The federal election in 2013 offers many opportunities to improve policy making relating to the building and construction industry.
If you haven’t decided who will win your vote in September, many in the industry will offer you plenty of opinions and some have formalised their list of recommendations for the new government that are worth considering if you are involved in the building and construction industry.
In a recent statement, Master Builders has asked the next Federal Government to look at making reforms in the following areas:
- Remove unnecessary and non-productive business regulations and reducing the compliance burden of remaining regulations
- Subject all new regulations impacting the building and construction industry to a transparent and rigorous cost-benefit analysis
- Simplify business tax compliance, recognise that inefficient collection and administration of taxes will distort economic decision-making, and divert resources which could otherwise be used more productively elsewhere
- Repeal reporting requirements for contractors in the building and construction industry which require them to make an annual report to the Australian Taxation Office (ATO) about payments made to other contractors in the industry
- Assist small businesses by reducing the broader complexity of the taxation system and the compliance costs of regulation, increase their ability to access debt and equity finance and do more to facilitate their participation in government procurement
- Reform the Environment Protection and Biodiversity Conservation (EPBC) Act by simplifying the approvals processes and removing the duplication between the Commonwealth and state and territory governments
- Work co-operatively with state and territory governments to identify and then eliminate within the next three years duplicative and/or inefficient carbon reduction and energy efficiency schemes
Time and money are the key issues business owners are considering. The more the government requires businesses to comply with new legislation, the greater the cost and inefficiency those businesses face. For large businesses, the extra cost of compliance may not be a great hindrance, but for the majority of businesses operating in the building and construction industries, changes in legislation come at a measurable cost, and it is more significant that most officials would suspect.
The Australian Productivity Commission made some observations and recommendations in a report (released in 2012), regarding the reduction of fees and government paperwork.
A summary of these points is below.
- Local governments impose a range of costs on businesses through regulation of building and construction activity, and a general drag on the economy through inefficient planning laws. In combination, these costs can have a material impact on building firms. The main costs imposed stem from:
– local governments mandating standards beyond those in the Building Code of Australia (BCA)
– delays in assessing and processing building applications
– conditions placed on construction site activity
– inspection regimes used to assess compliance for building and plumbing work
– often inconsistent fees and charges for assessing building applications.
- In terms of leading practices, a gateway model to vetting deviations from the BCA (similar to that used in Victoria, Queensland and Western Australia) lowers the risk of unnecessary compliance costs on business. Tasmania’s use of enforceable standards for construction site regulation similarly imposes the lowest compliance cost on business. Tasmanian local governments also had, on average, the lowest building application fees and among the fastest approval times of any state. Western Australia and South Australia had the most cost-effective and least onerous building inspection regimes.
- Adoption of leading practice approaches to the regulation of building and construction activity across jurisdictions could materially reduce building compliance costs.
- The main differences evident in 2010-11 involved the basis on which local governments set fees for building consent, the cost, breadth and frequency of inspections during the construction phase, the extent and substance of conditions placed on construction site management, and deviations from standards contained in the BCA (e.g. sustainable building design).
The compliance costs associated with these differences could be reduced by:
– introducing charging regimes for assessing building applications based on the time taken to efficiently conduct the assessment
– subjecting standards beyond those specified in the recently adopted National Construction Code to independent cost-benefit assessment before introduction
– implementing consistent state-based guidelines or enforceable standards in relation to construction site management
– moving to risk-based building and plumbing inspections
Given the consistency of feedback regarding issues in the building and construction industries, any new government will be unable to dispute the need for change. The will for change is another issue entirely and will require the industry to pursue a fair deal long after the election is over.