Opportunity Lost as the Wider Building Industry Suffers 3

Wednesday, October 15th, 2014
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The Victorian building industry is in turmoil and suffocating under a myriad of problems and issues brought about by years of abuse by leaders/regulators who prefer to bury issues rather than address them.

An example was presented only this week at a conference at The University of Melbourne where Professor Andrew Saint noted that many sub-par buildings are being built.

The commercial and domestic building sectors are under constant pressure to deliver buildings cheaper and this puts pressure on architects and draftsmen in all areas, including compliance. This flows onto the builders who strive to meet the developer’s demands by short-changing the building, leaving consumers with new properties that are non-compliant and which have many defects.

The ever-increasing permits being issued for apartments in both the domestic and commercial sectors, in the suburbs and on any site where high-rises will be accepted, often results in buildings that will be the subject of disputes and litigation for decades to come.

The Coalition has been speaking of change for years but it was an Auditor General’s investigation in November 2011 that uncovered a hotbed of collusion and corruption within the Building Commission and the regulators. This catapulted the Government into action that saw the Building Commission dismantled to be replaced by the Victorian Building Authority (VBA) followed by some 500 pages of new legislation which was developed and released. It travelled through the Parliamentary process only to be stalled at the last moment and now will not see the light of day in this Parliament.

The intended legislation promoted a vision of a One Stop Shop to dispense with the draconian Builders Warranty Insurance (BWI), which is hated by builders and consumers alike. It also called for the removal of all existing boards including the Practitioners Board and the New VBA, instead administering every aspect of the regime under the one umbrella that would promote transparency and return integrity to the industry.

This legislation can only be resurrected if the coalition is successful on November 29.

Since the introduction of the last resort Builders Warranty Insurance some 12 years ago, the building industry has been on a downhill slide. The compliance and regulation of the industry has availed itself of a soft hand approach that has led to many of the serious issues being continually swept under the carpet.

The VBA is the subject of what is now the third investigation by the Auditor General’s office. That investigation is currently under way and expected to be released in March next year. The terms of reference are taken from the VAGO website:

Victoria’s consumer protection framework for building construction, 2014–15

To assess the adequacy and effectiveness of consumer protection relating to building construction.

Consumer issues with building construction persist. Significant issues with aspects of builder registration and dispute resolution services are regularly raised by consumers, and problems commonly arise where builders may become insolvent. This audit will assess progress in implementing the Victorian Domestic Building Consumer Protection Reform Strategy and the effectiveness of reforms to the consumer protection framework. This will include examining the establishment of the Victorian Building Authority (VBA) and the extent to which it and other reforms, including changes to the Builders Warranty Insurance Scheme, have or are expected to improve consumer protection.

Proposed authorities:

While the political parties continue to dither and struggle with the issue of consumer protection and as of this time remain reluctant to issue a policy of any description, the trade associations are claiming victory in relation to the new reforms being stalled and suggest they may never see the light of day.

This position would suit the trade associations as their income stream would remain intact while the industry will continue on a path of delivering substandard property to many and place more consumers on the merry-go-round of misery brought about by a failed consumer protection policy.

While there are many good and responsible builders in our industry, it is unfortunate we only hear about the building disasters and there are far to many of them.

We need politicians/leaders who are brave, and can make bold choices!

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  1. Jarrod Maloy

    I like the last point about the fact that the majority of builders acting responsibly and in good faith. No doubt there are cowboys out there and their impact on consumers is terrible. But let's not hear only about the cowboys. Let's hear about the good honest builders and tradespeople who do the right thing every day.

  2. John Smolders

    Hi Phil,

    I couldn't agree with you more, well said.
    More builders should stand up and fight for our profession whilst our politicians dither. We have amongst us some great builders and they aught to be publicly recognised for the great work that they do but instead the media is awash with our second rate cousins who manage tarnish the entire reputation of our industry.

  3. Don

    If buildings were cars no-one would buy them:

    You write a cheque to purchase a $200,000 BMW, you expect quality.

    You write a cheque to purchase a $20,000 Hyundai, you expect quality.

    See where I'm going here..?