!

In another instance, a person who had completed a landscaping trade qualification wanted to obtain a builders licence. When he went to a private RTO advertising RPL to rapidly get a builders licence, they asked if he had laid bricks in his work as a landscaper. He said he occasionally did brick surrounds to gardens and some brick paving. That was apparently sufficient RPL ‘evidence’ for the RTO to tick off all competencies necessary for a Certificate III in Bricklaying qualification and over two thirds of the Certificate IV in Building qualification. It’s important to note that these two qualifications are used to obtain a full builders licence in NSW.

These guys obtained formal qualifications and subsequent licences within a ridiculously short period of time and without receiving any appropriate training. They are very much in the minority in terms of feeling that they should speak up. They know that they had simply paid for their qualifications instead of earning them. The overwhelming majority of allegedly ‘experienced’ building construction workers signing up to be processed through this flawed system will never be speaking out or making any complaints. It’s not necessarily the cheapest way to get qualified and subsequently get a licence, but it is very, very quick and way too easy. It is also absurdly wrong and it should be stopped.

Agencies such as NSW Fair Trading rely on the evidence of the applicant’s qualifications as demonstrating that they have been able to successfully complete an authentic course of training and pass an assessment within the vocational discipline in which they want to practice. They therefore depend on RTOs to only issue qualifications to persons who have actually learned and earned their qualification and not those that have simply paid for theirs. The system is skewed to provide many applicants with the latter outcome.

The issuance of an occupational licence is meant to be the most reliable indicator for consumer protection. With a deregulated training environment operating in such an unfettered manner, trade and post-trade training within the building construction sector has fast become a joke. The objectives of major professional and industry bodies such as the Australian Institute of Building and the Master Builders Association to try to lift the image of ‘building’ and ‘builders’ into a well respected and reliable occupational category populated by highly skilled and professional workers appears to have now been set back several decades.

Stowe’s advice to consumers to “Check your builder’s bona fides” is irrelevant when the qualifications that were used to obtain the builder’s licence were as ‘dodgy’ as the construction works those builders will be delivering to the consumers.

  • This article is light on data to support your claims. Not all tradies are dodgy, and not all RTO's are dodgy. If you have evidence of these dodgy private RTO's, you should report them. You haven't mentioned how the current award for building and construction apprentices encourages the 'slow down' of apprentice training via competency based wage progression. "RPL" has to be offered to students on request as per the ASQA standards. Not all RTO's 'tick & flick' this process, and this is the first time I have ever heard of a backpacker conduction training in the building and construction industry. Your article implies that because you have antidotal evidence the entire industry is under threat. In some states a separate certificate is awarded to apprentices who complete their trade and have their employers agree that the apprentice is industry competent. I would encourage customers to request these indenture papers. I would also encourage state licensing departments to critically review all their applications before they give someone a builders license, this is what they are for.

    • I never suggested that they were. In fact the traditional technical and further education training institutions for most trade and post trade courses that have operated throughout Australia for well over a century are highly reputable and valuable to industry. The reasons for this are many and varied but the fundamental one is that the TAFE business model never had a reliance on churning student numbers through their educational and training programs to course completion and the issuance of a nationally recognised qualification within the shortest time frame possible. That is precisely the operational business model for many private training providers, particularly those that run RPL strategies which are so loose as to be meaningless. You obviously don't keep up with the news of just how many of the private RTO's are currently being prosecuted but as with most enforcement procedure, the actions lag the events and the statistics really represent just the tip of the iceberg within the VET sector. I think you would find that all major political parties have agreed the system is a shambles in their electoral materials. If you think its that its working well then I suspect you might just have a vested interest in it.

  • Great to see fair trading finally step up its game – dodgy operators are a major problem for the industry not just in NSW but throughout Australia.

  • Brett, there are so many challenges confronting construction especially in the housing sector. There are so many statutory and compliance challenges that all seem to compete with each other, not to mention the variations to all of this as a result of Australia's federal system of governance. My sense is that construction has so many moving parts that all see a 'bandaid' solution for their 'part' – but that is unlikely to address the whole. A parts by parts strategy will no longer work in a modernising construction industry. I am following the developments in construction and in other industries as they transform to their modern future. To succeed these need to put the end customer 'value proposition' at the front of any strategy. At the heart of this will be re-imagining what the housing customer of the future will need and be realistically able to achieve. One size fits all will no longer apply in this thinking. Once some clarity emerges here then a fresh look at construction's value chain and how to best deliver a new value proposition becomes possible. I estimate that there are over 85 trade contractors (mostly self-organising) and suppliers to a typical dwelling in the current model. It is no wonder there is so much waste and dysfunction. This must translate into the systemic problems some of which Brett describes. A broader view of all of this would lead to understanding new more viable construction enterprise models and workflow/packaging. That will help define future skilling and risk/reward expectations. I see no government or regulator with any idea of this scenario. And, I see no industry association with a view on all of these issues may allow some of their members to make it to the other side of all this.

  • Last time I checked, the Australian Training Quality Authority had reported that around 75 percent of RTOs were unable to demonstrate compliance with the basic quality standard. I don't know what the situation is now.

    Whatever the figures are the number of unaccountable RTOs there are running around out there is extremely concerning.

  • Brett, you are absolutely correct and it is so good to hear your voice in highlighting the obvious failure of the credentialing 'system' and the pathetic process termed 'registration'. It is of course the same in Victoria (and across Australia), where 'building qualifications' are meaningless and 'registration' utterly worthless – this confirmed by the Vic Auditor-General as the case for 23 years in Victoria and also well documented in the Vic Ombudsman's report of 2012. A read of the Victorian Ombudsman's report provides all the evidence on how 'licences' are obtained – without sitting the test, failing the test, without ever even visiting a building site, without any reference check, etc. As you rightly state, deregulation – or no regulation – makes a mockery of any possibility of any 'consumer protection' and what we have is a scheme that is a scam. Underpinned by builder protection, this 'system' has delivered zero consumer protection and can only be described as a big fat consumer con!

    In relation to the OFT statistics, the 78 figure represents a minuscule number of offenders over a year. And if the OFT operates like its Vic counterpart, Consumer Affairs Victoria (CAV), you will find that none of these will have been REGISTERED! In Victoria, CAV only ever prosecutes the un-registered – and all those in the 'registered' flock are totally protected. Yes, as the 'con-sumer protection' agency, CAV acts to protect business interests. This is unsurprising given that CAV sits under the 'BUSINESS unit' of the so-called Department of Justice and Regulation – a Department that refuses to enforce compliance with building regulation and consequently its actions serve to deny any possibility of 'justice' for building consumers.

    • Thanks Anne. In light of the fact that the state agencies charged with 'protecting' consumers who are spending hundreds of millions of dollars on building works each year seem to think that their 'licencing' regimes are up to scratch when they clearly are not, could we expect a future collective action – run by Blackburns or similar legal firms – to be taken against the agencies as a reasonable proposition?

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