Second Reading Debate
Debate resumed from an earlier hour.
Mr TRI VO (Cabramatta) (17:56): I continue my contribution to the debate in support of the Building Legislation Amendment Bill 2023. Schedule 4 to the bill covers suspension of authorisation. The bill will amend the Building and Development Certifiers Act and the Design and Building Practitioners Act to enable the regulator to immediately suspend a certifier or registered practitioner while disciplinary action is being finalised. The regulator must be satisfied there is, or is likely to be, a serious risk to public safety, consumers or other businesses if the licence holder is allowed to continue to work while disciplinary proceedings are in progress. This power is already in place for builders and contractors under the Home Building Act. A suspension will be in place for a maximum of 60 days at a time and may be extended if the cause of action continues. I understand the New South Wales Government will continue to consolidate and modernise the State's building legislations. I commend the bill to the House.
Ms DONNA DAVIS (Parramatta) (17:58): I speak in support of the Building Legislation Amendment Bill 2023. Across New South Wales, the number of new buildings plagued with defects is simply unacceptable. Therefore, I welcome the bill, which will improve transparency, accountability and the quality of work in the building and construction industry in this State. New South Wales is in the throes of a housing crisis that does not discriminate. Right across the State, the pressure to increase housing supply is great, but we cannot sacrifice quality for quantity. Our Government is committed to ensuring that the new homes that New South Wales needs are quality homes. The first step to achieving this is the creation of a standalone Building Commission. With more than 400 dedicated staff, the Building Commission will have a pure focus on removing dodgy builders from the industry, and ensuring that families and individuals across our State get the quality homes they deserve. This will not be an easy fix. Our Government has provided $24 million in funding and a strong legal framework to ensure the Building Commission delivers on our commitment to transformational reforms to secure behavioural change in the building and construction industry.
All of us remember Christmas Eve 2018, when in my electorate over 3,000 people living in or near the Opal Tower in Sydney Olympic Park were evacuated. That 34‑storey apartment building, consisting of 392 apartments, was approved in June 2015 via a State-significant development approval. The building was found to have inconsistencies in its structure related to under-design and the use of lower quality materials. The failings within the building and construction industry uncovered by the Opal Tower incident were not the first and have definitely not been the last of their kind. Unfortunately, building failures have continued to be identified, increasing risks to the safety of families and individuals who live in those buildings and resulting in home owners having to fork out large sums of money to fix defects.
Those failures have tarnished the industry in New South Wales, reduced consumer confidence and negatively impacted tradespeople who produce quality work. Our Government has made a commitment to introduce a whole-of-sector building Act to consolidate and modernise all New South Wales building legislation. The bill is a first step to provide immediate support to the Building Commissioner and respond to issues in the construction sector, forming part of a holistic plan to transform and rebuild public confidence in the industry.
The recent surge in building defects has gravely impacted people in my local community. People who have invested their savings and taken out mortgages to knock down freestanding homes and build duplexes have ended up tens and even hundreds of thousands of dollars out of pocket trying to fix the unfixable due to shoddy workmanship from people masquerading as builders who have not spent a day in their life on the tools. This has broken hearts and driven people to their wits end while they deal with the unthinkable: failure to adhere to hydraulic engineering plans, resulting in internal flooding when it rains; failure to remove spoil and building waste and instead dumping it on the property; noncompliance with Australian standards for electrical and plumbing works; failure to comply with the BASIX statement; tradespeople with no trade qualifications working on building sites; and double garages that cannot fit one let alone two cars. This is unacceptable.
I welcome this bill because it makes amendments to various Acts across the Better Regulation and Fair Trading portfolio and Building portfolio. By recognising the high incidence of defects in the residential market, this bill specifically provides compliance and enforcement powers for low-rise residential dwellings, including houses and townhouses. The bill will ensure that individuals are held accountable for intentionally phoenixing and will clarify requirements for decennial liability insurance being taken up as an alternative to the existing strata building bond. The bill will also introduce new duties on all persons in the supply chain of building products to ensure that products that are designed, manufactured, supplied and installed in buildings are safe and compliant with relevant standards and building codes.
The bill expands on the current powers provided to the Building Commissioner under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act for high-rise residential apartment buildings. The current proactive powers for apartment buildings have resulted in significant improvements and purchaser confidence due to the early detection and remediation of defects. I welcome that this bill will expand these powers to class 1 low-rise residential homes, allowing for the early detection of defects and reducing the burden on home owners having to lodge complaints or take costly legal action to rectify building defects.
Inspectors will be able to enter residential homes under construction to inspect build quality and order rectification work where defects are identified. Inspectors will also be able to test materials and components to ensure that they are compliant. The regulator will be given the power to issue a stop work order where they consider that continuing building work could lead to significant harm to the public, residents or future residents of a building. Importantly, the bill embeds appropriate procedural fairness safeguards to ensure that everyone is sufficiently protected and that the laws operate in a fair and proper manner.
This is a hard row to hoe. I commend the Minister for his tenacity and commitment to find solutions to the problems New South Wales is experiencing in our building and construction industry. Those doing the wrong thing have been getting away with it for far too long, putting profits ahead of public reputation and profiteering at the expense of others. The Building Legislation Amendment Bill 2023 will help to restore common sense, transparency, accountability, quality of work and faith in this sector at a time when it is so desperately needed. I commend the bill to the House.
Ms LIESL TESCH (Gosford) (18:04): The Building Legislation Amendment Bill 2023 will protect community members across New South Wales by ensuring improved transparency and accountability while guaranteeing that the quality of work in the building and construction industry across New South Wales is of the utmost importance. The Government is committed to significantly increasing housing supply across our State, ensuring affordability and access to housing for all. However, this increase cannot come at the cost of quality.
Home ownership is an Australian dream. As a young child living off the grid in a caravan my dad made, I realised that owning a home was important in life and that having a tangible building was important to getting ahead. That is what most Australians aspire to and lots of Australians have achieved. In achieving this dream, it is important that our community is given the confidence to feel secure when they make the biggest investment of their lives. This bill is part of the first tranche of reforms that make up the biggest overhaul of building laws in our State's history, restoring integrity and accountability to our building and construction system. I commend the Minister and his team for their work.
By providing immediate support to the Building Commissioner, the bill takes swift action to address issues in our community. This comes without action from the previous Government, and it should have happened before now. Importantly, the bill will give inspectors the right to enter residential homes under construction to inspect building quality and order rectification works where building defects are found. The bill will further give the regulator the right to issue a stop work order in a case where significant harm to the public, residents or future residents may occur.
It is sad that this bill comes too late for some of the residents of my electorate. The member for Parramatta spoke about Opal Tower in her electorate. In Gosford, we have another dire situation for 54 apartments in the Vue building on Kendall Street. The residents came to see me to tell me about it. The builder went into liquidation along the way and the project was taken over by renowned local investor Tony Denny. Unfortunately, it is a disaster. The building contains over $800,000 worth of defects—the common areas have rain coming through them, and some apartments have leaking windows and doors meaning the residents cannot live there during the rainy season. The water defects are a disappointment.
It is sad that it has come to the point of needing to legislate to make sure builders do their jobs properly. So many people in the Vue apartment building and other apartment buildings have been left by builders who went into liquidation partway through construction. People's life savings go into their homes, and they do not have enough money to pay to rectify defects. There is not enough money in the pot of the apartments to keep repairing the shoddy work. Residents bought into those apartments in good faith.
While this legislation is too late for the residents of the Vue apartments, it will benefit consumers at the end of the supply chain in the future. High-profile examples of poor building works have cast a shadow over home ownership in our community, which is sad as the Gosford community moves into the apartment era. I am confident that the current builders of ALAND and St Hilliers will do an excellent job for our community on the first high‑rise building in the area.
The bill ensures that there is now oversight and that the commissioner has the power to shine a light on poor practice across the industry. The bill also protects consumers from contractors who phoenix by intentionally creating a new company to avoid the consequences of the liquidation of existing debts. For an industry which has experienced a high rate of insolvency in Australia, the second-highest of all industries compared with other industries, this issue is of significant concern across the community. By requiring individuals who have become bankrupt or directors who have been involved in a company that has become insolvent in the previous six months to prove that they are not a risk for consumers, the New South Wales Government is committed to protecting our community from dodgy dealings.
From large-scale builds to the great Australian dream, our community should be able to trust that work will be completed to a high-quality standard, and this bill will ensure that that trust will be restored. I commend the work of the Minister in bringing the bill to the House. Knowing that we have confidence in the industry moving forward, people will be able to not only buy and live in their great Australian dreams but also keep them to sufficient standards.
Mr NATHAN HAGARTY (Leppington) (18:10): I contribute to debate on the Building Legislation Amendment Bill 2023. The bill amends the Home Building Act 1989 to introduce new powers for the building regulator. The bill is designed to progress a range of reforms to strengthen consumer protections for home owners, ensuring accountability for unsafe building products, and to provide necessary powers to address practitioners, noncompliant work and poor behaviour. This in turn will improve transparency, accountability and quality of work in the building and construction industry in New South Wales.
The bill aligns with the Government's commitment to tackling the housing supply crisis after a decade of inaction that allowed the quantity of homes to come at the expense of quality of homes. The NSW Building Commissioner will have the power to enter any apartment or freestanding home in New South Wales to uncover defects before completion of buildings. The NSW Building Commission will also get more than 400 dedicated staff and a $24 million funding boost. This will allow it to scale up to ensure quality buildings are being delivered in New South Wales, many of which are being built in my electorate of Leppington. Supercharging the regulator's powers will ensure that, as the State meets the urgent need for more homes, buyers can be confident about the quality of home they are buying. These measures are further supported by the Minns Government's commitment to develop a pattern book endorsing housing designs for low‑rise and mid‑rise buildings that will also enhance the continuity of quality standards across new developments.
The bill will expand proactive enforcement powers for the building regulator in class 1 low-rise residential buildings. It will impose obligations and accountability on all persons in the building product supply chain to ensure the design, manufacture, supply and installation of safe and compliant building products. It will give the Secretary building product warnings, product use bans and product recall powers to ensure quick responses to the use of unsafe or non-conforming building products. It will clarify the framework for 10-year building warranty insurance to increase consumer protections. The bill will also enable immediate suspension of key building design and certifier practitioners' authorities where allowing them to continue to work would pose a serious risk to public safety consumers or other businesses. Finally, it will ensure existing data- and information-sharing arrangements continue to support the NSW Building Commission when it is established.
Consultation on the reforms has been extensive. In August 2022 the Department of Customer Service publicly consulted on a wide range of building reforms, including the reforms proposed in this legislation. Stakeholders were invited to provide comment on the draft bill and accompanying regulatory impact statements. The consultation received well over 1,000 submissions and 177 submissions from consumers, tradespeople and industry associations, and there was broad support for the reforms contained in the bill. Separate public consultation was carried out in August, September and October of this year on the proposal to introduce mandatory 10-year serious defects insurance for all new apartment buildings. The proposals contained in the bill are separate from that consultation and are intended to enable the ongoing voluntary intake of serious defects insurance.
Last Sunday, I was pleased to have the Premier, Minister Chanthivong and the Building Commissioner at Leppington to mark the expected passage of this legislation. We were at Home World Leppington. I think many people are familiar with HomeWorld—there are now five; one of the newer ones is at Leppington—where some of the better builders in our industry get together to display homes and give consumers a choice in one area. One of the houses we inspected was by reputable builder Eden Brae Homes—the first builder to receive certification on the quality of its class 1 residential buildings.
As I said, my electorate houses a lot of new subdivisions and is experiencing a fair bit of the housing growth in this State. While that is the case, as of a few months ago, to my knowledge, my electorate has no actual class 2 building—so no apartments in all of my electorate despite the fact that it is growing rapidly. What that means is that at present the Building Commissioner has little power to act, despite the fact that there is a lot of construction going on in my part of the world. That, of course, will change should this bill pass through both Houses. I welcome that.
The electorate of Leppington and the Liverpool local government area [LGA], which is in my electorate, have seen some of the worst examples of poor building practice. I am aware of an example of a class 2 building in Lurnea, which falls in the electorate of Holsworthy. From memory, it is a six-storey building, and it has sat practically finished and empty for three or four years. I made inquiries as to what was going on. Effectively, what has happened is that the private certifier has been pulled out and council has been put on as the certifier because, despite being a five‑ or six‑storey building, it was constructed without any fire sprinklers. The building has a series of very serious defects which all relate to fire safety. But that was only discovered after the Building Commissioner received complaints, made an inspection of the site and acted. Pleasingly, with the passing of this bill, we will also be seeing that on class 1 buildings
In my short time as the local member, I have had several complaints about class 1 buildings in Leppington, and I saw plenty when I doorknocked many of those new houses. A house in Denham Court stands out starkly in my memory. It could not have been no more than three or four years old. I knocked and the owner opened the door. Right down the hallway was a very distinct, very visible mould line. It was a double-storey building with obvious severe leaking happening. As I said, that building could not have been no more than three or four years old. Unfortunately, those stories are repeated across Leppington. Several constituents have come to my office complaining and I have seen some very poor examples.
One example is a house under construction at the moment, where they had to bury the water tank to save space. They decided that the best space to do that was under the driveway in the garage because if there were any issues with it, they could dig up the garage. The builder made a grave mistake and buried it halfway between the kitchen and the living room, so if there are any issues with the water tank they will have to rip up half the house. These are the kinds of issues that the Building Commissioner and the agency will be able to act on. It is a positive move. Certainly, the response in my electorate since the announcement on Sunday has been very welcome and very positive. I could go on all day with examples about poor building practice, but I will not bore the House. I am sure members are all aware of the issue and will be happy to see the bill passed.
The sweeping changes proposed in this bill will give the Building Commission unprecedented power over the entire sector. These changes will be critical, and we are determined to have the best building sector in the nation. Next year we will introduce a single reformed building Act to centralise the licensing regulation and enforcement of standards across the whole sector. These laws will ensure that homes in growing areas, like Leppington, meet the quality standard that buyers expect. I commend the Minister for his work on the bill. I wrote to him early in the piece as the member for Leppington, about a couple of issues concerning some of the shortcomings that currently exist. Home owners and such currently do have recourse to take things to NCAT, but I have written to him with a couple of examples where that has not proven to be effective. Obviously, the bill will go some way to fixing those issues. The new law will ensure that, in growing areas like mine, it will be harder for dishonest builders to cheat home buyers. It goes a long way to rebuilding trust and integrity in the construction industry and will ensure that home buyers are better off. That is what the Government is aiming to achieve. I commend the bill to the House.
Ms JULIA FINN (Granville) (18:19): I contribute to debate on the Building Legislation Amendment Bill 2023. The bill is incredibly important and I support it 100 per cent. The legislation will support the crucial work of the Building Commission and deliver on the Government's commitment to transformational reforms to secure behavioural change in the building and construction industry. Our homes are often the most expensive investment we will ever make, and the Building Legislation Amendment Bill will improve transparency, accountability and the quality of work in the building and construction industry in New South Wales for all new homes. The Building Commission will put trust and confidence back in the sector to ensure continued investment and to give people confidence.
The Building Commissioner has been incredibly important for high density developments, putting shonky builders on notice and holding them to account. We are expanding their powers to cover all new homes. That is particularly important. In recent years we have seen huge problems with Stroud Homes and Porter Davis—to name just a few—where new home owners were left in the lurch and tens of thousands of dollars out of pocket. The creation of a standalone Building Commission bolstered by $24 million in funding and more than 400 dedicated staff will drive dodgy builders out of the market and ensure buyers get the quality homes that they deserve and have paid for.
The Government has made a commitment to introduce a whole‑of‑sector building Act to consolidate and modernise all New South Wales building legislation. This bill is a first step to provide immediate support to the Building Commissioner and respond to issues across the entire residential construction sector. The Government is committed to delivering more homes. We need to ensure quantity does not replace or undermine quality. There has been a huge loss of confidence in the market in recent years. That is why people will not buy off the plan anymore, which is undermining finances for developers. In addition, costs have increased and the cost of borrowing has increased as well. That has done a lot to slow down the construction sector.
One thing we can do is try to restore confidence back into that market. Other financial pressures are beyond the scope of the New South Wales Government, but we can certainly do a lot to improve confidence in the sector by improving the quality of builds in New South Wales. Those and other reforms form part of the Government's plan to transform and rebuild that confidence. The bill makes amendments to various Acts across the Better Regulation and Fair Trading and Building portfolios, including the Home Building Act, the Building Products (Safety) Act, the Building and Development Certifiers Act, the Design and Building Practitioners Act and the Strata Schemes Management Act.
The recent surge in building defects has cast a shadow over home ownership and the safety of our built environments. Often health impacts—not just mental health but physical health problems—arise from poor construction. Recognising the high incidence of defects in the residential market, the bill provides compliance and enforcement powers for class 1 buildings—the low‑rise residential buildings under the National Construction Code. We have all heard horror stories. Many have worsened. We are seeing record insolvencies in the construction industry not just for high-rise developments but at all levels. The financial pressure to cut corners is enormous.
The bill will ensure individuals are held accountable for intentionally phoenixing and will clarify requirements for decennial liability insurance being taken up as an alternative to the existing strata building bond. It will also introduce new duties on all persons in the supply chain of building products to ensure that products that are designed, manufactured, supplied and installed in buildings are safe and compliant to relevant standards and building codes. The current proactive powers for apartment buildings have been incredibly successful, resulting in significant improvements in purchaser confidence due to the early detection and remediation of defects. To build on that momentum, those proactive powers will be spread to low‑density buildings as well. We are expanding the powers to class 1 residential homes, allowing early detection of defects and reducing the burden on home owners having to lodge complaints or take costly legal action to rectify building defects. The sooner defects are rectified, the sooner they can move into their home and move on with their lives.
The regulator will also be given the power to issue a stop-work order where it considers that continuing building work could lead to significant harm to the public, or residents or future residents of a building. Acknowledging the serious nature of rectification or stop-work orders, the bill also embeds procedural fairness, which is incredibly important. The secretary will not have to give notice about their intention to issue an order if they believe that there is a serious risk to safety or it is an emergency, but only in those instances. In those instances, the secretary can appropriately target high‑risk building work.
The bill also makes it clear that the Government will not tolerate builders who do not do the right thing. Failure to comply with a rectification or stop-work order will attract a maximum penalty of $330,000 for a company and $110,000 in any other case. Where the offence continues—this is really critical—the penalty amount will increase every day by $33,000 for a company and $11,000 for an individual. Time and again, when defects are uncovered during the process of construction, the builder will stop all work and just leave people with a half‑built home. Because it is a very common practice, it also sends a message to the market that it is best not to complain. By making sure the penalty increases every day after the rectification order is issued, we will make sure that that stops.
In terms of insolvency and phoenixing, during the 2022‑23 financial year the construction industry experienced the highest rate of insolvency in Australia compared to all other industries. Starting a new company after a failed company is a common and lawful part of the business cycle. It is important to make sure that it does not happen to avoid obligations and penalties. We have also seen, more so with the class 2 buildings, that it is very common to set up a new construction company for every new build. That has been done to essentially protect a business empire from problems generated on one site. The whole thing becomes a house of cards. It can make insolvent trading impossible to stop, because an insolvent company can have multiple other names and places and still work.
Currently, a person is only required to provide information to the regulator if they have personally become bankrupt or they have been the director of an insolvent company in the past three years. Where they have been a director or a person involved in the management of a company in the six months prior to that company becoming insolvent, the bill will require them to prove why they are not a risk to consumers or subcontractors and that they have sufficient measures in place to avoid future bankruptcy. That goes an enormous way towards tackling the problem of phoenixing.
The six‑month window was chosen to ensure that directors who do try to jump ship just before insolvency to avoid their obligations are still captured under those grounds but directors who legitimately left a business are not unfairly affected. All those things will go an enormous way to making sure that home owners can have the confidence to invest in new builds. It will help address the shortfall in housing, because it will make more people confident about building a new home in New South Wales. That is incredibly important. We have seen too many defects in recent years at all levels, not just in high-rise buildings. I commend the bill to the House and I commend the Minister for introducing it.
Ms JENNY LEONG (Newtown) (18:29): The Greens support the Building Legislation Amendment Bill 2023. The bill proposes welcome amendments to the Home Building Act 1989, the Building Products (Safety) Act 2017, the Strata Schemes Management Act 2015, the Building and Development Certifiers Act 2018 and the Design and Building Practitioners Act 2020. Together, these amendments will significantly enhance consumer protections in the building and construction sector—protections which have been severely lacking. As talk of new supply dominates discussions about alleviating the housing crisis that so many in our communities are facing, it is crucially important that building quality is safeguarded and not compromised in the interests of quantity.
We know that consumers have for too long been left exposed in a building sector that has been mired in scandal, and that if we are to build more homes for our communities in the coming years these homes must be safe, reliable and of a high standard. The bill is a welcome step in the right direction toward ensuring those things. It is based largely on the findings of the Public Accountability Committee 2019 report entitledFurther Inquiry into the regulation of building standards, which resulted from an inquiry chaired by former member of the upper House, and my Greens colleague, David Shoebridge. That report formalised and put on record what so many in the community had already experienced and already knew: that building standards in this State had fallen far short of the mark needed to protect people, that flammable and dangerous cladding is in alarmingly high use in buildings across New South Wales, and that there is a stunning lack of regulation and oversight of the industry by government.
Nobody should face financial ruin and housing precarity because of poor or noncompliant workmanship on their new family home, yet the inadequacy of current regulations within the building and construction industry means that for many people, including residents in my electorate of Newtown, this is sadly the case. Owners in Chippendale's One Central Park complex are facing a multimillion-dollar remediation bill for flammable cladding on their building. In nearby Mascot, Mascot Towers residents are still unable to live in their homes more than three years after they were forced to evacuate when massive structural cracks were found in their basement.
I urge the Government to step in to support those residents and the many more people impacted by the resulting financial, economic and personal challenges, many of whom are facing dire financial pressures. In the case of the Mascot Towers, I urge the Government to seriously consider buying back the whole defective block, remediating it and converting it into much-needed social and public housing. We know that the problem is not going to go away. The New South Wales Government and the Premier consistently talk about the need for urgent delivery of supply. That building is sitting there. The Government could step in, financially relieve those individuals, remediate the building and turn it into urgently needed public housing for the community.
The Greens support the proposed changes in the bill to the Building Products (Safety) Act to require persons in the building product supply chain to ensure the quality of products with which they engage. This obligation would go a long way towards preventing dangerous products like flammable cladding from even entering the market and causing untold devastation and risks to community safety. I turn now to the bill's introduction of the option for decennial liability insurance as an alternative to strata building bonds or home building compensation. This is a 10-year insurance taken out by the developer of a strata scheme in favour of the owners' corporation to cover costs associated with serious defects and potential collapse of a building after completion. This form of insurance is already in place in a number of other jurisdictions, including in France, where it originated. It would provide peace of mind for consumers and an avenue for alleviating the huge financial pressures they face when something goes wrong.
Finally, I turn to the expansion of the powers of the Building Commissioner under the Home Building Act to allow the commissioner to inspect buildings still under construction and to intervene without first receiving a formal complaint. The bill amends the Building and Development Certifiers Act and the Design and Building Practitioners Act to give the commissioner powers to immediately suspend a building practitioner who is subject to a show cause notice if the secretary is satisfied there is, or is likely to be, a serious risk to public safety or consumers if the practitioner is allowed to work pending disciplinary action. The Greens wholeheartedly support this expansion of the commissioner's powers.
We know that in the face of deep, pervasive, systemic issues, the utility of a commissioner as a way of providing independent oversight, and their ability to carry out their remit and deliver the change required to tackle these kinds of complex issues, is only possible if they are given the power, independence, resources and support that are being offered to the Building Commissioner, which we absolutely support. Unfortunately, and on a related note, the much-touted appointment of the Rental Commissioner earlier this year is an instructive example of the huge differences and discrepancies between the independence, resourcing, support and powers given to commissioners in this State.
It is unclear, in comparison with the powers and legislative role of the Building Commissioner, whether the Rental Commissioner has been provided with an office and resourcing of staff, what kind of budget they have, and the level of independence that is available to them outside the office of the Minister or the department itself. This is not a reflection on the Rental Commissioner and their role. Rather, I am being very clear that in providing a position of commissioner, we need to be ensuring that there is a robust and independent power provided to that commissioner. These powers should mirror the powers provided to the Building Commissioner, recognising the complexity of engaging with a highly fraught industry where people's homes, livelihoods, and financial status and situation are all at play.
Unfortunately, and very disappointingly, we are yet to see any movement toward key protections for renters, including an end to no‑grounds evictions and a freeze on rents, or indeed any attempts to control the rising rents in New South Wales. I urge the Minister to intervene to ensure that the Rental Commissioner has the level of resourcing, power and independence they need to be able to deliver on the protections and reforms needed for renters, just as the Building Commissioner has been able to do and will continue to do as a result of this legislation. Whether it be the Building Commissioner, the Rental Commissioner, the Fair Trading Commissioner, the ICAC Commissioner, the Anti-Slavery Commissioner or any of the other commissioners in the State, it is critical that when we give these commissioners roles and powers we also provide them the appropriate resourcing and support they need to carry out their vital work.
If we are to boost housing supply in this State—which The Greens absolutely support, provided it includes a boost to the supply of public housing and genuinely affordable housing—we must ensure that protections for consumers and industry regulations keep up with the rate of growth. The Greens support the measures proposed in the bill, as well as the raft of enhanced consumer protections they would deliver. However, we urge the Minister to consider giving the powers currently given to the Building Commissioner—powers to stand up against dodgy builders and dodgy problems in the sector—to the Rental Commissioner, who requires the same level of independence and autonomy to be able to carry out their work.
We believe it is absolutely crucial that the Rental Commissioner is able to stand independently with power if they are to deliver the kind of success and reform that we have seen to date as a result of the work of the Building Commissioner. We believe it is critical that the commissioner has the power, level of resourcing, independence and support required, including the backing of this Parliament, to ensure that they are able to do their work in what is an incredibly complex and highly contested housing market.
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) (18:38): In reply: I thank all members who contributed to the debate on the Building Legislation Amendment Bill 2023—namely, members representing the electorates of Willoughby, Sydney, Liverpool, Penrith, South Coast, Heathcote, Shellharbour, East Hills, Cabramatta, Parramatta, Gosford, Leppington, Granville and Newtown. I welcome their contributions.
The recent surge in building defects has cast a shadow over the dream of home ownership and the safety of our built environment. The scale of this problem is significant, and it demands urgent attention. The work of the New South Wales Government in addressing serious defects in residential apartment buildings has been transformative for consumers in New South Wales, improving confidence in class 2 residential apartment buildings. Buildings are not just bricks and mortar; they house our dreams, our aspirations and our daily lives. It is unacceptable that some of our citizens live in buildings that are unsafe and pose a threat to their lives. It is our duty as representatives of the people to ensure that buildings are safe and resilient and meet the needs of home owners.
The bill is the first step in the Government's significant building reform agenda. The Government is continuing to work on a holistic new building bill and expects to introduce it into Parliament next year. Expanding compliance and enforcement powers to class 1 buildings will ensure that the building regulator has the tools it needs to hold those who cause building defects accountable. That needs to be complemented by a robust regulatory framework to strengthen accountability for the products that are used in the design and construction of buildings.
The Government's efforts are paying off. We are now the first Australian jurisdiction where decennial liability insurance [DIL] is being offered. That product covers a building's critical elements, including its structure, waterproofing and fire safety systems. It provides a 10-year warranty for those elements. That is a big win for building owners throughout the State. It is a clear sign that confidence is returning to the market, and home owners in New South Wales can be confident that buildings will be compliant, safe and resilient going forward. The measures contained in the bill strike the right balance. They create new, necessary powers for the building regulator to protect unsuspecting home owners; enhance the obligations of directors; and support market‑led solutions that will give developers and purchasers real choices between untrustworthy and trustworthy operators in the industry.
I now briefly comment on the issues that were raised during debate. I thank the shadow Minister, the member for Willoughby, for speaking in broad support of the bill. I address his comments surrounding the push for national harmonisation of building product safety regulation. When developing the bill, both the national framework and the operation of the Queensland approach to building product safety were considered, to provide a consistent approach. The Government will continue to advocate for a nationally consistent approach to the safety of building products in construction. Although national harmonisation cannot be achieved yet, the amendments in the bill will provide immediate improvements to oversight building product safety in New South Wales.
I thank the member for Sydney for raising concerns on behalf of the Owners Corporation Network [OCN], a peak body representing the interests of people who live in strata buildings. I reassure members that the OCN has been a valued stakeholder during the development of the bill. Stakeholders have been widely consulted on the bill. In August 2022 the Department of Customer Service publicly consulted on a range of building reforms, including the reforms in the bill. The draft legislation was published on the New South Wales Government Have Your Say website, along with regulatory impact statements unpacking the proposed reforms. The consultation received close to 1,500 survey responses and 117 submissions from consumers, tradespeople and industry associations. The surveys and submissions revealed overwhelming support for the amendments in the bill.
The Department of Customer Service has also engaged in continuous consultation with industry stakeholders about the Government's proposed building reforms. Over 80 peak bodies comprising around 200 representatives have seen draft iterations of the bill and have been given an opportunity to provide feedback. The Government has carefully considered all feedback received from the public and industry in landing the bill we see today.
The member for Sydney, on behalf of the OCN, was concerned that loopholes may remain in the Home Building Act, in particular section 33B (1) (a) (iv). That section prevents an authority being issued or renewed to a director of a body corporate that is a debtor under a judgement for money. An authority here means a contractor licence, endorsed contractor licence, or supervisor or tradesperson certificate. The member for Sydney noted that, under that provision, no-one else involved in the management of the company is prevented from holding an authority. That could result in a building company continuing to operate under different licences where a director of the company has been denied a licence themselves.
The Government understands the OCN's intention to prevent builders who operate in the industry from trying to avoid their responsibility to fix defects. The Government will consider that proposal as part of the proposed building bill that I hope to bring to Parliament in 2024. Part of that process will be about finding the right balance to ensure that we are addressing the risky and untrustworthy behaviours of practitioners and entities, without unduly burdening them when they are engaging in legitimate business practices such as incurring justifiable debts that are discharged in a timely fashion.
The Government also supports the proposal to make sure, if a person loses their authorisation to carry out work under one of their licences, that there is an automatic consideration of how that impacts other licences held in their name or where they are involved in the running of the licensed business. While the Government supports progressing that policy concept, we need to ensure that such an amendment aligns with the broader reforms. The building regulator already has disciplinary powers to use if suspending all authorisations attached to a person or body corporate is appropriate. The Government does not support setting up the automatic suspension of all contractor licences at this time. We need to see how it will integrate into the broader regulatory framework and to understand how the new NSW Building Commission will effectively enforce those rules across the industry. I welcome the engagement from the member for Sydney. I have committed to reporting back to him on how the Government proposes to progress that policy proposal in the new building bill.
I also welcome the support from across the Parliament for the Government's work to introduce decennial liability insurance, also known as DLI. I note that the member for Newtown has spoken in support of it, as has every other member in this House. It is supported across industry as well. The Government has engaged with industry and the community to understand how to transition from voluntary decennial liability insurance to a mandatory scheme. That will take time and will require a measured response to ensure that we support industry to develop a mature market where DLI is affordable to trustworthy operators.
As a first step, the Government will increase the strata bond from 2 per cent to 3 per cent. That will not only enhance the existing consumer protections but also send a signal to the market that New South Wales is serious about making DLI the future of consumer protection for apartment owners across the State. However, we need to ensure that the conditions are right so that the DLI market has the necessary capacity to take on that extra work. While the Government has proposed 1 February 2024 as the date to increase the strata building bond rate from 2 per cent to 3 per cent, it will only increase the bond rate where there are multiple and proportional operators in the market. Government members welcome the work of Resilience Insurance to start the DLI market in Australia. We want to encourage other providers into the market before we increase the bond rate. That will ensure competition and market capacity, and will give confidence to the market that the Government is committed to making DLI a permanent feature of the New South Wales housing market.
In closing, buildings are not a luxury but a necessity. Passing the bill supports the Government's ongoing commitment to transformational reform of the New South Wales building and construction industry. It is focused on improving building quality and restoring confidence in the building and construction industry. I acknowledge the contributions of the NSW Building Commissioner, Mr David Chandler, and NSW Fair Trading for their efforts to help the Government deliver its reform agenda and for their ongoing input. In particular, I thank the staff at NSW Fair Trading for their work on the bill. I thank Angus Abadee, Donna Harris, Lauren Freemantle, Katie Harbon, Michael Marks, Gumneet Mangat, Urvashi Bandhu, Alison Morris, Ryan King and Michelle Devine. The Government's reform agenda has received genuine bipartisan support, and I very much thank all my colleagues for supporting this important bill and this significant reform. I look forward to working with each member to restore confidence in the New South Wales construction sector. I commend the bill to the House.
TEMPORARY SPEAKER (Mr David Layzell): The question is that this bill be now read a second time.
Motion agreed to.
Third Reading
Mr ANOULACK CHANTHIVONG: I move:
That this bill be now read a third time.
Motion agreed to.
