After the damaging Auditor-General’s Report of 2011 and the Ombudsman’s Report of 2012, there was much public comment on the disturbing revelations of failed governance and maladministration.
This forced a government response. The public officials were well prepared, and immediately after the release of the Ombudsman’s Report, Planning Minister Matthew Guy announced that oversight of the building industry would be reformed. The reality reveals that the ‘reform strategy’ was once again a misleading myth.
Much was promised in the campaign launch. Guy said there would be “a fresh start for building regulation.” The Building Commission would be gone and in its place, the Victorian Building Authority (VBA) would act as a “strong regulator.” Over the following months, we learned that there was a ‘Reform Strategy’ with the VBA to become a one-stop shop, responsible for everything: practitioner registration and discipline, regulation, enforcement, dispute resolution and even insurance.
Marketing was all positive, with Guy assuring confidence for consumers and the industry, improved registration processes, cultural change and strong governance, improved consumer protection and other benefits. Under the VBA, Guy committed to establishing “lines of accountability” that would be “transparent.” It sounded good.
An examination of the ‘strategy’ reveals, however, that there has been no real reform, if by reform we mean improvement. What we find is a marketing myth, an illusion of ‘reform,’ some changes, but no amelioration. Much like shifting chairs on the Titanic, there was a new name but the same people, strategies and consumers remain on the sinking ship. Unmasked, the ‘reforms,’ both implemented and planned, reveal an unchanged reality.
The Victorian Building Authority
The VBA is the new name for the old Building Commission. Re-branded, the VBA has grown in size, but beneath the surface little has changed. Most new senior officials of the VBA have come from similar backgrounds to those who left the Commission. In charge as chief executive officer is a senior official who designed and directed the Commission’s failed regulatory and governance systems. Surely common sense would dictate that any new staff enmeshed with the former so-called ‘regulator’ should have been entirely independent of and unconnected with the blighted Building Commission.
Guy promised cultural change, but consumers’ experiences demonstrate that there has been no change either in the culture or the agency’s operations. One example is attempting to obtain information. For consumers, this is fraught with difficulty.
The VBA makes less information available than was released previously. Building Commission documents and records are no longer available on the VBA website or on the internet. Yes, it as if the Building Commission never existed! Let us say that you wanted to become informed and read a back issue of the Commission’s Inform magazine, you can neither obtain it nor read it, nor become informed.
Additionally, what is on the VBA website is very limited. Where there is information, it is often incomplete, missing the most critical details. For example, a consumer may be considering engaging a building inspector. On the VBA website, you can look up ‘building inspector’ but there is no reference to the Building Act requirement that a building inspector must be registered and qualified. The law states that building inspectors must be registered, but there has been no enforcement. The reality is that there are hundreds of people currently claiming to be building inspectors, operating illegally, their conduct endorsed by the VBA whilst owners pay hundreds of thousands of dollars for worthless reports.
For 10 years, the Commission refused to stop this widespread illegal activity of false representation and under the VBA it continues unabated. Imagine the damage caused to consumers who pay for inspections and reports - sometimes as much as $20,000 - and they have been denied the opportunity to readily find this most basic information on the website of the putative ‘regulator.’ In reality, non-enforcement means that there really are no requirements. This make-believe ‘regulator’ makes a mockery of our laws and the touted ‘reforms.’ The cowboy practitioners are protected and the VBA has been complicit in enabling consumers to be robbed of their legal rights.
In relation to accessing information in the public interest, neither the VBA and Department of Transport Planning nor Local Infrastructure (DTPLI) have shown a willingness to give consumers access to documents. Over the last three years, the VBA and the DTPLI commissioned three reports, two on practitioner registration by Deloitte and PwC (costing $135,000), and one on slab heave. The VBA has withheld all three reports from those seeking access. This would suggest that the reports were very negative, but that does not entitle the public officials to hide such information. Consumers have a right to the facts and to be able to make informed choices.
Since the VBA has been operating as the ‘regulator’ for almost two years, let us review its performance. The Annual Report for 2013-2014 provides the scorecard. The CEO, Prue Digby informs us that the VBA’s core regulatory function is audits. So how many domestic builders, limited or unlimited were audited under Digby’s direction last year? From the look of things, not a one! There were 99 levy audits on building permits out of 164,000 Building Permits issued for $39 billion of building works; this is not only infinitesimal, but focused on collection of monies.
In other areas, how did the VBA compare in 2013-2014 to the Building Commission the previous year? For 2013-2014, the VBA carried out 70 fewer inspections and conducted 80 fewer investigations; with the Building Practitioners Board’s 53 inquiries and the VBA’s 28 prosecutions, the total number of building practitioners disciplined was 81, as compared to 136 under the Commission in 2012-2013.
As the number of registered building practitioners increased and the number of incompetent, unscrupulous offenders increased, the new VBA as the reformed ‘regulator’ decreased the minute number of audits, decreased the number of investigations and inspections, and the number of inquiries and prosecutions. Of 21,186 building practitioners registered, a mere 0.38 per cent were called to account last year. Put simply, 99.62 per cent of practitioners were free to act as they pleased without fear of sanction, for a near-zero probability of punishment! This performance comes as Digby states that the VBA is “working to become a better regulator.” These appear to be empty words, with the VBA’s performance seemingly in stark contradiction to its pledge to reform.
The VBA Mail of 13 May 2014 states: “The aim of the proposed reforms is to deliver improved consumer protection and oversight of building practitioners” and “the VBA will have responsibility for implementing the reforms.”
Yet with 46 more staff and a budget of $42 million to operate in 2013-2014 (80 per cent of this money paid by owners), the VBA has managed to deliver no improvement for consumers and to do less oversight of practitioners than its predecessor.
Consumers are not considered stakeholders by the VBA. They remain locked out of consultation and denied any representation, their rights and protection non-existent. It is therefore unsurprising that the mythical ‘reform’ has not become reality for consumers.