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Building Legislation Amendment Bill 2023 - Second Read Debate

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Cate Faehrmann
NSW Greens MP
19 October 2023

As The Greens spokesperson for building and fair trading, I support the Building Legislation Amendment Bill 2023. The bill amends the Home Building Act 1989, the Building Products (Safety) Act 2017, the Strata Schemes Management Act 2015, the Building and Development Certifiers Act 2018, and the Design and Building Practitioners Act 2020 to reduce defective building work, improve customer protection and increase the Building Commissioner's powers to address noncompliant or poor standards in the industry.

The bill is largely based on the findings of the Public Accountability Committee's report Further inquiry into the regulation of building standards. The Public Accountability Committee, chaired at the time by my former colleague Senator David Shoebridge, initiated an inquiry in July 2019 into the inadequacy of the building industry in this State. It focused on the role of private certification in protecting building standards; the adequacy of consumer protections, liability for defects and insurance; the role of strata committees in responding to building defects; flammable cladding on New South Wales buildings; and the degree to which the New South Wales Government had implemented the recommendations of past independent investigations of the building industry.

The Public Accountability Committee's first inquiry handed down two reports, one in 2019 and a second in 2020, and conducted a second inquiry into the regulation of building standards in 2022. The first report was released to inform parliamentary debate on the Design and Building Practitioners Bill 2019, which had been introduced during the course of the inquiry. Recommendations were made about the building regulatory framework, flammable cladding, insurance and the current licensing system for building tradespeople. The second report reiterated several findings of the first report and highlighted:

… the systemic issues plaguing the building and construction industry and the lack of regulation and oversight by the NSW Government.

The Public Accountability Committee's further inquiry into building standards was handed down in February 2022. Both inquiries highlighted the "devastating financial and emotional consequences that flow from building defects." While the Public Accountability Committee acknowledged some of the good work undertaken by the newly established Building Commissioner, it stated:

Further additions to a patchwork of legislation, continued division of responsibilities between multiple agencies, and lasting artificial demarcations between ministers' portfolios will only continue to undermine the government's own effectiveness improving in building standards and protecting consumers.

The bill goes some way in addressing the committee's concerns. It expands the powers of the Building Commissioner under the Home Building Act to overcome shortcomings in the commissioner's current remit of powers. That includes the powers to inspect buildings still under construction and to intervene without a complaint first being received by the commissioner's office. The latter situation is highlighted by the collapse of a Condell Park home in April of this year where the developer had had safety concerns raised about its other developments. However, as no complaint was made about the Condell Park property, the commissioner was unable to intervene.

The Greens support the expansion of the powers of the Building Commissioner and urge the Government to ensure that his office receives the additional resources needed for him to be the powerful watchdog he needs to be as soon as possible. Proposed changes to the Building Products (Safety) Act impose new obligations on persons in the building product supply chain to ensure that the quality of the products with which they engage. The Greens support that reform, which will go some way to removing dodgy building products from the supply chain and preventing them hitting the market.

The bill also introduces the option for decennial liability insurance as an alternative to strata building bonds or home building compensation. That is a 10-year insurance that is taken out to cover costs associated with serious defects and potential collapse of a building after completion. I understand that that is supported by stakeholders given the insurance costs to owners, which have gone up substantially over the past few years. The Greens support the shift to consumer protection, particularly regarding future owners, and note that more detailed legislation regarding decennial liability insurance has been floated by the Minister and will be coming to this place next year. We will look at that with interest. I note that in some countries like Egypt and France, decennial liability insurance is compulsory.

The amendments to the Building and Development Certifiers Act and the Design and Building Practitioners Act allow the commissioner to immediately suspend a building practitioner who is the subject of a show cause notice if the secretary is satisfied that there is, or is likely to be, a serious risk to public safety, consumers or businesses if the practitioner is allowed to continue work pending disciplinary action. The focus on consumer protection first is a welcome move. It is strongly supported by The Greens and, I am sure, by the people of New South Wales.

While I note that the Government has indicated that further reform will come next year, I reiterate that plenty more needs to be done in this space. We have seen the impact of unscrupulous and unethical developers who have gotten away with too much, for too long. It is not good enough that our laws have lacked appropriate checks and balances for so long. Let us remember it was up to this House to forensically examine the building industry through multiple inquiries and to ultimately recommend what was needed to clean it up. Stakeholders regularly raise concerns about the conduct of professionals. They want more to be done in terms of licences for tradespeople. That was a big issue during hearings of the Public Accountability Committee, and I certainly hope it will come in future reforms. As we debate this bill, a high-profile developer with lots of ruined and terribly unsafe buildings left in his wake is on the run as a wanted fugitive. I look forward to continuing to work with the Minister and the relevant stakeholders on those issues, and look forward to continuing this very important reform next year.

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Cate Faehrmann
NSW Greens MP
19 October 2023
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