Thursday, 8 February 2024

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

Second reading

Debate resumed on motion of Sonya Kilkenny:

That this bill be now read a second time.

And James Newbury’s amendment:

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’.

Paul HAMER (Box Hill) (10:11): I am very pleased to come back to the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, because it is a really important piece of legislation in terms of consumer protection. We have seen too often in recent times construction companies going into administration or outright collapsing. Many, many customers have saved for their entire lives to put down deposits for a new home, and it leaves many of these customers with incomplete builds and in a state of personal financial ruin, with their deposits gone and their savings destroyed. We have also heard of stories of companies not disclosing to their customers about the true state of their books and in some instances accepting deposits literally only hours before entering administration. This really reprehensible behaviour has collapsed confidence in the public’s eyes and depleted the construction industry, or certain sections of the construction industry, of trust. They do include some really big names in the housing construction sector. Porter Davis is one that has been named frequently, but there are other large builders – ProBuild and Pivotal Homes, for example ‍– previously big players in the residential volume build construction game. Some of the behaviour of these companies was really despicable. When Porter Davis collapsed in 2023 it was revealed that around 560 building owners or prospective building owners were at risk of losing their entire deposit due to the failure of Porter Davis to obtain domestic building insurance on their behalf. We have also heard of other builders that collapsed that had also not obtained the requisite domestic building insurance to protect their customers’ deposits.

I do want to just reflect on a case in my own electorate of a constituent who made contact with my office in April last year. Hallbury Homes were building two townhouses for him before entering sudden liquidation in early January, leaving 42 projects unfinished and owing $12 million to more than 400 creditors. My constituent had invested around $600,000 in his build, and in his case he had already entered legal proceedings with Hallbury because they were failing to meet their expectations by late 2022. He did raise with me that he felt he could see the writing on the wall because the company’s work had dropped off on his site, and that obviously triggered some of the legal dispute. It is not just the financial impact that this has on people, it has a huge mental impact as well. The individual told me that the experience had almost destroyed his life. His marriage was under immense strain and the stress was life changing, as you would expect if you had invested your complete life savings in an investment that you hoped would set you up for financial security. To have that taken away would be truly devastating.

It is really important that we do have the policies in place that require and strengthen the provisions for protection of customers. This bill seeks to do that by setting two new offences to the Domestic Building Contracts Act 1995, which will be triggered when a builder receives money from a building owner in relation to carrying out domestic building work under a major domestic building contract without having obtained the required insurance for that work. The bill will also make amendments to the Building Act 1993 to ensure that the Victorian Building Authority can enforce and take disciplinary action in respect of the set of new offences in the legislation. It brings in new offences and tougher penalties for builders who accept deposit money under a major domestic building contract without first taking out the required insurance, which was clearly an issue that was raised in the Porter Davis case and in others subsequently.

As I mentioned, this is really part of reform package that is designed to provide stronger protections for consumers, with further legislative options also being considered, including responding to the use of multiple contracts in the building industry, which in some cases try and avoid the requirement for a domestic building insurance policy to be taken out. This will allow also for a further review of the domestic building contracts to be undertaken.

This is an important bill in the context of the broader government program. Obviously there has been quite a lot of discussion around the debate of this bill about the housing situation that we find ourselves in in Victoria and the need for more housing, so it is really important that as we build that new housing we have those protections in place for consumers. There will also obviously be new market entrants coming in from a construction point of view and building those new houses, and we want to make sure that those players in the construction industry who are coming into the industry are doing the right thing by their clients, by the customers, to ensure that they have signed up and taken out all of the necessary insurance so that customers of new builds can go in with confidence that they will get the product at the end of the day. And if economic situations occur that unfortunately mean the builder cannot complete the work, then at least those consumers are well protected. So it is a very important bill in the current climate, and I commend the bill to the house.

James NEWBURY (Brighton) (10:19): I move:

That the debate be adjourned.

I move that the debate be adjourned because it is important that this house immediately debate the behaviour of the Greens, the pattern of behaviour of the Greens, and that a number of members of the Greens party have not apologised for the pattern of behaviour that is occurring. It is deeply distressing not only to many members of this place but to staff of members of Parliament, to staff in this building and to people in the community that a repeated behaviour is occurring and yet, sadly, that behaviour has not been apologised for.

Every member is elected to this place in their own name, every member. We represent our communities, but no-one speaks on our behalf in this place. What we saw this morning was the acceptance of an apology from one member by the Speaker for the behaviour of others, and many members of this place saw one member of the Greens laughing after an apology was given. It is totally and utterly unacceptable, and as such the coalition sought to move dissent from the ruling of the Speaker. I want to place on record how long and hard we thought through that course of action before doing so, how I personally spoke with the Speaker, how I wrote to the Speaker and how I met with multiple members of the government because I did not want to go down that path. My strong view was that every member should apologise for their own behaviour.

We have seen over recent months both chambers shut down. We must debate the behaviour and the action taken. The action taken this morning was that one member who has caused and led, frankly, this outrageous behaviour did not apologise. After an apology was given many members of this place saw one of the members laughing. This is very, very serious. This is about the behaviour of members of this place. That is what we need to debate – appropriate behaviour from members of this place and where they behave inappropriately in a way that does cause distress and does cause issues of safety concern. What we saw last year with the shutdown of the Parliament was a genuine concern for the safety of members and for the staff of this building, and I put on record the Premier’s comments where she concurred with that principle that the behaviour recently not only is wrong but is deeply concerning and is, frankly, inciting issues around safety. We cannot have behaviour of that nature.

We must have a debate about whether or not behaviour is appropriate from members in that way. When they are behaving inappropriately we must debate what sanction they receive, and the sanction of not apologising today was totally inappropriate. It was totally inappropriate, and to know that a member laughed about it – we should all sit here shocked by what we saw. It is not good enough to have a member knowing that they do not have to apologise and then laughing about it, because what we know is it is going to happen again. The Speaker did note this morning an intent to act further. But I have no faith that poor behaviour will not happen again, and we must debate whether behaviour of this type is acceptable. We must debate, when behaviour of this type occurs, whether or not a member apologises to the house for that behaviour individually and personally, as they rightly should. As such, because an apology was not required, we sought to move a dissent from the Speaker’s ruling, which we certainly did not take lightly.

We must debate those matters. We must debate that ruling. It is only appropriate that these issues be debated, and I do this noting for the house that this is not something that has been moved without fully thinking through the ramifications, fully thinking through what we are here talking about – the seriousness. But we cannot allow this behaviour to continue in this place, and we cannot allow members to get away with it without even an apology.

Colin BROOKS (Bundoora – Minister for Development Victoria, Minister for Precincts, Minister for Creative Industries) (10:24): At the outset can I say that I and I am sure many members on this side of the house share the sentiments that have been expressed by the member for Brighton in the speech that he has just given. I am absolutely concerned at the behaviour of members who deliberately obstruct the operation of this house. I have seen it a number of times over the years that I have been in this place, but it seems that there is a particular member who has a pattern that is emerging in terms of obstructing the operation of this house.

The importance of the proper operation of this house, Deputy Speaker, is that the people in my electorate are entitled to have their representative be able to contribute to debates in this place and to be heard, just as they are from your electorate and the member for Brighton’s electorate. Every member of this place has members and constituents who expect that their members are able to represent their views in this place, and people who obstruct the operation of this house are effectively silencing the rest of us on behalf of our constituencies. So it is absolutely inappropriate for people to selfishly perform in the way that they did yesterday and during other examples that we have seen as well.

I do not want to have anyone think that I am not as angry at the behaviour as other members of this place are – I am. I think we are very fortunate in Victoria to have the form of democracy we have and the way that this Parliament works. It serves us all. It serves our communities really well. It is not perfect, but it serves us all so well. But I think the way in which this has been raised, as a procedural motion to adjourn debate during debate on an important bill, is not the appropriate way for this matter to be dealt with. Just as I have described the obstruction that occurred yesterday – this is no way on the same level, but of course we are debating some really important legislation to protect building consumers. I would hope that we can continue with that debate and then with the next piece of legislation that we are going to debate without these sorts of procedural debates, notwithstanding the genuine nature by which I think the member for Brighton raises this matter. There are ways for members of this place, particularly those that have carriage of the operation of the chamber, to negotiate and discuss, whether it be in this place or outside, to resolve these sorts of important matters.

I think members need to carefully reflect on how they approach these sorts of matters. We need to give them careful consideration. The curtailing of a member’s right to participate in this place is a serious matter. The sorts of actions that we might contemplate in terms of sanctions on members are really important and serious things for us to consider, and they are not matters that should be contemplated as part of an adjournment to a piece of legislation without notice to other members of this place. I would encourage the member for Brighton, who, as I say, I think is genuinely raising this matter, to engage with government representatives and other members of this place to ensure that these matters are considered in a careful and timely way.

James Newbury: On a point of order, Deputy Speaker, imputations are unparliamentary, and I did in every way engage with both the government and the Speaker, who refused to engage on the matter and change the position that was taken to this house.

The DEPUTY SPEAKER: The minister is to continue, but I will say I am listening carefully to the member for Brighton’s contribution, the minister’s contribution and further contributions. The question in front of the house at the moment is whether we adjourn, and it is a procedural debate. I understand that the house needs to explain the whys and wherefores, but please keep it to the procedural motion. I am just saying that out loud.

Colin BROOKS: I in no way intended to impugn the member for Brighton. Deputy Speaker, your ruling then is correct and highlights the fact that this is a procedural debate about the adjournment of a piece of legislation. My argument is, despite the fact that these are serious matters that have been raised, that the appropriate way for these to be dealt with is not via the way in which the member for Brighton has raised this as an adjournment during a piece of important legislation debate, and therefore I do not support and would imagine the government does not support the adjournment of this piece of legislation for the matters that he has raised.

Ellen SANDELL (Melbourne) (10:29): I would just like to make a few brief comments on this matter. There has been a lot of what I would class as faux outrage about the obstruction of the house in this debate. The member for Brighton –

Members interjecting.

The DEPUTY SPEAKER: Order! Member for Melbourne, I am just going to repeat what I said. The question in front of the house is on the adjournment of the building legislation, so please keep your debate to the importance of that or otherwise.

Ellen SANDELL: The member for Brighton is proposing that we adjourn debate on bills, which are the normal business of this chamber, to debate something for his own political ends. I would just say that there has been a lot of outrage from the member for –

James Newbury: On a point of order, Deputy Speaker, it is a breach of the standing orders to make imputations on members, and this undermines the apology that was given this morning. This undermines the apology, and every member can see it.

The DEPUTY SPEAKER: Imputations on members are disorderly. I would encourage members to keep that in mind.

Ellen SANDELL: All I am simply doing is referring to the contribution that the member for Brighton made. He is suggesting that we adjourn this bill to debate a matter that is about his view that members are obstructing this house. He is seeking to suspend the normal business of this house to debate the obstruction of the house, and that to me is a little bit nonsensical because what he is doing is using a tool to debate obstructing the house. I do not think that that is a proper use of this Parliament’s time. I would argue that spending 30 minutes on this debate and then a further however long debating whether members are obstructing this house is more obstructive than a 5-second protest that happened yesterday. There has been a lot of talk about decorum in this house. Through this debate there has been ‍–

Members interjecting.

Ellen SANDELL: Deputy Speaker, I believe I have the right to make a contribution in silence.

Members interjecting.

The DEPUTY SPEAKER: Order! Settle. The member to continue in silence.

Ellen SANDELL: Thank you, Deputy Speaker. There has been a lot of talk about decorum in this house, and I would just like to point out some of the activities and actions that we have seen over the last little while in this house, because I think it is important to take a holistic view and not just look at one particular incident. This week we have seen incredibly loud call-and-response from the government –

Members interjecting.

The DEPUTY SPEAKER: Without assistance, please, members on my right.

Mary-Anne Thomas: On a point of order, Deputy Speaker, this is a narrow procedural debate. I note also that you have given some licence to members to talk about some substance in relation to this issue, but I would ask that you bring the member for Melbourne back to the procedural issue that is –

The DEPUTY SPEAKER: Thank you, Minister. The member for Melbourne to continue, with the procedural debate in mind.

Ellen SANDELL: I understand that the content of the procedural debate is about the decorum of the house and obstructing the house. That is what other contributions have been about. I would just like to remind members about the decorum that we have seen in this chamber over the last little while: very loud call-and-response from the government, incredible walls of noise in this place. In my time in this chamber we have had situations where students have been banned from coming in to even watch Parliament because of the bad behaviour in this place. I note the Premier was out this morning talking about decorum, and in fact she was suspended for six days back in 2013 for appalling behaviour, in fact calling the Speaker a dictator. So I think we should just look in the mirror when we talk about decorum –

James Newbury: On a point of order, Deputy Speaker, on relevance, we reserve our right to take further action in relation to this speech.

The DEPUTY SPEAKER: It is not a point of order. I appreciate that members need to make examples of why, but you have to come back to why. The member’s time has expired.

Mary-Anne THOMAS (Macedon – Leader of the House, Minister for Health, Minister for Health Infrastructure, Minister for Ambulance Services) (10:34): I want to take the opportunity presented by the procedural motion that has been moved by the Manager of Opposition Business to say that on this side of house we abhor the behaviour that we saw yesterday in the Parliament. It was unparliamentary in every sense of the word. It was a deliberate attempt to shut down debate in this place, and it was a deliberate attempt to intimidate members of this place. And the thing about it that was most offensive to my mind was that it was once again a premeditated action by the Greens political party to use this place, as I think has already been noted, for their own political purposes and not at all in the interests of Victorians, for whom each of us has a responsibility to act –

The DEPUTY SPEAKER: Order! It is a procedural motion.

Mary-Anne THOMAS: Thank you. However, there are procedures in place for managing behaviours in this place. The Speaker is in charge of ensuring that the standing orders and the sessional orders and indeed other rulings made by Speakers are upheld in this place. I think the Speaker was clear today that having witnessed this behaviour in the past she will no longer be affording those that have shown on now multiple occasions their willingness to disrupt the business of the house – the Speaker has indicated that she will not be affording those members the opportunity to make an apology to this place but she will be taking swift action.

In terms of some of the issues that have been raised by the Manager of Opposition Business, the Manager of Opposition Business and I, as you would expect, have had a number of conversations following what we both agree was outrageous and disrespectful behaviour in this place, very unparliamentary behaviour in this place, yesterday. We have, as you would also expect, discussed the significance of today in relation to the apology that is being given to care leavers, many of whom, hundreds of whom, are assembling in this place. We have talked about the significance of this day. There are other avenues that are available for both the Manager of Opposition Business and I to take the will of the majority of members of this place to the various committees that this Parliament convenes to take some further action in relation to what we saw yesterday.

I do not think that interrupting debate on an important bill before the house to discuss behaviour that is completely antithetical to everything that this house stands for is a useful use of this Parliament’s time at this particular time and place. While we appreciate the sentiments, we will not be supporting the adjournment of the debate on the business before the house now.

David SOUTHWICK (Caulfield) (10:38): I rise to support the member for Brighton in his call to adjourn the debate to raise an important debate on the outrageous behaviour of the Greens. I think we have seen today from the member for Melbourne that this was not a sincere apology for yesterday. In her contribution she wound back what was said in effectively a very, very small apology earlier today ‍– five words, I think, were used – that was meant to be on behalf of all of the Greens, when we know it was the member for Richmond yesterday that led the charge and that had a debate which was horrific in the language that was used. There is the fact that the manager of government business has said ‘premeditated’, which clearly from the government suggests that this is not a one-off – this is a member of Parliament, the member for Richmond, that has premeditated things, not just today, not just yesterday but on other occasions as well.

Therefore to take an apology on behalf of all of the Greens is unacceptable, and that is why it is really important that we debate this today. It is an important process. You would see that we hardly ever would go through the process that we have of seeking to move dissent. And I think quite frankly that we should receive an apology from the member for Melbourne today for the speech that she has given, because the speech that she has given completely undermined the apology. It wound back the apology, and I think we need to hear again from the Speaker, because it was not sincere. It was a political stunt, but it was more than a political stunt. It actually brings up the issue of safety, and it brings up the issue of incitement of hate – the very nature of what we all stand up against in this Parliament. We are unified as the government and opposition against the hate. But if we are going to allow the Greens to behave in this particular way, then where does it stop? We have protesters out the front, and Greens members are activating those protesters to bring them into the chamber to photograph, to go down to my office and to threaten my safety. Where does this stop? I would ask for each individual member of the Greens, like every member of Parliament, to be judged individually. That is the process and why we are calling on this discussion to be brought forward today, because it is important. We stand here as individuals. Yes, the Greens might be part of a party that has a clearly antisemitic and anti-Israel approach to things; we know that. It is unquestionable, their approach on Israel.

Ellen Sandell: On a point of order, Deputy Speaker, the member for Caulfield has levelled an offensive accusation, which I take offence to, and I ask him to withdraw.

The DEPUTY SPEAKER: The content of the debate was made to a collection of members, not to a single member, and therefore imputation does not apply. There is no point of order.

David SOUTHWICK: As I was stating, it is clearly understood, the Greens position on Israel and on the Jewish community; we are aware of that. But when you come into this chamber, you come here as an individual. The member for Richmond yesterday came here as an individual and raised a question which was outrageous. It was antisemitic, hateful and hurtful. And then the rest of the Greens followed suit. So it is quite right that each individual member of the Greens should apologise. That is not what has happened, and that is why we are questioning, unfortunately, the ruling of the Speaker, because we do not believe it is in keeping with what should have happened. We clearly know that it was not a sincere apology, because the member for Melbourne has wound that back today.

The DEPUTY SPEAKER: Come back to the procedural motion, please.

David SOUTHWICK: So until we actually get a proper apology from each and every member of the Greens, each and every one of them that was thrown out yesterday, then unfortunately it is not good enough. If the government effectively do not support the member for Brighton in this, unfortunately they are supporting the Greens in their activity. It is really important today that we take this up, because there is nothing more important than the safety of this Parliament and the divisive nature that the Greens are using for not just Parliament but the whole of the state of Victoria.

James Newbury: On a point of order, Deputy Speaker, I formally request that you refer the member for Melbourne’s contributions through this debate to the Speaker, with a view to considering whether the behaviour undermines the apology that was given, obviously falsely, this morning.

The DEPUTY SPEAKER: There is no point of order.

Tim RICHARDSON (Mordialloc) (10:43): I think it is an important point on standards, and I welcome at least the discussion around a procedural matter that has some sort of substance and is worth discussing. Rather than some of the 2023 procedural debate deferments, this actually has some merit in its consideration. But the form which it takes – and there are a couple of points I will make to this – is a bit of concern. One is that the interplay of reflections on the Speaker and then a dissent risks then reflecting on the Speaker’s ruling during that reference as well, rather than just debating whether the Greens political party members were apologising or not. We have had other standards of behaviour here that we have seen over time which have been referred to the Speaker. They have not come back in a dissent like that, and I just think that is something that should be reflected on. Mashing the two together as a reflection on the Speaker’s ruling and then also the merit of the issue and the really poor conduct of members of Parliament in here needs to be carefully considered.

The other thing is the standards, which is a really important point. We saw really significant concerns yesterday. We are representatives; all 88 of us have 50,000 constituents in our communities, and it is an important point to reflect on the standards that we accept as behaviour in this place, which should be upheld. People look to us as leaders, and when we diminish or belittle those standards, we take the low road and low pathway. The member for Melbourne and others have had Guardian articles about standards in this place and adhering to behaviour and different procedures but then undermine all of those points with the behaviour and conduct that was put forward yesterday.

The member for Brighton made some important points, and I think the ministers at the table – the Leader of the House and the Minister for Development Victoria – did as well. But let us just pause and reflect that in the 59th Parliament we had people literally threatening the Premier with hanging out on the steps of Parliament, and no-one was calling that out on that side. In fact they were inflaming that behaviour and those antics.

James Newbury: On a point of order, Deputy Speaker, I ask you to bring the member back. I am sure that we all share similar views on poor behaviour, and I would ask you to bring the member back to the motion.

The DEPUTY SPEAKER: I think the member had strayed a little bit from the procedural debate. If he could come back to it, that would be appreciated.

Tim RICHARDSON: Standards are important, and I think they are something that we should reflect on at a time that is appropriate, rather than interrupting the building insurance legislation bill – an opportune time. Standards in the Public Accounts and Estimates Committee would be a great thing to debate – putting your feet up on the table and belittling ministers and witnesses. I would really welcome those opportunities to debate standards in this place. We would lean right in for a chat on that, but not at this time. This is not the appropriate time, where we are debating important legislation and where we have an apology coming up that should be the focus of everyone’s attention, not allowing the Greens political party another moment to undermine such an important and significant day in those reflections. That should be the focus of everyone today for those who have fronted up to our Parliament and should see it in all its importance and all its multipartisanship in an apology that the Premier will deliver and, hopefully, will be supported by everyone in this place. We do not want to defer, delay or impact on that schedule and some of the legislation that comes through. So at this point in time, with also the risk of going into what is then a dissent from the Speaker’s ruling on those issues, we should keep the program underway and oppose the deferral of this adjournment on this occasion.

Assembly divided on motion:

Ayes (26): Brad Battin, Jade Benham, Roma Britnell, Tim Bull, Martin Cameron, Annabelle Cleeland, Chris Crewther, Wayne Farnham, Sam Groth, David Hodgett, Emma Kealy, Tim McCurdy, Cindy McLeish, James Newbury, Danny O’Brien, Michael O’Brien, Kim O’Keeffe, John Pesutto, Richard Riordan, Brad Rowswell, David Southwick, Bridget Vallence, Peter Walsh, Kim Wells, Nicole Werner, Jess Wilson

Noes (57): Juliana Addison, Jacinta Allan, Colin Brooks, Anthony Carbines, Ben Carroll, Darren Cheeseman, Anthony Cianflone, Sarah Connolly, Chris Couzens, Jordan Crugnale, Lily D’Ambrosio, Daniela De Martino, Gabrielle de Vietri, Steve Dimopoulos, Paul Edbrooke, Eden Foster, Will Fowles, Matt Fregon, Ella George, Luba Grigorovitch, Bronwyn Halfpenny, Katie Hall, Paul Hamer, Martha Haylett, Sam Hibbins, Mathew Hilakari, Melissa Horne, Natalie Hutchins, Lauren Kathage, Nathan Lambert, Gary Maas, Alison Marchant, Kathleen Matthews-Ward, Steve McGhie, Paul Mercurio, John Mullahy, Tim Pallas, Danny Pearson, Tim Read, Pauline Richards, Tim Richardson, Ellen Sandell, Michaela Settle, Ros Spence, Nick Staikos, Natalie Suleyman, Meng Heang Tak, Jackson Taylor, Nina Taylor, Kat Theophanous, Mary-Anne Thomas, Emma Vulin, Iwan Walters, Vicki Ward, Dylan Wight, Gabrielle Williams, Belinda Wilson

Motion defeated.

Jordan CRUGNALE (Bass) (10:52): I rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. We have heard already in this place in the course of the debate the enormity of making the decision to build or renovate a home. This decision is complex and personal, a decision involving both financial and emotional investment and a decision that should not need to involve consideration of the financial viability of a building company. However, according to ASIC between mid-2021 and 2023 in excess of 2000 building companies went into liquidation, with a further 783 folding in the September quarter of last year. In too many cases these closures saw significant losses for purchasers – deposits lost, houses largely paid for yet unfinished.

The constituents of the Bass electorate have not been immune to the impacts of residential building company collapse. In July 2022 Langford Jones Homes went into voluntary liquidation, reportedly leaving 66 homes partially completed and 60 more homes yet to be commenced in the areas of Phillip Island and Melbourne’s bayside and south-east suburbs. Then when the Porter Davis collapse happened in March 2023 many constituents with properties in our south-eastern growth corridor, including Clyde, experienced the devastating impacts, many reaching out to my office for support and advice in tears, in disbelief and struggling to come to terms with what had just happened.

Of the many left devastated I want to speak about one family in particular with three young children. After reaching lock-up stage, weeks away from moving in, they paid $94,000 – the day before Porter Davis Homes went into administration. If that was not enough, their home was then destroyed by a suspicious fire. Their dreams shattered in an instant, the financial burden was unbearable – it was beyond devastating. They reached out for support and advice on how to navigate through both the administration process and also the insurance process, which was a double whammy of red tape, only adding to their distress. They lost money; they lost their dream home. What we saw at the time of the blaze was also a rise in vandalism at construction sites by suspected out-of-pocket tradies. It was reported in the media at the time that a swathe of devastated customers were starting to padlock their fences and install security cameras to ensure their homes were not targeted. Domestic building insurance (DBI) and the obligation for builders to obtain insurance on behalf of purchasers were meant to protect these individuals. Unfortunately not all purchasers were protected. Builders delayed obtaining insurance, accepting deposits but waiting until construction commenced or just not obtaining it at all.

I am proud to be part of this Labor government, which has taken action to support individuals who through no fault of their own have been impacted by the awful and careless practices of these building companies. We have done this through the initial support of Porter Davis customers and the subsequent introduction of the liquidated builders customer support payment scheme. While these measures have provided significant financial support to many impacted customers, the actions of these building companies has had devastating impacts both financially and emotionally for all families – for the families, individuals and broader communities. The significant negative mental and physical health impacts of longer term ongoing stress, particularly relating to stresses over which you have no control, is well founded. These families will likely experience these impacts well into the future, and that is why I am pleased to stand and speak in support of this bill, a bill which amends both the Domestic Building Contracts Act 1995 and the Building Act 1993 to help protect Victorians from experiencing the strains – as I mentioned, the financial strain, emotional strain and physical strain – which result from a building company collapse when required insurances have not been put in place.

The opposition could do something right now actually to deliver stronger protections for Victorians building or renovating their home. They could support this bill and give the Victorian Building Authority (VBA) the powers it needs to better protect consumer deposits, power that would hold builders to account for doing the wrong thing, and instead they moved a reasoned amendment asking us to delay debating the bill and to go back and do another review – more talk, no action.

This bill, the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill ‍2023, will protect consumers by ensuring builders take out domestic building insurance prior to the receipt of first payments, ensuring coverage both during the delay between payment and commencement of construction and through to completion of their project. Further, this bill introduces two new offences to apply should builders fail to meet this obligation, and these offences entail significant and appropriate fines, fines that will not disappear should a company become insolvent, fines that responsible individuals and/or company directors may be held liable for.

Importantly, this bill also provides the VBA with the necessary powers to take action against builders who fail to take out the required insurance prior to accepting payment, and these actions extend to immediate suspension of registration if warranted. I am sure the people of Victoria, particularly those with plans to build or renovate, will be reassured to know that the VBA continues to audit compliance with DBI requirements.

This bill is the first in a suite of reforms which will provide greater protection to Victorians. This Labor government is acting to ensure Victorians have access to safe and quality homes through reforms that deliver greater clarity of roles in the building system and stronger regulators to protect consumers, facilitating skill enhancement, professionalism and transparency and improving the approvals process to ensure homes are safe and built to last.

While these important measures will act to protect Victorians building and renovating houses, I would like to take this opportunity to acknowledge the subcontractors, often small businesses, who have also been impacted by recent liquidations of housing construction companies. In the case of Langford Jones Homes, liquidators reported that over 400 creditors were owed in excess of $23 million. Many of those creditors were local subcontractors relying on payment for supply of already installed materials and payment of wages.

Last year the Legislative Assembly Environment and Planning Committee, of which I am a member, conducted an inquiry into employers and contractors who refuse to pay their subcontractors for completed works. Our review and subsequent report identified insolvency as a significant risk for subcontractor payment. Australian corporate insolvency data indicates 90 per cent of unsecured creditors will receive nil returns, and as such the downstream impacts are significant. Subcontractors have invested in materials, time, staff and planning for delivery to these large building companies, and when the company collapses, failing to make payments to their subcontractors, the subcontractors themselves are at risk of insolvency, putting jobs at risk. As such, there is a trickle-down effect. The insolvency of the head company may result in more flood-like events downstream, potentially resulting in multiple insolvencies.

I would like to thank the chair the member for Wendouree, the deputy chair – he is in the room – the member for Morwell and my fellow committee members for their work, as well as the committee and the team for their support for the duration of the inquiry. We had so many submissions and held public hearings, and I extend my thanks to the many that contributed to the hearings, providing evidence. It is a great report.

I would like to thank the Minister for Planning and her ministerial department team for this legislative work and for their response to the recent collapse of significant building companies and the negative community impacts. This bill sends a strong message to industry while giving consumers confidence in the building industry and our regulator’s ability to ensure compliance. I commend the bill to the house.

The DEPUTY SPEAKER: Before I call the member for Hastings, I note in the gallery a former colleague the former member for Broadmeadows Mr Frank McGuire. Welcome back.

Paul MERCURIO (Hastings) (11:02): I am happy to rise to make my contribution to this very important bill before us today, one of the longer titles, the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. Effectively there are four main purposes of this bill: to amend the Domestic Building Contracts Act 1995, to amend the Building Act 1993, to provide that investigation and enforcement powers may be exercised in relation to the contravention of certain offences against the Domestic Building Contracts Act 1995 and to provide that builders who are found guilty of contravening certain offences against the Domestic Building Contracts Act 1995 may become ineligible for registration for a period of time. There are 19 clauses in this bill, and each has multiple additions within it. Oftentimes the additions are the same – in fact oftentimes the exact wording is used in multiple sections. This is because of the issue which arose last year with the collapse of Porter Davis and which has continued on with other large and small builders and building companies also collapsing.

Put simply, some builders were taking people’s deposits without taking insurance out on their builds and therefore leaving their clients completely vulnerable in the event that the building company collapsed. As we know, many building companies have collapsed, sadly. I would like to acknowledge that we are talking about real people, people who have lost their dream, their money and their future, people who now must begin again. This is untenable. It is unfair. It is completely unnecessary. The depth of despair that these people must feel is unfathomable. I would also like to acknowledge that there are thousands of builders and building companies around Australia that have not collapsed, that have always done the right thing, that take great pride in their workmanship, their customer service – companies that do make people’s dreams come true.

This bill will be the first part of a reform of the regulatory framework to make sure that people who have given money to their builders for domestic work will be protected, because what has happened to not only Porter Davis customers but others is wrong. This will be achieved by inserting new offences with tough penalties and also providing strengthened powers for the Victorian Building Authority to enforce compliance with insurance requirements. The new offences are designed to stop builders like Porter Davis and other domestic volume builders from receiving money for a contract without holding the required insurance by inserting new penalties ‍– up to $96,000 per person and up to $420,000 for a company. These penalties are for the builders who knowingly or recklessly committed the offences, while slightly less penalties are given to builders that committed the offences at a standard of strict liability.

These changes will also give the Victorian Building Authority more power to commence proceedings to make sure that builders are complying with the new regulations and also allow them to enforce the new offences to non-complying builders. Amendments to the Building Act will state that the VBA has grounds to immediately suspend the registration of a registered building practitioner if they are deemed to have committed one of the new offences. These changes are being made after the Porter Davis collapse, which exposed loopholes in the Building Act which some builders have been taking advantage of. I will say that the Building Act has not changed since 1995, so it is good that we are making changes now. These new offences and amendments to the act will make sure that it stamps out this awful behaviour and create penalties to deter anyone from repeating these disgraceful acts. Actions from companies like Porter Davis continue to give a bad name to our domestic home builders. It is a reputation that most do not deserve, and they are doing the right thing by the law and are not taking advantage of people who want to own their own home.

With this bill we have done our due diligence and consulted with multiple organisations and government departments to ensure collaboration and mitigate potential risks. I do note that Master Builders Victoria have concerns and wish to see further changes to the act, but we are here today to make changes to close a loophole that has been taken advantage of for too long. Just as a reminder, this is the first part of a suite of reforms that will deliver stronger protections for Victorians building or renovating their home.

In addition to that, we have commenced consultations as part of the review of the Domestic Building Contracts Act 1995, looking to improve safeguards for consumers when entering building contracts. We have also released the stage 2 report of the expert panel reviewing our building system. This came up with 14 recommendations to deliver greater accountability, improve insurance coverage and strengthen compliance and enforcement. In short, after there has been further consultation with the building industry and consumer groups and looking at those 14 recommendations, it will allow for decisions to be made and possible further legislation to improve building practices and make sure people who have worked hard for their deposits are not left out when things go wrong through no fault of their own.

These changes also come at a very important time, as we are on the way to building 800,000 homes over the next decade. Having made these amendments, homebuyers can be confident that if something goes wrong with their builder, they will be insured and they will not lose their hard-earned deposits. We are also supporting the building industry by providing them with a huge pipeline of work through our landmark housing statement. As I mentioned previously, we have set an ambitious target of 800,000 homes to be built within the next decade, and we need to provide buyers with certainty that their dreams will not come crashing down because a builder did not want to follow the correct rules. We want the building industry to have confidence in the government as we provide a strong list of works heading into the future, but we also need that confidence in return when putting deposits down. Young people are having to sacrifice and save more money than ever for a house deposit. So we need to make sure that they are protected heading into the future, and this bill is the start of that process.

My wife and I like to walk around my little township where we live, and a couple of years ago a new development was being built. Once they put the roads in, my wife and I would walk around those roads because they were very quiet. They did not stay quiet for long, because people started building. It was really interesting watching the process of houses going up. The land was cleared, foundations were laid, slabs were laid and walls – but in that process I noticed one house stopped completely; nothing happened. Around it other houses sprang up – the walls were made, the roof truss was put in, painting was done – and I also noticed another house was locked up, nothing happening. It was dirty. There was plastic and fencing. It was very unfortunate; you could see that there was some demise going on.

Eventually the whole suburb sprang up, with lots of wonderful different houses. There were gardens and grass and cars out the front and kids playing, and yet there was another house that just looked a bit like a ghost house. There were probably 4 per cent of buildings in that area that did not happen. Around them there were beautiful houses where people had their dreams come true – their families were living there, they had everything they wanted – but there were three houses there where people’s dreams had been destroyed. They had lost their money, they had lost their dream and they had to go back to the drawing board. It is such a disgrace. This bill is working towards stopping that, and it is really unfortunate that those on the other side, the opposition, have moved a reasoned amendment asking us to delay the bill and go back and do a review – basically do nothing, more talk, no action. Of course the opposition have form on this. In 2022 they opposed a bill to strengthen the oversight of the building industry, before supporting virtually the exact same bill six months later, after the election. I mean, let us get this done. Why delay this bill?

One of the most important jobs – and we all know this – we have in this place is to protect Victorians from bad business practices. People have worked too hard for their deposits to be taken away because a builder knowingly does the wrong thing. We have started the process for building reform to protect Victorians, and this is only the beginning. I ask those in the opposition to stand up, support your constituents and do not allow your constituents to lose their dream of owning a home – that is not fair. I will always do what is fair. I commend this bill to the house.

The DEPUTY SPEAKER: Before I call the minister, I would like to also acknowledge in the gallery the Honourable Luke Donnellan, former Minister for Roads and Road Safety, former Minister for Child Protection and former Minister for Disability, Ageing and Carers. Good to see you back.

Danny PEARSON (Essendon – Minister for Transport Infrastructure, Minister for the Suburban Rail Loop, Assistant Treasurer, Minister for WorkSafe and the TAC) (11:12): I move:

That debate be adjourned.

Motion agreed to and debate adjourned.

Ordered that debate be adjourned until later this day.