Thursday, 4 May 2023

Home building industry

Jess WILSON (Kew) (17:27): (159) My adjournment is for the Assistant Treasurer, and the action I am seeking is a full and comprehensive review of Victoria’s building insurance scheme, including a full audit of current residential building contracts to ensure the requirements for builders to take out domestic building insurance have been met. Recent events have highlighted the significant regulatory failures in this space that are undermining Victorians’ confidence in the residential construction industry when building their own home. The minister will of course be aware that over 500 Victorian families paid a deposit to Porter Davis prior to its collapse. These families were effectively stranded when it became clear that they did not have domestic building insurance taken out on their behalf.

While the coalition welcomes the government’s decision last month to compensate these families for their clear regulatory failure, other customers in the same situation have been unfairly carved out of the eligibility criteria simply because they used a different builder. In particular, there are a number of families who have found themselves in exactly the same situation as Porter Davis customers when their builder Hallbury Homes collapsed earlier this year. Yesterday I met with the Hallbury Homes customers on the steps of this place to hear firsthand the incredibly distressing situation they find themselves in. They are simply seeking to have the insurance they are legally entitled to and that they paid for as part of their deposit honoured, just like those Porter Davis customers. As one of these Hallbury Homes customers has since written to me:

We felt despondent as our dreams of building our own house were shattered …

When the announcement came out to assist Porter Davis customers in the same situation as ours, we felt unnoticed, and discriminated against, as our situation was not considered in the same way.

It defies both logic and fairness that there is one set of rules for some homebuyers and another for other homebuyers. The government needs to take responsibility for its regulatory failure and provide insurance to any customer that has paid for it. And I welcome the Assistant Treasurer’s indication, given in this place yesterday, that the government will consider other homebuyers, such as Hallbury Homes victims, on a case-by-case basis.

It is clear, however, that the rot in the building insurance framework extends beyond the Porter Davis and Hallbury Homes victims. I have been contacted by many Victorians whose experiences with the Victorian Managed Insurance Authority and the Victorian Building Authority paint a stark picture of a regulatory and compliance framework that is quite simply ineffective. Customers have told me of stories of months or even years of waiting for VMIA claims to be actioned and processed. The Porter Davis and Hallbury Homes insurance fiascos are just reflective of the broader policy and enforcement issues of the VMIA.

Despite having these clear issues brought to his attention nine months ago and being presented with options to de-risk consumers in this space, the Assistant Treasurer has failed to take effective action. We are in the midst of a housing affordability crisis in this state, and we must restore confidence to the home building industry if we are going to tackle housing affordability. To do this, Victoria’s building insurance scheme must be fully reviewed so that we have a system that works to protect Victorians into the future and homebuyers can be certain that their deposit is insured.