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Submission by the Master Builders Association of NSW to the Discussion Paper May 2015 Independent Review of the Building Professionals Act 2005

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Master Builders response to questions raised in the Discussion Paper Questions: legislative structure for building sector regulation 1. Is there merit in consolidating the legislative framework for building sector regulation and control in one part of the EP&A Act, expressed in plain English, on a principles-based approach, with its own objectives, and incorporating any reforms approved by the Government? 2. Are there sufficient additional benefits involved to justify consolidating all building legislation in one Act, including the Home Building Act 1993? The Discussion Paper (Table 1) clearly demonstrates the fragmented structure of building and building related legislation in NSW. The administration of building legislation is also fragmented with responsibility to various departments and agencies which have led to a siloed structure, which in turn has realised piecemeal amendments to individual legislation and regulation, and too often resulting in duplication, additional red-tape and increased costs. Master Builders supports the consolidation of NSW building legislation where possible into a single Act, a Building Act. However, we recognise that this is a major task, but nevertheless we suggest the process should commence as soon as possible. We have reservations as to whether the proposal to consolidate building regulation provisions of the EP&A Act and the BPB Act into a separate Part of the EP&A Act goes far enough, even as a transition phase. It is difficult to consider real gain unless provisions of the Home Building Act are included. For example there is an obvious affinity with the accreditation of certifiers and licensing. It is difficult to consider the consolidation of building legislation, unless firstly there is also a transition to a consolidated administrative structure, with accreditation and licensing under a single administration.

Questions: administrative structure for building sector regulation 3. Are there sufficient benefits to justify the consolidation of building regulation administration? Yes, although Master Builders is aware there may be some resistance for a move to a consolidated administration (e.g. Building Commission). It is said that creating a new large bureaucracy, simply does not necessarily deliver a cooperative and harmonised administration or automatically result in efficiencies. Indeed, the Discussion Paper notes that it “…is not a guarantee for success”. Clearly however, the fact that other jurisdictions have moved this way for some time and have maintained a consolidated building administration despite several reviews of their administration is itself a positive indication. Furthermore, there have been previously reviews and inquiries which have consistently made recommendations based on considered evidence for the establishment of a consolidated building administration. While Master Builders strongly supports and has advocated over many years for a consolidated administration, it must be structured in way to ensure there is strong governance, clear objectives and direction. The residential sector is a major economic driver for NSW, however the primary legislation, the Home Building Act, administered by NSW Fair Trading.

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We see there is significant conflict between Fair Trading’s primary charter of consumer protection while at the same time regulating the residential sector through licencing and compliance. Master Builders advocates that NSW should take the lead of other jurisdictions and separate the consumer protection function to a separate agency, and consequently, it would be clear to consumers as to where consumer protection functions clearly reside. Master Builders supports as a transition to a consolidated administration, the Discussion Paper’s third option of establishing a single agency consisting of the BPB, Building Policy Unit of the DPE and the Home Building Service. A new single agency would consolidate the functions of accreditation and licensing and would be well positioned to include architect registration. It would provide for a consolidation of resources in respect of investigation and compliance work, as well as providing a significant technical resource.

Questions: Building Professionals Board governance 4. Should the BP Act provide the BPB with the power to employ its own staff in addition to seconding staff? If the BPB remains as a separate statutory body then indeed it should be positioned to employ its own staff. It appears the BPB has been treated as the “poor cousin” of the DPE and to some extent the “dumping ground” as a consequence of policy decisions which require additional or expanded role for certification – an example of this is the new requirements for the inspection of swimming pool fencing. The BPB is required to provide important statutory functions and is highly vulnerable to complaint and criticism; however it has virtually no control in ensuring its fundamental functions are sufficiently and competently resourced. Disclosure that it has absolutely no control over its financial resources is disturbing, especially while it is responsible for collecting accreditation fees and imposing substantial financial penalties. In comparison, the Home Building Service, an agency of Fair Trading, appears to be sufficiently resourced to perform its functions of licensing, compliance and the investigation of building related complaints and oversees statewide inspection and approvals of plumbing and drainage works and energy and utility consumer safety. It would appear that the BPB, since its inception, has not been significantly resourced by the DPE. Cleary, well resourced auditing and investigative functions is critical to the BPB’s core function, however a back log of complaints were allowed to develop and auditing has essentially been non-existent. Similarly, with the growth in building activity and an aging cohort of certifiers, it is essential that the processing of applications to become a certifier or a variation of certifier category is adequately resourced, so that industry is not hampered by the lack of appropriately accredited certifiers. 5. Is there merit in the functions undertaken by BPB continuing to be undertaken by a statutory board? Under the existing structure whereby the BPB is essentially an agency of the DPE, then the independent statutory Board should remain. The current Board comprises a wide cross –section of industry representation, including consumer representation. In respect of current resourcing issues

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it is important that the Board exists with direct communication to the Minster. We suggest there is significant political exposure if the BPB cannot effectively perform its statutory duties and these duties are compromised due to governance issues.

Questions: framework for cooperation between private certifiers and local government 6. Would the framework of cooperation developed by the BPB Local Government Reference Group provide an effective approach for interaction between private certifiers and local government? The Discussion Paper provides insight that the BPB Local Government Reference Group is providing an effective forum in resolving outstanding issues involving the Board, councils and private certifiers. The proposed framework for cooperation between the parties is testament to the benefit of the Reference Group and provides a good framework for resolving jurisdictional and compliance issues between council and the private sector, including the vexed issue of cost –recovery for councils. 7. Should certifiers be required to report all cases of building and planning noncompliance to councils? There should be a two-way exchange even where council may not be the PCA. Where a council may observe non-compliance, the certifier should be advised rather than the council simply lodging a complaint against the private certifier without discussion. The cooperative framework developed by the BPB’s Local Government Group should be trialled in preference to absolute reporting to council. 8. Is there merit in a partnership model between the State and local government in the area of certification and building regulation enforcement? The establishment of the BPB Local Government Reference Group appears to be a catalyst for a closer cooperation between councils and the BPB. If this forum is achieving results, then it is questionable as to whether there is the need to formalise a partnership model as proposed by IPART. Indeed the lack of formal structure may provide greater flexibility for the Reference Group

Questions: strata and community title developments 9. Would enhanced oversight of the certification process assist in addressing the problems experienced by owners of strata and community title developments?

Firstly, there needs to be agreement and understanding as to the purpose of certification and the

role and function of certifiers. It appears that the development of a Practice Guide for certifiers will

assist in doing this.

As it is currently understood, the certifier’s role is not one of quality control and identifying defects

during construction. Consequently we do not believe an enhanced oversight of the certification

process will address problems in strata.

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Furthermore, we do not see the proposed defects bond (Reform of strata proposals) as a proactive

approach to dealing with defects in strata. Rather, the approach should be to identify and correct

defects during the construction phase, not after the building is completed.

Current discussions suggest the answer lies with a combination of fundamental quality assurance

documentation, such as Inspection and Test Plans for critical or known problem areas, in addition to

independent on-site oversight, essentially of critical areas; or preferable from commencement to

completion of the project. Whilst there is an added cost, such costs would be offset by limiting

defects, call-backs and is a proactive approach preferable to developer funds residing in a defects

bond. The proposal would also provide certifiers greater confidence when relying on compliance

certificates due to the work being overseen by an independent third party.

Questions: use of e-technology 10. Would an electronic system for development applications, complying developments and building certification generate useful information for government and the industry and improve regulatory performance? Yes

11. Do you support the adoption of standard forms for development applications, CCs, CDCs

and OCs?

Yes, to ensure that essential and fundamental detail is consistent and lodged with all applications.

Questions: building regulation and certification – planning and approval Stage 12. Do you support, as ways of improving the planning and approval stage: • limiting development approval to a concept approval Agreed, the Development Approval process should be no more than a consideration of a concept as occurred under the previous legislation (DA/BA) prior to 1998. This change will produce cost savings and reduce delays. • a standard set of development application conditions Agreed, there should be a set of standard conditions applied across the State, especially for detached housing. The provisions of National Construction Code and referenced Standards are subjected to regulatory impact assessment. Councils should be required to undertake a cost/impact assessment where they intend to apply conditions beyond a standard set of state wide consent conditions. • independent assessment of instances where a council seeks to impose higher building standards than the BCA Agree, see response above. • improved information to the community on developments in their area?

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The combining of the BPB and Home Building Services area of Fair Trading would provide for a single contact point for consumer inquires regarding development in their area. This would allow for concerns in relation to development to be direct to the appropriate area. The proposed framework of co-operation between councils and private certifiers should also assist in addressing consumer concerns. There are mandatory requirements for project signs stipulating contact details for the builder and the certifiers. However there appears to be limited enforcement in this area. A non-conformance with site signage requirements is good example of a breach which should be the subject of a demerits points system.

Questions: building regulation and certification – certification to allow commencement of building work 13. Will a significant improvement in the process of certification, to allow commencement of building work be provided by: • standardising the information to support the CC/ CDC Agree. Information to support a Complying Development Certificate should be standardised and similarly flow to Construction Certificates accepting there may be a need for additional information to be supplied with more complex developments. Standardising information to support the CC/CDC will reduce costs and delays, however this should also be supported by a requirement that applications should be prepared by appropriately accredited or registered professional practitioners, such as architects and building designers (as two examples). • standardising the report to support alternative solutions with content confirmed by the certifier Agree. Require alternative solutions to be supported by standardised documentation (where possible) which clearly identifies the design material and construction method in relation to the alternative solution meeting the performance requirements of the NCC. The relevance of requiring such supporting documentation has been highlighted in particular by the increasing incidence of defective or non-conforming building materials of products. • replacing the not inconsistent test with the consistent test for both CCs/ CDCs and OCs? Agree, and the proposal is important to align with the Practice Guide. 14. Do you support combining the roles of certifying authority and principal certifying authority? Agree. There is sufficient confusion as to the role of certification and certifiers without understanding difference between the labels given to certifying authorities. It follows removing the distinction between council certifiers and private certifiers.

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Combining the roles would need to be supported by an enhanced audit process. 15. For a CC or CDC, is there merit in separating the assessment of conformity with planning requirements, to be handled by the consent authority, from the assessment of building requirements? Under a merit assessment, the D.A. process should consider planning requirements with building requirements quarantined to the CC process.

In respect of a Complying Development application, it should be a single assessment on the

understanding that planning requirements have been sufficiently considered by the Codes SEPP. The

Codes SEPP is currently too complex and needs to be made user friendly.

Questions: building regulation and certification – building construction Stage 16. Would the current problems with the building construction stage regulatory approach be addressed by: • ensuring the builder receives the certified plans and CC/ CDC Ideally, a builder should be quoting on certified plans. However, this is not always practical, but it is prudent that certified plans are attached to the contract. A significant problem is that often approved or certified plans are incomplete. For example, the plans don’t contain BASIX commitments; or bracing and tie-down requirements. Consequently, builders become de facto designers or specifiers due to shortcomings of approved plans. There is consequently a strong case for the accreditation of those preparing designs to ensure that applications are professional and complete. Nevertheless, there may be merit in obligating the approval authority to provide a copy of the approved plans to the builder nominated on the application. • documenting and requiring adherence to good certifier practice This needs to be covered by the Practice Guide. • potential additional critical site inspections based on risk assessment On face value, the proposal for critical site inspections to be based around the level of risk has merit, however such inspections would be variable depending on the construction type and therefore also discretionary based on the perceived risk. The immediate priority is to clearly determine the intent of current certifier site inspections, prior to considering additional inspections. The issue relating to the compliance certificates leading to self-certification also needs to be resolved as for certain work there can only be reliance upon such certificates. As a consequence of a fragmented administration, there is work at foot by other government departments/agencies in proposing an additional range of inspections. For example, there has been a proposed inspection in residential strata as part of the defects bond proposal and there has also been proposed a defects inspection regime by the Home Building Compensation Fund.

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There is consequently the potential for duplication and unnecessary red –tape as various departments and agencies individually develop site inspection requirements or protocols without taking a coordinated and consolidated approach. There is also the concern at the competency of person undertaking other separate inspection regimes. Whilst accredited certifiers are required to meet specific accreditation criteria, including mandatory professional indemnity insurance, there is no detail as to the required qualification and expertise of person undertaking these other inspections and indeed, whether they will be subjected to any accreditation or registration requirements. The fragmented approach to inspections also impacts on the future resourcing of accredited certifiers whereby other inspection processes with lower regulation or accreditation requirements and lower business costs may draw persons away from certifier accreditation. • replacing interim and final OCs with an OC and development completion Certificate This proposal again on face value has merit, however of concern is that the new OC would simply become a another interim OC and the proposed Completion Certificate would inherit similar problems as occurs with the current OC, whereby builders payments are delayed because an OC will not be issued due to incomplete work. Often this work is unrelated to the occupancy of the building; or work outside of the builder’s contract and to be undertaken by the owner. In certain council areas, interim occupation certificates are common due to homeowners undertaking certain work to reduce costs. While other council areas are very reluctant to issue interim occupation certificates due to the level of outstanding and incomplete work. While it is proposed that the 10 year liability period under the EP& A Act would commence from the date of issue of the OC, prior to this there needs to be established consistency with the liability period under the EP&A Act and the statutory warranty periods under the Home Building Act, including consistency as to when these periods commence. • requiring projects with missed mandatory inspections, and unauthorised work, to obtain an OC At the outset there needs to be established clear protocol between the certifier and the builder, considering that the builder cannot appoint the certifier and therefore has no formal engagement with the certifier. This protocol to include written notice to the nominated builder of required inspections, formality in booking inspections and documentation identifying when the inspection occurred, the work inspected and the outcome of the inspection, with a copy provided to the builder. It is acknowledged that s. 129C of the EP&A Act provides for a record of inspections, such requirements generally can be completed post inspection and don’t provide a record or details of the inspection at the time of booking. While we are aware that there is generally good communications between builders and certifiers, missed inspections could arise in which there is argument between the builder and the certifier as to who is at fault and with no formal record – one word against the other. As an example, where a builder booked a footing inspection, including strip footings and piers, however the certifier overlooked the pier inspection which was located at a separate part of the project. In this example,

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the scope of the footing inspection was not clear and communications were done by phone, including the builder being advised the inspection was compliant, although as realised, incomplete. The situation is further exacerbated when the PCA will not issue a Building Certificate; or under new proposals, an OC. While the PCA may stand their ground, the situation is unsatisfactory for the builder and the client and there needs to be a mechanism to break the stalemate. Of consideration is that the builder is bound by statutory warranties of the Home Building Act and will foremost need to account for any work related to the missed inspection, which is defective or not to code standards. Whilst a certifier may argue they are exposed in a positon of ‘last man standing’, the immediate exposure lies with the builder. The proposal requiring the certifier to undertake a subsequent inspection and submit a missed inspection report is considered meaningless where a subsequent inspection of certain work, especially that which has been enclosed or encased will not enable the certifier to form a satisfactory opinion.

• effective financial sanctions for unauthorised work?

Agree. There should be appropriate financial sanctions for unauthorised work, including requiring

an application for a modified CC or CDC at substantially increased fee in addition to a fine.

Questions: building regulation and certification – building construction Stage 17. Do you support the option of requiring the creation and maintenance of a Building Manual for all new Class 1b-9 buildings?

Agree to the proposal, although it needs to be determined as to who is responsible for compiling and

maintaining the manual.

Chapter 8 of the Planning Review White Paper outlined the proposal for a Building Manual and

Master Builders is also aware that there has been a proposal for a Maintenance Manual to be

provided for residential strata projects as a proposal of the review of strata legislation.

A coordinated and consolidated approach needs to be taken with proposal for a Building Manual,

rather than proposals being developed in isolation to each other.

Questions: building regulation and certification – fire performance and Safety 18. Do you support the reform of the fire protection system certification, including the proposed revised role for NSW Fire and Rescue? Agree generally with the key proposals. The qualification of practitioners designing, installing, commissioning and maintaining fire safety systems is considered a priority, however the issue we raise is as to whether such persons should fall within the licensing system as a special licence class with wider application beyond residential, or

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fall within the accreditation system of the BPB. NSW Fair Trading already licences installers of fire protection systems and fire sprinkler systems as a sub-class of a plumbing licence. Criteria would need to be established to assess the competency and experience of such persons whether under a licence or accreditation process. It appears practical and sensible that such criterion is established through expertise, such as the Fire Protection Association of Australia (FPAA) as has been noted in the Discussion Paper. It is further noted that there are competing associations and although one or the other may not have been involved in the development of an accreditation scheme, this should not be a barrier to moving forward should the FPAA scheme prove sufficient and acceptable. The core issue is which authority is best positioned or resourced to undertake the task of qualifying such persons. Obviously a consolidated authority incorporating licensing and accreditation resolves this issue, including incorporating the current licensing of fire protection systems and plumbing.

Questions: supply, accreditation, accountability and oversight of certifiers – supply of certifiers 19. Would the options for change set out in this paper be helpful in improving the supply of qualified certifiers and making it a more attractive profession? 20. Is there an adequate pathway that allows a certifier to progress from the A4 category (building inspector) right through to A1 (building surveyor – grade 1), if desired? It is agreed that the options proposed would be helpful. There is an overall industry issue of an aging workforce and a major skills and supply gap occurring, due to a general reluctance for persons to enter the industry. The issue is not so much over regulation, but rather the impractical, fragmented and useless regulation which contributes to an elevated risk which is well above typical profit levels. The ongoing criticism of certifiers, especially of private certifiers at the hands of certain councils, together with a lack of a defined role and understanding of certification is an added disincentive to entry. In addition, high entry and ongoing costs, and relatively high risk are issues in attracting new entrants. Initiatives such as the Practice Guide, better consumer education and the general support for certifiers especially at a Local Government Level is important. There needs to be caution with government proposing additional and separate inspection regimes or processes (e.g. strata defect inspections and Warranty Insurance inspections) which may attract or draw away certifiers due to lower accreditation requirements and less risk or exposure. Consequently, there needs to be a consolidated approach to statutory inspections. For certain regional areas the limited supply of certifiers and the tyranny of distance will require lateral solutions and a greater use of technology and improved documentation. Although potentially controversial, there may be no other alternative other than a greater reliance on self-certification by builders who have an established record of consistent performance, underpinned by a random audit process. However it is likely that such a proposal would only be available to regional councils and not private certifiers.

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Questions: supply, accreditation, accountability and oversight of certifiers – accreditation process 21. Would the proposed changes to the accreditation process address the main deficiencies in the current system? Agree. 22. Do you support the use of an evidence-based framework and guide for the review of the accreditation scheme?

Master Builders is concerned that the conceptual framework for licence design developed by PwC

provides an easier process to make a case to refuse licensing, rather than in practice, making the

case supporting the need for licensing. This view is consistent with the brief given to PwC by the

Government, to examine NSW licenses and identify reform which would produce the greatest

reduction in regulatory burden. However there should not be a nexus between reducing cost to

government under the guise of reducing regulatory burden, especially where the is a strong call from

industry that there is need for regulation (e.g. Licensing of building designers, and licensing of

engineers).

For example, there may be an ongoing need for licensing as viewed by industry due to a significant

number of complaints or problems occurring in a particular area. However, evidence of such

complaints or issues, while well known to industry cannot be formally substantiated because there is

no agency categorising and recording such complaints, or complainants are unwilling to identify

themselves.

An example of the above is the removal of licensing for pre-purchase property inspections by the

Better Regulation office in September 2009. Industry is aware of issue and complaints relating to

property inspections and reports, however have been unable “to make a case” due to the fact that

complaints to Fair Trading go into the pool of general complaints, and therefore cannot be

categorised and identified. The government has expressed no interest in re-introducing licensing

despite ongoing requests from industry.

A further example is the removal of licensing for fencing contractors, however at the same time the

Government is looking to strengthening requirements for swimming pool fencing.

Under the PwC framework, the current certifier accreditation scheme would not satisfy stage 3

(Licensing administered effectively /efficiently) due to the time lag in responding to complaints and

that compliance enforcement is generally reactive to complaints, with no proactive measures such

as auditing.

Questions: supply, accreditation, accountability and oversight of certifiers – accountability of certifiers 23. Are the following sufficient to create a suitable level of accountability for certifiers in respect to their regulatory role: • improved transparency of the performance of a certifier with a Practice Guide

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Agreed. The Practice Guide is recognised as critical tool to clearly identify the role, obligation and responsibility of certifiers and at the forefront to ensure better performance and compliance. • proactive investigations and audits Agreed. It is essential for the integrity of the certification process to ensure there is an active auditing process at site level and not simply a desk audit. • increasing the awareness of the role of certifiers? Agreed. There is a severe lack of understanding by consumers and the general community as to the role and responsibility of certifiers. A greater process of awareness needs to be undertaken at the planning application stage utilising such tools as consumer brochures which identify the certification process, the role and responsibility of the certifier and indeed, the responsibility of the applicant.

24. Does the establishment of certifier panels by councils have merit?

No, this is not supported. We believe it diminishes the private sector role and empaneled private

certifiers would effectively be less than their competing council employees. An issue that could arise

for example is that of preferential jobs (e.g. low travel distances) which could be allocated to council

employees over private empanelled certifiers; or at the very least having to deal with such

accusations.

Questions: supply, accreditation, accountability and oversight of

certifiers – investigations, audits and disciplinary action 25. Do you support an expanded program of proactive investigations and audits by the BPB and if so, how should they be conducted? See previous comments regarding field audits. The benefit of a consolidated administration would provide the potential for an enhanced investigative and compliance process whereby combined resources could investigate both the actions of the certifier and the obligations and responsibilities of the builder in a single operation. 26. Would introducing a demerits point system and issuing more penalty infringement notices provide a more timely mechanism for disciplining certifiers who have not performed to a required professional standard? The introduction of a demerits point system would underpin the use of penalty infringement notices (PINs) whereby an accumulation of PINs would attract demerit points. The PINs system should be adjusted to create a process whereby a certifier may accept the issuing of a PIN in order to immediately resolve a matter, without an admission of guilt. As previously mentioned, an unacceptable accumulation of PIN’s in such a manner would attract demerit points. As previously mentioned, a proposal for a demerit point system for certifiers would be complimented under a consolidated administration whereby, a demerit system would also apply to licensees.

27. Would you prefer an online system for the lodgement of complaints?

Agree.

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Questions: supply, accreditation, accountability and oversight of certifiers – support for certifiers 28. Would the establishment of an education and training program to inquiries, complaints and audits together with a building services advisory hot line address the needs of certifiers for training and information support? Agree. It is illogical that there is not a nexus between matters arising from complaints and investigation and a focus of utilising CPD as a mechanism to address such matters. Mandatory CPD has been attached to builder and swimming pool builder licensing since March 2004, however in our view this process has not been properly utilised by the Regulator to address significant and recurring building problems (e.g. waterproofing). In 2014, the NSW government sought to remove mandatory CPD attached to licensing through the Mutual Registration (Automatic Licensed Occupation Recognition) Bill 2014; following a recommendation by the IPART in its report on Reforming Licensing in NSW. The CPD component of the Bill was defeated in the Legislative Council. Once again it can be seen that a consolidated administration could provide a coordinated approach with mandatory CPD whereby there is the potential for licensed builders to also benefit from CPD programs developed for certifiers, in providing builder with a greater understanding of the certification process, specifically in relation to Complying Development, while providing a greater scope to meet their CPD obligations. The DPE’s Building Policy Unit contains a wealth of technical knowledge especially in respect of the National Construction Code. It also facilitates the Building Regulation Advisory Council (BRAC) of which provides a unique forum in NSW due to its make-up of all key industry organisation and government related agency and department representation. There is also a level of building technical knowledge residing in the Home Building Service of Fair Trading. We agree that this technical advice should be consolidated into one area and fully utilised by providing technical advisory advice, including independent technical advisory resource for the building divisions of the Courts and NCAT.

Questions: supply, accreditation, accountability and oversight of certifiers – competitive neutrality between council and private certifiers 29. Is it possible to achieve full competitive neutrality without either councils ceasing to offer certification services, or private certifiers being abolished? No, neither option of the abolishing council certification services or private certification is a solution, - rather greater cooperation between the local government and the private sector.

Questions: supply, accreditation, accountability and oversight of certifiers – insurance 30. Would certifiers’ insurance issues be addressed by expanding certification and accreditation to cover critical building elements and design, and by implementing an industry scheme to cover the gap in insurance cover from certifiers leaving the

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industry or where the certifier changes for a particular project? If not, what additional problems remain?

The lack of regulation of building design and engineering services is a significant gap in the building

regulatory process. While it is recognised that architects are registered under the Architects Act, this

process relates more to using the term architect than considering the responsibility and competency

of those preparing designs and specification.

Detailed and comprehensive design and specification is recognised as critical to achieving quality

building outcomes, however ironically in NSW and in contrast to other jurisdictions, licensing and

accreditation in NSW excludes these core services and effectively commences “half way up the

licencing ladder”. This often results in builders filling in the design gaps and specifying key

components which should have occurred upfront and prior to the builder appointment.

Whilst the key providers of design and engineering services can purchase professional indemnity

insurance, there is no statutory requirement to do so and therefore and consequently the risk is

spread to those obligated to have cover. However, there needs to be caution in setting statutory

insurance requirements as experienced by the Home Warranty Insurance Scheme (as formerly

known) whereby insurers abandoned the scheme, stopping industry in its tracks and forcing the

governments of NSW and Victoria to underwrite the scheme.

Such caution as raised above needs to be considered if extending statutory insurance to run-off

cover or similar gap insurance when the supply of this insurance product is volatile. The ability of

industry to establish and industry insurance scheme will depend upon their ability to self–regulate

and manage the risk in order to attract and maintain insurance underwriters.

It is difficult to foresee alternatives to certifiers relying upon third party installation and design

certificates. Greater credibility can be given to this process if the documentation required provides

specific detail in relation to the work being certified. As an example, a certificate related to

waterproofing would go further than simply stating the work complies with AS 3740, by including

such things as the waterproofing system used, film thickness of product, number of coats of product

etc.

31. Do you agree that there is not a ‘last person standing’ problem arising from the different liability cover between builders and certifiers? If it does arise, please explain the problem created.

It is a recognised tactic to join all parties to a building matter, especially those known to hold

insurance cover. We are also aware that insurers compel the insured to settle matters in order to

avoid expensive litigation.

We support the alignment of statutory warranty period; simply from a point of reducing complexity

and providing industry practitioners and consumers with a clear understanding of the liability or

statutory warrant period. Insurers have consistently advised that they will price the risk accordingly,

and therefore it has to be accepted that a reduced and aligned liability period must influence the

ability to provide cover and appropriately set premium.

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Questions: supply, accreditation, accountability and oversight of certifiers – swimming pool certification 32. Do you favour a simplification of the requirement for swimming pool fencing certification requirements, moving from three standards to one? There is a general view that the majority of pool barriers will not comply due to the highly technical and layered content of the regulatory requirements, and that the majority of pool owners will be required to undertake work. The National Construction Code (NCC), Volume Two, Part 3.9.3 references the Australian Standard for pool barriers, AS 1926 Parts 1 and 2. The NCCC set minimum performance and construction standards, however there nothing which prevents a person from exceeding these requirements. The NCC is not intended to be applied retrospectively. The application of the current Pool Barrier Standard to all existing pool barriers can be considered as retrospective regulation imposing added costs to pool and spa owners not previously envisaged. Governments generally endeavour to avoid making retrospective legislation, especially where there have been costs in meeting previous regulatory requirements. Queensland has developed a pool safety Standard based on the 2007 version and modified by the Queensland Development Code. Consequently current or later Standards conditions are not applied retrospectively to earlier constructed barriers. This appears to be a sensible compromise and ideally similar requirements should have been established in NSW, however this may be a consequence of a fragmented administration between the Office of Local Government, NSW Planning and the BPB. Training has already commenced in line with the current regulatory requirements of the Swimming Pools Act and three versions of the Australian Standard. Persons completing this training have incurred substantial costs and ongoing cost in maintaining their accreditation and any simplification of the regulatory requirements leading to reduced training cost would be unfair to those completing their training and leading to possible calls for compensation or reimbursement. Also, one should not forget to mention the approved training organisations who have developed their training courses on current requirements and the costs involved. We are concerned that there will indeed be difficulties and issues with certifiers required to identify and apply layered Standards depending upon when the barrier was installed. It is envisaged that substantial resources will be needed to address complaints and grievances between pool owners and certifiers. Independent technical expertise is seen as critical to resolve issues and provide support for certifiers and those undertaking upgrades or repairs.

Questions: resourcing of the building and certification system 33. Would setting charges for both councils and the State to recover processing costs for development applications and CDCs be the most equitable and efficient approach? A review of D.A. charges is required prior to any consideration of setting costs on a cost recovery basis. Currently relatively minor building work is attracting substantial applications costs in relation to the size of the project and short construction periods. This is particularly so for the lightweight construction sector which generally specialises in additions comprising sunrooms, atriums, pergolas etc. Many of these projects fall outside of Exempt and Complying Development and require a full merit assessment. This is leading to such projects being constructed by owners without approval due to the cost and delay in seeking approval.

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A new levy should not be considered in isolation without considering the consolidated impact of other levies and charges imposed through other departments, agencies or legislation (e.g. long service levy).

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