HOME BUILDING AMENDMENT (INSURANCE) BILL

[Debate resumed.]

Mr WEBB: Many builders in Queanbeyan, Cooma and Eden are experiencing building booms. Builders in Jindabyne and in the Snowy Mountains area must complete jobs prior to the onset of winter. Many companies—suppliers, subcontractors and people involved in the industry—are waiting for this Government to resolve these problems. Unfortunately, this legislation does not go far enough.

Mr McBRIDE (The Entrance) [10.33 p.m.]: I support the Home Building Amendment (Insurance) Bill. I commend the Government for implementing this legislation, which is part of a series of legislative packages to be implemented by the Government since the collapse of HIH. Last year, when HIH collapsed, there were three insurers in the building industry—Dexta, HIH and the Housing Insurance Association. HIH was the major insurer among those three insurance companies. It provided building insurance for builders, home owners and other people in the building industry. When HIH collapsed, the Australian Prudential Regulation Authority [APRA] was the body responsible for oversighting the insurance industry. The Minister responsible for APRA was Joe Hockey. At the last Federal election Minister Joe Hockey got the punt because he failed builders throughout Australia as a result of the collapse of HIH.

Minister Joe Hockey did nothing to alleviate the problems in the industry. He was an apologist for the Federal Government. He constantly appeared on television and in the media and said that somehow those problems were the responsibility of someone else. However, all honourable members would be aware that they were the responsibility of the Federal Government and Joe Hockey. Joe Hockey was responsible for APRA, which came within his portfolio responsibility, but he did nothing to correct those problems. Joe Hockey was not up to the job because he was incompetent. He was so incompetent that when the Federal Government was re-elected he was demoted from Cabinet and put into the second eleven. Joe Hockey, the Minister responsible for insurance companies in Australia, failed not only the people of New South Wales; he also failed the people of Australia. He was subsequently sacked and demoted by Prime Minister John Howard.

Mr Fraser: Point of order: The honourable member for The Entrance is referring to a Federal Minister and to insurance companies per se. We are debating legislation that deals with home warranty insurance. The incompetent State Government appointed two insurers—

Mr ACTING-SPEAKER (Mr Mills): Order! I have heard the debating points as well as the point of order. The House is debating the Home Building Amendment (Insurance) Bill. My recollection is that Federal Minister Hockey was involved in home building insurance. The honourable member for The Entrance is in order and he may proceed.

Mr McBRIDE: The Government introduced this legislation because of the collapse of HIH. The responsible authority was APRA. The Minister responsible for APRA was Joe Hockey. Because Joe Hockey embarrassed the Federal Government and the Prime Minister he was sacked after the last election and sent to the second eleven. This legislation was introduced because of the failure of the Federal Government and Joe Hockey, the Liberal Minister responsible for oversighting the insurance industry. Under the Constitution, responsibility for that industry comes under the auspices of the Federal Government. This Government acted responsibly after the collapse of HIH. The first issue that Minister Watkins dealt with following the collapse of HIH was the protection of home owners. This Government provided a guarantee for all those people who had defects associated with their properties.

The costs for those defects were picked up by the State Government. The Government protected ordinary home owners who had invested their life savings in their houses. The former Coalition Government did nothing to protect home owners. This Government did something to protect home owners, but members of the Opposition have the gall to criticise it for its actions. Opposition members have done nothing. They are a good group of do nothings. At least the honourable member for Coffs Harbour does something—he lights fires—but all other Opposition members have done absolutely nothing. The Carr Government implemented the first stage of its rescue operations after the failure of Joe Hockey—a favoured Cabinet Minister in the Howard Government.

The second phase of this Government's initiatives involves builders. When builders wanted to obtain reinsurance they fell into the trap because the rules had been changed. After the collapse of the HIH there were only two insurers in the building industry. Insurance companies—good fellows that they are—changed the rules. They now require further capital injection. Companies without some sorts of guarantees, assets or capital cannot operate in the building industry. That change was made by the insurance industry; not by the State Government. Because of this reduction in the size of the market, insurance companies took the opportunity to squeeze builders. Private enterprise in the building industry is squeezing small building operators.

The State Government, under the former Minister the Hon. John Watkins, set up on-line computer workshops throughout the State that could access Dexta and HIH. Obviously, the honourable member knows nothing about this. That was not his interest then. He was not the shadow Treasurer then, it was someone else. Builders could attend the workshops, go on line and chase up their re-insurance. I attended a workshop on the Central Coast and talked with builders who had been struggling to get their re-insurance. They walked out of the workshop with re-insurance. They got it on the spot. Private insurance companies in Victoria, Dexta and HIH, were incapable of dealing with the matter. The State Government supplied public servants to work in their offices to process the forms because private industry did not have the capacity to do the job. We were doing our best to help builders get back into the industry and start building again. That was another phase of the operation.

The incompetence of a Liberal Cabinet Minister in the Howard Government means that we have had to pick up the pieces and do something about it. Why did not the Federal Government do something about it? The Federal Government has responsibility for the insurance industry; under the Constitution it is responsible for that industry. We are now dealing with the third phase of the operation. The first phase was to deal with home owners, protect them and guarantee their protection. The second phase was to deal with builders and get them re-insured. The third phase is the legislation. The bill makes provision for home owners to claim against their policy as a last resort, where the builder is dead, has disappeared or is insolvent. Insurance will cover structural defects for six years and non-structural work for two years. Claims relating to incompetent work will be limited to 20 per cent of the contract price for the work. The contract of insurance will include cover for such reasonable legal and other costs incurred by the claimant in seeking to recover from the contractor. Alternatively, indemnity schemes and other arrangements may be approved.

Finally, the bill contains an enabling provision under which, if appropriate, the Builders Insurance Guarantee Corporation may be used as a vehicle to administer any re-insurance or other arrangements that may be put in place by the Government. Last week I was speaking to a builder and noted that, in the building industry, a builder could operate as a $2 company. A builder did not have to have any assets or guarantees. A builder insured job by a job. But that situation changed and, as a result, builders are now required to have assets. I attended a meeting of more than 200 builders and spoke hypothetically about a successful builder who has had no problems and has been in the industry for 30 years. Why should he now be subjected to the same sorts of rules as those who are in small business? Why does he have to take out a guarantee? Anyone who has been in small business will know that, often, people have to take out a bank guarantee and put up their assets. That is what I had to do when I was in a small business. That was part of the business. But that was not required in the building industry.

Mr Piccoli: It is not the same thing.

Mr McBRIDE: It is the same thing. I worked in the building industry as well. I worked in both. This particular situation relating to insurance existed in the building industry. It was totally different to other areas of small business, in which I have also been involved.

Mr Piccoli: It is not professional indemnity insurance.

Mr McBRIDE: I can assure the honourable member that was the situation. Builders must recast how they run their businesses. It is as simple as that.

Mr Piccoli: It is the builders' fault now!

Mr McBRIDE: No, it is not the builders' fault. It is the fault of the private sector. It is the failure of HIH. We now have only two major insurers. Dexta fell over because Swiss Alliance would not reinsure. It is the private sector—the insurance industry—that needs to be brought to heel. Who is responsible for the regulation of the insurers industry? I thank members opposite for their help—yes, it is the Federal Government. The Federal Government oversights, regulates, enforces and should discipline the insurance industry.

Mr Ashton: That is in the Constitution.

Mr McBRIDE: It is in the Constitution. Thank you for your help for leading us back to the real responsibility in this issue. This is important legislation. It is another phase in dealing with this problem that was created by the incompetence and mismanagement of the Federal Minister responsible for the oversight of the insurance industry in Australia.

Mr PICCOLI (Murrumbidgee) [10.44 p.m.]: We have just seen another extraordinary performance from one of our Labor Party colleagues in this Parliament. When will he get it through his thick head that the problem is that the Labor Government has never done anything about it?

Mr McBride: Point of order: The honourable member used unparliamentary language. Would he like to withdraw or apologise?

Mr PICCOLI: To the point of order: I have plenty of evidence that the honourable member has a thick head. I am prepared to present it at any time he would like to see it.

Mr ACTING-SPEAKER (Mr Mills): Order! Is the honourable member for The Entrance requesting a withdrawal?

Mr McBride: That is right. I certainly am.

Mr ACTING-SPEAKER: I ask the honourable member for Murrumbidgee, in accordance with the standing orders, to withdraw.

Mr PICCOLI: I will withdraw it, just because it is late.

Mr ACTING-SPEAKER: Order! I advise the member for Murrumbidgee not to direct second-person remarks across the Chamber. If he refers to other members in the third person or by their correct titles he will find that the aggression is not so personal.

Mr PICCOLI: It is the very inaction of this State Government that has caused the crisis. If the honourable member does not think there is a crisis, and if he thinks the Government has solved the problem or has gone even some way to solving the problem, then he should get out there and ask a few builders. We have builders in the gallery with whom I had the pleasure of having dinner this evening who will tell the honourable member of their problems. They have been in contact with the Department of Fair Trading, the current Minister and the former Minister, as have many other builders in New South Wales, for a long time. I have had people coming to my office for more than two years complaining about this problem. If the Government believes, as the previous speaker said, that this problem has been even partially addressed and solved, it is completely mistaken.

It is typical of this State Government to try to foist any problem that arises on the Federal Government. Certainly, the Federal Government is involved in regulating insurance companies, but when the State Government mandates that a particular private industry must have insurance, surely the State Government must take some responsibility for the problems that causes. The fact that builders must have insurance to construct residential properties will cause significant problems. It will give insurance companies the upper hand. The system is uncompetitive. The State Government has not addressed all sorts of problems in the system. The Opposition will not oppose the bill. We certainly would not oppose anything the State Government is trying to do to rectify this problem, but this is seriously tinkering at the edges.

Aspects of the home owner warranty system must be changed to alleviate builders' problems. It is a problem for the builders and the people for whom they are building, be they wealthy clients building multistorey apartments or battlers building their first home. The Federal Government's first home grant scheme has been a great boon for what, at the time, was a struggling building industry. But this home owner warranty crisis has the potential, and has already started, to undermine the building industry. It is a very important industry in New South Wales that directly and indirectly employs a lot of people. The fillip the industry got from the first home owners grant is being lost.

Many builders, including those in the gallery this evening, have large businesses, large amounts of money in investments, and developments that are on hold because of this crisis. They are some of the thousands of builders who are unable to go about their daily work. It is a problem for building managers because they are the ones who have to put up their houses and assets as security. But it is also a problem for the tens of thousands of people that the building industry employs. If the Government thinks that the crisis will somehow be solved by one bill, it is sadly mistaken. The honourable member for The Entrance referred to builders who do not have assets. What about the young kid who has just finished his apprenticeship or has done a few years post apprenticeship and wants to start his own business? He will not have the $200,000, $300,000 or $500,000 worth of net assets that he will need to get a level of insurance that will enable him to operate a business.

Young builders in my electorate who have wanted to start their own business have been able to get insurance for work to the value of $30,000. These days $30,000 would be the cost of about half a renovation. The crisis is affecting large and small builders, the people who need to be fostered in the building industry so that it remains what it is today, a very important part of our economy. The State Government needs to take firm action to resolve the crisis. I am aware that builders have put plenty of proposals to the Government as to how the problem can be resolved or at least alleviated, and I am disappointed that the Minister has chosen to simply ignore the problem and has not put any significant proposals into effect so that the problem can be sorted out sooner rather than later.

As previous Opposition speakers said, the crisis is getting worse. If the current millions of dollars worth of developments do not go ahead, there will be more job losses in the industry and that will be very bad for home owners, investors, building managers and builders. For the honourable member for The Entrance to go on with a lot of hogwash about the crisis being sorted out and about it somehow being the responsibility of the Federal Government is to totally dismiss the role of the State Government. Home building insurance is mandated by the State Government. Under the legislation, builders must have home building insurance; they cannot do any building work without it. Therefore, the State Government has total responsibility for it. The communities of my electorate, such as Griffith and Leeton, which are developing quickly with a strong building industry, need that industry so they can continue to develop. Plenty of other builders in New South Wales are in the same situation. I plead with the State Government to take on board some of the suggestions that have been made and do something about this crisis immediately.

Mr FRASER (Coffs Harbour) [10.53 p.m.]: I wish to engage in a bit of a parish pumping with respect to this bill because of the importance of the building industry to the North Coast of New South Wales. What members opposite fail to accept—and I listened with amazement to the drivel that came from the honourable member for The Entrance—is that HIH Insurance did not go broke because of the home warranty insurance in New South Wales. It went broke because Minister Lo Po' licensed it to underwrite home warranty insurance without doing the appropriate probity checks she should have done. HIH was entrusted with home warranty insurance, a function that previously had been entrusted to the Building Services Corporation, which made a profit. The State Government saw the corporation as a hollow log, which it raided, and then entrusted private insurers with home warranty insurance without doing the appropriate probity checks. All this bill does is underwrite three insurance companies—Dexta, Royal and Sun Alliance, and Reward Insurance. It does not solve the underwriting problem in New South Wales.

Mr McManus: It is a Federal matter.

Mr FRASER: The Parliamentary Secretary says it is a Federal matter. It is not a Federal matter. The Government should go back to the previous scheme, which ran at a profit. It should review the planning processes and go back to having local government check that shonky builders do not build shonky houses. Insurers do not want to touch building insurance now because the due process of building approvals is not being followed in the way in which it was followed years ago. The Government needs to address the problem to ensure that insurance companies regard the risk as acceptable. The Parliamentary Secretary laughs. I am sure he does not realise that the crux of the New South Wales economy is the building industry. That industry provides jobs for many people. The construction of a house involves tilers, plumbers, electricians and so on, and then the purchase of soft furnishings, curtains, furniture, floor tiles, et cetera. The building industry is the engine of the New South Wales economy. We have had an incompetent Government under an incompetent Minister put insurance into the hands of an insurer that was not economically sound and could not meet the general insurance requirements, and the insurer went broke.

The Parliamentary Secretary said earlier that it is a Federal responsibility. Perhaps the insolvency of insurance companies is a Federal Government responsibility. However, it is the responsibility of the State Minister to ensure that insurers who are given a contract by the State Government to exclusively insure home owners warranty insurance are solvent. The Minister did not do that, and people across the State are now paying for the incompetence of this Government. The bill has been introduced at short notice, without proper consultation with the Opposition or the people of New South Wales. We cannot be sure that it will solve the problem. Indeed, I do not believe it will. It is a short-term underwriting fix. The Treasurer said he has a $700 million surplus, which will blow out to $1 billion with the GST revenue it is reaping from the Federal Government. The Government needs to underwrite the building industry, as it used to do with the Building Services Corporation. Then it needs to look at the shonky builders, commercial licences and the project home operators who are creating the problems in this State.

The Government can then look at the dinky-di, honest builders—as they are in my electorate—the ones who are good builders, so they can continue with their work if a claim is made against them. They are the ones who cannot feed their families or pay their bills at the moment. They are the ones who cannot work because the Government has let them down badly. Under Minister Lo Po', this Government allowed a shonky insurer to take on a risk that it could not underwrite—not because of the problems within home owners warranty insurance in this State but because of general problems.

The Government needs to wipe the slate clean and go back to the scheme that was in place previously. It needs to bring in regulations that will ensure that homes are completed properly and there are no claims, or that claims are extremely limited, so that builders, the tradesmen and craftsmen, can complete their jobs. The bill does not cover the unfortunate builders who cannot complete the jobs they have already started because they are the subject of insurance claims. On other occasions I have told the House about a Coffs Harbour resident who has to use ladders to get to the three different levels of her home. The builder was a shonk and did not finish the job properly, the insurance company did not accept the claim, and the builders who are now trying to complete the job cannot do so because they cannot get insurance.

There are other instances in my electorate where builders are able to do a job but they cannot get insurance. Dexta, Royal and Sun Alliance, and Reward Insurance constantly shift the bar. Companies in my electorate are being asked to put forward security that is more than the value of their jobs. According to the underwriting contract, if builders are insured for $2 million of work per year, once they complete a building and the warranty period expires, they cannot increase the insurance to cover $2.2 million worth of work for the year or even keep it at $2 million. The insurance companies insist on a total contract value. If the builders do $2 million worth of work in the first six months of the year, they cannot work for the next six months. This bill is not going to fix the problem. It is up to the Government to introduce legislation that will fix it. Whilst the Coalition will not oppose the bill, because it may provide some slight relief in the short term, I ask the Minister for Fair Trading to devise a scheme that will work and will give the industry some assurance for the future.

Mr HAZZARD (Wakehurst) [11.00 p.m.]: This bill will do very little to assist consumers or builders. We have to go back to 1996 to see where the problems originated. They started with the then Minister for Fair Trading, Faye Lo Po'. The then Minister, presumably on bad advice—because I cannot begin to imagine that she understood anything about the issues at all—effectively threw out the baby with the bathwater. The previous scheme, which was operating through the Building Services Corporation and prior to that the Builders Licensing Board, did have problems, but nowhere near the level of problems that have come about through the replacement scheme that Minister Lo Po' auspiced in 1996 and commenced in 1997. There were issues with the previous scheme. The Building Services Corporation had both a regulatory and an insurance role. There were failures and there were problems from the point of view of both the builders and the consumers.

Builders often complained that they were not given a fair shake by the corporation. Sometimes payments were made to consumers without proper and appropriate discussion with the builders. The result was that after money was paid out to consumers from the fund, the corporation would then seek to recover it from the builders. Often the builders were surprised that they were suddenly being asked to pay this money. On the other hand, consumers argued, quite properly, that they regularly did not get access to the funds, which were almost guarded by officers of the Building Services Corporation as if they were their own funds. There were problems with that scheme. But this scheme has been an unmitigated disaster. It has been a Faye Lo Po' special, much like she has managed to do with the Department of Community Services. She moved on from this disaster to create a new one.

This bill is a total let-down for builders and for consumers. In that sense, it is consistent with what has gone on in recent years. I am appalled at some of the provisions contained in the bill. For example, the bill provides that home building insurance contracts may limit liability for non-completion of building work to 20 per cent of the contract price or the work. Honourable members should think about what that means for consumers. This is a sop to the remaining few insurers just to keep them in the marketplace. They only stay in the market by the skin of their teeth and are certainly not interested in the consumers. The usual problem that occurs with a building contract is when a builder fails or when the work is not being done appropriately. Under the current scheme, consumers then instigate a claim to one of the private insurers. When and if the matter is dealt with and concluded, it may be necessary for the consumers to get another builder to do the work. Consumers often find that they cannot get another builder to give a quote for the work. If they manage to get a quote, they rarely manage to get a quote for the same amount that was reflected in the original contract.

In other words, if they had a contract worth $100,000 and $40,000 of the work has been done, they still have $60,000 worth of work to go. It is not a simple matter of getting another builder to do the balance of the work for $60,000. The new builder builds in a factor, usually a substantial factor because he is involved in what is already a tortured situation, and often that $60,000 worth of work turns into $100,000 or $120,000 worth of work. It is farcical that this bill provides that consumers will get only 20 per cent of the contract price. Consumers are not being considered at all in the formula. The Government has failed to look at the regulatory side. That is the key in the sense that poor builders who continue in the industry damage the industry for good builders. Builders of long repute and young builders who want to get into the industry will find that this bill will not markedly improve the situation. This bill is simply aimed at holding existing builders and the three remaining insurers—Royal Sun Alliance, Renewal and Dexta—for a short period of time. It is not an answer. It is a half-baked attempt to glue together a system that is in total chaos.

I shall recount a problem experienced by a couple of my constituents. They had a Henley Home built under a contract worth $130,000. When it was almost completed they discovered huge cracks in the slab. They made an application to their insurer, who told them that before it would even consider their application they had to get an engineer's report. The engineer's report cost them the best part of $10,000. Before they could even make a claim, it cost them 8 per cent on top of the contract. They wrongly thought that because they made an application to the insurer that the Department of Fair Trading would make a regulatory review of the builder's licence. It was only when they came to my office that we were able to clarify that the Department of Fair Trading was not doing anything about the builder's licence.

Henley Homes is famous for its incompetence. I believe it is now out of the New South Wales market. Although Henley Homes was a known disaster in the marketplace, the Department of Fair Trading was reluctant to bring regulatory proceedings against it. The current regulatory system is appalling. Yet this bill will do absolutely nothing to change that regulatory area. It will not help consumers by dealing more appropriately with builders so that good builders survive and bad builders are taken out of the equation. This bill is a continuation of the Government's failure. The Minister for Fair Trading is following in the footsteps of his predecessor, the current Minister for Community Services. She has gone from mucking up the consumer affairs portfolio to mucking up the Community Services portfolio. The Minister for Fair Trading has come from the Education portfolio to consumer affairs and has mucked up both. Unfortunately, the Ministers who have had responsibility for this legislation, whilst they are individually nice people, are totally incompetent in their portfolios.

Mr Aquilina: Don't be so patronising.

Mr HAZZARD: The Minister tells me not to be patronising. I do not wish to be patronising. I would like to say good things about him in a personal sense, but he is not doing a good job in the management of his portfolio, and he knows it. This is a half-baked bill that goes nowhere. As the Leader of the Opposition said earlier, it is a sad situation. It is a sad situation that the Minister cannot resolve it; it is a sad situation that the Minister for Community Services started it. We do not want consumers or builders to be left with this bill. We ask the Minister to get back to the drawing board and come up with a better scheme.

Mr AQUILINA (Riverstone—Minister for Land and Water Conservation, and Minister for Fair Trading) [11.09 p.m.], in reply: I thank all honourable members, both Government and Opposition, for their support for this legislation. It needs to be placed on the record that the Government is moving this legislation and the Opposition is firmly in support of it—although one might think otherwise after listening to the many comments that have been made tonight by various members of the Opposition. Curiously, one member of the Opposition has not contributed to this debate—the honourable member for Gosford. I find that curious because I thought his contribution in support of the legislation would have been the most genuine of all contributions from members opposite. On radio 2GO on 17 April he could not wait to swallow his corn flakes before commending the Government for what it was doing with this legislation. At 8.00 a.m. on 17 April on 2GO radio news, the honourable member for Gosford said:

The building industry is vital to the Central Coast. It's one of our major industries. And I welcome the decision by the government to provide some temporary assistance for builders and for consumers until more insurance can be brought back into the marketplace.

They are words spoken from the heart. They are words of great import, words that mean what they say, unlike many of the so-called pious comments we heard tonight. Many members opposite decided to give a history lesson on this topic. They made a somewhat blinkered attempt to recount what occurred in relation to home warranty insurance in this State. Having been a former history teacher I am well used to marking thousands of history papers in which young people—the honourable member for East Hills, also a former history teacher, is nodding—try to put forward a certain position and conveniently ignore relevant history and simply make points they think will support their views.

In this instance, members opposite rounded quite suddenly on the Minister for Community Services for her former role as Minister for Fair Trading in 1996. For the most part they neglected to say that it was the 1993 Dodd inquiry into the Building Services Corporation—the old government-backed scheme—which was initiated by the Fahey Coalition, that did away with the Building Services Corporation and led to the 1996 legislation. That inquiry found that the Building Services Corporation was in a no-win situation. Its role as both a third party expert in evaluating the cause and effect of damage and as an insurer was clearly a problem.

The Dodd report recommended a private sector insurance market. Let us remember the real facts. It was the Fahey Government that initiated the Dodd inquiry. It was the Fahey Government whose inquiry recommended a private sector insurance market in building operations. On 4 May 1994—curiously, before the election of the Carr Government—the Hon. Wendy Machin, then Minister for Consumer Affairs, long before the Hon. Faye Lo Po', said in relation to the Building Services Corporation:

Very few people in responding to the Dodd report raised strong objections to the private sector taking over this role, provided consumers were treated fairly by any new arrangements.

When the bill was introduced in 1996, there was bipartisan support. The Opposition supported the legislation. Now, with hindsight, six years later, members of the Opposition are saying they did a bad thing in supporting it on that occasion and in recommending, when they were in government, that the Building Services Corporation be done away with and that home warranty insurance go to the private sector. As may be expected, their attempts to provide a blinkered account of the history of this matter have backfired because there are those of us who do more thorough research and provide full histories, as is warranted in this case. We are attempting to provide the full story. The Opposition says it supports the legislation, but that it falls very short of what is required.

Mr Ashton: That is easy.

Mr AQUILINA: As the honourable member for East Hills just interjected, that is very easy to do. As always and as is typical, the Opposition is high on rhetoric but short on ideas and policy. It has squibbed out, saying that it will wait until the bill gets to the upper House before moving amendments. If the Opposition has a genuine alternative to the measures outlined in the bill, it should be honest and declare the details now. The truth is that it has no details and no understanding. All that members opposite have done today is to criticise, to nark, and to say they will not oppose the bill but will not really support it. They have no notion of how they would do anything different to rectify the situation.

The Opposition has not done its homework, it does not understand and it does not have the courage to declare its hand now. It is not helping consumers or builders in this State by not opposing, but at the same time criticising. It is a weak response. The Opposition is saying that the Government is negotiating with the insurers, that it is in the pocket of the insurers and that it is doing everything it can to make sure that the insurers survive, and that it has not consulted with consumers. Again, the Opposition is wrong. Again, it has a blinkered vision. The Opposition likes to look at things out of context, to look at individual matters rather than at the total picture.

I refer the Opposition to a number of things the Government has already done to assist consumers and builders. The Home Building Legislation Amendment Act was assented to on 17 July last year. The reforms contained in that Act significantly improved the level of protection for consumers. Those reforms were achieved by tightening the licensing system to exclude insolvent and unscrupulous traders, by speeding up the process for disqualifying incompetent or unfit persons, and by increasing penalties for unlicensed and uninsured work and for other offences.

The reforms also made the insurance scheme fairer and more accountable and established an early intervention dispute resolution system. Consumer awareness of remedies available when things go wrong was also raised by these reforms. To top it off, earlier this year the Opposition had the hide to make reference to the Victorian reforms, which were catching up to the New South Wales reforms of July last year. Again, this is a warped vision, a warped sense of history and a warped presentation from the Opposition, who once again purport to support this legislation but do only with so much criticism—criticism that is baseless. That is what the Government has done to support consumers.

In relation to builders, I refer the Opposition to various products that I introduced on 19 December last year. I introduced, for example, Builder Assist to help builders who were having problems obtaining home warranty insurance. That came out of my consultation with the building industry. Builder Assist was based on recommendations made by builders themselves. It related to the small number of builders struggling to get home warranty insurance in the wake of the collapse of HIH. The scheme was a practical way to help builders obtain the insurance they need to get on with the job. Financial advisers were chosen to work alongside builders to help them present their financial position to the insurance companies in the necessary format. That scheme was of great assistance and at the time the insurance industry complimented the Government on introducing that initiative. Also, the Government introduced Rapid Access Warranty, which was of benefit to sole traders and partnerships with a turnover of up to $1 million. This enabled those people to obtain insurance, in some cases within 24 hours—half of the Leader of the Opposition's much-acclaimed 48 hours.

A number of Opposition speakers referred to the difficulties experienced by young people wishing to get into the game. In my former position as the Minister for Education and Training I was at a loss to make sufficient positions available for the apprentice carpenters and builders who were graduating and wishing to join the rapidly increasing building industry. However, the Opposition now claims that young builders are now finding it difficult to get into the market and that the Government did nothing for them. On 19 December I introduced the New Builder Access program, which provided a pathway for young builders entering the industry. By using the New Builder Access facilities, builders could obtain fast insurance approvals on a project-by-project basis. This meant that younger builders did not need large sums of capital to get a foothold in the industry. Again I commend HIA Insurance Services, part of Aon Risk Services Australia Ltd, for developing these products in response to the industry's needs.

The Government recognises a problem, consults with the people concerned, accepts suggestions and acts to bring about resolution to the problem, such as this legislation. The Leader of the Opposition and other Opposition members referred to the Government's gall in ensuring that builders of high-rise buildings were able to keep taking out insurance. Reference was made to the fact that the Government was using government money as a backup, reinsurance for insurance companies in relation to high-rise buildings. Indeed, they made a number of comments concerning the Building Insurers Guarantee Corporation. The Leader of the Opposition said this was a way for the State Government to leave the State open to a liability of something like $600 million—a possible $600 million blow-out.

Oppositions are want to indulge in hyperbole. I know that, because I was a shadow Minister for seven years. I suppose it is excusable from time to time, but it is ridiculous to suggest a $600 million liability for a period of only two or three months. I notice that the honourable member for Vaucluse is looking at me somewhat askance. I put his quizzical mind to rest. Actuarial advice provided to the Government by PricewaterhouseCoopers indicates that the total estimated liability to which the Government will be exposed for the two-month period is, in fact, less than $2 million. So much for $600 million! Not only are Opposition members no good at history, they are no good at maths as well. They do not know much about numbers.

This $200 million provides reinsurance to both Dexta and Royal and Sun Alliance. This exposure represents approximately 25 per cent of low-rise development and 100 per cent of high-rise development. I am pleased to advise that the same actuarial advice concludes that this liability should be offset by the premiums that are to be received by the Government in its role as a reinsurer. The alternative that the Opposition wanted the Government to introduce is to leave high-rise builders uninsured. Those who will potentially suffer as a result of that will be consumer and builders. In my discussions with builders—unlike the hypothetical builders of the Opposition—I was told in no uncertain terms that builders wanted to ensure that the insurers of high-rise buildings remain in the game. They want the security of being able to carry on with high-rise buildings knowing they are covered and that the people for whom they are building are also covered.

None of the arguments put forward by the Opposition have any relevance or carry any weight. That includes the arguments of the Leader of the Opposition—who made a poor contribution and posed two rhetorical questions—the honourable member for Vaucluse, who led for the Opposition, and other Opposition members. Their comments suggesting that the Government did not consult with consumers are false. The Government has consulted extensively and developed proposals to help consumers. It has consulted with builders and come up with real propositions. Indeed, as long ago as July last year the Government introduced legislation that was of great assistance to consumers.

In relation to the home building industry, I conclude by stating that the Opposition always takes great delight in talking down the New South Wales economy. Listening to them tonight one would think that New South Wales is in the depths of depression and that no building is taking place. However, the record shows the building in New South Wales is at the highest level it has ever been. New South Wales has more than 30,000 builders. In fact, we do not have enough builders to cope with the demand for all the buildings we need in New South Wales because of the great show of confidence in our economy and in the management of New South Wales generally. Let us not, like the Leader of the Opposition and the Opposition generally, talk down the economy. Let us continue to introduce the sort of far-sighted and important assistance to builders and consumers that this legislation provides.

Motion agreed to.

Bill read a second time and passed through remaining stages.