Victoria’s Building Regulation Failing Consumers: VAGO 3

Friday, May 29th, 2015
liked this article
Embed (expire April 30, 2017)
construction tools
FavoriteLoadingsave article

Building industry regulation in Victoria is failing to provide reasonable levels of consumer protection, with the current registration system being insufficient to ensure that registered builders were competent to perform their tasks or were of good character, a damning new report has said.

Unveiling its latest report, the Victorian Auditor-General’s Office found ‘critical weaknesses’ in the state’s consumer protection framework for building industry regulation, and said that critical agencies had ‘failed to take sufficient, timely action to address these issues,’.

In particular, the report found that:

  • The framework is overly complex, with multiple agencies responsible for different elements.
  • Deficiencies in the registration and discipline scheme for building practitioners means the system does not ensure that all practitioners who are registered are qualified, competent and of good character.
  • Current dispute resolution services, which consist of voluntary conciliation only with unenforceable outcomes, provide only minimal protection and meant that builders and consumers were often dragged through long and costly dispute resolution processes at the Victorian Civil Appeals Tribunal.
  • Oversight of building surveyors is deficient and monitoring and compliance activities do not at this stage provide assurance that domestic building construction complies with minimum standards.
  • Disciplinary sanctions against building practitioners and surveyors have not been effective: over 27 percent of building surveyors, for example, appeared at disciplinary enquiries more than once within the same year.
  • The ‘last resort’ domestic building insurance scheme is inefficient and provides only limited consumer protection.
  • Key agencies had failed to take timely action to address legitimate shortfalls and deficiencies within the system.

The report follows a number of other damning reports into regulation of the state’s building industry over recent years.

In 2011, a VAGO audit of building approval processes found as many as 96 per cent of building permits examined had not complied with minimum statutory building and safety standards, and that the then Building Commission had failed to develop a framework to monitor the effectiveness of the building control environment.

Twelve months later, a report by the Victorian Ombudsman found that the building practitioner registration process was riddled with conflicts of interest, lacked accountability, and was allowing practitioners who failed stages of the competency assessment to still progress and be granted registration.

Moreover, whilst the former Coalition government rushed through a botched reform process in 2013, there is widespread agreement within the sector that a number of weaknesses still remain.

Auditor General John Doyle said the report highlighted that many problems within the system had still not been addressed.

“I found that the existing framework does not adequately protect consumers and that there is a pressing need to improve consumer understanding of the system,” Doyle said.

“The practitioner registration system does not ensure that the only practitioners who are registered are qualified, competent and of good character, and the disciplinary system is not protecting consumers, as current sanctions are ineffective in deterring practitioner misconduct.”

Whilst critical weaknesses identified in previous reports had been well understood, Doyle said, ‘key agencies have failed to take sufficient, timely action to address these issues’.

“Successive governments have consistently and regularly received advice about potential legislative and policy improvements to the consumer protection framework,” he said.

“However, recently proposed reforms failed to fulsomely address all of the issues and have stalled, compounding the detriment faced by consumers. These issues now require urgent attention.

“While there is no doubt that legislative reform is needed, agencies and regulators have sometimes been too quick to point to the technical boundaries and limits of their responsibilities, and too slow to work together to ensure the existing consumer protection framework, flawed as it is, works as well as it can to protect consumers.”

The report details nine recommendations, which include that building practitioner and discipline regimes, regulatory arrangements and the Victoria Building Authority’s monitoring and compliance regimes be reviewed.

Doyle says the agencies had accepted VAGO’s recommendations and outlined actions to address them.

Master Builders Association of Victoria Chief Executive Officer Radley De Silva said a figure quoted in the report that 28 percent of all consumers who engaged tradespeople to help build or renovate a home were experiencing problems – many of poor workmanship – highlighted the lack of requirements for tradespeople to be registered provided they were working for a registered builder, an issue he said Master Builders had been talking about for years.

Whereas Queensland and New South Wales have around 50,000 and 40,000 registered tradespeople respectively, De Silva says Victoria has only 2,000.

“This means that there are unregistered tradespeople who are pouring the concrete of people’s homes, putting the bricks around their homes and putting the roof above their heads,” De Silva said.

“Unregistered tradespeople also operate knowing there is a low risk of government regulators turning up at their sites to check on their performance or compliance.

“It is not surprising therefore that there are high rates of poor workmanship being experienced. This is evidence of the need for a broader trades registration program in this State.”

FavoriteLoadingsave article


 characters available
*Please refer to our comment policy before submitting
  1. Russ. Jones

    The VAGO, report. I have read a small part of it and it seems that a lot of people I know don't whinge for something to do they all have had building work done to stages of poor workmanship. not done to specifications wrong materials used to cut costs inspections by council, consumer affairs, state govt. building dept. not done to the the specifications that they have put in place themselves. All been paid to do a JOB and not done it in a Workmanship like way. The people who payed for the work and there wages should be able to sign off on there reports before any payment is made. Russ. Jones.

  2. Anne Paten

    Mr De Silva refers to the 2011 Australian Consumer Survey and the 28% of owners who had problems with sub-standard workmanship. However, owners did not state that their complaints were about sub-contractors. For major building projects, the owners contract is with the builder and it builders who have the contractual obligations to build to minimum building and safety standards. Whilst there is room for improvement in training for the trades, the most deficient group are builders. They may be registered, but registration is meaningless as this latest VAGO Report has highlighted.

    In the CAV 'Consumer Market Experience Study' of 2011, 38% of Victorians suffered financial detriment in 2010 and this was in the billions of dollars. This is almost 4 in every 10 and it is not acceptable. This was 5 years ago and we know it is far higher now. It is time for us to stop the blame game and to act to achieve real change. W need builders to improve their skills and ethics. We need building performance and standards to improve drastically and all who breach the laws and regulations must be made accountable. Meaningful penalties are essential as punishment and to act as a deterrent to others.

  3. Mark Whitby

    Good article as usual Andrew,

    The short-cutting is definitely going on… but the builders (via their supervisors) sign off on these short-cuts… and they are registered. And when are we going to have a non-paper audit I wonder?