Thursday, 23 March 2023

Building Legislation Amendment Bill 2023

Second reading

Debate resumed on motion of Sonya Kilkenny:

That this bill be now read a second time.

David HODGETT (Croydon) (12:34): It is a pleasure to rise to lead the debate and make a contribution on the Building Legislation Amendment Bill 2023. There are quite a few elements to this bill. It comes out of the work of the expert panel on building reform – work that Anna Cronin has overseen. Having had a look at that report and examined that report, there are some terrific elements to it, and certainly when it comes to regulation or regulators Anna Cronin is second to none. We welcome her work and the work of the expert panel and understand its role in setting the scene for this bill, and I am sure from my discussions with the Minister for Planning that there is more to come in the planning space as this term of office proceeds. I am sure we will see a lot more in the planning space, and we look forward to having a look at what comes out of that report.

In terms of our position on the bill we actually think there is a lot of good stuff in the bill. We are supporting the bill, but we think the bill could be improved and go a lot further. It is for that reason that I wish to move a reasoned amendment to the Building Legislation Amendment Bill 2023, 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 minister consults further with stakeholders, including the Australian Institute of Building Surveyors, about options to require building surveyors practising in Victoria to be members of a professional standards scheme, allowing AIBS to assist the government to regulate practitioners and strengthen the building permit process’.

I will come back to talk further about that in my contribution. I will just put on record, though, that from my discussions with the Australian Institute of Building Surveyors and certainly from my discussions with the minister’s office there are no surprises here. There will be nothing new. I understand that the AIBS has written to the minister, to the department, and anything that they have provided to me in terms of their views on this bill they have also provided the exact same information to the minister and the minister’s office. So I expect there will be no surprises, and who knows, we might get bipartisan support on this to actually improve the bill and take it further. But, as is the custom, I might just go through and outline the purpose of the bill, the main provisions, a bit of background and history, and then I will come to discussing the elements of it that we think could be improved. The bill will:

… amend the Building Act 1993, Architects Act 1991, the Domestic Building Contracts Act 1995, the Building and Construction Industry Security of Payment Act 2002, the Victorian Civil and Administrative Tribunal Act 1998, the Sale of Land Act 1962, the Owners Corporations Act 2006, the Cladding Safety Victoria Act 2020 and for other purposes.

These legislative amendments will create reforms that were outlined in the minister’s second-reading speech and in the bill. The amendments will create the following reforms: formalise and strengthen the role of the state building surveyor, establish a building monitor, expand the categories of building practitioner that will be required to be registered, enhance the building approvals process by introducing further safeguards to better inform consumers, strengthen information sharing between statutory entities with a role in the building regulatory framework, amend the distribution of the cladding rectification levy and strengthen and improve the governance arrangements of the Architects Registration Board of Victoria under the Architects Act.

Then coming to the main purpose of the bill, the purpose of this bill is to amend a number of acts and make a number of changes, and I might just put on record and outline those for the benefit of the house. The purposes of this bill are:

(a) to amend the Building Act 1993–

(i) to provide for the appointment of a State Building Surveyor; and

(ii) to provide for the appointment of a Building Monitor; and

(iii) to provide further in relation to the sharing of information and data; and

(iv) to provide for changes to categories of building practitioner; and

(v) to insert an offence relating to building practitioners; and

(vi) to require that relevant building surveyors give certain information to persons to whom building permits are issued; and

(vii) to provide for building manuals to be prepared and updated by owners and updated by owners corporations in respect of certain buildings; and

(viii) to provide for additional purposes for which money may be paid out of the Cladding Safety Victoria account; and

(ix) to make changes to the delegation powers of the Victorian Building Authority; and

(x) to make other consequential and miscellaneous amendments …

There are a number of acts that get amended by this bill, which I will just outline:

(b) to amend the Architects Act 1991 to make changes to the governance and procedures of the Architects Registration Board of Victoria; and

(c) to amend the Domestic Building Contracts Act 1995 in relation to the disclosure and sharing of information and data by conciliation officers under that Act; and

(d) to amend the Building and Construction Industry Security of Payment Act 2002 in relation to the disclosure of information under that Act; and

(e) to amend the Victorian Civil and Administrative Tribunal Act 1998 in relation to the disclosure and sharing of information and data under that Act; and

(f) to amend the Sale of Land Act 1962 to insert an offence relating to the provision of an approved building manual to a purchaser of land …

I will come back to that. That is a very important change and one that we support. Then:

(g) to amend the Owners Corporations Act 2006 in relation to the provision of an approved building manual at the first meeting of an owners corporation; and

(h) to amend the Cladding Safety Victoria Act 2020 to make consequential amendments.

A number of acts are being changed there, and as I said at the outset, this bill has quite a few elements. By way of background, just to set the scene a bit here, the bill replaces a previous bill that expired at the table in the Legislative Council last Parliament, and in the previous bill the government were proposing changes to the architects accreditation board, removing accredited architects from the board. Part 5 of this bill outlines the amendments to the Architects Act 1991, and clause 60, which is right at the back of the bill, deals with the membership of the board. The Australian Institute of Architects have informed me now that they are okay with the latest changes and are comfortable supporting these amendments. I think that bill last year, 2022, was proposing removing any registered architects or qualified architects from the board, which clearly they took issue with. Now the government, the minister, have made appropriate changes there to include up to three, the clause says, which they are more comfortable with. Make no mistake, I have certainly had some discussions with the Australian Institute of Architects and relevant people to that. They are all for a good skill mix on the board, qualified people that are in the position to deliver the best outcomes, so no-one is arguing against that. But I know they are pleased with those changes that were made to that previous bill in 2022.

The 2022 bill also included provision for local councils to undertake pre-occupation inspections for high-risk buildings. This has not made it into the 2023 bill, so I am suggesting the government may be doing some further work there. I would be interested in what their thoughts are about those changes. They have obviously had second thoughts about the changes to the building approvals process, and I look forward to perhaps what might come in that space down the track. We know there are a few issues around that, so we will work with the government to see where that takes us down the track.

In terms of the main provisions, as I keep saying, there are quite a few elements to the bill. Fundamentally the bill is around greater consumer protection within the building industry, and it links into the work, as I said, that the building system review expert panel has been doing around broader building reform. All these components, except for the cladding levy, are related to implementing recommendations from the stage 1 report of the expert panel. That is all about oversight and improving the regulator, who – it depends on who you to talk to – the industry might suggest has been asleep at the wheel, but I will leave that for others to form views around. But it is about oversight, about improving the regulation and about more accountability into the system and protection for consumers, and I do not think anyone could argue with that. Again, as I said at the outset, I commend the work the building system expert review panel has been doing around that broader building reform.

The first change will be to formalise and strengthen the role of the state building surveyor. That is already a role established in the Victorian Building Authority (VBA), but this will give it a statutory role as the primary source of expertise and technical guidance for the building and plumbing industries. That includes the power to issue binding determinations relating to the technical interpretation of building and plumbing regulations, codes and standards. The second component is establishing a building monitor to represent domestic building consumer interest in the system. Part of the rationale for this is looking at systemic issues. At the bill briefing I think it was explained me it is not just a person having one particular issue with their property, but what issues are occurring more broadly across the system. I am informed that we do not really have an advocacy role for that at the moment, so this is looking at filling that gap.

The bill will expand the categories of building practitioners required to be registered to enable the regulation of building designers, project managers, site supervisors and building consultants. This is about ensuring practitioners have the necessary skills or qualifications to carry out complex or high-risk work. This includes things like overseeing OH&S on sites and ensuring compliance with the NCC, the National Construction Code.

The bill will enhance the building approvals process, including by requiring relevant building surveyors to provide their clients with an information statement and requiring building manuals to be prepared for certain classes of buildings. The information statement aims to address the lack of consumer understanding about the role and functions of building surveyors and the building permit process, and the building manuals are intended to be a single repository of all relevant information relating to the construction and subsequent building works on the building and any relevant maintenance work. It is really creating a one-stop shop for all that information, and it should be noted this only applies to new buildings. It will not apply retrospectively to existing buildings, and I think that is sensible; it would be quite a task to do that.

Incidentally, I was talking to someone in industry that had purchased a new building – or their company or whatever had purchased a new building – and was the recipient of that information about the building on a USB stick, and they said the process worked quite well. I think the information given to me was that it was quite simple to pull that information together. The builder had it all on their computer, and it was quite a simple process. I make that point because this is not going to make it onerous or create additional problems in being able to provide those building manuals. On the ground out in the world it seems that this works well, so we support that.

The final component, which is separate to the expert panel’s work, is amending the distribution of the cladding rectification levy, to provide financial or other support to owners who are not eligible to receive funding under the current program, which is administered by Cladding Safety Victoria. The arrangement at the moment cannot authorise the cladding levy to be used to fund activities where full rectification solutions are not funded by the state. The amendments will provide greater flexibility in how the cladding levy is used, including enabling the use of the levy to provide financial or other support to address buildings that CSV have determined will not be eligible to receive funding under the current program. This is about giving greater discretion, obviously within the purposes of funding cladding rectification works or trying to fix the cladding issues, to do out-of-scope things that might not be eligible for full funding, as the funding at the moment obviously looks at high-risk buildings. Again, we think this change makes sense.

Moving on now, not so much to the areas of concern but to the ones that are the reasons for me moving a reasoned amendment and the areas we think could be taken further or addressed. I am using the reasoned amendment to put these on the record. As I said, I think the minister is aware of these because most of them have come from the Australian Institute of Building Surveyors, and they have informed me that there are no surprises and no secrets here. They have advised the minister’s office that it is a good way forward and they are encouraging that, so I wanted to put them on record in support of that.

As discussed above, the 2002 bill included provision for local councils to undertake pre-occupation inspections for high-risk buildings. That has not made it into the 2023 bill, suggesting that the government might be doing some more work around that. That is fine. They might be thinking more about any changes to the building approvals process there. I am led to believe the above provisions may have been omitted because we know there is a chronic shortage of building surveyors, both in the municipal and private sectors, and the shortage means that most councils do not have the capacity or are struggling with capacity, as I am informed, to undertake their core building control functions. It has been suggested to me that over the last 20 years building control has probably not been at the forefront of focus. ‘Neglected’ may be too strong a word, but it has been neglected by most councils, and as a result many councils are without appropriately registered building surveyors and inspectors and lack the staffing numbers to discharge their building control functions. Any additional burden of mandated responsibility would not see any benefits to consumers and industry, so that has been removed.

We look forward to where the government might go on that and to receiving a briefing around that area, but we will watch this space and we will respect the department and the minister’s opportunity to go and explore that further and come back with further legislation as needed.

Industry stakeholders stated that they would be pleased if the government – certainly with bipartisan support for the legislation – strengthened it by including the requirement for building surveyors practising in Victoria to be members of a professional standards scheme. The AIBS are very big on this and provide solid arguments for building surveyors practising in Victoria to be members of a professional standards scheme. AIBS also want to be allowed to assist in regulating the practitioners who carry out a role that was created by government to assist government in the building process. For example, the AIBS scheme mandates the need for practitioners to undertake continued professional development training as required for registration. The workforce shortage of building surveyors in Victoria certainly needs to be urgently addressed, so we would support any measures that would address and strengthen that.

The bill we think could be further strengthened in other areas. There was an example; I will not go into it here. Other contributions might touch on this, but I know the issue of waterproofing defects is back on the agenda or certainly back being talked about in the construction industry; I think there were some media reports on it in recent times. So the bill may be able to be further strengthened in areas such as that. The example of waterproofing defects is one which has been, as I understand it, among the highest percentages of defects for the last 15 years. So again there are ideas that the AIBS have in terms of addressing that issue, proposing a registered trade category. As I said, I perhaps will not go into that now. I know it is not in the scope of this bill, but it might be something that the government wishes to consider and we would be happy to have further discussions around that.

The Australian Institute of Building Surveyors also submits that the role of the state building surveyor should be an independent statutory office, not a position under the influence of the VBA, and certainly not an employee of the VBA, as the proposed legislation prompts. The role in its current form is obviously heavily influenced by the VBA and certainly not sufficiently independent. Furthermore, the proposal suggests that binding decisions cannot be appealed via the Building Appeals Board, a denial of procedural fairness and natural justice. That on the surface I think makes sense. It is certainly worthwhile further exploring, but it is always a good measure to have independence and a review process as needed.

There is one other. I will not attribute this to the AIBS but another industry stakeholder, when looking at the final report to the government expert panel on building reform. Their suggestion – and it was constructive – was that rather than take a piecemeal approach to planning reforms, whilst the industry was supportive of those reforms, the preference of industry is that they would rather see all the reforms together with an overall strategy and future direction to be considered. We understand that. I also think it is reasonable to accept that the department and the minister’s office will bring pieces of legislation to this place for debate and consideration as they see fit, but industry obviously like to have the broader detail and an overall look at the entire strategy, as opposed to piece by piece.

I notice he has left the chamber, but I put on record my thanks to the member for Narracan. He has a background in the construction industry, and certainly the member for Narracan has been very helpful in scrutinising this bill and assisting us to form a position on the bill. Again we were very appreciative of the minister’s office organising the bill briefing, and that allowed the member for Narracan and indeed other members to participate in that process and raise concerns and questions. I again just put my thanks on record to Aidan Wright, Ada Young and Andrew Grear, who were helpful; it is a good example of the process working. The member for Narracan raised a number of matters. It was – simple is probably not the word, but it was a better process for the member for Narracan to put those concerns in writing, and we were able to then provide them to the minister’s office.

I am pleased to report that we got a very, very thorough, detailed response on those, which then helped the member for Narracan to form a view across a range of issues. Time probably does not permit me to go into them all, but certainly we received detailed information around binding determinations, building practitioner registration, expert panel new practitioner site supervisor, expert panel new practitioner consultants, definitions and the process for building practitioner registration. So again, credit where credit is due, I do want to give my thanks to all those involved that provided that information. It makes it much easier for us to scrutinise the bill, assess it and form a view on it. As I said at the outset, we are supporting the bill, but we believe a reasoned amendment is the way for us to put a number of points in the debate for the government to consider.

I thank again all the stakeholders. It is a short period of time between legislation getting dropped into this place and in effect being debated two weeks later. It is a challenging process at times to get out to stakeholders, seek views, scrutinise views, form views, get a bill briefing and get a bit of back and forth in on getting information, but I am most pleased that again that process worked smoothly.

In summary, from the information provided in meetings, discussions and feedback, there is recognition of the need for reform. It is well overdue and absolutely necessary; that is the view of industry. Many stakeholders urged support for the bill. There is some great stuff in it. There are some really good reforms around that oversight regulator being more active and about more accountability in the system, consumer protections, information and that sort of thing. The industry basically are very supportive of the bill and suggest that in some areas it does not go far enough. Therefore there is that opportunity for us to put on record areas where we think we could strengthen the reforms, and I urge the government to take those on board.

It is without doubt that stakeholders support these reforms that provide for a modern building system which delivers safe, quality buildings. They believe the reforms will deliver significant improvements to the building system that will place safety and consumers at the heart of it, and as such, after all our ongoing assessment and feedback, we formed a view that we would support the bill but would move a reasoned amendment first so that we could put those things on record.

I think I have covered everything. Again, I will just take a moment to thank the work of the expert panel. Their report is an excellent read. For those that might be interested in looking at planning over the break of the next five or so weeks before we come back in May, it is a good read – a good bedtime read for people that might want to know where we are heading in the state, certainly on building reform. Good work. I commend the work of Anna Cronin, again one of the best, if not the best, regulators in the system. Her work is outstanding and first class, and I look forward to seeing what else comes out of that.

Again, I just place my thanks on record to everyone involved in providing information, providing the stakeholder feedback, and to the member for Narracan, who was most useful and most helpful with his background in construction to help us assess this bill, get our heads around some of the more technical components and be able to form a position to come and make a contribution on the bill and support it, but first move a reasoned amendment.

Sitting suspended 12:59 pm until 2:01 pm.

Business interrupted under standing orders.