Building Ministers around the country have agreed to adopt a national approach to solving the insurance crisis and to addressing deficiencies which have led to thousands of multi-residential towers throughout Australia being clad in flammable material.

During its meeting yesterday, the Building Ministers Forum (BMF) agreed to a adopt a national approach to implementing recommendations from the Building Confidence report written by former Secretary of the Department of Prime Minister and Cabinet Professor Peter Shergold and lawyer Bronwyn Weir which was handed to the BMF in February last year.

At the centre of the new approach will be the Australian Building Codes Board, whose mission will be recast to encapsulate current industry challenges, a communique which was issued following the meeting said.

An implementation team will be established within the ABCB to develop a national framework to guide the consistent implementation of recommendations from the Shergold Weir report as well as the design, construction and certification of complex buildings.

The Board will also be expanded to include greater representation from industry.

Whilst the Commonwealth would continue to facilitate, however, this will happen only on the understanding that the power and responsibility to regulate building matters continues to rest with states and territories.

States and territories will also bear responsibility for their own efforts to remediate and rectification buildings which are clad with flammable material.

Ministers also agreed to address the crisis in professional indemnity insurance, which has seen premiums for building professionals skyrocket and underwriters demand exclusions for items such as flammable cladding when offering policies.

An options paper will be developed in collaboration between Queensland and New South Wales and will be released for targeted consultation with insurers and the building industry.

This will set out a pathway for professional standards schemes and alternative insurance options.

Outcomes of the consultation will be reported back to the BMF by September.

The ministers called upon insurers to honour existing obligations and to lift exclusions on professional indemnity insurance.

In its communique, the BMF said a national approach was needed to deal with critical issues in the sector.

“Building Ministers agreed to a national approach to the implementation of the Building Confidence report,” the communique read.

“It was noted that many issues are historical and will continue to be addressed as the need arises. However, Ministers acknowledged the issues of the past won’t cripple the future of the sector and, to that end, Ministers committed to work together to build a stronger building and construction sector in Australia.”

Industry groups applauded the agreement.

“This is a very welcome and important step towards addressing issues around building regulation compliance and enforcement at a national level,” Ken Morrison, Chief Executive of the Property Council of Australia said.

“We are pleased that ministers have listened to the concerns of the building, construction, insurance and property industries about the inconsistent approach that has been taken to date, particularly on issues such as combustible cladding, as well as building standards and professional integrity.”

Morrison noted that much work remained especially around a consistent approach toward addressing cladding and insurance issues.

As for the ABCB, Morrison said the ABCB should be adequately funded to expand its capabilities and to ensure that its governance structure is fit for purpose with an expanding mandate.

Nevertheless, he said the ABCB was highly regarded and the move to adopt a national approach was a ‘big and welcome step’.

Master Builders Australia Chief Executive Officer Denita Warn agrees, albeit whilst stressing the urgency for implementation of the reforms and calling for a timetable for implementation of the reforms to be released as soon as possible.

“It’s a breakthrough that will lead to improved enforcement and compliance with building regulations and standards throughout the building supply chain,” Warn said.