Victoria’s Building Industry at a Crossroads 3

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Thursday, April 24th, 2014
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Back around the turn of the century, the domestic building industry in Victoria was gripped by massive upheaval as privatisation in 1997 was followed by the introduction of industry management in 2002.

Whilst many of these changes were billed at the time as enhancing consumer protection, in a number of areas they in fact largely had the opposite effect – witness, for example, the impact of Last Resort Warranty Insurance upon a significant number of builders and consumers.

Moreover, over time, these arrangements created a culture within the Building Commission that saw a gradual decline in standards of regulatory enforcement within our industry.

The extent of this was laid bare in the Victorian Ombudsman’s December 2012 report into the Victorian Building Commission, which found failures in the Commission’s inner workings including corruption, misuse of funds, inappropriate processes for builder registration, failure of governance and administration and questionable recruitment of staff.

In that report, not only did the Ombudsman conclude that the registration process for building practitioners had been poorly administered and that it was not possible to confirm that only those with the necessary and appropriate qualifications gained registration, he also found that:

  • For a fee, third parties are able to complete the application and supporting documentation on behalf of a building practitioner applicant.
  • Of 27 registration files reviewed by the Ombudsman’s office, the BPB had only sought to conduct a reference check of the building practitioner applicant on one occasion.
  • Former Registrar Peter Brilliant might have placed himself in a position of conflict by assisting applicants with the registration process.
  • In 90 per cent of applications, concerns had been noted in relation to the completeness of the Competency Assessor’s report.

To see the impact of this not just on builders but also ordinary Victorians seeking to engage contractors for construction and renovation work, one only has to look at the cost and duration of some of the disputes which have been dragged through the Victorian Civil Appeals Tribunal.

Worse, whilst the abolition of the Commission and its replacement with the Victorian Building Authority last year was billed as a fresh start, this process has been fraught with complications and setbacks. We at the BCA have not observed any material improvements in practices and continue to question the adequacy of the new arrangements to deliver the standards of regulation the industry and its consumers need and deserve.

Builders in the first instance and consumers ultimately fund every cent of compliance, consumer protection, and building industry management, and deserve much better than the current situation.

It is not rocket science. It is straightforward and can be delivered with a minimum of fuss.

To be done effectively, however, those who wish to manipulate the system for their own benefit must first be removed.

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3
  1. David Chandler

    Phil,
    Its great to see this discussion getting some ventilation. I have hundreds of photos of shoddy work done on Victorian school buildings during the BER program. Not only did these buildings cost too much they were often badly constructed. I could not believe that the project managers and certifiers just ticked the box the way they did. Some school building roofs were so bad they were not fit for purpose. When I physically inspected many of these and asked if the PM had been on the roof before acceptance the answer was no. This applied to brickwork, joinery and even factory built pre-fabs!
    In essence those builders claimed for work not performed in accordance with the contract. PM's and QS's certified their progress claims and so called independent certifiers ticked the box.
    Worse was the ineptitude of the Victorian plumbing Commission. I had to drag them out to sites to see this work. They then assured me that thinks would be made good, but their actions only lead to a patch up at best.
    In SA I was told that the diminishing quality of work was an industry wide issue and clients would just have to get used to an evolving "industry standard". I found affected clients did not have the metal to take this on, so it mostly got swept under the carpet. I know of no instance where a PM, QS or Certifier was held to account for delivering diminished value.
    In Victoria, SA and NSW the industry Associations did not have the integrity to call on their members to step up – they blamed the the program and shortage of trade skills. But they all readily accepted an economic stimulus that for many assured their survival during the GFC.
    Of further concern was the lack of Australian Standards to be found on building sites nationally. I only found one site manager with an appropriate set of standards who could tell me what the tolerances were for the work they were doing.
    The situation is national, its systemic and it will lead to building failures. Hopefully these will more of an inconvenience and not harm the public or their occupants. Unfortunately the risk of industry non-compliance finds its way into consumer insurance premiums and cost, rather than long overdue lancing at source. All the best with your airing of this subject.

    • Paul

      As consumers, we have been exposed to all of the above and as a consumer, nobody is listening to little old me. We don't have the hundreds of thousands of dollars or fortitude required to go the legal route which seldom results in effective prosecution. This industry emotionally and financially damages entire families. Ultimately diminishing financial security and well being. A rogue industry being supported at all costs and to hell with the collateral damage. Far reaching repercussions.

    • Wayne Carter

      Phil,
      Thanks for highlighting this conundrum that exists re home owners warranty. Apart from what you have noted above there is the lack of support from the self labelled industry voices that are weak on warranty & legal support often sought by the very members they claim to help. Legal support from the associations that represent their members is very fragile as I've found they support a book of law rather than the building professions bible being the BCA which is not representative to builders