Bill - Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023

BILL

‘BUILDING LEGISLATION AMENDMENT (DOMESTIC BUILDING INSURANCE NEW OFFENCES) BILL 2023’.

Tuesday, 6 February 2024.

Mr NEWBURY (Brighton) (13:23):

I do rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, and at the outset I do want to note how difficult this debate is for so many people.

This debate will touch on, throughout the discussion in both this place and the other place, issues that have absolutely wrecked people’s lives, frankly speaking. People have had their dreams crushed. There is no greater dream perhaps than being able to buy your home, to go into a home and to – if you choose to – have a family in that home. That dream is crushed in many cases because of bad behaviour. We have seen that play out publicly, unfortunately, especially over the last year. We saw with the collapse of Porter Davis almost a year ago that there is a serious issue in terms of the industry and how consumers are protected.

At that time, in the middle of last year, the then Premier said:

… it can’t continue operating the way it has been. It has got to be better, and we’re determined to do that.

It was 270 days ago that he said that, in the fallout from the Porter Davis collapse and with so many people being so devastated by that collapse. Something needed to be done about it. I think a lot of people looked on, heard him, and said ‘Perhaps there has been a wake-up call. Perhaps the Government has had a wake-up call, and we are going to see action. We are going to see greater protections.’

What this Bill does is nowhere near enough. The Coalition will not be opposing the Bill, because it does do something, but it does not do anywhere near enough. I will speak to what the Bill does, some of the industry feedback to that and also the depth of the problem and note how little is being done.

The Bill, as I mentioned, is a consumer protection Bill effectively. But what it does not do is go to the root cause of the problem. I was at a series of homes recently where the builder had not taken out insurance. The buildings were in a state that I will describe later. One of the homeowners, who was just crying her eyes out, said to me, ‘I have more protection if I buy a toaster than if I buy a home, and I am broken.’ Her neighbour was living in a van opposite the site in Frankston. That is a site in Frankston. I know that the minister is aware of the site, and I will speak to it a little bit later.

We all want to see greater protections. We all want to see the issues that exist fixed; I know it sounds simple. This Bill, unfortunately, does not do enough. As I said, it does do something, so the coalition will not be opposing it. But we will move a reasoned amendment, and I move:

That all the words after ‘That’ be omitted and replaced with the words ‘this house refuses to read this bill a second time until the government commits to comprehensively protect victims and their families from rogue behaviour from a small minority of dodgy builders and the potential loss of their deposit if a building company collapses’.

270 days ago, we heard that something would be done. What does this bill do? If you strip the Bill down to its basic core, what it effectively does is insert new offences for builders who demand or receive money under a domestic building contract if the builder has not ensured that the work that is to be carried out is covered by insurance. That is the core of what this Bill does. It inserts new
offences, and when looking at those offences it is hard not to agree with the need for those offences.

Of course, no-one should be demanding money where they are not appropriately insured. We have seen too many examples of the hurt, the devastation and the pain where that has occurred, where builders have not been appropriately insured and families have been left with no funds, clearly because they have been ripped off, so an offence is appropriate. Unfortunately, that does not go far enough.

I will turn to some of the specific feedback from industry in relation to the Bill, because it is important to put that on record. I will start with Master Builders Victoria, which called for the government to prioritise the review of the Domestic Building Contracts Act 1995 before the Parliament considers this Bill.

It is important because what the Master Builders are saying is there are bigger issues, not that this is not important but there is much more to be done, and we are not doing enough at a macro level. A further quote:

The legislation must be clearer and fit for purpose. The current legislation contains a notable grey area concerning the timing of domestic building insurance contract signing and deposit collection.

Further, preliminary agreements or holding deposits paid before the formal signing of a domestic building contract are some of the issues raised. A number of other issues in relation to the definition of ‘builder’, which is a change that is made in this act, have also been raised. Effectively what the Master Builders association is saying is that there is a bigger problem and more needs to be done – and that would be my contention and the Coalition’s contention also. I will move to the Housing Industry Association and their feedback on the Bill, because they have raised concerns as well. They have raised concerns about the breadth of the Bill:

The fact is that the regulations are not being improved. It is just being added to, and it is causing more complexity. A lot of the time the Government comes up with proposals to change the laws because they have not been able to enforce or make use of existing laws. I think there is a real fear here that we are going to see a lot more regulation imposed to try and deal with people who are not doing the right thing, and what will happen is we will see more rules for those who are trying to do the right thing and more rules for those who do not want to do the right thing ignored.

Those are important points in relation to the Housing Industry Association’s feedback. So, we have the master builders, who were talking about a broader, much bigger problem, and the Housing Industry Association effectively saying the changes do not fix the problem.

The Association of Consulting Architects have made similar points but also made the point that the Victorian Building Authority do not have the capacity or expertise necessary to cover the workload required for the depth of the issues that exist.

I do think that it is important to have a conversation around the VBA, because at the end of the day it is the role of the authority to ensure that behaviour is appropriate, to ensure that the industry is performing as it should be. The VBA has previously publicly talked about the fact that it is on builders to make sure they do the job right, and that is a notable point, but at the end of the day it is also up to the authority to ensure that work is being checked appropriately and to weed out bad behaviour.

You see as you look at New South Wales a need to expand upon that work. I note they have a Building Commissioner, who has recently both received support from the former Government and had a significant increase of funds under the new Labor Government to do work around inspections. I am not proposing that as a solution, rather it is by way of noting the difference in models in states, because clearly we have issues that are not being resolved in Victoria, and other states – Queensland, and I spoke about New South Wales – have dealt with those issues differently and fairly recognise that the depth of the problem is greater than anybody would want, especially at a time when we need to build more homes.

We need to build more homes, which means people want to build more homes more quickly, and the proportion of people doing the wrong thing in effect will clearly require further oversight, because if you are building more and you are trying to rush that build, you will see either a level of performance that sometimes is not up to scratch just through the sheer speed of the work – but also you will see people come into a market to try and make money out of a growing industry. And we have seen that in a number of ways in terms of public policy over the years. I think we all saw the pink batts rollout as an example of speeding an industry up and there not being enough oversight and regulation around that growth in industry. And as we need to build homes, we need to assess whether or not we are appropriately ensuring that industry, who for the overwhelming most part are doing a good job – the overwhelming most part are doing a good job, but there is a small minority, a very small minority, whose behaviour is not just egregious but is just breaking people’s dreams, destroying people’s dreams. So, we need to make sure that we are doing more.

I mentioned a number of peak bodies who had spoken about their concerns, and I do also note Oldham Fairweather Legal, who said the fine associated with the new offence in this Bill:

… is kind of useless … The only reason why this becomes relevant is if the builder has taken the deposit and kind of scurried off.

That is an issue, and what he is saying is that the root cause of the problem is not being addressed. If you look at the feedback to this Bill overall as a package, I think it would be fair to say the central theme of that feedback is the root cause of the issue is not being addressed. And that is what the Coalition is contending today: that we do not oppose the offence being put on the statute book – of course we do not oppose it – but the root cause of the problem is not being addressed.

Further, the firm said:

It’s going to overload an already jammed and massively under-resourced justice system …

and:

They’ve got these avenues to justice but no justice …

All of the feedback that I am pointing to makes those same points that we have a very big problem and not enough is being done. So, when we consider the Bill, we do have to recognise that this is not an issue that happened yesterday.

I spoke about the former Premier 270 days ago saying: ‘We’re going to do something about it.’ Well, 270 days later this Parliament is considering one new offence – 270 days to write one new offence. I mean, is that a lot of work over the last 270 days? Is that doing enough?

We have been shocked, I think, over recent weeks to see the example of Montego Homes appear in the media. In that circumstance there have been an estimated 63 people and families affected. Unfortunately, these Victorians are not eligible for the very limited scheme of payment that the government announced following the Porter Davis collapse, and the difficulty with the payment that was announced in that circumstance is there have been more instances since, but they are not eligible for compensation. So, I would say one thing the Government could look at is where we have an instance as we have seen in recent days – and I will mention some of the Victorians that have been affected because they deserve to have their voices heard – the government should consider offering them a lifeline, as they have with other collapses.

I think it is just not right to say that because of a time frame they are eligible, as some collapse victims have been, but that more recent ones are not eligible. For what reason? Of course, every time you add a time frame it does cost you more money. Of course, it does. We definitely have budget constraints as a state, but I
think we need to look at our priorities and say, ‘How do we look at 63 people and
their families who are affected in this instance and say, “Because of the cut-off
only recently none of you are eligible for support”?’ It is just wrong – 63 families.

I will mention Tiana Hutcherson and Matthew Coppen, who said:

Losing this deposit and trying to work out where we’re pulling the money from is an absolute nightmare …

an absolute nightmare. And further:

I’m praying something like –

the Porter Davis payment –

… can be done for us …

She and her partner are about to get married. Can you imagine the heartache they are going through as a family, the two of them – and the broader family, I am sure – at this time to know that they do not have a lifeline? They are saying to the government, ‘Please, please extend that payment to our circumstance.’ Those families will be coming to Parliament over the week, and I would strongly say to the government to please think about their cases. Please find it in your good conscience to consider those 63 families, because they absolutely deserve a level of protection similar to others and should not be cut off purely because of that time frame.

That example is not the only example. I am sure that every Member of this place has come across someone who has been affected in this way, and it is just heartbreaking.

I recently went to Frankston to a site. I know the Minister is aware of it; there have been representations over a long period of time to the minister in relation to that site. There are two builds, one of them is in Frankston South. The site has some 15 to 20 townhouses. When you walk onto the site it is actually jarring that anything of that nature could have been built. I will not go into the details surrounding the case specifically, but there are issues, clearly, around the builder, and there are issues around who approved what. Are there questions perhaps around relationships and whether appropriate relationships existed around that process?

You walk onto the site, and you meet dozens of people who do not know what to do and have run out of money with nowhere to go. The first person I met at the site was living in his van across the road. He had been living in his van for – he could not tell me for how long. I then met a number of other residents, but this first man really struck me. He took me into his home, and it was very kind of him to allow me into his home. As I walked through the hallway the water damage was so bad that you could not breath because of the mould in the walls. You could not breath.

One of the other residents who lived in a different block had come to walk in with us, and she had to leave because the smell was so bad, she thought she was going to vomit. We walked into his property, and part of the roof had fallen in, and the balcony above had collapsed. I do note the Government has assisted with funding in relation to cladding replacement, and I do acknowledge that funding, but in terms of the structural damage to the buildings themselves you are almost at a point where those buildings need to be stripped right back to frame. They are just so bad. As you walk along there is so much water that it seeps out of the ground as you walk. You cannot go into the underground car park because it is a pool, and you need to be very careful as you walk along because balconies have collapsed.

I do not think anyone could look at that level of building – can you even call it a building? – or that level of construction and say, ‘That type of construction is fair, reasonable or what we would hope any Victorian should have to live in.’ But there are no avenues for the people who own those properties. There are just no avenues. The more people you talk to who have been touched by these, for want of a better word, crimes – I do not know what other word to use; I just do not know what other word to use – you see that these properties in many instances are very new. In most cases they are very, very new. You visit them, and they are almost demolition quality the moment you see them. What you will hear from the victims on every occasion is they have gone to the VBA – on every occasion – and they have tried to get support.

Discussion around the Authority is a difficult conversation to have. Some of the issues in relation to the authority have been aired. They have been aired, and some of them are very difficult. I will not go into some of the internal issues in relation to the VBA that are difficult to talk about, because there are some very, very concerning cultural issues that have been aired and that have had the worst possible impact upon people associated, so I think it is important to note that.

In relation to the site in Frankston I visited, I should mention the Member for Mornington, who first became aware of that particular site when he was the federal member. Because he is a good person – and that is the reason – he has kept a strong friendship with the victims involved and been a guide to them in trying to get support, in trying to advocate in whatever way that he could advocate. Not the local Member – the local Member does not sit on our side of the Chamber – but the Member for Mornington, even when he was not a Member of Parliament, was a point of contact for these victims, so I do want to acknowledge the Member for his work in relation to those victims and thank him for his advocacy on their behalf. I am sure he will speak to some of those matters in his contribution.

But I was speaking about the VBA and some of the issues that have been raised publicly. Some that can be touched on are things like inspections being conducted by iPhone, not once – a level of poor inspection that was so systemic industry leaders have formally raised it. They have formally raised it publicly, have put out media releases about it, have raised it with the Government. You cannot expect to be properly inspecting a property if you are doing it by iPhone.

The issues surrounding quality of inspection are important to highlight. They are important to put on record because we need to do better. The Government needs to do better to ensure that there is a level of quality in terms of inspection, and that is clearly an issue. We have seen for probably the last year most major bodies talk about lack of compliance around the Building Act 1993. We have heard people talking about concerns over the technical capacity of inspectors, so not just how they are performing the inspection but also their capacity. In no way am I reflecting on the staff, because I am sure there are a lot of staff who work very, very hard in the authority. I am sure that there is more work for them to do than they have time to do it in, but we do need to make sure that for the type of work they do they are fully trained – I do not think that is an unreasonable thing for them to be – and that the type of work they do is appropriate to the job they are doing.

You look over the last year and a number of issues have been raised not just in terms of types of inspection – I mentioned the iPhone issue – but also things like roof checks being done from the street and people in industry saying things like there is blanket noncompliance in roof construction on most major new developments. That is scary. That was a comment from Russell Kirkwood, a
licensed plumber, who further said:

It’s the wild west out there – roof plumbers are certifying whatever they want to certify because there is nobody checking. And the consumer is the one that suffers.

When we look at this Bill, what we are seeing is a Bill that is a drop in the ocean, frankly. It is a drop in the ocean in a space where there are so many people who are being hurt and not being protected. There is not a level of consumer protection that should exist. In the instances of people who have been so much victim to poor behaviour, those victims, unfortunately, have not been given a fair or reasonable level of cover. Montego is a perfect example of 63 people and their families who have not received a level of protection.

The Coalition will not be opposing the Bill. We have proposed a reasoned amendment to say we need to do more. We cannot keep saying we are going to do something at some point as a Government. The Government cannot keep saying that it is going to do something. For the last year in this space that is what we have heard: we are going to do something. When, Government, are you going to do something? When are you going to do something to protect the people that deserve protection and ensure that we have a system that we would all expect as Victorians?