First Reading

Bill introduced on motion by Mr Anoulack Chanthivong, read a first time and printed.

Second Reading Speech

Mr ANOULACK CHANTHIVONG (Macquarie Fields—Minister for Better Regulation and Fair Trading, Minister for Industry and Trade, Minister for Innovation, Science and Technology, Minister for Building, and Minister for Corrections) (14:31): I move:

That this bill be now read a second time.

I am proud to introduce the Building (Approvals and Practitioners) Bill 2026, which continues the Minns Government's commitment to ensuring regulation supports the delivery of well‑designed and constructed homes. This bill at its core is a productivity reform, complementing the Minns Labor Government's pro-housing planning reforms led by the Minister for Planning and Public Spaces, who is present in the Chamber. Crucially, the bill does not achieve productivity gains at the expense of building quality and safety. In fact, it does the opposite. It is focused on building quality and safety and will achieve significant construction productivity gains by removing unnecessary, outdated and duplicative administrative processes embedded in the current legislation.

This bill provides a modern, efficient and intuitive approvals system for building work. It simplifies the registration framework for the professionals responsible for designing, certifying and approving building work—functions critical to maintaining public confidence in New South Wales homes. This bill strips away decades of red tape and administrative burden that is hampering industry and frustrating consumers due to a highly complex certification system. The building certification system, when introduced last century, was a novel approach to building regulation. While appropriate at the time, it has not kept pace with modern construction practices and digital advancements. It has also been impacted by years of ad hoc changes and bandaid solutions that have only served to burden the system.

This bill integrates into the new approvals system the design and building declaration requirements established under the Design and Building Practitioners Act 2020, or DBP Act. This ensures that those critical elements of a building such as the structure, enclosure, fire safety systems and waterproofing are designed by suitably skilled and registered practitioners. Our building laws need to support the rise of off-site or prefabricated construction. Not only are they more efficient, but modern methods of construction result in fewer building defects due to manufacturing in a controlled environment that is not impacted by the weather or other site factors.

Prefabricated construction is a key part of solving our current housing challenges. The efficiencies of prefabricated construction have already been demonstrated by the great success of the modular housing projects such as the one at Shellharbour, which saw three new modular homes for social housing finished in just 14 weeks. Despite these benefits, prefabricated construction is regulated inconsistently or not at all in building regulation. This creates uncertainty for consumers as to what they are buying, uncertainty to lenders financing these projects, and inconsistency in building quality due to poor regulation.

This bill takes these challenges head‑on, fundamentally reshaping the building approval process to be a modern, efficient, and digitally capable system that supports homes being built. For the first time, a prefabricated dwelling will receive the same regulatory treatment as any other dwelling. As the public rightly expects, the bill reiterates the clear outcome that buildings in New South Wales comply with the Building Code of Australia, more commonly known as the BCA. The BCA sets the accepted minimum standards for the safety, health, amenity, accessibility and sustainability of buildings.

The Minns Labor Government has been absolutely focused on pursuing the right reform at the right time, particularly for an industry as economically important as the construction industry in these uncertain times. While implementing the bill will have some short-term administrative impacts, these will be easily offset by the cost and time savings going forward. These impacts will be further offset through sensible implementation, the use of a digital platform that will also generate standardised templates, and the fact the bill has been drafted in plain English to be easily understood and followed.

Building regulation has been the subject of countless reviews over the years, and the subject of multiple inquiries. In all instances, reforms have been recommended. This bill addresses pain points that industry has highlighted time and again. Not least of these pain points is the inability for a certifier to deal with variations to designs and building work. It is the practical reality that buildings will slightly change throughout design and construction for a multitude of reasons. This is the nature of building, and it is not controversial.

What is shocking is that to comply with the current law, an applicant frequently needs to go back to the original consent authority and reapply for a development approval to get a modified consent. This is a burdensome process that does little to support good building outcomes. What it does do is cause delays—delays which increase costs, delays in people moving into their new home and delays to commence the next project. These are unnecessary and have flow‑on consequences throughout the industry.

Certifiers, both in the private sector and councils, fulfil an essential role in issuing necessary approvals to help meet the State's housing needs and in underpinning public confidence in the integrity of the building sector. However, there is a poor public perception of private certifiers and the certification industry in general. While this is largely misplaced, the perception must be acknowledged and addressed. The poor perception of certifiers relates to the lack of clarity of the statutory role of a certifier and the fact that the current certification system does not align with the public's understanding or reasonable expectation of what it does.

This bill resolves these issues. It clarifies the role of certifiers, who will be known as the "approval authority", making clear what the approvals process is, what an approval does, and what is the responsibility of an approval authority. While most certifiers do the right thing, one bad apple can quickly tarnish the entire profession. That is why this bill introduces strong measures for any certifier who breaches core public interest responsibilities—that is, by acting in a partial manner, operating with a conflict of interest or seeking to gain benefit.

Before I move on to the specific detail of the bill, I sincerely thank the many stakeholders who have worked so closely with the Government on this bill. In particular, I acknowledge the members of the Building Reform Industry Reference Group established by the Building Commission NSW to review and provide expert advice on the drafting. This bill would not be possible without their input, and their feedback has been critical to ensuring these reforms will deliver the outcomes intended. I look forward to continuing to partner with key stakeholders and get their feedback as we develop the regulations. I assure stakeholders that the key elements of the bill will not commence until the regulations are developed and approved.

I turn now to the substance of the bill, starting with a broad overview of all parts of the bill followed by a more detailed explanation of part 3, which covers the core reforms. Part 1 sets out critical administrative matters governing the legislation's operation. Of note, commencement by proclamation acknowledges that regulations need to be developed to support the reforms and ensure appropriate time for industry readiness. Provisions allowing the Crown to carry out prefabricated building work will commence on assent to enable modern methods of construction to accelerate the delivery of social housing. Part 2 defines key terms, with most unchanged from existing legislation. Prefabricated building is new, recognising modern and evolving methods of construction. This reform addresses longstanding duplication and inconsistency in how prefabricated construction is regulated across different legislative frameworks.

To give effect to this change, the bill removes the existing exemption for manufactured homes from the definition of "building" under the Environmental Planning and Assessment Act 1979, or the EP&A Act. Removing this exemption ensures that all buildings are treated consistently under the law, regardless of where they are constructed. These definitions establish a clear foundation for a modern and consistent regulatory framework for prefabricated buildings. The framework is designed to ensure compliance with building standards and enables the Home Building Act 1989 to be applied to prefabricated buildings through regulation. This means that regulations will prescribe how requirements, including those relating to licensing, consumer protections and contractual requirements, will apply to a prefabricated building where the work is captured as "residential building work".

Part 3 establishes an approvals framework for building work and other supporting requirements for practitioners carrying out approvals work. I will speak to the detail of this part in a moment. Part 4 establishes a registration framework to ensure that only competent and suitably skilled professionals are registered to carry out work governed by this Act. In providing a single registration framework and applying it to all types of "registered work", the bill ensures a consistent approach for key practitioners in the building industry and reduces regulatory burden. The regulations will then outline the specific types of work that require a registration, including the classes within each registration type.

The intention is for the regulations to enable the existing registration schemes under the DBP Act and the Building and Development Certifiers Act 2018, or BDC Act, to be captured under the new framework. This means we intend to continue to regulate the work that is done by certifiers, professional engineers, and designers and builders who declare BCA compliance for class 2, 3 and 9c buildings under this new framework. We are aware of the impact transferring registration could have on existing practitioners and commit to ensuring the transition is smooth, with clear communication and advanced notice to avoid impacts to work.

Parts 5, 6 and 7 complement the registration framework, ensuring the building regulator will be equipped with a modern process for commencing disciplinary proceedings and a robust investigation and enforcement framework implementing the standard suite of powers used in other laws, including the ability to conduct investigations and accept undertakings. Part 8 reproduces the statutory duty of care established under the DBP Act. Whilst recent legal cases have led to much debate surrounding the existing statutory duty of care, the bill seeks to uphold the existing operation, application and interpretation of the duty. Now is not the right time to overhaul our established duty of care system for construction. Under the DBP Act, the duty is applicable to work on buildings, relying on the broad definition of "building" in the EP&A Act. It is therefore not limited to class 2, 3 and 9c buildings. This definition has been carried over into this bill, and therefore "building" will continue to have the same broad application.

While the bill does not carry over the clarifying provision for work to include residential building work under the Home Building Act 1989, this work is still covered by the duty, noting it is covered within the broad meaning of construction work. The clarification does not need to be expressly provided and has been removed as part of drafting convention. Part 9 contains miscellaneous provisions that support the effective operation of the bill. Importantly, clause 192 re-establishes the existing long-stop limitation period for defective building work claims currently provided for in the EP&A Act.

The EP&A Act will continue to maintain the application of a long-stop limitation period for defective subdivision work. The current operation of the provision is intended to be preserved. The only change that is needed is because compliance certificates no longer form part of the new building approvals framework established in this bill. In circumstances where a building completion is not required, the bill provides for completion on first occupation or use under clause 192 (2) (c). While the drafting has been streamlined, the provision continues to provide for completion where a completion approval was required but not issued and a required inspection of the completed work was not carried out. In this circumstance, completion is also covered by clause 193 (2) (c), being on first occupation or use.

The bill includes necessary consequential amendments to other Acts. Key amendments include retaining the certification requirements for subdivision work in the EP&A Act and preserving the current regulatory settings and benefits for manufactured homes and manufactured home estates. The bill also amends the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 to include a new head of power in relation to dispute resolution. This reflects the widespread recognition that too many building disputes end up as drawn‑out, expensive legal proceedings. Following the passing of the legislation, Building Commission NSW will work with consumer groups, the building industry and representatives from the justice system to develop a reformed system for resolving building disputes.

I will now speak in more detail on the operation of the new building approvals framework established in part 3. Division 2 of part 3 includes a new approvals process that will replace the current building work certification requirements in part 6 of the EP&A Act. Industry stakeholders have long supported a standalone, simplified building approvals system. An approval under this new system would mean a "building approval" or a "completion approval". The term "approval" is deliberate, being an approval to do things such as carry out building work or to move in. Being an approval rather than a certificate allows the person issuing the approval to rely upon designs and declarations from other professionals as the basis for issuing an approval, such as the design of the structural elements from a registered structural engineer.

A building approval is the approval required to carry out building work. Clause 15 makes clear that it is an offence to carry out building work without either a building approval, where the building work has development consent, or a complying development certificate [CDC] issued under the planning system. Clause 16 also makes clear that a person carrying out work under a building approval or CDC must carry out that work in accordance with these approvals. The new approvals process is digitally focused, with the application process for approvals being through the NSW Planning Portal. By having a digitally designed system, the use of the Planning Portal can significantly reduce double handling and unnecessary burden that is inherent in the current system, which was developed as a paper-based process.

Clause 17 provides that when an application is made through the Planning Portal, it nominates a single approval authority for the building work—an approval authority that will typically be the local council or a registration holder. This process is replicated for CDC applications. Clause 18 transfers the important design and declaration requirements established under the DBP Act. While the requirements are largely unchanged from that Act, clause 18 now makes these designs and declarations part of the building approval, ensuring there is a single set of designs that can be relied upon and built to for those critical building elements such as the structure, waterproofing and fire safety systems. The requirements maintain the policy intent, but this bill has facilitated the streamlining of these provisions, as they are now integral to the approvals process rather than being complementary to it.

The use of performance solutions, which involve achieving BCA compliance using a bespoke building technique or new building material, is a key flexibility tool under the BCA. It enables tailored design approaches to achieve compliance. Clause 19 provides clear and consistent requirements on how all performance solution reports must be developed. This consistency is intended to support greater uptake of performance solutions. Where a performance solution relates to a fire safety matter, the regulations will prescribe when these reports must be prepared following consultation with the New South Wales fire commissioner. For higher risk performance solutions, such as where they are required to be prepared by a fire safety engineer, these must be certified with a new "performance solution report compliance declaration" attesting compliance with the BCA.

Clause 20 formalises industry practice of issuing approvals for building work in stages. When the first application for staged building work is made, this must be accompanied by a staging schedule. This schedule sets out the stages in which the building work is proposed to be carried out and sets the road map for the approval authority to follow when issuing approvals. Staged building work is important as it allows the approval authority to issue early works approvals for matters such as excavation and piling work. This enables building works to commence as soon as possible. It also supports the sensible and practical staging of designs for the building and does not delay or encumber the building process for matters than can be rightly dealt with later on. For staged building work, the approval authority must consider the impact of each stage when deciding to issue a staged building approval. This means considering the building as a whole and not the staged building work in isolation. A simple example would be a staged approval for a building footing system that must be designed with consideration of the building it will be supporting.

An issue that has consistently stifled construction productivity is the ability to deal pragmatically with variations. Clause 25 empowers the approval authority to consent to variations if satisfied the approval would have been issued if the works were included in the original application. This test is important as it ensures that the works would have always been approved and does not create a mechanism to sneak matters in or game the system. This sensibly reflects that building work is fluid by nature. Another important safeguard is that this is not a retrospective process, meaning the specific physical work that the variation relates to cannot have already been carried out. However, this does not mean that, where building work has been carried out in relation to an approval, a variation cannot be consented to even if work has been carried out on a building element.

For example, if a first-floor concrete slab of a building has been partially poured and it is discovered there needs to be a design change for the unpoured part of the slab, the approval authority could consider and consent to this variation. The bill includes clear penalties and prohibitions for unauthorised work and for issuing retrospective approvals. However, this Government acknowledges that proper approval is not always obtained before work is carried out. This wrongdoing should not have flow-on consequences for future owners and occupiers or prevent the ability to obtain proper approvals for a building. Where breaches of legislation occur, there will be clearer offences that can be dealt with by the building regulator, through compliance, enforcement and disciplinary powers, to ensure that the punishment for doing the wrong thing is imposed on the correct party.

Clause 27 will empower the secretary and other prescribed entities to authorise an approval authority to issue or vary a building approval after building work commences to resolve and regularise unauthorised works. The core outcome will be ensuring that the unauthorised building work is otherwise compliant with the BCA and defect free. The secretary or other entity can also impose a condition that rectification work be carried out as a condition of the approval. Regulation powers are included to further strengthen the operation of this power, including relevant review rights for an applicant. There are also necessary safeguards in clause 28 to protect an approval authority issuing an approval under authorisation. These provisions are not an enabler for circumventing the right process. They give future owners and occupiers of buildings confidence that their building is compliant despite any anomaly with the approvals process.

Indeed, the fact that there are clearer offences associated with unauthorised works will give the regulator greater visibility of these issues and enable the exercise of relevant powers. Subdivision 2 establishes the new completion approvals framework that, process-wise, mirrors the building approvals process and supports a consistent and easy-to-use system. The approvals system applies to buildings ranging from a simple retaining wall through to a high-rise, multi-use building. Given this variety, there has been confusion around the statutory end point for the approvals process and when a building can be legally occupied. The bill addresses this by making it clear that building work approved by a building approval or CDC requires a completion approval.

Building work is already required to have a final inspection. At its simplest, this completion approval is the formalisation of that inspection and the sign-off that the approval authority has no issue with the building work. This is not intended to be a burdensome or complex process, but rather a necessary and useful signal that this statutory process has been completed. These completion approvals are also relied upon for other purposes, such as contracts, financing and conveyancing. Completion, in the context of a completion approval, is the completion of the building work that is the subject of the building approval or CDC. It is not intended to signify completion of the whole development or matters that either are not included in the building approval or may be a contractual matter, such as finishes.

The completion approval will evidence, among other things, that the work has been completed, is in accordance with the building approval and meets the BCA. While the completion approval is designed as the overall end point, the bill does not limit or prevent the completion and occupation of part of a building. Similar to the approach for staged building approvals, the bill enables a building to be completed and occupied in stages. The completion also links to the building approval work. For example, if the fit-out of a factory, apartment or retail area is not part of the building approval, this means the fit-out does not need to be completed in order to obtain a completion approval.

Clause 32 is intended to facilitate the occupation and use of parts of buildings as soon as it is practicable and safe to do so. One of the main restrictions on allowing people to occupy and use new buildings or parts of buildings is the current restriction that any condition on a development consent framed as needing to be complied with before occupation commences is a prohibition. This prohibition applies irrespective of whether the condition has any bearing on the building work or any relationship to the occupancy of the building. Unfortunately, some local councils frame conditions to utilise the occupation process as a convenient compliance checkpoint. While this may seem reasonable, it has the effect of delaying completion of buildings and preventing people from occupying and using buildings. A commonly raised example is when all landscaping must be completed before the building is occupied. While landscaping is an important part of the development consent, it should not be a prohibition on occupying an otherwise completed and safe building.

To provide some relief, this bill introduces the concept of "relevant conditions" that give the approval authority discretion to issue a completion approval without certain conditions being complied with. The circumstances in which this discretion can be exercised would be limited only to where a condition either is not possible to comply with before the completion approval is issued or is simply not relevant to the work that the completion approval relates to. This does not mean the condition need not be complied with; it just means it is not blocking the ability of people to occupy their homes. The regulations will maintain specific conditions that cannot be overridden by the discretion.

A cornerstone of building regulation is fire safety. It is imperative that the fire safety systems in a building are installed and compliant from day one. This not only ensures the safety of occupants and first responders but also means owners are not burdened with costly future rectification. To support this, requirements for a fire safety certificate have been uplifted from existing regulations to clause 38 of this bill, and the responsibility for issuing the fire safety certificate is now with the approval authority instead of the building owner. While the approval authority will issue the fire safety certificate, the certification, testing and compliance checks that support the issuing of the certificate will be carried out by appropriately qualified tradespersons and fire safety practitioners prescribed by the regulations.

A clear offence provision has been included in clause 42 in relation to the occupation of buildings, which is the impetus to obtain a completion approval. This offence complements the completion approval process and makes the distinction that, while all works require a completion approval, the permission to occupy a building primarily relates only to new buildings or a change of building use. Subdivision 3 deals with building work carried out by or on behalf of the Crown. These provisions are largely unchanged from the EP&A Act, with the exception of clause 44, which gives the option for the Crown to have work approved using building and completion approvals. This option is currently unavailable to the Crown.

Subdivision 4 has specific provisions relating to prefabricated buildings. While a prefabricated building under this bill will now, by definition, be a building and be treated the same as traditional buildings, there is a need for specific regulatory requirements due to the nature of this type of construction. Clause 48 introduces the concept of a prefabricated building declaration. The manufacturer will attest that the prefabricated building, as manufactured, meets the requirements of the BCA and any additional requirements made by the regulations. Clause 49 introduces the concept of prefabricated building instructions, which is another document prepared by the manufacturer of the prefabricated building with details related to transportation, design and building requirements.

The instructions must include information related to the building and design requirements necessary to support compliant installation onsite. The regulations may prescribe other matters to be included in the instructions, allowing flexibility to address evolving construction methods. Combined clauses 48 and 49 are central to how the bill regulates offsite construction. For the purposes of the bill, the manufacturer of a prefabricated building is defined in clause 47 as the person who manufactures the building away from the building site. This supports the approval framework as the responsibility to prepare the prefabricated building declaration and prefabricated building instructions rests with the manufacturer.

Clause 50 clarifies that the obligation for submitting the prefabricated building declaration and instructions as part of the building approvals framework applies only to class 1 buildings. This is in recognition that existing regulatory requirements for class 2 buildings established under the Design and Building Practitioners Act and carried over into this bill already provide sufficient regulatory oversight of building work involving prefabricated buildings. The bill establishes the requirement for submitting the documentation as a condition of a building approval. This approach allows the declaration and instructions to be considered by the approval authority at the point where it is most relevant, while supporting early onsite works, such as site preparation, to proceed where appropriate. As a safeguard, the bill enables the approval authority to prevent building work from continuing where the documentation does not adequately demonstrate compliance.

Clause 51 makes it an offence for a person who supplies a prefabricated building to another person to do so without providing the prefabricated building declaration, instructions and other information prescribed by the regulations. This provision is designed to support an owner's ability to satisfy the requirement for the condition of building approval, enshrining accountability for the manufacturer and others supplying prefabricated buildings, reinforcing the importance of providing accurate and complete information. To ensure a robust chain of responsibility, this offence is not limited to class 1 buildings, but applies to all building types, ensuring this information is available for all designers and builders involved in incorporating prefabricated elements into larger builds.

Clause 52 enables flexible application of the regulatory approach for prefabricated buildings that are manufactured outside of New South Wales but supplied for installation within the State. It allows the regulations to exempt such buildings from some or all of the prefabricated building provisions or apply alternative requirements. This ensures that the regulatory framework can respond appropriately to jurisdictional differences while maintaining building safety and compliance outcomes. Clause 53 provides building-related requirements for complying development certificates that relate to building work. These are not additional requirements but are the core building requirements established through this bill and mirror the requirements for building approvals.

Clause 54 entitles the approval authority to rely upon declarations prepared by others to carry out approvals work. The effect of this is ensuring responsibility for design and work is taken by the relevant party and removes duplication. For example, the structural engineer would be responsible for declaring that the structural elements of a residential apartment building comply with the Building Code of Australia and the approval authority can rely on this as suitable evidence to issue the relevant approval. The approval authority is still required to take reasonable steps to ascertain the veracity of the declaration, but it does remove the obligation for an approval authority to make the statement of compliance for the structural elements when they are not suitably qualified to make this determination.

Division 3 carries over and modifies the existing conflict of interest provisions in the BDC Act. Specifically, clause 55 replaces the existing largely subjective two-limb test for what is a conflict of interest, which leaves much room for interpretation. The bill replaces that provision with a clear set of factors that give rise to a conflict of interest and this clarity will benefit approval authorities and consumers alike. Conflict of interest breaches can have serious consequences, particularly where they lead to substandard building work being approved. These situations must be addressed firmly to create a specific and general deterrent effect. The bill also increases the maximum penalties that can be imposed for conflict of interest offences from $33,000 to $1.1 million. That signifies the seriousness of the misconduct where personal interests are placed above the public interest.

Division 4 reflects existing provisions in the BDC Act that relate to responsibility for approvals work, including individuals acting on behalf of a body corporate or local council. Division 5 establishes key offences for people who have a function as part of, or are otherwise involved in, the building approvals process to safeguard the integrity of the process and support its effective operation. Specifically, clause 63 introduces a new obligation for a person to take all reasonable steps to ensure building work they carry out complies with the BCA. This is a sensible provision that signifies the importance of everyone taking personal responsibility for complying with the BCA when working. Clause 65 also carries over existing offences to safeguard impartiality for approvals work. As these offences are crucial to upholding the integrity of the approvals system, the maximum penalty for a contravention is $1.1 million or imprisonment for two years, or both.

Division 6 imposes specific obligations on building practitioners to carry over existing obligations from the DBP Act. Consistent with the existing approach under the DBP Act, the meaning of "building practitioner" in clause 67 intentionally places the obligation on one practitioner so that responsibilities are clear. It is intended to continue to regulate work that building practitioners undertake on class 2, 3 and 9c buildings under this new framework consistent with the existing scope of the DBP Act. Division 7 transfers existing Environmental Planning and Assessment Act provisions relating to appeals of local council decisions to refuse to issue a building or completion approval. This retains an applicant's right to appeal to the Land and Environment Court within a time frame to be prescribed in the regulations.

Division 8 establishes specific provisions for approval authorities. Specifically, clause 73 re-establishes a broad direction power for approval authorities, being both a private approval authority or a local council. A key change is making a failure to comply with a direction, without reasonable excuse, an offence. Division 8 also outlines how an approval authority can be replaced and the circumstances in which approval authorities are required to notify clients of certain changes, such as where their registration is suspended. Division 9 contains miscellaneous provisions governing contracts required for approvals work and the effect of lodgement on the NSW Planning Portal, and maintains existing rights for a person to apply for restraint proceedings.

In conclusion, the bill is a much-needed reset for building regulation in New South Wales. The Government has listened to stakeholder concerns, but more importantly has understood the history of this space. That is why we can put forward a bill that supports construction industry productivity, because it does not make change for change's sake. The bill makes sensible, well thought out and meaningful changes to provisions and processes that will make a real difference while maintaining necessary provisions that are working well. The bill supports productivity while retaining necessary oversight and safeguards to maintain quality. I commend the bill to the House.

Debate adjourned.