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Simon Croft

Chief Executive, Industry & Policy

Up for debate

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Inquiries, committees, the rise of the ‘expert’ and superficial reforms has industry caught up in a media maelstrom that’s eroding confidence in newly built buildings in the community.
For some time we’ve been opening newspapers or hearing and seeing significant media attention dedicated to the issue of building quality – or a perceived lack thereof – particularly for newly built apartments and so called ‘dodgy’ builders. Many media reports question the adequacy and independence of the current building certification framework, and have given voice to a growing list of industry ‘experts’ grandstanding on the state of non-compliance and the reasons why.

Politically, there appears to be a blame game being played out in the media at both the national and state government level. The debate has focused on who is responsible for creating the legacy problems of combustible cladding and defects, who should be funding rectification and what reforms are needed going forward. Yet the solutions being debated look to change the rules going forward more so than resolving these legacy problems. 

Over the past five years a growing list of inquiries and reports have proposed reforms, including, most notably, the Shergold and Weir Building Confidence Report. Insurers operating in a tighter global marketplace have also responded with significantly higher premiums and policy exclusions (and are separately advocating for changes which can regain their confidence). 

Unfortunately, this situation is causing substantial reputational damage to the building industry, and is eroding confidence in the quality and compliance of newly built buildings in the broader community. 

Common criticisms

The public debate cites a number of issues that are perceived to be the crux of the problem, including:

  • Private certification, independence, conflicts of interest, lack of inspections and commercial interests over public responsibility
  • Using the performance-based NCC to overcome  non-compliance and a lack of peer reviews during the process
  • Poor quality building products and misunderstood building products including combustible or flammable cladding, and poor practices
  • So called ‘dodgy’ builders, certifiers and developers
  • Unskilled and unregistered contractors and design experts such as engineers and building designers 
  • Lack of recourse for home or apartment owners when things go wrong
  • Building defects
  • Lack of government oversight and enforcement.

While each of these issues is part of the problem a deeper dive into the heart of the matter often reveals warped perceptions, theoretical criticisms or sweeping generalisations about the whole industry’s failing from one-off incidents.

Misleading mania

Melbourne’s Lacrosse apartment fire in November 2014, plus other building fire incidents that followed, brought the issue of flammable Aluminium Composite Panels (ACPs) to national attention. Ongoing investigations since have yet to determine the true number of buildings in Australia that may have incorrectly used this product. State governments have been responsible for auditing high-rise apartments and it appears that in many cases once the detailed audits are completed the number of buildings that require rectification work is much lower than initially estimated. In some instances buildings may be considered very low to nil risk with rectification unnecessary. 

More recently, the structural cracking occurring in the Opal Towers and Mascot Towers in Sydney has kept building quality concerns in the spotlight in a highly emotive way. These cases however are very isolated incidents for Australian buildings, and the individual circumstances for each should be judged on its merits rather than pointing to widespread industry non-compliance.

HIA is not downplaying issues of non-compliance or potential implications for non-compliant use of materials, such as cladding on a high-rise building, nor is HIA of the view we should accept non-compliances as being an acceptable part of our industry. But when you consider that on average Australia builds around 200,000 buildings per year, with the majority resulting in successful outcomes, then the notion of widespread non-compliance paints a misleading picture of the industry. HIA sees first-hand thousands of outstanding projects and innovation from members and businesses every year, in particular through the HIA Housing Awards, which is in direct opposition to the scenarios painted by certain sectors of the media. 

Recommended reforms should focus on practical and tangible improvements and not on reforms that only sound good on paper

Responding to the call for action 

Since the Lacrosse fire there has been a raft of actions by governments, but there has been limited alignment of the outcomes to ensure a nationally consistent approach is taken. A number of changes have been made to the NCC, new testing standards adopted, cladding ‘bans’ introduced, building product safety legislation implemented in Queensland and NSW, labelling standards published, state audits undertaken, and legislative reforms developed.

Most of the outcomes have proposed the usual ‘go to’ list, that is: mandatory licensing or CPD, more inspections, higher thresholds for licenses and insurance, prescription over performance-based design solutions, local government over private certification, and so forth. Some of these options may have merit and warrant consideration, but the question (and analysis) of why, for what purpose and how it will apply in practice, is too often an afterthought. 

Reforms rollout

The most substantial government-initiated review to date was the Building Confidence Report (BCR) released in 2018, prepared by Professor Peter Shergold and Bronwyn Weir. It contained 24 recommendations across licencing, CPD, insurance, engagement and conduct of building surveyors, codes of conduct, competency of practitioners, peer reviews, and the quality and accuracy of plans and specifications.

In 2019, the Building Ministers Forum (BMF) agreed to the implementation of the BCR, giving the ABCB responsibility for managing the reforms. The ABCB has now established a team responsible for developing and publicly reporting on a national framework for the consistent implementation of the recommendations.

The ABCB’s first order priorities will be:

  • CPD training on the NCC
  • Fire authorities in the design process
  • Building information database
  • Performance solutions documentation
  • Building manual
  • High risk building products (linked to the future of CodeMark)
  • Dictionary of terminology
  • Complex buildings.

In parallel with this work, the ABCB is also moving ahead with an out of cycle amendment to NCC 2019 addressing performance solutions, timber mid-rise buildings, early childcare centres in high-rise buildings and complex buildings. Several state governments have also started progressing recommendations of the BCR independent of the ABCB, including Western Australia, the ACT and NSW.

Watch and act

HIA is often consulted by state and federal governments for its input on proposed reforms and will continue to monitor and respond to any as they arise. The Australian building industry is already highly regulated and, generally speaking, HIA’s position is that industry would be better served by improving how the rules are explained and applied, rather than adding more regulations to the playbook. Recommended reforms should focus on practical and tangible improvements and not on reforms that only sound good on paper.
HIA will continue to engage with members in 2020 as reforms to address building quality are proposed nationally and by the states.