General Purpose Standing Committee No. 2

Debate resumed from 7 May 2008.

The Hon. ROBYN PARKER [2.31 p.m.]: On behalf of General Purpose Standing Committee No. 2 I thank all those who participated in the inquiry, by appearing as a witness, by participating in the public forum or by making a submission. The committee especially appreciates the contributions of those who shared their personal experiences with the home building industry and the impact those experiences had on their lives and the lives of their families. I acknowledge that building a house is the dream of most families, but unfortunately when things go wrong in that regard the impact can be significant. The committee recognises the importance of effective regulation of the home building industry. Without proper protections, consumers and builders may experience massive financial loss.

The difficulties of dealing with defective building work can also take an enormous emotional toll on people. Numerous State and national inquiries and reviews over the past 15 years have highlighted the need to continually modernise and improve regulation. I am grateful to my committee colleagues for their commitment to this inquiry, and also to the members of General Purpose Standing Committee No. 4, which commenced the inquiry during the previous Parliament. My thanks go also to the committee secretariat, in particular Merrin Thompson, Rebecca Main, Madeline Foley and Beverley Duffy, for their work in facilitating the inquiry process.

The role of the Home Building Service in the Office of Fair Trading is to protect consumers by regulating the home building industry. It is responsible for licensing builders, investigating building complaints, resolving disputes and administering the home warranty insurance scheme. Regulatory systems are put in place by government for the benefit of citizens. The home building industry is regulated in order to protect consumers, and consumer protection should always be seen as its first and most important goal.

Ultimately, an effective regulatory system prevents poor building work in the first place. The service deals with complaints swiftly and fairly, and penalises those who have acted improperly. It also compensates people fairly when things go wrong. We have quite a way to go before we have such a system in New South Wales. Consumer protection is the first and most important goal of the Home Building Industry Regulation, but the system needs to work also for the benefit of builders. Both consumers and builders took part in this inquiry, and the committee's recommendations reflect their concerns. The committee has recommended legislative and policy changes as well as improvements in the way that the Home Building Service delivers on its performance standards.

The Home Building Service needs more resources to properly fulfil its role in licensing builders, handling complaints and penalising builders who do the wrong thing. Underpinning all of the committee's recommendations is the sense that consumers need to be better informed and supported as they navigate the home building system. The committee calls on the New South Wales Government to deliver each of the recommended much-needed improvements. The experience of home and building consumers has been the key focus of this inquiry, and it is clear from their experience that the Home Building Service of the Office of Fair Trading has not always succeeded in protecting consumers, whether in relation to licensing of builders, complaints handling or disciplinary matters.

In addition, the home warranty insurance scheme is limited in its ability to compensate consumers when things go wrong. The home building regulatory system must also work for the benefit of builders; it must deal with them fairly and support them as professionals. Building industry representatives revealed a number of ways in which the licensing dispute resolution disciplinary and insurance schemes need to be improved. The establishment of a Home Building Service in 2003 was a step forward for regulation of the home building industry and for consumer protection. However, the evidence gathered during this inquiry attests to the need for further work to deliver better outcomes for both consumers and builders.

Legislative and policy changes are essential to improve the way the Home Building Service seeks to deliver on its performance standards. Additional resources will be needed, and the committee believes further that it is very important that the New South Wales Government works to minimise fragmentation and duplication in the home building industry—for example, by considering the establishment of an independent building commission. In addition, the Government should ensure that the promised new home building Act delivers more cohesive and user-friendly licensing systems and should establish clear objectives for the Home Building Service to enable consumers and the building industry to better understand its role.

On the basis of evidence before the committee regarding building licensing, it is clear that the credibility of the licence assessment system and the public register have been undermined by significant and ongoing problems. Individual homeowners have suffered at the hands of unscrupulous and/or poorly skilled builders. That could have been avoided had high standards operated in the Office of Fair Trading at the time. When the licensing system fails it does so at massive financial and emotional cost to the consumers involved.

The Home Building Service has put in place a range of practical measures to enhance the licensing assessment system and the public register. However, there are many more ways that consumer protections could be improved, including a review of current performance standards and investigating changes to the public register in respect of builders who are the subject of complaints that have not yet been resolved. The committee considers also that a number of consumer concerns may be addressed through the implementation of recommendations of the review of licensing in the New South Wales home building industry, which was conducted by Ms Irene Moss.

The building complaints resolution system has three tiers, one of which is the Consumer, Trader and Tenancy Tribunal [CTTT]. A number of the cases presented to the committee by consumers predated the establishment of the Home Building Service. Nevertheless, we remain concerned by the stories of inquiry participants and alarmed by the impact that costly and prolonged disputes have had on individuals and families. On that basis the committee considers that early dispute resolution processes should be improved in a number of ways.

Further effort should be devoted to both community and Office of Fair Trading staff education, and the industry competencies of building inspectors should be improved to ensure that they are better able to investigate and resolve disputes. In addition, builders should be able to initiate early dispute resolution through the Home Building Service rather than only though the Consumer, Trader and Tenancy Tribunal, as is currently the case. Without having taken evidence from tribunal representatives, the committee is not able to document a complete picture of the performance of the Consumer, Trader and Tenancy Tribunal.

Nevertheless, we were very concerned by the evidence put forward by consumers about the protracted timeframes and the competency—or perhaps more correctly, incompetency—claimed on behalf of tribunal members. Their expertise was questionable on many occasions. These concerns were strengthened by the findings of the tribunal's operations review and the Ipsos top 10 tips research report. Together these would seem to indicate that the tribunal is not fulfilling its objective, to resolve disputes in an accessible, informal, efficient and inexpensive manner. We acknowledge that the tribunal has taken action in relation to the review findings. However, we consider that there is a critical need for substantial and timely action to improve the operations of the Consumer, Trader and Tenancy Tribunal.

The committee believes that there is a strong need for an independent body to provide advice to and advocacy for consumers about home building disputes, thereby preventing many of the adverse experiences and outcomes brought to the committee's attention. We recommend that a home building advice and advocacy service that is affordable and accessible throughout the State should be established on a long-term basis. The Home Building Service has an important role to play in ensuring that builders comply with the Act and in disciplining them when they are in breach of it. The committee believes that the level of effort in enforcing builder compliance with the Act has improved. However, compliance procedures need to be improved further, and there needs to be more investigation of alleged breaches. We are concerned that the Home Building Service needs to take a more active and consistent approach to the discipline of builders.

The committee took some evidence about home warranty insurance. As I said, many of the claims were operating prior to the establishment of the Home Building Service. We felt that claims made when dispute resolution cannot take place because of the death, disappearance or insolvency of the builder was not enough, and we recommend that further triggers be established. Certainly, the home warranty insurance scheme is not delivering on behalf of consumers in the way it should. Consumers need to be able to access more affordable home warranty insurance and at an earlier opportunity. The committee accepts that the New South Wales Government is operating under a privatised home warranty insurance model, but we are concerned at the perceived vested interests of insurers and industry bodies within that model.

Finally, the evidence put forward by consumers and, to a lesser extent, industry representatives indicates a mismatch between consumers' understanding and expectations of the home warranty insurance scheme and their entitlements under it. Other committee members may wish to expand on the home warranty insurance scheme. The committee would like to know a little more about what other triggers can be put in place. It should not be accepted that the committee is happy with the home warranty insurance scheme—indeed, far from it. We think that the way it is operating at present needs to be strengthened and improved. Inquiry participants suggested that the Home Building Service requires more resources to effectively fulfil its role in relation to licensing, complaint resolution and the discipline of builders.

These claims were strengthened by the fact that they were made not only by consumers but also by industry representatives and other parties, as is documented throughout this report. I endorse the committee's recommendations. We look forward to a timely response from the Government. On behalf of those who have unresolved issues and who presented those to the committee, we hope that there will soon be some resolution and conclusion to their issues. We think the Government has a long way to go in terms of the Home Building Service. In quoting the Government's line, "Heading in the right direction—more to be done", I suggest there is certainly a great deal more to be done. I look forward to hearing the comments of other committee members on this report. I recommend the report on the inquiry into the operations of the Home Building Service.

Reverend the Hon. Dr GORDON MOYES [2.43 p.m.]: At the outset of my contribution to this take-note debate on the report on the inquiry by General Purpose Standing Committee No. 2 into the Home Building Service I place on record my appreciation to the committee secretariat for the excellent task it performed and to other committee members who made it an enjoyable inquiry to be associated with. In particular I appreciated the fine chairmanship of the Hon. Robyn Parker, and I thank her for that. Few things upset Australian families as much as ineffective and inadequate protection by governments against any who would damage or destroy their homes. The iconic Australian film The Castle is a classic example of the concern of such families. Unfortunately, there are always shonky builders and others who damage or limit the family home.

The New South Wales home building industry generates in excess of $19 billion per year and employs approximately 250,000 people. In 2005-06 the industry built 32,000 new homes and undertook 21,500 major renovations and 1.66 million minor building works. Regulatory systems are put in place by the Government to protect citizens from shonky builders. The home building industry is regulated in order to protect consumers, and consumer protection should always be seen as its first and most important goal. However, as the report states, the committee was concerned by evidence put forward by inquiry participants about the poor consumer protections offered under the current scheme.

Particular concerns included the last resort nature of the scheme and its tendency to escalate disputes. In addition, payouts are sometimes seen to be totally inadequate, while the costs associated with exhausting other avenues before claiming on insurance can be exorbitant for the normal family. The fact that both consumer and industry representatives highlighted these deficits attested to the weight of the existing problem. For these reasons the committee considers that the New South Wales Government should adopt the recent recommendation of the home warranty insurance scheme board to introduce an additional trigger to enable consumers to claim insurance without having to pursue a builder's bankruptcy or insolvency.

In New South Wales the Home Building Act 1989 requires builders and tradespeople to be licensed for the work they do. Only builders who are properly trained and who have relevant experience may be licensed. As this is true, it is remarkable how many builders manage to slip through the net. The Home Building Service sets and maintains standards of competence for builders and tradespeople and issues licences and certificates to builders and their companies that meet the requirements of the Act. It is responsible for assessing licence applications and in so doing undertakes various checks. It also maintains a public register of information on builders, tradespeople and specialist workers that building consumers may check before entering into contracts.

On the basis of the evidence before this inquiry, as well as independent investigations by oversight bodies, it is clear that there are ongoing problems with the licence assessment system and the public register that undermine their credibility. The experience of home building consumers has been the key focus of this inquiry, and it is clear from their experience that the Home Building Service of the Office of Fair Trading has not always succeeded in protecting consumers, whether in relation to licensing of builders, complaint handling or disciplinary matters. In addition, the home warranty insurance scheme is limited in its ability to compensate consumers when things go wrong.

Nevertheless, we remain concerned by the stories of inquiry participants and alarmed by the impact that costly and prolonged disputes have had on individuals and families. The committee may need to consider further claims about certain inaction following complaints going back over many years. On this basis the committee considers that early dispute resolution processes must be improved in a number of ways. Further effort should be devoted to both community and Office of Fair Trading staff education, and the industry competencies of building inspectors should be improved to ensure that they are better able to investigate and resolve disputes. In addition, builders should be able to initiate early dispute resolution through the Home Building Service, rather than only through the Consumer, Trader and Tenancy Tribunal, as is currently the case.

The home building regulatory system must also work to the benefit of builders. It must deal with them fairly and support them as professionals. Building industry representatives also revealed a number of ways in which the licensing, dispute resolution, disciplinary and insurance systems need to be improved. Ultimately, an effective regulatory system is one which prevents poor home building work from occurring in the first place, which deals with complaints swiftly and fairly, and which, when appropriate, penalises those who have acted improperly. It should compensate parties fairly when things go wrong. Finally, it should ensure that all parties are properly informed about the way the system works, and about their rights and responsibilities.

The establishment of the Home Building Service in 2003 was a step forward in the regulation of the home building industry and consumer protection. However, evidence gathered during the inquiry attests to a need for further work to deliver better outcomes for both consumers and builders. Legislative and policy changes are essential, as are improvements in the way the Home Building Service seeks to deliver on its performance standards. The report indicates in which directions the changes must be made. Additional resources also are necessary to ensure that the Home Building Service is more effective in its licensing, complaints handling and disciplinary roles.

The Home Building Service also has an important role to play in ensuring builders' compliance with the Act and in disciplining them when they are in breach. The committee believes that the level of effort in enforcing builders' compliance with the Act has improved since the establishment of the Home Building Service. Compliance procedures have been strengthened and penalties have increased, but far too much non-compliance is still slipping through the cracks. However, the fact that the Home Building Service determines whether it will investigate an alleged breach, and that some alleged breaches are not investigated, will trouble many people who read the committee's report.

Moreover, the committee is concerned by evidence from both consumer and industry representatives that the Home Building Service could be more active and consistent in disciplining builders. This concern was strengthened by evidence arising from the Moss review, and information from the Office of Fair Trading, that only 70 per cent of investigations in 2005-06 were completed by the due date. While the committee recognises that some delays are beyond the control of the Home Building Service, we consider that the service should take bigger steps to meet its performance standards in relation to the discipline of builders.

The committee considers that the penalty system should be reviewed with a view to further improvement in policing and encouraging compliance with the Act. The New South Wales Government also should examine the potential for contractors and individual builders, and perhaps the directors of various firms that tend to declare bankruptcy, to be prosecuted for breaches of the Act, only to be resurrected under another name.

Underpinning all of the committee's 21 recommendations is the sense that consumers need to be better informed and supported as they navigate the home building system. Under the scheme, the primary responsibility for ensuring that work is properly and adequately performed lies with the builder. The scheme provides last-resort cover for homeowners when the builder has not honoured its responsibility. Claims may be made only where dispute resolution cannot take place because of the death, disappearance or insolvency of the builder.

The relationship between the owner, the builder and government agencies will always be a complex one. Government agencies tend always to be behind the poorest practices by builders and that in turn concerns all owner-builders. We believe the recommendations of this report are long overdue. We urge government agencies to ensure they implement our recommendations. I look forward to the Government's response to the committee's 21 recommendations.

Ms SYLVIA HALE [2.53 p.m.]: I will not reiterate the litany of problems to which previous speakers have referred in this debate. Clearly, many members of the public find themselves in an extraordinary predicament when, believing they are doing the right thing, they check out the website of the Office of Fair Trading to see whether any complaints are listed against the person with whom they are proposing to contract, to either build a house or undertake renovations, they check to see that the person is licensed, and they make inquiries. When push comes to shove, often consumers find that the work performed by the builder, the subcontractor or contractor whom they have engaged is below standard, and they are left in the position of finding out what sort of compensation is available.

Frequently people naively believe that because home warranty insurance has been taken out, somehow, as with most insurance policies, there will not be any problems with claiming against that insurance, and that if the complaint is substantiated they will be appropriately compensated. After all, that is what happens in Queensland, where there is still a publicly funded, not-for-profit, statewide insurance system in operation. In Queensland, if a person has a complaint and the complaint is substantiated, the insurance body pays the claim. Because that insurance body also is responsible for the licensing of builders, it has the influence and authority to ensure that the guilty party either makes restitution by carrying out repairs or comes up with the money to settle the outstanding amount that has been paid to the wronged consumer. The Queensland system works very well.

Unfortunately, however, here in New South Wales—as in Victoria, Tasmania and Western Australia—we have a privately run system of insurance. As previous speakers have pointed out, the opportunities for claiming against that insurance are extraordinarily limited. As has been said, homeowners can make a claim only if the builder is dead, has disappeared or is bankrupt. Clearly, in the case of many people, the builder does not die in the process of the work being undertaken, nor is it common for the builder to disappear. People who stand to lose large amounts of money—in some cases their entire life savings, as well as the value of loans they have taken out in respect of the building work—are put in the absolutely untenable position of having to institute legal proceedings to have the builder declared bankrupt. By that time, instituting legal proceedings is beyond their capacity and they are left in a situation where they cannot seek any form of restitution.

In many cases, not only is the consumer financially ruined but their families also are affected, and there is huge psychological damage. In some instances people have a house that they cannot inhabit because a council refuses to give an occupation certificate, and they are left with a debt burden that they have no hope whatsoever of paying off. It was for that reason I submitted to the inquiry a minority report. However, the many problems that people experience through inadequate building work are just one aspect. The Parliament must address and focus its attention on the quality of building work and people's ability to obtain redress. These are issues that will not go away.

In large part the inquiry resulted from ongoing pressure exerted by the Building Action Review Group—a group whose membership changes over time. The group comprises people who are victims of the building system in this State. Many of the group's members, as well as other members of the community including builders, gave evidence to the inquiry. Many of their stories were genuinely heartbreaking. I suggest to members that they take the time to read the transcripts from many of those victims. They gave evidence of poor-quality workmanship and about the operations of the New South Wales Home Warranty Insurance Scheme. For years before I was a member of this Parliament, the group pushed and pushed for an inquiry. As a result of that pressure, the inquiry was established and got underway.

The Building Action Review Group certainly provided me and, I am sure, other inquiry members with a consistent series of complaints illustrating that their issues have not been dealt with. They are adamant that a new inquiry should be held so that a proper airing of the problems and inadequacies of the Government's response to the problems can take place. They said that they have not been given an opportunity to pursue matters because the inquiry's hearings have concluded. When they received the report of the inquiry they were particularly incensed at the response of the Commissioner of Fair Trading, Ms Lyn Baker, to many of their complaints. They felt that their issues had been trivialised and that many of Miss Baker's statements were either wrong or misleading, or deliberately obscured their issues.

That is symptomatic of the problems that people have had all along with the Home Building Service and the Office of Fair Trading. The group is concerned that often the people they deal with are uninformed, or they are incompetent and are not qualified to deal with issues appropriately. They feel that often inspectors and other employees of the department show partiality. They also feel that the Office of Fair Trading is extraordinarily tardy in responding to complaints. It is that tardiness, possibly because of a lack of resources and general indifference, which creates in the group a feeling that this massive government department is really wishing that complainants would go away rather than ensuring that people are provided with a measure of justice.

I am sure that members of the Building Action Review Group will continue to push for further examination of the issues that bedevil home building in this State. I know there was a great deal of disquiet among committee members about what is happening. It is not only consumers who are unhappy; many builders feel the very same way. The Master Builders Association told the inquiry that it was not at all happy with the system of privatised insurance. In submission No. 14, the Master Builders Association commented:

The privatisation of consumer protection insurance in NSW has had a devastating impact on the New South Wales residential building industry Other than for insurers, it is difficult to identify who has benefited from the introduction of a privatised insurance scheme in NSW.

Small builders feel that they are at a huge disadvantage when they have to deal with large insurance companies. They are often pressured to provide bonds and guarantees in case, in the infrequent event of an insurance company making a claim, the insurance company proceeds against a builder who has insurance. The insurance company effectively protects itself from having to make any payout whatsoever. [Time expired.]

The Hon. MARIE FICARRA [3.03 p.m.]: At the outset of my remarks relating to the recent inquiry into the operations of the Home Building Service undertaken by the members of the General Purpose Standing Committee No. 2, of which I was a member, I commend the work of my fellow committee members, particularly the Hon. Robyn Parker, who was instrumental in chairing a process that has led to 21 key recommendations. I sincerely thank all the clerks assisting the committee for their outstanding advice and support to the Chair and all committee members.

One area examined extensively by the committee was building licences. The home building industry covers contractor licences, qualified supervisor certificates, tradesperson certificates, building consultancy licences and owner-builder permits. Licences are intended to ensure that a builder or tradesman is reliable, honest and capable, yet this has not been the experience of numerous consumer complainants whose evidence was received by the committee. Furthermore, the actions of those who abuse the licence system give the profession as a whole a bad name, which is not fair to the overwhelming majority of builders and tradesmen who do the right thing.

Consumer complaints throughout the inquiry were largely in three related areas—alleged misrepresentation of licences or qualifications by builders, licence assessments and the public register. One of the key problems identified by the Building Action Review Group was that only 10 per cent of licences are checked thoroughly. While the Office of Fair Trading claims to run checks on criminal records, bankruptcy and insolvency for all licence applications wherein an applicant discloses a criminal history or has previously been bankrupt, only a random 10 per cent of those who have not declared a criminal history will be checked. In other words, unless an applicant who has a criminal record declares their criminal history in their application, there is a strong chance that the Office of Fair Trading will not check their application at all. The system virtually ensures that unscrupulous people have only a slight chance of being caught.

Misrepresentation of licence qualifications also is an issue in the building industry. One consumer had firsthand difficulty with the building licensing system when a builder who was sent by his insurance company for repairs had an expired personal licence number on his business card and a different licence number on the building contract. The number on the building contract was inappropriate for jobs worth over $12,000. It got even worse for this particular consumer when the builder asked him to sign two separate contracts, each valued at less than $12,000. Consumers are simply not protected under the current regulatory system.

Another problem with the public register was that it gives an incorrect view of the records of individual builders who change their company's name. One consumer signed a contract thinking that his builder had a clean record, only to find that the builder had previously been the owner of a company that had gone into liquidation. Another consumer found that it took over six months for the public register to update its information about a builder who had been fined as a result of her action against him. She discovered that after she had originally relied on the information from the public register about the builder, but the information proved to be incorrect.

Based on those experiences, the committee made three key recommendations regarding licensing, including a more rigorous assessment of licences, accurately updating the public register in a timely manner, and, through the public register, helping to alert consumers to builders who are the subject of unresolved complaints. Furthermore, the committee recommended that the Government require individuals only to be licensed with a number that is kept for life to avoid unscrupulous builders being able to hide their previous records by changing their company's name.

The committee also made a number of recommendations regarding the dispute resolution process for complaints in the home building industry. As members would imagine, the cost of building is considerable for most consumers. Significant financial strain can result from building work being found to be negligent. The committee has recommended that complainant consumers should undertake a three-tiered system that involves the Office of Fair Trading, the Home Building Service and the Consumer, Trader and Tenancy Tribunal.

One of the key complaints about the Home Building Service from consumers is the high cost of obtaining independent reports on defective building work—reports that are quite often dismissed by Home Building Service inspectors. Consumers have been required by the Home Building Service to substantiate their claims of defective building work, only to find that the opinions later are dismissed. The high cost to consumers of complaint resolution means that the longer a case goes on, the less likely it is that a consumer will achieve a satisfactory outcome. In one case a consumer spent many years trying to obtain compensation from a builder who built a home that had been declared by a local council to be too dangerous to live in.

The committee made four recommendations in this area: that the Office of Fair Trading develop and implement a strategy for further improving education for community members about early dispute resolution processes; that the Office of Fair Trading improve early dispute resolution by ensuring the highest performance standards in this area among Fair Trading Centre and Home Building Service staff; that the Home Building Service work to further increase the industry competencies of its building inspectors to ensure that they are better able to investigate and resolve complex building disputes; and that the Office of Fair Trading enable builders to initiate early dispute resolution through the Home Building Service.

I believe that the majority of builders in New South Wales and their employees are honest and hardworking people who contribute enormously to the economy. It is important that the majority of builders who are genuine, hardworking and honest are not punished for the actions of a minority. The Master Builders Association argued for penalties to be directed towards builders who actually do the faulty work and not just the contractor who is legally responsible. I am pleased that the Committee took up this suggestion and made that one of its 21 recommendations because hopefully it will ensure that the responsible party will be more likely to face penalties, rather than the primary contractor who may have had little to do with the faulty work.

The Committee concluded that since being established in 2003 the Home Building Service has effected slight improvements in home building licensing, complaints and disciplinary systems. It is important to achieve more improvements to ensure that consumers are protected from dishonest and incompetent tradesmen and to achieve a better dispute resolution process. One of the key findings of the inquiry is that the Home Building Service should be provided with additional resources to enable it to resolve disputes in a cheaper and more timely manner, thereby assisting builders and consumers to avoid being hit with unnecessary and high legal costs. In conclusion, I call on the Government to accept the Committee's recommendations, which will be the best way to ensure that consumers receive greater protection from shady operators and that competent builders are not made to pay for the mistakes of others.

The Hon. JENNIFER GARDINER [3.11 p.m.]: Unfortunately, the problems that established the need for a parliamentary inquiry into the Home Building Service go back a very long way. A former Deputy President of the House, the late Sir Adrian Solomons, was a champion of the group that was referred to earlier and attended the inquiry, the Building Action Review Group. As previous speakers have said, although the group changed its composition over the years, certainly from time to time its members have felt that they had been banging their heads against a brick wall in their attempts to have action taken. I note that in the Fifty-Third Parliament my former Liberal colleague John Ryan was among those foremost in taking up the cudgels on behalf of aggrieved home building consumers.

During the previous parliament General Purpose Standing Committee No. 4 began an inquiry into the Home Building Service of the Office of Fair Trading. I take this opportunity to thank the members of the inquiry and also to thank the secretariat of Legislative Council committees for their assistance in the work of that committee, which involved public hearings and the like. As has been pointed out, the Parliament was prorogued before the Committee reported. In the new Parliament the allocation of portfolios between various general purpose standing committees changed, and the Fair Trading portfolio was transferred to General Purpose Standing Committee No. 2. I thank my colleague the Hon. Robyn Parker and members of the General Purpose Standing Committee No. 2 for taking up this issue and bringing the inquiry to its conclusion.

As other speakers have said, the final report makes 21 recommendations. It is really important for the Government to insist on the Home Building Service and the Office of Fair Trading lifting their game and acting upon each of the inquiry's recommendations expeditiously, particularly given the long-running nature of issues that practically affect people's sanity. Some consumers, having invested their life savings in their home, have been left with a building that is seriously faulty and financially they are bereft. All that has had a physical and mental effect upon their lives and the lives of their family.

I particularly thank witnesses who attended the inquiry to tell the committee of their personal experiences at the hands of recalcitrant builders. Some of the case studies are referred to in the report of General Purpose Standing Committee No. 2. I thank the people who came forward. I thank the members of the Building Action Review Group for attempting over a long period to bring the issues to the attention of the Parliament in a coherent manner. I think their views and problems have been fairly represented in the report. I endorse the comments of other speakers who have called on the Government to get its act together and ensure that the Office of Fair Trading and the Home Building Service, in particular, lift their game. Their performance to date has not been good enough, given the heartbreaking stories told by witnesses. It is time for action.

The Hon. CHRISTINE ROBERTSON [3.16 p.m.]: This was an incredibly complex inquiry for General Purpose Standing Committee No. 2 to undertake. We had masses of reading because the inquiry by General Purpose Standing Committee No. 4 was so broad. Certainly before proceeding, General Purpose Standing Committee No. 2 reached consensus on accepting the evidence and information from the previous inquiry, but, in a way, that increased the complexity of the task of finalisation. It was an incredibly difficult, complex inquiry.

General Purpose Standing Committee No. 2 worked very hard to develop recommendations for the long-term advantage of the people of New South Wales. For committee members the task was different from the first round of hearings in that we had written documentation and we also heard evidence from incredibly unhappy and sad persons who in some cases had endured decades of destruction in their lives as a result of incidents related to building. A lot of work was done by individuals associated with the committee to ensure that the recommendations made sense and to create a path by which to step forward, instead of perpetually looking backwards. As a whole, we worked very hard on achieving that.

Although I feel terribly sorry for the member to whom I will allude, I must express disappointment that at the second or third last recommendation the member said, "No, no, I object to this because I have to put in a dissenting report." After all the work that went into achieving consensus recommendations of the committee, including debate and negotiations for three-quarters of a day to make sure that the recommendations made sense and met all the requirements of the committee, one member declined to endorse some recommendations. That was very disturbing because the committee as a whole had worked incredibly hard to produce a report that every member of the committee could endorse. I deeply regret that in the end something went wrong, but I nevertheless think the recommendations are very valuable, both for the persons who gave evidence and for the Government.

The committee heard evidence from many different groups, which I will not list, but which included the government, the builders and contractors, and consumers. The committee as a whole made sure of the availability of a forum for those who felt they would not be served well by the committee. I thank the secretariat: It was very complicated to organise some of those opportunities. The structures that have been put in place gave everyone affected an opportunity to say something, which was a valuable part of the process. It is important to register the time that the committee took to conduct its inquiry. Earlier the Hon. Jennifer Gardiner referred to other inquiries relating to this matter. During the course of this inquiry and the earlier inquiry the department worked hard to implement change for the long-term advantage of the industry. It was heartening for committee members to know that their proposals would be implemented. In the beginning much of what we had been talking about and much of what we had read relating to the earlier inquiry had already been implemented, which was also heartening.

I look forward to the Government and the department noting the inquiry's recommendations that changes be made in the future to the Home Building Act 1989. The committee's report, which is timely, should be taken into consideration in the rewriting of that Act. I trust that in 2008 the Government will introduce such amending legislation. Many of the committee's recommendations related to the resolution of a number of issues, for example, working through issues with the Office of Fair Trading. I know that that work is already occurring. Many of the committee's recommendations related to planning processes. I believe that committee members could have been somewhat harder in their recommendations relating to planning processes, but it was difficult to grapple with the evidence.

Many people who were badly affected by this process missed out on receiving even minimal compensation and many people inadvertently were given bad advice. Many conflicts had to be resolved when the committee was conducting its hearings, so it was difficult to keep things objective. I understand that a lot of the work that is occurring in the current round of negotiations involves changes to the planning Act, which will make a considerable difference. Any members going through the political rhetoric and reading those consultation documents will find that many of those issues have been picked up, for example, the protection of consumers, builders and investors, communities and local government.

Committee members were not the only group of people questioning issues at that time. I do not know how the Government intends to address many of these issues, but I am aware that the committee managed to link into the McClelland inquiry and the department is working hard to implement our recommendations. Committee members were able to reinforce or value-add to many of the issues that were debated. It was worth conducting this difficult inquiry. It is not possible for me to take up an inquiry such as this again in the future, as I will not be here for the next round, but I feel sorry for anyone who has to do so. Many of the committee's recommendations related to the rewriting of the Home Building Act. I was pleased to be able to contribute to that process.

The Hon. KAYEE GRIFFIN [3.23 p.m.]: I speak briefly in the take-note debate as I was a member of General Purpose Standing Committee No. 4 in the last term of Parliament when the initial inquiry commenced. It is unusual for an inquiry to commence with one general purpose standing committee and to be completed by another. I congratulate the committee on its recommendations relating to this important inquiry. As other members said, it was difficult to come to grips with this inquiry as it involved an emotive issue—the issue that consumers spoke about when they gave evidence in the committee hearings. I wish to refer, briefly, to the complaints resolution issue. Other speakers said that it was important to place an emphasis on early dispute resolution. A number of people gave evidence at the inquiries conducted by General Purpose Standing Committee No. 4 and General Purpose Standing Committee No. 2.

Many of the problems that those consumers faced pre-dated some of the reforms that are already in place and the establishment of the Home Building Service. I hope that some of those issues have been more precisely resolved since the establishment of the Home Building Service. As a result of this inquiry people are now aware of these problems. I wish also to comment on the discipline of builders and the potential for contractors and individual builders to be prosecuted for breaches of the Act. Unfortunately, it has been easy for some unscrupulous people in the industry to duck and weave, to avoid their responsibilities, and to leave people in difficult situations—people who have paid a great deal of money for homes in which they are not able to live, as a massive amount of work has to be redone. Those people are not able to tie down the builders who are responsible for that work.

As I said earlier, some builders are unscrupulous enough to evade their responsibilities, which causes financial hardship and distress for many people and renders them unable to support their families. I refer, next, to the Home Warranty Insurance Scheme. If builders do not honour their responsibilities it frustrates many consumers. Sometimes consumers employ builders to build their homes, they buy new properties, or they buy properties that require renovating and they are told that, if there are problems in the future, they will be readily resolved. In many cases people take those statements on face value. When monumental problems arise down the track and issues have to be sorted out and resolved, it is difficult to deal with some people.

Consumers believe that they do not have enough information, they are not sure how to negotiate with someone reneging on his or her responsibilities, and they need a great deal of support. The committee's recommendations acknowledge that there must be earlier dispute resolution, more information for people to use, and that individual builders as opposed to contractors must be prosecuted. It is important for people to feel secure in the future if they face the sorts of problems that were alluded to by some of those who gave evidence to the committee.

Debate adjourned on motion by the Hon. Don Harwin and set down as an order of the day for a future day.