‘Hot Potato’ Policy Still Top Secret! 9

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Thursday, June 2nd, 2016
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Imagine that the most burning issue facing Australia today is not on the agenda for the upcoming federal election – again!

The issue is our flawed building policy. In political speak, it’s termed a ‘hot potato.’ Enjoying bi-partisan support for three decades, it has facilitated a framework for the building industry to construct an ever-increasing poorly built environment. However, this policy has been obscured from public view, with its consequences imperceptible to most consumers and the populace. In 2016, it continues ever more piping hot – and still classified as ‘top secret.’

By contrast, those who work in the industry – or in the offshoot ‘dispute industry’ – are acutely aware of this reprehensible policy and its resultant devastation, with Peter Mulherin designating the malaise an “industrial disease,” an apt description given its endemic nature. Appalling building industry practices, combined with decades of uniformly atrocious governance, have been thoroughly documented. As well, the destruction visited upon consumers has been quantitatively measured and authenticated in hundreds of reports.

Nevertheless, this remains a fiercely fiery issue, so potentially damaging politically that it has been forcibly and furtively filed away and forbidden from surfacing in public policy debate for two centuries!

An inconvenient truth

The most recent example of political contrivance may be the Senate Inquiry into ‘Non-conforming Building Products.’ Ostensibly set up to examine the extensive use and ramifications of non-conforming building products, and to make recommendations on solutions, the inquiry has now legitimately lapsed. Initially to report in October 2015, this was deferred, and when the Parliamentary double dissolution arrived early in May 2016, conveniently unseating the Senate Committee, no final report was written. One would have to question the timing of the election – most fortuitous for the major parties as the investigation into the building industry’s latest non-conformance calamity was discontinued.

Although an interim report was released in early May, if no new Senate Committee Inquiry is inaugurated, the damning evidence accumulated will remain ‘lawfully’ lost.

Instead of dealing with the revelations exposed by the inquiry, which would serve to exacerbate the already flaming hot policy, political expediency intervened with all disclosures validly vaporized.

The ‘hot potato’ parade

We could fill a book demonstrating the devastating effects of the ‘hot potato’ policy bucketing on our building parade. Suffice it here to highlight just a few of the menacing manifestations flagging Australia’s failed built environment.

Since 2013, 40,000 buildings across Australia have been identified as containing cheap, non-compliant electrical cabling. Today those in powerful positions remain impassively indifferent as residents in 22,000 of those buildings remain under threat of electrocution or fire.

Over the last 10 to 15 years, non-compliant cladding has been widely used on the exterior of buildings in Melbourne, Sydney, Brisbane and Perth. In the cladding audit conducted by the Victorian Building Authority (VBA Report May 2016), over 50 per cent of buildings were found to have non-compliant cladding – or no permit issued regarding external walls. The NSW Department of Planning and Environment is concerned that up to 2,500 buildings in the Greater Sydney region contain highly flammable cladding “notorious for causing towering infernos.” In other states, the exposure to harm from this cladding has not been ascertained – such complacency a sign of the government’s absolute defiance of their legal and moral obligations.

In 2015, the MFB expressed its serious concerns that 20,000 buildings in Melbourne may be non-compliant. In New South Wales, 85 per cent of new apartments are defective according to a 2012 University of NSW study, and whilst strata associations in Victoria do not have definitive data, their assessment is that it would be similar to NSW – 85 per cent.

Back in 2014, Victoria declared 4,300 cases of ‘slab heave.’ However, the VBA refused to release its report, obscuring the real extent of this problem. At the time, industry sources estimated the most plausible number to be 10,000 (cutting corners and cost-saving), but having continued unabated, now the number is probably much higher.

Recent findings in NSW indicate a higher proportion of defects in buildings constructed in the decade from 2002 to 2012. This is the same in Victoria, where statistics confirm building defects have caused an exponential increase in consumer detriment over the same period – dating from the introduction of Last Resort Insurance, indicative of an Australia-wide pattern.

In sunburnt NSW, there are now more house fires than bush fires! The number of house fires and fatalities ever-increasing, with 4,070 house fires across NSW in 2015, causing 17 deaths.

As if these issues of unabashed non-conformance are not enough, across the country we have a long list of non-compliant products in use – steel, glass, wood, asbestos, the list goes on. Governments’ collective response has been to employ duplicitous ploys to avoid any slivers of honesty, accountability or transparency. Consider the use of asbestos: banned in Australia in 2003, today it is still arriving in the country, and since 2008 there have been only two prosecutions! No enforcement means the industry considers it a joke, albeit a very sick one.

Non-compliance

An analysis of statistics from the ACCC and Product Safety Media Releases is shocking. To take one example: from 2010-2015, there were over 913,000 houses affected by faulty electrical products – this calculation based on only eight products! The very latest in the long line of unsafe products is the Thermomix – used in washing machines, electric blankets, toys and other products. There is varying efficacy in relation to recalls; about 60 per cent for Samsung washing machines (42 fires), down to 10 per cent for electric blankets. The ACCC recently stated that builders and electricians are ignoring recalls. No wonder, given that ‘regulators’ refuse to regulate.

The number of suppliers distributing non-compliant electrical appliances simply beggars belief, and many of the offenders are among Australia’s biggest companies. But without enforcement, or any penalty, or punishment as deterrence, none of the offenders will change their conduct.

Therefore, even in election mode, it is impossible for Australians to hazard a guess at the totality of hazardous building products or the high probability of harm facing them and their families. Ratified to stay under the radar, government policy has promoted censorship ‘in the public interest’ – basically buttressing the vested interests.

Election extravaganza

This election has seen the politicians out early on the hustings and as the extravaganza rocks on, the stakes are high, with those holding privileged positions of power afforded many opportunities and unrivalled rewards.

If we examine the broad brushstrokes, there is little difference between the major parties. Predictably, both are focusing on the economy, acknowledging the building industry is the key economic driver. Building is quintessentially about business and money-making!

Unfortunately, any dialogue on the real building policy is taboo. Thus for this election, the debate has been diverted to ‘housing affordability.’ This classic strategy designed as a distraction from the most critical issue and to terminate troubling matters – just like the lapsed Senate Inquiry in May 2016.

So with bipartite support, the public’s attention has been deflected away from building quality and safety, and the tragic consequences for consumers, and instead directed deliberation to house prices, thereby again negating any scrutiny of the shameful ‘hot spud’ policy from this election’s agenda.

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9
  1. Mark Whitby

    Great summary of our virtually out-of-control building industry Anne.

    The question is how do the carers in the industry get through to governments that there is a ginormous looming (poor quality workmanship) economic blight on the residential building industry.

    And I wonder how many more new home owners and the new apartment owners with decrepit homes and illegally clad towers will it take to get the message through to all governments.

    A small group of home owners hurt by the previous dispute system got the message through to the VIC government in the mid-1980's railing against the system where an arbitrator was appointed.

  2. Les Williams

    Consider the incestuous relationship between building regulators and peak industry groups. Consider also the methods used by the same groups to influence legislation all over Australia and is happening now. We had a senator in the old house that represented family values that had interests in building companies accused of selling rubbish houses to families and was an ex president of the HIA. Until the questionable influence of peak industry groups over state based legislation and industry regulators is exposed and they are held accountable this will continue unabated. The spectre of "legislation by donation" was highlighted by the 4 Corners TV program only one week ago. The issues you outline coupled with non-payment issues in the industry can only be CATEGORISED as very SERIOUS FRAUD.

  3. Brett Bates

    Excellent article Anne. Very detailed and well constructed (unlike much of our built environment!) expose of how our government failed miserably. We were well on the way to establishing a national occupational licensing scheme for builders after COAG initiatives recognised the absurd porosity of allowing states and territories to have vastly divergent licensing requirements. It would have put in place a far more stringent system of incrementally graded and categorised licences based on higher qualifications to dramatically reduce the number of shonky operators that can enter the system. States and territories shied away from it due to pressure from some disgraceful self interest of supposed industry associations and naturally the federal government of that time (Gillard) had its own self interest focused on other areas such as clinging to power. If its true that we get the governments we deserve then we must be atoning for some very serious sins of the past!

  4. Joel Nash

    Notwithstanding the well documented problems, I must say that the idea of this being 'the most burning issue facing Australia today' is just a little bit overblown.

    When coming to the election, most people really want to know about the big picture issues, such as the economy, health, education, refugees, law enforcement and so forth. Whilst built asset quality is important – and yes, there are serious problems which must be dealt with – it's certainly far from the only issue facing Australia today and indeed, there are many other issues which are also important. Think of healthcare, for example. Whilst the standards of healthcare throughout Australia are generally recognises as high from an international perspective, we still hear about very serious issues of malpractice which has massive impacts upon victims in that field – so building is not the only field in which problems occur.

    Also, we should recognise that built asset quality throughout Australia remains generally high by world standards. If you think built asset quality in Australia is bad, just look at in places like India, Egypt, Brazil and the like, where building collapses are common and construction of additional floors beyond what is allowed for within the approval documentation happens all the time. Compared to this, Australians should be thankful about the quality of the built environment that we do have.

    Also, even other developed countries have problems – witness the leaky homes debacle over several decades in New Zealand. Australia has problems and we mus deal with these, but let's just keep things in perspective.

  5. Lucy

    What a shame that this issue continues to be swept under the rug. Well done to Anne on highlighting very succinctly the taboo topic of our terrible building system. It's only a matter of time until it will be impossible to continue hiding the facts from the general public, but unfortunately it seems many thousands will have to be hurt financially, emotionally and physically before this happens.

  6. Russell Jones

    Hi. I think the quality problem started way back when AV. Jennings (hope memory right on that name) went from building house frames with stud centre's from 18 inch. stud centres to 24 inch.stud centres and Jennings were the biggest volume house builders.A Royal commission to support the master builders association, Old Man Grollo never had these problems he was a working man the lot now running the show have a bit of paper on the wall.The rot is so set in to protect the business \ companys that those who pay have there rights taken away by the self interests of those in control. R. Jones.

  7. Diarmuid Hannigan

    A long time ago Australian homes were built to Australian Standards using products that were made in Australian by Australian manufacturers that complied with Australian Standards. The Geni who inhabit the land in the clouds decided that the principals of free trade and economic rationalism would be a healthy pill for Australia.
    Australian bureaucracy has always been known for its laziness but as there was a buck in it they had an effective system for ensuring imported products that entered Australia sort of complied with Australian Standards.
    When the tariffs were removed Customs and Excise changed its name to Border Force and has lost sight of one of its major roles which is to ensure that imported building products that are used in our homes must comply with Australian Standards. This role protected Australian Industry and Australian Consumers.
    The Gods of Canberra forgot that its government departments have always been a lazy lot who avoid doing hard work and now because the people who Australian Consumers rely upon to protect their consumer rights are not doing their jobs we will inherit a disasterous legacy of faulty homes for years and years to come.
    Joel you must understand that your house is your home your home is where your family lives, it is also an Australian family`s main asset and Australian families who work hard to purchase their homes must be assured that they are safe to live in and are not built with sub standard products. Those families also need jobs and the industries that provide those jobs should be assured that they are competing on a level playing field which at present because of the laziness within the public service they are suffering..

  8. Anne Paten

    Joel you seem to have missed the point in relation to this issue. Building policy has never been on the political agenda for any election – BECAUSE it is too hot for the electorate. In other words the people, all of whom are Australian consumers and fund the multi trillion dollar industry, are not allowed the to know the truth, much less have any debate. This building industry causes the greatest financial detriment to consumers by far – much more than any other consumer market sector. Likely to be upwards of $30 Billion in Australia this year. That is too hot!
    Remember shelter is our most basic need and for most people it is their largest investment – but for around 50 per cent, their building disaster will not only cause enormous financial loss, it will ruin their lives forever. This is a burning issue – for the pollies and the people. The pollies just have to keep the truth hidden from the public and this is the role of the public officials that we the people pay!
    By the way, we are not supposed to be a third world country, and the building collapses in much of the third world are the result of natural disasters – but in Oz ours are all man-made! And you think that this is not something Australians would like to know and discuss? I am sure it is a horrible hottie!

    PS Many of our collapses do not make it into the media, especially in domestic building! Just one of the strategies to mask the reality from the ordinary folk!

  9. Beverley-Jane

    As long as we have politicians who prostitute themselves for votes instead of truly representing their communities, this issue will be allowed to fester and further contaminate the construction industry.
    Building between the 2002 – 2012 period Anne mentioned, we became victims of a dishonest and incompetent builder. Checking registration is a farce since far too many incompetent and dishonest conmen are repeatedly registered.
    Adding to the stress was over seven years of fighting for some form of justice via the toothless, disinterested regulators and so called consumer protection bodies who allow these conmen to proliferate. Justice we never received and time we will never get back.
    In response to Joel Nash's minimisation of this seriously detrimental issue, this industry and it's conduct directly affects many of the issues he considers more relevant; i.e. the economy, health, law enforcement etc. Building a home for your family, where you are making the biggest financial investment of your life, only to have that hope of security shattered by dishonesty and incompetence of so may in this industry, directly affects the economy, mental, physical and financial health and all too often law enforcement.
    Having lived in third world Africa and building three substantial homes there, I can assure you the construction sector, and their delivery in this country is substantially inferior which reinforces the worthlessness of the so called regulatory bodies who, along with politicians/ government, refuse to live up to their responsibilities.
    Time to stop the political and industry back scratching and earn their salaries legitimately by dealing with these serious issues by dumping them in the 'too hard basket'!