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- 15 November 2002
Building Legislation Amendment (Quality of Construction) Bill
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Page: 6889
Second Reading
Debate resumed from 13 November.
Mr DEBNAM (Vaucluse) [1.21 p.m.]: The Government is bulldozing this bill through the lower House. The Opposition has not had time to read it, the public does not even know it exists, and it has been on the Internet for only 26 hours. The bill is a fitting end to the disaster that has landed in the lap of the Minister for Fair Trading. It was not this Minister who started off this mess six years ago, in October 1996, it was the honourable member for Penrith, who was then the Minister for Fair Trading. In 1997 a bill was introduced to privatise home warranty insurance and the Minister for Planning at that time, the Hon. Craig Knowles, implemented very dramatic changes to planning legislation. The result of all that is that after eight years of the Carr Government, builders across the State are absolutely adamant that the Government has not done its job to regulate the home building industry.
It is now two minutes to midnight. Parliament is about to shut down for the State election, and Minister Aquilina has rushed into the House and said he desperately wants this bill to pass through the lower House today. The Opposition will not vote against it, because we do not know what is in it; no-one knows what is in it. People across the State are scrambling through its various provisions and comparing them with the desired outcomes that we have all spoken about for many years. In late October, Minister Aquilina announced a number of changes to home building legislation and reforms within the Department of Fair Trading. The Deputy Premier has announced a number of changes to planning legislation. At that time I issued a press release headed "Musical chairs and increased taxes for home warranty crisis".
The Carr Government did not adopt the first recommendation, the key recommendation, of the Campbell committee's review into building quality. That recommendation was to establish a home building compliance commission separate from the Department of Fair Trading. A committee established by the Carr Government had noted that the Department of Fair Trading was the problem, not part of the solution. Various Ministers over the past five to six years have caused this problem. Today, through this bill, and just prior to the State election, we are seeing a desperate attempt by the Carr Government and the Minister who has ended up with this mess in his lap, playing musical chairs within the Department of Fair Trading.
For five years the Department of Fair Trading has failed to do its job. The department has not even had the necessary appropriate technical resources to do its job. All this time New South Wales Treasury has been creaming off most of the building licensing fees as profit to Consolidated Revenue. Those fees have been used not to administer the industry but to bolster Treasury profits. In its latest reforms the Government is once again talking about increased fees, which will clearly increase the profits for Treasury. Everything that the Carr Government promised in late October was also promised five years ago when the then Minister, the Hon. Faye Lo Po', said the Government was going to do two things: first, privatise home warranty insurance, and, second, strengthen regulation within the industry.
That is exactly what the Government has not done over the past six years. The result is that New South Wales builders have suffered five years of hard labour under the Carr Government, because various Ministers, including the Hon. Craig Knowles, the Hon. Faye Lo Po', the Hon. John Watkins, and the Hon. John Aquilina, did not do what they promised to do. In 1997 the Carr Government privatised home warranty insurance because the Premier thought it was a good idea on the day. The Government did not have any idea of how it was going to implement that privatisation and at that time the Government promised to dramatically improve the oversight of builders and certifiers.
However, year after year the Government has failed to do that. The announcement by the Carr Government in late October of various reforms within the Department of Fair Trading and the Department of Urban Affairs and Planning is not an effective solution for the home warranty crisis. The Minister for Fair Trading has outlined in detail the various proposed changes but they will not be enough to solve the problems. As I said before, the Department of Fair Trading is part of the problem, it is definitely not the solution. If the Minister wanted to make a difference to the home building industry, four months before the State election and in the last few days of this parliamentary session, he would be honest with the people.
Today he would tell people insured with Dexta what is happening with their claims. He would tell us what is going to happen with Dexta after 31 December. What will happen if Dexta withdraws from the market? What will happen in the new year when home builders come back to work after their Christmas holidays? What will they be confronted with? I have no shortage of commentary from the industry expressing extreme frustration and anger with the Minister's announcement in late October about his so-called reforms. At this stage I have no advice from the industry on this bill because, as I said, it was released publicly only 26 hours ago.
The Opposition will not oppose the bill in this House. When the upper House considers it, the Opposition will draw on the advice of every single interested party and voice their concerns. Perhaps we will propose amendments, where necessary. If there are some good provisions in the bill that add to a commonsense reform of the industry, the Opposition will embrace them and support the Government on them. However, if not, the Opposition in the other place will say no. Every builder across the State would appreciate the Minister coming clean on the future of Dexta.
Mr AQUILINA (Riverstone—Minister for Land and Water Conservation, and Minister for Fair Trading) [1.26 p.m.], in reply: I thank the honourable member for Vaucluse for his contribution to the debate. I will address, albeit briefly, some of the matters he raised. The bill has been introduced specifically in response to the report of the Joint Select Committee on the Quality of Buildings, which was released in July. The committee inquired into building processes and this bill is an attempt at implementing the majority of its recommendations.
Under this bill the Director-General of PlanningNSW will be able to take action against certifiers, including the power to suspend and fine certifiers. It will be an offence for developers to improperly influence the decisions of certifiers. Councils will not be able to rely on self-certification by building practitioners under the Local Government Act. Engineering details of buildings will be certified by a council or private certifier, someone who is accredited and can be investigated. On-the-spot fines for breaches of development consent and fire regulations will be increased. The link between the certification process and the development consent will be strengthened. The roles and responsibilities of certifiers will be clarified.
Under this bill, certifiers must inspect buildings at critical stages. All engineering details will have to be inspected and certified by an accredited certifier. Certifiers will be required to ensure that a completed building conforms with the approved plan. Consumers will have more control over who certifies their building because they, not the builder, will appoint the certifier. The auditing process will be more effective because the Director-General of PlanningNSW will also be able to fine and suspend certifiers. Builders will have to undertake a financial test before being licensed. New prescribed standard conditions in building contracts will be implemented.
Further, work will have to conform to the Building Code of Australia and relevant standards. The final 5 per cent of the contract price will not be paid until the work meets the requirements for the occupation certificate. Inspectors will be empowered to make rectification orders against builders. The consumer and builder will be able to appeal to the Consumer, Trader and Tenancy Tribunal against an inspector's assessment. The tribunal will be able to accredit experts to report jointly to the parties in dispute. The experts' report and the building inspectors' reports will be the only reports unless the tribunal determines otherwise. In a nutshell, they are the primary recommendations and facets of this legislation. Detailed and technical, yes, but also specific responses to many of the issues raised by builders and consumers over the past few years to ensure that building in the State is creditable and done by creditable builders to the satisfaction of consumers.
Having said that, I am aware of discussions in the building industry about some of these measures. The Government is continuing to hold discussions with the various organisations involved. It may well be that some of the issues that are apparently under consideration will leave the door open for amendments. I signal that the Government is open-minded about some of these matters, particularly in relation to receiving a response from affected bodies. If any amendments are considered appropriate, they will be dealt with in the Legislative Council, given that a great deal of consideration and discussion is ongoing.
These matters have not been hurried through. However, the issues involved are complex and detailed and they require a substantial amount of deliberation. I believe that everyone, irrespective of whether they are in government or in opposition, wants to ensure that this legislation is of maximum benefit to the parties in this venture, both builders and consumers. It is appropriate that we continue to discuss and debate these matters until the issue is resolved, even though that may mean amending some provisions of the legislation. I again thank the Opposition for the indication that it does not intend to oppose the legislation.
Mr Debnam: Point of order: It is very important that the Minister tell us about Dexta.
Mr ACTING-SPEAKER (Mr Mills): Order! There is no point of order.
Mr AQUILINA: I was going to conclude with a comment about Dexta, even though it is not directly relevant to this legislation. I believe that both the Government and the Opposition are keen to ensure that this is the correct legislation to address the issues of concern to both consumers and builders and takes us one step further towards getting it right. As I have previously said to the honourable member, discussions are continuing with Dexta and, indeed, with all insurance companies about providing appropriate insurance cover for builders in this State.
This State has performed much better than all the other States. Despite the difficulties involved in the industry as a result of the collapse of HIH, 11 September, and subsequent events, we have been able to address and meet that change far more satisfactorily than the other States, and I believe that will continue to be the case in the future. Those discussions and consultations have not been concluded and decisions have not been made about how to proceed. However, as soon as I am able to provide further detail and the assurances that the builders of the State are looking for, I will do so and make those details available to them and to the Opposition.
Motion agreed to.
Bill read a second stage and passed through remaining stages.
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