The Victorian head of one of the most influential building industry groups in Australia has launched a scathing attack on an overhaul of building regulation in his state, saying reforms have been introduced without genuine consultation and there has been ‘failure after failure’ on the part of the state government to recognise the importance of the industry.

Housing Industry Association (HIA) regional executive director for Victoria Gil King says the abolition of the Building Commission and far-reaching changes to consumer protection laws announced by the Victorian government in May are unnecessary and raise significant concerns for builders.

“While we will have to wait and see what the full impact of the changes will be, they will inevitably impose additional costs and red tape on the building industry across the state without any clear benefits for consumers or the industry,” King wrote in the HIA’s August edition of Building News.

“A number of the proposals suggest a lack of clear understanding of the industry, its engagement with clients and consumers and the impact on building costs of delays in the approval and construction stages.”

The central plank of the new reforms involves the abolition of the former Building Commission and creation of a new Victorian Building Authority which the government says will act as a one-stop-shop for building industry regulation. The reforms also include changes to domestic building insurance and building practitioner registration as well as an overhaul of the building permits system.

The changes follow a December 2011 report from the Victorian Auditor General which claimed 96 per cent of building permits issued in the state throughout 2010/11 did not meet building standards as well as a subsequent report from the Victorian Ombudsman which found the Commission lacked accountability and was failing to adequately discharge its functions.

Gil King

Gil King

King says these reports overstate problems and the subsequent reforms go too far. Findings of the Auditor General’s report, for example, were based on a sample of less than a quarter of one per cent of building permits issued over the year in question, he says.

“HIA does not believe the figure that ninety-plus per cent of buildings were at risk through the outcome of the auditor-general’s report” he said. “No one believes that figure. Not even the government believes that figure.”

“Yes, there are some issues, there are some cowboys out there, there are some things that need to be fixed. But do you need to pull down a whole regime in order to fix that? No.”

King says the reforms raise a number of concerns, including:

  • Uncertainty over the future role of Consumer Affairs Victoria and whether CAV or the new VBA will administer the Domestic Building Contracts Act
  • A new ‘show cause’ investigative model, which will place the onus on builders to demonstrate why they should not be prosecuted under administrative procedures
  • A new dispute resolution model which King says largely does away with judicial review in decision making
  • A lack of practical building industry experience on the recently announced board of the new VBA, though King stresses he is not criticising any individual board member personally

What irks King more than anything, however, is what he says has been a lack of genuine industry consultation surrounding the reforms.

“In the very first paper which came out, we provided our response, and we had no consultation after that – none,” he says, referring to the HIA’s submission to a discussion paper on consumer protection.

“There seems to be this view that if you talk to industry, you are somehow colluding with them. That’s not the case.”

“Unless they [the government] actually sit down with industry and negotiate and work through the major issues, it’s [the new reforms] going to be an absolute failure. It’s going to impact heavily on an already bleeding home building market.”