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Corruption, maladministration, scathing, and overspending are just a few of the terms the press used in connection with the Victorian Ombudsman’s report of December 2012 into the inner workings of the building industry regulator.

Of the 16 recommendations made by the Ombudsman in the report, 14 have been accepted/agreed to, with the two remaining recommendations flagged for further discussion.

In late November 2012, it was announced that the Building Commission, the Plumbing Industry Commission and the Architects Registration Board would be replaced by a new body called the Victorian Building Authority (VBA) that will streamline the governance for builders, plumbers and architects.

The VBA came into effect in July, 2013 with a corporate plan to deliver a trusted regulator, a respected industry, an informed community.

The VBA also aimed to:

  • create an accessible, transparent and responsive organisation that delivers public value through effective and efficient regulatory services, and
  • lead a contemporary approach to regulation of industries and professions

The Architects Registration Board was excluded from the new body at this very late stage even though they play a major role in terms of how the building process is undertaken and managed.

With these principles in mind, and applying the Auditor General's report (VAGO) of May 2015 which had very similar recommendations to the Ombudsman’s report, it's time to establish the VBA scorecard.

Recommendation 1: That the Practitioners Board reviews the registration process and develop minimum standards for qualifications and experience of applicants together with another four enhancements.

No change other than the BPB functions transferred to VBA on September 1, 2016.

Recommendation 2: Ensure that face-to-face interviews of applicants are audio recorded.

No change!

Recommendation 3: Conduct regular audits of the audio recordings of the face-to-face interviews.

No change!

Recommendation 4: Consider whether the Practitioners Board should meet more frequently than once a month to consider registration applications.

No change!

Recommendation 5: Develop a policy concerning the approval process for a registered training organisation, proposing qualifications to the Practitioners Board for the purpose of registration. This should include obtaining formal advice from the VRQA or its national equivalent to ensure that the courses offered are accredited.

Many RTOs feature building registration as their primary business with incredible claims of becoming a builder in a very short time. Even though this fact has been brought to the attention of the VBA with a list of the RTOs, nothing has changed.

The Age ran a major story in September 2016 on Intaj Khan who founded the Western Institute of Technology (WIT) in 2008 and has amassed a $70 million fortune in a few years. WIT claims to specialise in building courses for both local and international students from three campuses: Maidstone, South Melbourne and Dandenong.

No change!

Recommendation 6: Require that the assessment coordinator, competency assessors and the Registrar complete a conflict of interest declaration for each application considered.

No change!

Recommendation 7: Ensure that the Registrar is not involved in the assessment of applicants for registration. Multiple registrars have been used in the last three years, and the VBA fails to list any transparency in who is on the Qualification and Experience Review Committee (QERC).

No change!

Recommendation 8: Introduce tighter controls to ensure the integrity of practitioner registration applications.

No change!

Recommendation 9: Review all registration applications, which have been:

  • submitted by the Universal Technical Institute or Mr Syed Shah in light of this report Review its practice of providing:
    • hospitality including meals, and entertainment
    • sponsorship to external stakeholders, particularly those whom the Commission has a responsibility to regulate
    • general funding to external associations
    • approval under delegation by Mr Peter Brilliant, with an eye to taking appropriate action where practitioners have been registered without appropriate qualifications or experience.

On multiple occasions, the VBA failed to act or investigate unregistered practitioners. We can provide evidence of licensing via 457 visas and non-apprenticeship pathways. No outcomes have been published in terms of these recommendations.

Recommendation 10: Review its practice of providing:

  • hospitality including meals, and entertainment
  • sponsorship to external stakeholders, particularly those whom the Commission has a responsibility to regulate
  • general funding to external associations

No change!  No outcomes published in terms of these recommendations.

However the Annual report 2016 states there was:

  • $3.7 million spent on accommodation
  • $748,000 on staff related expenditure
  • $1.1 million on committee fees
  • $1.4 million on policy function
  • $1.3 million on technical contractors/panel members
  • $5.8 million on external staff

This equates to $14 million of external spending with no explanation or reports. This is on top of the $26 million of staff benefits and $3.5 million in general costs.

Recommendation 11: Seek an audited statement on how monies paid by the Commission to the Green Building Council of Australia and World Green Building Council since their inception have been spent.

No audited statement provided

Recommendation 12: Strengthen its recruitment practices by requiring successful applicants to:

  • undergo a criminal records and fingerprint checks
  • complete and sign a statutory declaration in relation to their background including any criminal history and antecedents, as well as whether they are, or have ever been, the subject of an investigation by a law enforcement agency or current/former employer.

Recruitment appears to have come exclusively from the public service in last 12 months, including those with little industry technical knowledge or prowess.

Recommendation 13: Review the criteria for investigator positions to ensure that appropriate emphasis is placed on investigative experience as well as technical knowledge/experience of the building/plumbing industry.

No effort has been made whatsoever to improve this position, as can be seen by the financial reports and amount of expenditure lost to technical contractors ($1.3 million) and external staff ($5.8 million).

Recommendation 14: Introduce specific training for investigators to ensure an adequate standard of technical knowledge.

Most of the experienced staff have been moved on and focus has shifted to a young inspectorate with little experience or industry knowledge

Recommendation 15: Review Mr F and Mr G’s suitability for continued employment with the Commission in light of this report.

Nothing published!

Recommendation 16: Review its human resources practices to ensure that executives do not receive payments upon their resignation or termination outside the entitlements set out in their employment contracts.

A temporary CEO received a golden handshake after only three months in the CEO role.

Although the VBA annual report shows funding for the multitude of ancillary boards under its watch, no reports exist apart from attendance records.

Beyond all that, there are plenty of other issues besetting the industry. Despite the fact that Victoria is recognised as leading the way in Australia’s management of non-compliant and non-conforming building products, VBA CEO Prue Digby has been quoted as saying she did not believe the high rate of cladding non-compliance proved that the regulator had failed.

In addition to stakeholder consultation on the reforms, the VBA continues a program of stakeholder meetings. Building and plumbing stakeholder reference groups have been established to ensure industry views inform the VBA’s decision-making and programs of work. Yet there are no reports on who the stakeholders are!

On page 14 of the VBA’s annual report, the organisation takes credit for its performance on the building industries permits and registrations, but how any of these figures are related to their performance is not explained.

Some conclusions on the shortfalls of the regulator can be drawn by looking at the figures. Of 110,000 building permits issued, only 341 sites were proactively inspected. Out of 1,405 building complaints received, 184 were followed up for investigation.

Plumbing under certificates of compliance regime had 368,043 lodged and 13,816 proactive audits. This was up from 2.2 per cent to 3.75 per cent, but still under the prescribed five per cent.

The annual report of operations clearly illustrates the VBA’s initial three-year plan has fallen well short and delivery dates are still listed well into the future.

The relationship between RTOs and the VBA working together to achieve acceptable outcomes is in complete conflict with industry demands to the VBA to intervene in the short courses and ensure applicants had skill sets matching the registration category they were seeking. Such demands were met with "it’s a national issue and we cant do anything about it."

After three years of the VBA, we have only seen proposed changes to the consumer protection components in the Act.

Nothing has been heard or seen of any other parts of the new Building Act.

The Building Confidence campaign aims to raise awareness of, and build confidence in, the VBA as a trusted regulator but it is still falling well short of the mark.

Conclusion

The VBA corporate plan back in July 2013 stated it would deliver a trusted regulator, a respected industry, an informed community.

Clearly these values have not been achieved, as we still see consumers being put on a merry-go-round of despair without any hope of a resolution or outcome while the recalcitrant so called builders/developers continue to inflict continuing damage to our industry and its integrity.

We find the spin and tokenism from the VBA to be offensive. There is a strong need to create an accessible, transparent and responsive organisation that delivers public value through effective and efficient regulatory services and secondly leads a contemporary approach to regulation of industries and professions.

Outcome: a dismal scorecard!

 
  • Recommendation #9 – I obtained, under FOI, a document that states 150 hand-picked RPB's were audited by PWC without the agreement of Vic Ombudsman and not the FULL audit as agreed. It is signed by Angela Jurjevic who was a manager at The DPCD, under Prue Digby. Digby is now the CEO at The VBA!!. Matthew Guy was Minister responsible for DPCD!

    Transparency? The corruption is pretty clear.

  • Well done Phil you are the last of the Mohicans who have worked tirelessly to try and make effective change for the last 2 decades. No doubt the thick skins of government & the lack of common sense by public servant bureaucrats with little right to be in our industry will not allow effective change. The cause & effect has smothered all of us long standing industry participants along with the misery it has brought to consumers who will never recover.
    Unless we can raise the public awareness that all the gob smacking high media profile building disasters are being caused by poor regulatory regime. We will continue to see new buildings catch fire, nearby houses fall into construction sites & pubs getting pulled down illegally. It is only going to get worse. At the moment it is like herding cats!!!
    The buck stops at one place – VBA

  • No surprises here. All they have done is change the name and rearrange the deck chairs. The appointment of Justin Madden as Deputy Chief Commissioner smacks of jobs for the boys, albeit one of Richard Wynne’s boys. There has not been any cultural change at the organisation and no real steps to address the recommendations from the Ombudsman’s report of December 2012.
    That VBA CEO Prue Digby has been quoted as saying she did not believe the high rate of cladding non-compliance proved that the regulator had failed simply confirms that there is no commitment to properly regulating the industry or addressing the very real problems that continue to beset the building industry.
    The culture of protecting the building industry and covering up will continue now that the Building Practitioners Board has been abolished and the responsibility of disciplining dodgy building practitioners now rests in the hands of the Victorian Building Authority alone. Those of us with first-hand experience of how the Building Practitioners Board and the Victorian Building Authority operate fear that the Victorian Building Authority will operate behind closed doors and no public information will be available regarding the many wolves in sheep’s clothing who will continue to operate with the VBA seal of approval. It will only be a matter of time before the VBA again removes the practitioner disciplinary register from the public domain, allowing cowboy builders and surveyors to operate with impunity.

  • Obviously there is no question that the VBA will have to lift its game.

    Builders and consumers alike deserve good strong regulation but it appears that this is not what we are getting.

  • Thank you Phil.

    It is a great article.

    I hope that our Government will take an urgent action now.

    3 years ago, in July 2013 the Chief Commissioner and Chair of the VBA Board Bill Kusznirczuk had promised that ‘’ The new VBA will improve consumer outcomes providing appropriate balance, fairness and independence, while also ensuring that disputes are resolved quickly, fairly and cost efficiently.”

    I and many of my friends had a bad experience with the Building Commission , we all hoped that the VBA will be different in implementing its functions, but in reality nothing has changed.

    I was abused, victimised and misled by the VBA.

    We( building consumers) hoped for the good regulator because Government promised us , but our hope gone.

  • With the audits, why is BCA D3 not considered?

  • Excellent article Phil. Your article patently shows why there is such a great need for DBI warranty insurance to be altered to First Resort as it was pre 2002… with the insurer acting as policeman; so that the government insurer bears the brunt of its insufficient checks of the qualifications, financial status and capabilities of the builders it insure. After 3 strikes the rogue builders will be de-registered.

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