Federal Minister Karen Andrews said after the Construction Ministers Forum in July 2019: “What we need to do is rebuild confidence in the Australian construction industry.”
Since the Federal, State and Territory Ministers commissioned Peter Shergold and Bronwyn Weir in mid-2017 to assess the effectiveness of Australian construction industry regulation, this has been a recurring Theme of. They submitted a construction confidence report to the ministers in February 2018.
In the 18 months since then, the combined capabilities of the nine governments have made little progress in implementing the report’s 24 simple recommendations. The public and construction industry’s confidence in building regulations and quality clearly continues to decline.
Expensive but essential repair
Repairing such defects is an expensive business. A decision by the Victorian Civil and Administrative Court determined that the cost of fire and replacement of the combustible cover on the Melbourne Lacrosse Building averaged about A$36,000 per unit. At Mascot Towers, consulting engineers estimated that the average structural maintenance cost per set of equipment was as high as A$150,000.
According to research by UNSW and Deakin, 70% to 97% of the units in the strata apartments have serious defects. Assuming that 85% of people have such defects, and the average cost of repairing these defects is only $25,000 per unit. This means that the total maintenance cost of about 500,000 apartments (four floors and above) across Australia may exceed 10 billion Australian dollars.
The Victorian Government has taken the lead in establishing and funding an A$600 million replacement plan on combustible cladding. It will also replace combustible cladding on low-rise school buildings, even if these claddings may meet the requirements of the National Building Code.
No other state has followed this momentum. This involves life danger. No one watching the images of the Neo200 fire in Melbourne’s central business district will doubt the danger of combustible cladding.
Other states and territories should immediately replicate the Victorian plan. Although it is imperfect and may be underfunded, this is a positive step to improve public safety. Congratulations should be given to the Andrews government for some of the practical operations done, and the Andrews government has fiddled with many buildings with combustible cladding in its counterparts in New South Wales and Queensland.
All governments share responsibility
The federal government’s response was not sufficient. When asked about contributing to the Victorian plan, Karen Andrews said:
The Commonwealth is not targeting the ATMs in the states […] This problem is caused by the states. They need to strengthen and solve the problem, and then pay for it.
This flies in front of reality. All nine governments are responsible for building codes and enforcement. All have signed an intergovernmental agreement on building regulations.
The Federal Government, chaired by the Construction Ministers Forum, is responsible for Australia’s building codes. The Australian Building Code Council, which sets national building codes, is actually a federal government agency. The Australian Building Code, the predecessor of the National Code, is a federal initiative.
Obviously, the Australian government has been effectively cooperating in the past to respond to threats to life and safety, or to provide consumer protection across the country. For example, various initiatives include plans to buy back firearms by the state, the establishment of the Australian Securities and Investments Commission (ASIC), and plans to replace defective Takata airbags in cars.
The large number of construction deficiencies we see today are the direct result of negligent supervision by the governments of all nine countries over the past two decades. Obviously, they all have legal and moral responsibilities to coordinate and promote a plan to manage the resulting risks and economic losses.
All evidence points to long-term failure to comply with repeated warnings about dangers. The government and regulatory agencies are bound by the interests of the development lobby, the construction industry and the building material supply industry.
What should the government do
The government must stop blaming the game. Effective procedures are urgently needed to repair defects, including combustible cladding, incorrectly installed fire protection measures, structural non-compliance, structural failures and leaks.
Should be directly responsible for the chaotic Australian Building Code Board to ensure it becomes an effective regulator. The National Building Code should be amended to make consumer protection the goal of selling houses.
All parties involved will have to endure some pain: regulators, developers, builders, subcontractors, consultants, certifiers, insurance companies, aluminum sheet manufacturers, suppliers and owners. Only the government can represent the solution, because this will require legislation and the allocation of responsibility for failures.
