Victoria’s building industry is failing consumers

Victoria’s building industry is failing consumers

Fifth Estate 2 July 2015

fifth estate

Anne Paten, Victorian Building Action Group | 2 July 2015

The verdict on Victoria’s domestic building industry is in and on the public record. And it’s not pretty.

The evidence of the Victorian Auditor-General’s Office Audit into Victoria’s Consumer Protection Framework for Building Construction was released on 28 May 2015 and confirms the scheme has failed consumers, contrary to the bureaucratic spin.

Victorian building consumers have been conned, deliberately denied access to their supposed “consumer rights” regarding building defects as guaranteed under the law, and for 22 years owners and their families have been defenceless, open to exploitation and most shamefully unprotected.

While the VAGO’s audit findings are extremely damning, with the auditor-general calling for “urgent reform”, a close examination uncovers several unthinkable truths.

First, every single element of the so-called “consumer protection scheme” has failed. Yes, not one element of the consumer protection strategy serves the purpose of providing any protection for consumers. And in its totality, the Auditor-General concluded that the scheme is utterly inadequate and entirely ineffective.

The scheme is a scam. It is pointless in terms of the “stated objectives” of safeguarding consumers’ rights, or providing consumers access to their legal entitlements or any possible means of redress or recompense for building defects.

Most alarmingly, what the report highlights is that all the bureaucratic officials responsible for policy, administration and governance have been investigated and audited by many independent authorities over the last two decades and all reported findings have deemed the system a failure – over and again. Though nothing has changed.

The VAGO has completed three audits, the previous two in 2000 and 2011, and together with this third one, the Auditor-General has investigated the governance agencies across the full 22-year period of this system. Every time the findings have been damning, documenting the widespread systemic failure, conflict of interest, collusion and cronyism, and also identifying consumers’ vulnerability.

Every time the recommendations for improvement have been put to department and agency officials. And every time the officials have committed to implementing the recommendations and effecting change. Yet, every time the next independent audit, review or investigation is conducted, the findings reveal that the recommendations have simply been ignored, with no changes ever implemented.

Even more shocking, if possible, after each investigation, audit or review, these officials agreed to making their obligatory “improvements”. However, in reality all the VAGO reports have revealed that these officials have actually made the system worse. In place of “improvement”, these officials managed to inflict more damage upon more consumers.

An examination of the elements of the “consumer protection” scheme and the Auditor-General’s key findings demonstrates the involved officials’ culpability for harm to millions of ordinary Victorians.

Key findings of the VAGO Report

REGISTRATION

In relation to registration, the Victorian Building Authority (VBA) and the Building Practitioners Board (BPB) are meant to ensure that practitioners are only registered if qualified, experienced and of good character.

VAGO findings: “Registration does not provide consumers assurance that all registered builders are competent, qualified and of good character.”

The VAGO found many deficiencies in standards and processes for assessing applications, as did the Victorian Ombudsman in 2012. We now know that the overwhelming majority of registered builders do not meet the stated criteria for registration.

MONITORING AND COMPLIANCE

Surveyors have a key role in compliance. They are meant to issue building permits and conduct stage inspections. In reality, their business relationships with builders are underpinned by conflict of interest. In 2011, the VAGO examined building permits and the Auditor-General found that “96 per cent of building permits did not meet minimum building and safety standards”.

VAGO findings: “Monitoring and compliance does not provide consumers assurance that surveyors are acting in their best interest and that problems will be promptly discovered and addressed.”

Further, their “important role is undermined by a conflict of interest”.

Surveyors are supposed to ensure that buildings meet minimum standards, but “reliant on builders for ongoing work, this limits the surveyor’s independence to challenge non-compliant work”.

PRACTITIONER DISCIPLINE

The BPB and VBA are responsible for consumer complaints, investigations and discipline of building practitioners. In reality, very few building practitioners are called to account; they have but a 0.3 per cent chance. Under the VBA since 2013, they have less chance than under the Building Commission. Of those fined by the BPB, few pay the fine. Most appeal at VCAT and walk away.

VAGO findings: “No efficiency or timeliness standards for disciplinary functions, disciplinary sanctions appear ineffective, surveyors are over-represented and the Disciplinary Register is not prominent on the website (for consumers).”

“Over 27 per cent of offending surveyors appeared at disciplinary inquiries more than once within the same year.”

Consumers cannot have confidence that they are protected from misconduct and that practitioners will be appropriately sanctioned when they offend.”

DISPUTE HANDLING

an go to VCAT, which may be time consuming and costly.”

“Consumers cannot rely on dispute resolution to provide a satisfactory, timely and cost-effective outcome.”

Consequences for consumers

The most recent CAV statistics, in 2010, found that 256,000 or 40 per cent of owners have suffered financial loss from building defects. Five years on, we know it is much worse.

The financial detriment to Victorian owners was $500 million in 2005 (according to the Building Commi

Consumers have no access to any fair, affordable or timely means of “dispute resolution”. From many hundreds of consumer case studies, we know the Consumer Affairs Victoria outcomes and VCAT outcomes. With CAV, there are very few conciliations. Of those, consumers rarely, if ever, obtain any satisfactory outcome.

As for what the VAGO was informed, CAV’s claimed 68 per cent of cases “resolved” is absolute nonsense. Another VAGO audit on CAV in 2013 found that CAV reported false statistics in its annual report.

And at VCAT, if owners “win”, they lose. Cases can last up to nine years, commonly hearings can go for 17 days and owners will leave much worse off financially than before they sought “justice” at VCAT.

VAGO findings: “Consumer Affairs Victoria does not measure its performance. Ultimate consumer outcomes are not known.”

“CAV assesses complaints and will not attempt conciliation unless it believes there is a ‘reasonable likelihood of resolution’. It reports a resolution rate from its dispute conciliation services of 68 per cent, but its definition of ‘resolved’ does not necessarily mean that parties to the conciliation are satisfied.”

“CAV only accepts a complaint for conciliation if both parties agree to participate.”

“Any agreed outcomes, such as building repairs or payments, are unenforceable.”

“Critically, CAV does not follow up or monitor actions agreed by parties.”

“If consumers aren’t satisfied by the outcomes achieved in the conciliation process they c

ssion) and according to CAV was $706 million in 2006, $1.6 billion in 2008 and around $3.8 billion in 2010. There are no official statistics since 2010.

However, we estimate that in 2014 the financial loss alone would have been around $15 billion for Victorian consumers.

If we compare this consumer disaster with natural disasters, it becomes beyond scandalous. Publicly available information says the Queensland floods of 2011 caused a financial loss of $16 billion. The damage bill for the 2009 Victoria bushfires was $4.4 billion. But our man-made consumer disaster is more expensive – but it is preventable and repeated every year. Across Australia in 2014, we estimate it cost owners $45 billion.

As this VAGO’s verdict has decreed in three reports covering 22 years, every element of consumer protection has failed. The blame for this is clearly with the governance agencies, the blighted Building Commission and its cloned regulatory successor, the Victorian Building Authority. Of course, the “regulator” did not manage to create the greatest consumer catastrophe ever all on its own.

It clear that the BC/VBA have been assisted by Consumer Affairs Victoria, the Building Practitioners Board and the Building Appeals Board, since these have had responsibility for protecting consumers.

Two government departments have responsibility for these policies and operation of these agencies. It seems senior policy officials have been critical in allowing this to happen. Instead of taking control of the building industry or enforcing compliance of building and consumer laws, or safeguarding consumers or ensuring good governance, consumers have been betrayed, and many have lost trust and confidence in the government. Those past and present officials, who failed in their obligations and duty of care, must now be held accountable.

Anne Paten is a consumer advocate who has worked for over seven years assisting building consumers and to reform the governance of the domestic building industry. She is president of the Victorian Building Action Group.

Anne Paten

Comments

5 Responses to “Victoria’s building industry is failing consumers”

  • Dave Marriott says:

9 July 2015 at 1:07 pm

Dear Anne I am from WA we have the problem as you .A major builder company has wiped their hands of our dream home even through it is still under warranty, Dave Marriott

Reply

  • Melissa says:

6 July 2015 at 10:43 am

Thank you Anne for another wonderful article which is, although shocking, 100% truth. It is only those unfortunate enough to become stuck in this system due to dealings with bad builders and their associates that fully know the horror that awaits when things go wrong. Accountability is desperately needed, we have been waiting too long.

Reply

3 July 2015 at 9:01 am

That was shocking to read – 96% of building permits did not meet minimum building and safety standards and the resulting magnitude of the damage bill. I cannot imagine what the further consequences would be if the rising issue of non-compliant building products is also included!

  • Cheyanne Dumbleton says:

10 July 2015 at 9:38 pm

Unfortunatley its only those that are victims of the system that this information doesn’t shock. To add insult to injury its highlighted when you see criminals get more of a fair go than building consumers. When we are the ones faced with legal battles to try and attempt of gaining any justice at getting what we paid for & not even get a cent of it back. Why do we have to go to VCAT where they are protecting the builders? Why can’t it simply be a classic case of breaching the contract?

Reply

  • Anne Paten says:

10 July 2015 at 12:59 pm

Dear Dave
This is a problem across the country, and as you say ‘warranty’ is meaningless. No one will enforce and thus in reality, such claims are pure nonsense. This disaster has been caused by people being registered who are incompetent and unscrupulous – this sanctioned by all Governments for decades. Combined with zero enforcement, a lack of punishment and hence no deterrence, the misconduct has escalated in terms of numbers and the outrageous conduct has worsened dramatically – and as you know dreams turn into nightmares. The industry is literally ‘out of control’ and the cowboys rule! Consumers have absolutely no protection and are ‘lambs to the slaughter’.
Our new website will be up soon and I hope that you will contact us at that time. Also, write a submission to the upcoming Senate Inquiry into ‘Non-conforming building products’. We also urgently need a Royal Commission at the federal level. Let us all get angry and tell the Governments it is time to stop this brutal harm to all Australians.

The Great Australian Dream: Spin, Lies and Fantasy

The Great Australian Dream: Spin, Lies and Fantasy

69 SHARED THIS Contributor: Anne Paten Published: 21 September 2015

aussie dream 1

Victoria’s ‘Great Australian Dream’ industry is supported and stimulated by spin, lies and fantasy.
The building companies’ spin includes the ‘dream’ as a star fantasy feature. The standard slogans include ‘Build your Dream into Reality,’ ‘Create Your Dream Home,’ and ‘Turn Your Dream Home into Reality.’ Conjuring up aspirations, the ‘dream’ inspires the values of achievement and success, but its potency is as a persuasive ploy, primarily aped to attract beginner building clients.
For more than 250,000 Victorians each year, however, this ‘dream’ will prove to be a fallacy – one accompanied by enormous financial detriment, much distress and causing immense devastation to the lives of owners and their families.
The word ‘dream’ has become a classical choice in construction’s make-believe world of marketing. Acting like a magic magnet, it is a password proffering promise, asserting that the ‘undreamed of’ fairy-tale is feasible. Through the display homes, ‘castle in the air’ dreams are converted into ‘castles on the ground’ – the hitherto out of reach, made to seem reachable. The vision is tangible and touchable: many spacious rooms, multiple bathrooms, a dedicated home theatre and outdoor living with a stunning garden, structural plants and no weeds! It looks charming, seems tantalizing and for many, it proves irresistible. As for the many negative elements that nurture the building industry, these are all camouflaged, rendered invisible to even the most circumspect clients.
One dream-into-nightmare reality
Alison

aussie dream2

Alison and Mark reckon they are “at least six figures down” because of the delays. Photo: Chris Hopkins
Mark and Alison Attard’s terrible tale appeared in The Age on August 16. Written by Clare Kermond, it was titled When your Dream Home becomes a Nightmare. Sadly, this family’s sinister story is all too familiar, with the warning of the ‘dream’ heralding an injurious outcome.
When they signed to build, Alison was pregnant with her third child. Since the home was to take less than a year to build, renting a place to live in seemed manageable “before their dream home was to be ready.” The baby is now nearly three years old and the Attards will still not be in the house for months.
“We felt going into it, what a great contract we have, we’ve got all this protection, we’ve done our homework,.” Alison recalled.
She added that they had signed with a registered builder “who came well recommended, made sure their contract included clauses for delays and checked that the builder had insurance.”
This is the same nightmarish story most owners relate.
The truth is that these owners did their homework to the extent that one can in such a shameful system. They also had the registered, insured builder – an ‘Award Winning Builder’ no less! The contract had been checked. But, the term ‘registered’ builder is meaningless. The ‘well recommended’ testimonials are often from the builder’s relatives or those doing the recommending are paid for their affirmation. Concerning the contracts, these favour the builder, making owners exceptionally disadvantaged, literally left helpless. And since the overwhelming majority of owners cannot ever claim the ‘warranty insurance,’ it is worthless.
Almost from day one, delays were generated. With the cowboys, this is the custom – a different take on ‘custom builders!’ A year on, when the builder had been paid 90 per cent of the money and the building should have been finished, the implications of the ‘dream’ they had been spun fully unfolded. Another year passed and the builder did no work. Again, this is the common scenario. Take most of the money and run – because you can!
As Kermond said, the couple’s “last three years were a horror story of delays, building problems, legal battles and hundreds of thousands of dollars that they’ll never see again.” From dream to despair, the full-scale nightmare is the irrefutable reality!
How the nightmares are facilitated
The alliance between Victoria’s building companies and the responsible Government officials has allowed builders to operate without restraint. Building companies have been allowed to manufacture spin, fabricate falsehoods and breach all building and consumer laws. In fact, the Government departments and agencies have actively assisted in promoting the illusion of ‘consumer protection.’ Here are just a few of their achievements now on the public record:
• ‘Arranging registration’ for builders when the majority should not have been ratified – with information on bad builders being virtually impossible to track down, including all reports on ‘registered cowboys’ from 2012 and 2013.
• Building up a false sense of security regarding ‘regulatory compliance’ – Prue Digby, CEO of the VBA announced that audits are the VBA’s “core regulatory function” as if regulatory compliance is far more common than it actually is.
• Stating in the VBA Annual Report of 2013-2014 that “The VBA has made it a priority to rebuild relationships with industry and consumers” and “Senior VBA staff have met regularly with industry and consumer groups” when in reality, many consumers feel let down.

•Removing information from public access – the VBA has removed all chronicles of the 20 years of the Building Commission and deeming the Building Commission’s history now to be “irrelevant.”
• CAV has reported on ‘consumer satisfaction’ in its annual reports, when these findings were contradicted by findings from the Auditor General in 2013!
• Expenses for VBA’s 2013-2014 operations were $42 million, the highest ever, with Digby saying the costs were for “delivery of regulatory development activities, practitioner registration, compliance activities, building dispute resolution, building industry research, informing consumers and industry and internal systems improvements.” It is incumbent on us to ask, was this money well-spent, and did it actually lead to strong regulatory and protection measures to serve consumers?
The fairy tale dream has propped up the industry and rewarded plenty of beneficiaries. But the dream has been packaged falsely, delivering delusion in place of the ‘dream’ and inflicting nightmares on innocent, defenceless consumers.
Despite their duty of care, officials – wittingly or not – were collaborators in the spin, lies and fantasy, conning consumers into buying what was not really for sale. They have let down those for whom they were responsible, and ultimately they are culpable.
By Anne Paten
Monday, September 21st, 2015
Discussions
9
Comment
1. Jay

September 21, 2015
That is a nice little hate rant that lumps all builders and construction companies into a single negative based on one example and blanket statements. Absolutely useless without any suggestions on improving actual problems or issues faced in the construction industry.
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o Mark Whitby

October 16, 2015
Jay,
I believe that example is one of well over 5000 similar stories Anne could write about. It might come across as a rant, but I wouldn’t go about saying that because Anne has a heap of facts at her disposal as per her other articles if you’ve read them
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2. Andrew Heaton

September 22, 2015
Certainly, there are many problems with Victoria’s building regulatory system, as has been laid bare in various reports from the Ombudsman and Governor General. Most definitely, too, there are a lot of cowboys.
However, I do think we have to be careful in demonising the industry and its regulators too much. Whilst there are no doubt a significant number of unscrupulous operators who cause genuine trouble for consumers, I’m sure the vast majority of builders and tradespeople do at least try to do the right thing and do the job properly.
Likewise, whilst problems with the former Building Commission and current VBA are well documented, no doubt the majority of people working within these organisations do strive to do their job adequately and properly.
With regard to the genuine cowboys, I wonder what the solutions are? That the industry has problems is well documented, but I wonder how we can get practical, workable solutions in place.
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Anne Paten
October 16, 2015
Jay, I must respond to your comments. This article was not constructed on a “single negative”. If this one case had been selected as the basis to generalize on owners’ experiences and to show how the building industry operates, then your opinion of a “hate rant” may have been justified. But this is definitely not so! In your bid to negate, you have ignored the compelling evidence presented and on the public record. Your comments are in contradiction to what has been widely validated as legitimate fact. By contrast, this article’s narrative is founded on authentic actuality and established reliable facts accumulated from a wide body of evidence of genuinely trustworthy sources. The horrendous experience of the Attards, the trail of destruction that followed when the builder absconded and the injurious consequences for the owners, is sadly the reality for 40% of owners who sign to build in Victoria each year. Perhaps the truth seems too shocking for anyone to find credible? Perhaps the impact on so many lives is too difficult to fully comprehend? Or perhaps the truth has to be negated and denied publicly in the interest of propping up the industry, the dysfunctional ‘governance ind
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4. Graeme Doreian

October 16, 2015
Great article Anne, more ‘system’ incompetence, with ‘everyone covering for everyone’ at the expense of the consumer.
My Dad had the first display home on the Mornington Peninsula Victoria, being a second generation tradesman in the building industry he was disillusioned with the bosses he worked for over the years, and started his own business, doing EVERYTHING, working on the job, with his tradies, the paper work, mum supporting him, typing all the paperwork, no pre printed forms etc like now.
My dad was asked to join the Master Builders Reg no 665, having to confirm numerous details of his experience, and with three other builders endorsing his membership. In those early 1960’s it was an honour and privilege to join, not now
anyone can join, with the legal system ensuring the builders are protected and the consumers ripped off in the majority of cases. Relevance any ‘Tom, Dick or Harry can massage the’ system’ and be a builder, some with no trade experience, these are just managers, managers it appears, along with the Government system protecting each other with no conscience. The is ‘no honour’ in the whole system which is destroying people, keep up the good work Anne.
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o Brett Bates

October 26, 2015
It’s great to hear a success story and you can be very proud of your dads achievements in the cottage building industry. However, your comment “Any Tom, Dick or Harry can massage the’ system’ and be a builder, some with no trade experience, these are just managers, managers it appears, along with the Government system protecting each other with no conscience” is inaccurate. Back in the 1960’s home construction design, materials and the trade skills involved were simple by comparison with today. Contract administration and the complexity of the legal and regulatory environment in which the housing sector operated were almost non-existent 50 years ago. Indeed, anyone could call themselves a builder. The trap that people still fall into is that their ‘builder’ may have a good grasp of a particular trade – usually carpentry in home building – but that won’t necessarily make them a good builder! The failure listed in this article is all about the builders inability to ‘manage’ a construction program, acquire and allocate resources and act on contractual obligations including dispute resolution mechanisms. These are all ‘high end’ skills that are far removed from being competent in joining timber or sticking bricks together. In no way do I disrespect skilled building trades persons as they are vital components to the construction sector. But they are and will become much less important particularly as prefabrication technologies gain ground. Much work today is really site assembly, not construction. We have moved on and need a high quality, rigorous national training and licensing regime to make sure all builders are highly trained managers equipped to handle contemporary construction matters. We don’t have that at the moment
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Martha
October 17, 2015
No one should have to live the nightmare that these dodgy builders and what they are allowed to get away with! Where are our laws when we need them? Why are these builders allowed to still be registered? These builders are continually getting away with it and have friends in the trade that assist with all their lies by providing them with reports that are false! Mandatory inspections for every single stage of the builders work should be made a law in Victoria. This would be a big step in eliminating some of the nightmares consumers are living!!!
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6. lesley

October 23, 2015
Obviously there are good builders in the building industry and I sincerely hope that when two of my children have finally saved up enough money to get a home loan to build their houses, they are lucky enough to get one of these good builders. I feel very sorry for the Attards and the situation they have found themselves in. Even if there was only one building disaster, that is one disaster too much. I would think that the good builders would also want problems in the industry to be seriously attended to, so that their good names and reputations were not tarnished by the cowboys that have been referred to in the article. One should be able to rely on the regulatory system that is currently in existence but from what I have read in the past, it would seem that it is not working or perhaps it is not enforced. If problems are not attended to by the appropriate authorities, then the problems get worse, not better. We need a strong building industry to help our economy, to have houses built that are going to last the test of time, just like my father’s house did, to house the Attard’s safely and all the other consumers just like them. I am going to downsize soon and I want to have faith in buying a new property, and hope that the person who has built it, built it with integrity and pride in their finished product.
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7. Mel

October 26, 2015
Great article Anne, and most definitely not a hate rant. Unfortunately I have heard of, or know firsthand many stories similar to the Attards. The effect that bad builders have on homeowners and their families cannot and should not be discounted. Time to stand up!
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Consumer Protection Reform Strategy Fails. Dodgy shonky bad builders prevail.

Why the Consumer Protection Reform Strategy Fails and dodgy shonky bad builders prevail.

By Anne Paten Sourceable 15 July 2015 LINK: https://sourceable.net/why-the-consumer-protection-reform-strategy-fails
88 people shared this article No 10 of Top 10 articles for July 2015

why consumer reform fails

It is clear that the Domestic Building Consumer Protection Reform Strategy was created as a mirage, to give a vision of providing better protection for consumers.
On close examination, just like a mirage, we see an illusion with no visible means of any real consumer protection. In reality, the ‘strategy’ was never intended to enhance consumer protection; rather, it was intended to delude and deceive both consumers and the public.
For the payers of the pipers, consumers who finance the domestic building industry and directly fund all the government agencies involved in its supposed ‘governance,’ all were denied any say in the ‘strategy.’
Consumers’ voices were forcibly silenced, just as has been the practice for two decades, which was critical to the successful passage of what is really the ‘no consumer reform strategy.’ Crushed, the consumer ‘payers of all the pipers’ were excluded from contributing even a line to the chorus, much less calling the tune!
How did this ‘strategy’ come about?
In order to understand the governance of the domestic building industry, it is important to consider some of the historical background. Deregulated in 1993 and effectively uncontrolled, the industry and its governance descended into lawlessness, this documented in many independent reports and reviews over the past 20 years.
Underpinning the governance scheme was, and is, a weak ‘regulator’ and a meaningless ‘registration regime.’
There is virtually no industry oversight, no enforcement of laws and regulations, no monitoring of conduct and few practitioners are ever penalized. As a consequence of the no punishment for recalcitrant practitioners’ policy, there has been no deterrent to their abuse of the system. In reality, the cowboys have been encouraged to increase in number, with their ever-worsening misconduct sanctioned. Known in the industry as ‘gods’ and ‘untouchable’, those officials purported to be in control of the industry, with a supposed duty of care to protect consumers, in fact abrogated their responsibilities.
Instead, these officials have acted as collaborators, authorising and enabling cowboy misconduct. In truth, consumer protection has been sacrificed with consumers’ rights misappropriated; the building practitioner offenders – and not consumers – have been protected by the public officials. This certainly seems incongruous, but shamefully, this is the consumer reality.
The Building Commission/Victorian Building Authority has acted as a ‘no touch’ regulator, this leading to the inevitable artificially-created ‘building disputes’ – a direct result of a total lack of regulatory enforcement combined with disregard for all building and consumer laws.
In turn, this has spawned an ever-increasing ‘building dispute industry’; one in which owners who seek justice are forced into a biased and unfair legal system, where consumers have virtually no access to justice. Instead, we have a ‘legal system’ functioning as a ‘no justice system’, every year delivering large-scale consumer harm.
Finally, we have the ‘Last Resort’ or ‘no resort’ insurance scheme, another government stratagem compelling owners to pay for insurance premiums that are in fact donations to the VMIA and insurance brokers. Yes, building consumers must pay for insurance that 99 per cent of them can never claim!
Following the extremely damning report by the Victorian Auditor-General on Compliance with Building Permits in 2011 and the even more damning Ombudsman’s Report on the Investigation into the Governance and Administration of the Victorian Building Commission in 2012, the then-Liberal government was forced to make some response.
The conduct of the senior executives of the Commission, the Building Practitioners Board and the Department of Planning and Community Development were severely criticized, with both reports offering scathing rebukes of the bureaucrats’ conduct over two decades. These officials were put under the spotlight, but no action was taken against any individual. A small number of very senior officials were allowed to resign, but the majority remained, and then additional replacements were recruited at the senior levels, these predominantly from a similar background and culture.
Thus, the ‘no regulation’, ‘conflict of interest’ and ‘capacity for corruption’ culture continues unabated, and for the government officials in all the responsible departments and agencies, it is business as usual.
By 2012, the government was forced to make some policy-type response to a domestic building industry under siege. Not only was the industry in crisis, but decades of appalling governance had been exposed.
The public officials responsible for the calamity were called upon to create a ‘solution’ that could be sold to consumers as ‘meaningful reform’ but not deliver any amelioration or genuine improvement for consumers. The construction of the Domestic Building Consumer Protection Reform Strategy was the outcome.
Of course, the ‘strategy’ appears to have been aimed at calming the disquiet, placating the media and the community and most importantly, pretending to deliver some improvement in consumer protection. Those responsible officials rose to the challenge, cleverly crafting a set of stratagems, utilizing illusion to feign ‘real reform’ and better protection for consumers. As a close examination of the scheme reveals, the officials managed to go beyond ‘no reform’ and ‘no improvement’ for consumers. They excelled in ‘strategic thinking’, exceeding all consumer expectations, such that if this proposed ‘reform’ is fully enacted, building consumers will be worse off than under the current ruinous regime.
The last official statistics from Consumer Affairs Victoria in its Consumer Confidence and Market Experience Study 2010-2011 were shocking. We learned that 256,000 building owners, or 40 per cent, suffered financial damage in one year. This is without considering all the other serious harm to owners – work, health, relationships, families and loss of ‘normal’ lives. This detriment totaled in the billions of dollars just for 2010. Building is by far the worst consumer
market sector in Victoria, causing the greatest damage to owners and their families, year in and year out.
Five years on in 2015, we know that this disaster is far worse than in 2010. It may be 300,000 or 400,000 owners who are negatively impacted in 2015. Whatever the number, it is scandalous. It is inexcusable that there is no political will to initiate genuine reform, to protect those that fund the building industry and drive the Victorian economy.
Beneath the cleverly crafted marketing and the splendid spin contrived to sell the Consumer Protection Reform Strategy, what is uncovered as ‘reforms’ are exceedingly ‘unreal reforms’, with present and future consumers’ outcomes as per the ‘strategy’ fated to be even worse than under the current dysfunctional system.
The word from industry repeatedly is “everyone knows, but no one cares!” This reflects poorly on a society where the credo isg “greed is great!” Worse still, it is a sad indictment on those in positions of power and privilege, those who are paid by owners, not out of the taxpayers’ purse, and those who we have elected to govern in the interest of the greatest good for the greatest number.
For building consumers who pay all the pipers, if they were in any other consumer market sector other than ‘domestic building’, as payers of the pipers, they would be calling the tune!
Published on 13 July 2015
CONTRIBUTED BY:
Anne Paten
Anne Paten is a well-known Building Consumer Advocate, who has worked for seven years as a public advocate for the enforcement of consumers’ rights.
1. Branko says:

July 13, 2015 at 8:11 am
Another great article Anne! It must be obvious that there is no political will to change anything because there are too any fat snouts feeding from the trough. As with any system that is corrupt and does not work it must be brought down. Nothing will change until 10,000 extremely mad homeowners demonstrate and smash down parliament doors and force the change.
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David Chandler says:
July 13, 2015 at 8:39 am
Anne, Your articles point to a significant issue which should concern the voting public and a industry that has got it mostly right for so long. Unfortunately the horse looks to have bolted. With governments long past the date where they employed the talent needed to help turn this deteriorating situation around a new approach will be needed in my view. As you report the industry is now in the hands of many conflicted parts. Not all intentionally doing the wrong thing, just not fully understanding that the sum of the parts must add up to the whole. This lack of end customer insight or interest is the core issue that allows the bit players to play with all care for their bit but immune from the rest. “Not my patch,” they say. It will be a bold public or elected official who would know what to do next in the face of powerful advocacy that wants any response to these issues to accommodate all of their members, which mostly are able to join at the door. Once in the club one rarely if ever hears of expulsion, just more accommodation for the weakest. Industry warranty insurance is an example where one price fits all as a result. Can you see the bottom coming? Its a race.
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3. Dick Gower says:

July 13, 2015 at 11:12 am
Anne is correct in her statements. Speaking from experience, there are fundamental flaws arising from the deregulation and consumer protection is non-existent.
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4. Andrew says:

July 14, 2015 at 8:44 am
Once again Anne has hit the nail on the head. It is incredible that an industry that drives the economy of Victoria has been so disastrous for so many families and all the government does is make it harder for the people that are affected to get what they pay for. The system needs to be changed from the top down with genuine consumer
representatives on the panels that make the strategy for this industry. The whole system needs to be changed starting with the registration of builders, so that the cowboys are weeded out. If all builders are good builders then the rest of the system would not be needed and all the money spent on these government departments, that do nothing, could be spent on more worthwhile projects.
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5. beverley-jane says:

July 14, 2015 at 5:19 pm
Consumers are not being heard and protected due to shockingly inept regulators and disinterested politicians. Shonky builders are bolstered and protected by all too powerful industry associations and bodies. The only way forward in my opinion is for consumers to play the same game by paying a ‘legal insurance’ fee into a fund which allows them access to a powerful legal firm prepared to take on these bullies in court/hearing situations. A consumer protective building contract is essential and could possibly be incorporated as part of the ‘legal insurance’ package. It is abundantly clear that our government and regulators will not defend the victims in this money making, recalcitrant industry. Having been through this diabolic building process, I would be more than willing to pay up front for a fair contract with strong legal backup in the event of being exposed to another devastating building nightmare. Certainly more honest and viable than the sham Builder’s Warranty Insurance we are forced to contribute to!
Reply
6. Branko says:

July 15, 2015 at 8:47 am
Anyone building a home and waiting for government to protect them will grow old. In meantime their biggest investment is at risk. So what can they do? Take control! How? Look around and find independent building consultant that specialises in building stage inspections. These are critical points during build and serve two purposes. Firstly it is to inspect and report on any defects with instruction to correct to avoid defects being built in. Secondly it sent a message to the builder that you have someone professional that looks after you and you should get a better job. I have been doing building stage inspections for over a decade and invariably get from A-Z with minimum of fuss. 1 Pre contract review, your most important inspection because if you sign off on a bad deal who will help you? 2 Pre slab inspection, overview of excavation and preparation works 3 Frame Inspection, frequently I find frame defects after they are passed by building inspectors. 4 Pre plaster Inspection, your last chance to spot and rectify before it all is covered up (frequently found: damaged structural members by other trades) 5 Pre final- defective, incomplete, non conforming, non compliant work
Reply
7 beverley-jane says:

July 16, 2015 at 12:53 pm
Good in theory Branko but the reality is many inspectors/consultants are failed builders. Our ‘Wonderboy’ a prime example of this since his temporary suspension, liquidation, multiple warranty claims and delivering our home with 140+ defects! (Building Practitioners Board report) Homeowners don’t venture into this nightmarish undertaking too often and are at the mercy of smooth talking conmen promising monitoring, reassurance and competence then escape accountability via liquidation when their deficiencies result in devastating consequences for families. Registration is handed out without checks on competence, good character or prior track record. Failed and liquidated members permitted to re-register after short periods of time. Where is the supposed consumer assurance of registration under these circumstances? Regulators don’t regulate and disciplinary histories are hidden, preventing viable due diligence checks by consumers. Warranty claims records kept from consumers supposedly to protect the privacy of these conmen. How do you suggest consumers ensure their ‘inspector’, ‘consultant’ or ‘builder’ are competent and not just another link in this industry’s gravy train?
8Bruce Christopher says:
July 15, 2015 at 12:36 pm
Agreed Anne that this is one area which cannot just be left open to market forces. Often through ignorance, as a collective, consumers end up getting what they ask for, even if it’s not what everyone needs or the minority wants. Low cost usually trumps quality and suppliers and builders risk becoming redundant if they do not serve the majority.
Taking an interest, doing homework, checking quality and references for previous projects makes all the difference. Expect to pay a premium for compliant (let alone quality) materials and good workmanship. A good builder should welcome some scrutiny.
For such a high level of spending I’m surprised more people don’t become more active in the project. For those who don’t understand the differences then more effective regulations and compliance checks are required. Though some builders are shonky and cutting costs due to greed, there will be many I’m sure who are responding to the market demands for low price and buying cheaper materials, which probably should not be on the shelf in the first place.
Consumers also needs to reflect on their own impact from the disturbing trend of unrealistic expectations which can drag standards down.
Reply
9Mark Whitby says:
July 15, 2015 at 7:48 pm
Great overall view Anne,
Let’s not just hope the Governments listen, but let’s work toward making them listen. The only question remaining is how does on go about making that happen if the owners do not form some sort of enormous consumer group that they have to listen to?
Reply
10Anne Paten says:
July 16, 2015 at 9:02 am
Bruce, your comment raises a number of points. First, you cannot have a deregulated market and ‘consumer protection’. The ‘policy’ makers authorized ‘deregulation’, devising the legislation/framework, deliberately making both biased against consumers. Second, the governance agencies committed to protecting and rewarding the industry players who rule; with just one of their strategies being information asymmetry, whereby consumers are denied the information to make informed choices – what you call “ignorance”. In fact, no matter how much ‘buyer beware’ homework an owner does, the flawed money-driven system, underpinned by conflict of interest, ensure owners are helpless. Third, regarding your argument that how much you pay determines the outcome, this is irrelevant. Unlike architects who do a degree, building practitioner ‘registration’ includes most who have no quals or skills; it is meaningless, as are ‘references’, and the unfair con-tracts, heavily biased in favour of the builder, who has a business relationship with the surveyor, leaving the owner literally and figuratively ‘LOCKED OUT’. This issue has nothing to do with unrealistic expectations, owners are totally outgunned!
Reply
11Anne Paten says:
July 16, 2015 at 9:36 am
Bruce, I am compelled to add another comment. This issue is about a deregulated market, with no enforcement of any regulations. Owners try to do their ‘homework. They find a ‘registered’ builder – means nothing; with insurance – they later find out NOT claimable; check references – often turning out to be the builder’s relatives! The solicitor reviews the unfair con-tracts and says nothing. All worthless! As for being active in the project, the cowboy builder has full control – this enabled and endorsed by VBA and CAV. We had the registered, insured, HIA award winning cowboy, and con-tract checked by lawyer. We paid $15,500 a square 8 years ago, landing a monstrous building. We pursued every avenue, through to VCAT, walking away with a loss of another $80,000, the mega defective building unchanged to this day. As for “some builders are shonky”, an understatement. In 2010, 1 in every 4 owners, or 256,000 suffered financial loss! Regardless of what owners pay, the united, organized forces always win against the voiceless, powerless owners.
Reply
12Graeme Doreian says:
July 16, 2015 at 7:15 pm
Basically legal system has manipulated and massaged the ‘building system’ to ensure their overpaid fees are collected knowing the ‘sucker paying’ will receive NO SATISFACTION. From experience, builders and tradesmen have a duty of care to ensure any job is completed in a tradesman like manner NO MATTER how much a client is paying. Builders know the ‘system protects them when there appears a conflict between builder and client, builder tells client ‘it’s my way or the highway,’ closes site down and walks away. Consumers helpless and governments/officials don’t care. Another wall collapse two houses on the brink of falling into hole No 6 Branko I would like to modify point 4. At this stage a pre electrical inspection, especially the roof space must be conducted with any rectifications addressed before under taking plastering and should apply to any trade installing their components especially in that roof space For decades the State Electrical Offices have not conducted wiring inspections on all jobs in roof spaces, which can allow unprotected cabling over ceiling joists not to be rectified, which is what actually killed two young workers during the failed Home Insulation Program
Reply
13Connie says:
July 19, 2015 at 8:02 am
How can it be so different in building to anything else we buy? Because no one cares. This is not right and it is time for change.
Reply
14Mel says:
July 19, 2015 at 10:15 am
We need genuine change where only competently skilled, ethical practitioners are allowed to operate in the domestic building industry, and compliance with laws, regulations and standards are enforced. This will restore integrity, accountability and transparency to the administration and governance of the domestic building industry. Continuing to ignore the valuable knowledge of consumers who have experienced the downfalls of the current system would be yet another injustice to those already suffering.
Reply
15Rob says:
July 19, 2015 at 2:50 pm
The law makers and enforcers have a responsibility to consumers and enterprise to weed out the cowboys. We need a fair system for everyone no matter what side you are on, so trust is won back and consumers are happy to invest their money in this field. Consumer satisfaction is very important for growth. If the wrong thing is continually done, it has to catch up eventually.
Reply
16Sharon says:
July 24, 2015
I have sadly reached the conclusion that it will take a tragedy, something like the Lacrosse building fire with deaths, before any real action will be taken to reform the building industry. Having dealt with those at the Victorian Building Authority, I know that rather than regulate the building industry the Authority works to protect dodgy builders and surveyors at the expense of consumers. The organisation is rotten to the core and beyond reform.
Why the Consumer Protection Reform Strategy Fails

Was Australia’s Unaffordable Housing Crisis Avoidable?

Was Australia’s Unaffordable Housing Crisis Avoidable?

unaffordablr

Over recent decades, the price of Australia’s housing stock has continued to soar. Now in 2016, we have reached a crisis point where, for so many Australian families, the dream of owning their own home is no longer achievable.
However, Australia’s ‘unaffordable housing syndrome’ did not happen inadvertently or unexpectedly. Rather, successive governments’ long-term pertinacious policy is the cause of today’s disparity of opportunity. Worst of all, the inequitable outcomes were anticipated and absolutely avoidable.

Australians’ dreams disappear
With each passing year, we watch the dreams of Australian families disappear as evermore of them face the realization that they are locked out of buying a home. Whilst this subject is of paramount importance, it has only gained traction with the media in recent times. However, this issue is by no means a recent phenomenon – it was just expertly concealed and for decades kept under the radar.
As the issue of rising house prices has reached the public, the genie is out of the bottle – and the details decry any past delusion. A recent 4 Corners program called ‘Home Truths’ provided the cold, hard facts. A few decades ago, the price of a house was three or four times the family’s gross annual income. Now it is 10, 20 or even 30 times annual income.
New Zealand researcher Hugh Pavletich states if housing is to be accessible and affordable, housing costs should not exceed three times a household’s income. But as we know, this ‘affordable’ formula was now surpassed, and with it many Australians’ dreams of home ownership have fallen by the wayside.
The Australian Bureau of Statistics (ABS) figures shine a light on the pattern over time. In 1982, an ABS survey found that 10 per cent of home buyers spent more than 30 per cent of their gross income on housing. By 2011, it was 21 per cent of home buyers, with the increase in housing costs reflecting the increase in housing prices. The ‘now reality’ revealed is that this trend is on target to worsen and the gap between rich and poor is likely to grow ever wider.
Sydney and Melbourne are now two of the most expensive cities in the world in which to buy housing. In Sydney, houses are well beyond the reach of families, even with two combined incomes of $180,000 per year. Today, the median house price in Sydney is more than $1 million (and Melbourne is not far behind). And the huge debt incurred requires an average payment of $50,000 a year just to service the loan, despite historically low interest rates. For many of our young people, no matter how hard they might work and save, repayment of debt is unreasonable and owning a home unaffordable.
In recent years, we have had a boom in apartment buildings, especially in Sydney and Melbourne. This has served the needs of Australian and overseas investors, but as Governments well knew, this was not the right kind of housing for low and middle income families. As Dr Kate Shaw from the University of Melbourne noted, we have had a pattern of “buying, selling, demolishing, rebuilding (very badly), buying more,” and so on. This pattern effectively pushed up sale prices and rental costs, which provided good news for the winners, those already in the market. But this was at very great cost to those young Australians seeking to enter the housing market, and as their dreams disappear, they are the unmistakable losers.

House prices a prickly issue
For the major parties, the trend of ever-increasing house prices has been a prickly issue, in particular the consequences for low and middle income families. Thus, this was determined a most unpalatable subject and relegated to the fringe as if the shattered aspirations of Australians were of negligible significance. The pollies’ expectation was that if the subject was out of sight, it could effectively be out of mind – and all at fault could escape any public scrutiny and accountability. And it has worked a treat!
So what’s the strategy?
• Bad Government policy, predicated on pandering to the interests of business was at the core of planning policy. Planning, not building, was the number one priority, and there has been no official housing policy.
• There has been no supply side problem, just the wrong mix of housing. This has suited developers, building interests and, incidentally, investors.
• The corollary is that our young low and middle income families’ interests were totally ignored. As consumers with no voice on any government board or committee, their views were easily discounted – and unsurprisingly they became the disadvantaged.
• The cost of land, together with the need for developers and their buddies to snatch a bigger piece of the pie, forced land and house prices to continue to rise
• Disincentives for many older Australians to downsize or sell their investment properties – think stamp duty and capital gains tax – contributed to the spiral of increasing house prices.
• Focus on the economy, with all considerations rationalized in economic terms, has underpinned all policy ‘strategies’ – an enormous mistake, with the ramifications for people totally inconsequential.
• Those most impacted have had no access to pollies, no forum for consultation and no part in any decision making – as all consumers, their voices have been effectively non-existent.
Electioneering
For this election, the focus is again on the economy, Mr ‘Jobson Growth’ the sloganistic prime mover of the Liberal platform. The Libs’ housing policy is to retain the status quo, with Malcolm Turnbull’s referring to the idea of limiting negative gearing and decreasing capital gains tax as “an assault on economic freedom.” He obviously means an assault on those who profit from directing policy.
The Labor Party’s position is no different; ‘Budget Repair that’s Fair’ – the focus on ‘budget’ as for the Libs, combined with Labor’s ‘fair’ slogan as a fallacious con. Then we have both parties in sync on ‘consumer policy,’ which incidentally sits under Treasury and Finance. Yes, as befits ‘consumer matters’ which we now know do not concern consumers, all consumer matters are simply of economic and business significance. The only ‘consumer’ issue is “how can consumers be used to boost business, sales and increase profits?”
In this campaign, there is nothing anywhere about new polices on housing or building, despite shelter being our most basic need. There’s nothing about the increasing the disparity of wealth among Australians and nothing about people – full stop.
For many low and middle income Australians, owning a home for their family is now out of reach. In the ‘lucky country’ we know that attaining this milestone of unaffordable housing was not inevitable. It was not the result of a weak economy, nor too few resources, nor for that matter a lack of planning. Rather it was predictable, the natural outcome of bad policy, one predicated on pandering to the interests of business and ignoring the incremental detriment to consumers.
Unquestionably, the policy makers were cognizant of the inequity and injustice, and yet as per business and bureaucratic demands, they shamelessly committed to policy which they knew would make unaffordable housing for ordinary Australians utterly unavoidable.

By Anne Paten
Friday, June 17th, 2016

Discussions
10

Comment
1. Barry B
June 17, 2016
An excellent and timely article Anne, as well as one which highlights the gross failure of both major parties to cater to the needs of ordinary Australians.
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2. Les Williams
June 20, 2016
Another great article. Its simplistic but Australia has been sold down the river. We have a government refusing to give states and territories funding if they don’t enter into asset sales — asset sales to their mates who have politically donated. In QLD before the last state election we had our worst Premier in the states history running around QLD threatening electorates they would not get improvements if they didn’t vote for his party. Generally they didnt How have we managed to allow some companies such huge market share? Market share that is detrimental to consumers and small business in Australia. The spectre of political donation threatens our democracy. It is nothing but corruption.
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3. Andrew
June 20, 2016
Once again Anne has it the nail on the head. The housing crisis has been worsening over time and all governments have sat back and allowed all the interest groups, i.e. developers, building industry associations, insurance companies and the other groups who benefit to control public policy. This is beyond scandalous. It is ordinary Australians who vote in governments and the two party system (both in agreement on this issue) has made it impossible for them to have any voice – they cannot be heard over those who make the big donations. And the money which arrives as donations originates from ripping off ordinary Australians. How disgraceful!
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4. Charles Litho
June 20, 2016
When you could sit on my aunties front Porch & watch cows grazing, 6 kilometres out from the Melbourne CBD, my mother made a comment “why can’t we cross the river and build ourselves a two room house” on all that vacant land.
My father made my mother aware all land in Australia is owned by somebody, and, no one will even give away 50 metres to anyone that has a need to live somewhere. Finding a place to rent was impossible, let alone buy anything. Some people lived in slums that were below third world conditions.
A person I know told me his uncle used to shoot Aboriginal, women and children if they camped by any Creek and burn their bodies, when the men were away, on his land a few hours outside Melbourne, in my lifetime.
The philosophical restrictions about land ownership and the political stupidity about keeping people poor and controllable worked against everyone. The silly old world thinking about controlling everything the ordinary people do is still with us.
As a country we are as rich and democratic as the bravery we allow ourselves, to trust each other.
In a wide street in Melbourne’s Toorak I watched three storey town houses being constructed while in a working class suburb with the same zoning, the same land size in a wide busy street close to all services I have to justify why I wanted to build two stories and with less site cover, and, being refused a permit.
I used to be a member of a couple of industry bodies who had members who thought the main aim has to be about restricting competition and who can work in the industry. They make some bad Unions look like extreme liberals.
Economic freedom and deregulation has to be our only aim. Deregulation and increase in living standards go together.
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5. Tim Pine
June 20, 2016
Down here in Melbourne, an average priced house some of the lowest price suburbs like Melton South will set you back around $250k. For a houseshold on, say, $60k per annuum, that’s more than four times their income before tax. In the eastern suburbs, even average priced homes would set the family on a modest income back more than ten times their average income before tax. From what I understand, in Sydney, it is even worse. If nothing is done, we will have a generation locked out of home ownership. Given all of the social issues associated with families being locked out of the most secure forms of housing, this is a major, major problem.
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6. Mark Whitby
June 21, 2016
A problem well stated once again Anne.
Unfortunately, economics revolves around supply and demand… and the demand is being driven up rapidly by immigration of enormous proportions to ‘help our GDP’. The incentives to investors hasn’t helped either… and so we have first home buyer grants … all of this pushing up the demand further and further. And so the prices go through the roof, with less building companies to compete with each other and very few builders building ‘speccies’ any longer… all this lowering supply. Make it easier for the small builder to compete perhaps?
Also, new houses are on average twice the size of those in the 1980’s when 125 square metres was the go. This greed based in easier loan arrangements with both partners working also doubled the demand.
In turn these demands on materials, labour and land have only served to drive up existing property prices and increase congestion. We need to work on the supply factors more and demand factors less.
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7. Mike M
June 21, 2016
At last – an article which clearly articulates the inadequacies of a system which privatises everything and anything and panders to the wealthy. Unaffordable…
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8. Diarmuid Hannigan
June 21, 2016
Australia desperately needs productive industries not speculative ones that support a parasitic banking sector. The house prices in Australia are being inflated by a large number of overseas buyers. Approximately 15% of house buyers do not live in Australia. The three basic requirements that a human needs for survival are food, shelter and safety from predators. In today`s Australia more and more families are being denied this basic human right. Our two major political parties do not have any policies that will address these pressing issues as they have both swallowed the economic rationalist pill of free trade. Our food is imported the money and the buyers that are inflating our house prices are imported and the process is supported by three tiers of incompetent government that is facilitated by a corrupt financial and legal sector. In many instances our food is not fit to eat as it is imported by the duopoly from god knows where, we cannot afford to either rent or buy a shelter and if we can it could be made from substandard imported materials.
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9. Irvine
June 27, 2016
Thank you Anne for this article and also to Sourceable for publishing it. It is so refreshing to read something real, especially in the midst of 8 weeks of spin from the politicians. This resonates strongly with me because I have grandchildren who are locked out of the housing market and many of my friends share my fears for the future of their grandchildren. We now have no faith in either of the major parties. They refuse to govern in the interest of all Australians, and ignore we ordinary Australians who get them into power and pay their salaries and exceptional superannuation benefits. As you correctly point out, the housing industry has rewarded big business just as the building industry has rewarded the vested interests and caused such harm to so many Australian families. We are angry and we are certainly not alone. We need some new independents to take this issue on board, to clean up the broken system and to put people ahead of company profits.
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What Lies Ahead in Construction: Leadership or More Licentiousness?

What Lies Ahead in Construction: Leadership or More Licentiousness?

Published in Sourceable 31 August 2015 143 people shared this article
By Anne Paten Link: https://sourceable.net/what-lies-ahead-leadership-or-more-licentiousness

Construction lies

It is clear that we have a major crisis in the Victorian building industry. Hundreds of thousands of Victorians are living in limbo, casualties of a blatantly non-compliant and completely out-of-control building industry.
The blame for this calamity is unequivocally with those responsible for leadership failure: the senior departmental executives who formulated atrocious policies and the ‘governance’ officials who committed to this ‘no controls’ strategy. The culpability also lies with those we elected to govern, Governments and Ministers who are supposed to be in charge of building regulation and consumer protection. For decades, they have failed in their obligations and duty of care. Their lack of moral leadership and inability to recognize what is iniquitous made licentiousness legitimate.
At the end of the day, consumers and the public have a right to expect their Governments to protect them from the worst excesses of the market. But successive Governments abandoned the community, allowing the industry to be unrestrained. The ravages of the ‘free unregulated’ market caused hundreds of thousands of owners/residents to suffer enormous financial loss and for many, their lives are now placed at perilous risk.
Almost weekly, we learn of more building disasters. Be it the Mt Waverley wall collapse in July, the apartments with non-compliant cladding, the Lacrosse building fire in November 2014, or the fire and electrocution hazards in 40,000 buildings, with the ACCC now spending $80 million to remove the dangerous Chinese cabling – to be paid for by ordinary Australians. Then we have the estimated 10,000 Victorian families living the nightmare with faulty slabs, termed ‘slab heave.’ None of these are ‘accidents.’
Qualified, skilled and ethical practitioners, proper regulatory enforcement and punishment of offenders as a deterrent to misconduct, together with a real consumer protection regime, would have prevented what is the greatest consumer catastrophe in our history. As well, buyers would not be facing grave risk when attempting to purchase a house or apartment, and the Victorian community would not be confronting what is now a third-world built environment, bequeathed to them as the hangover – when they never profited from the party!
Let’s consider the Mt Waverley wall collapse, which had the same surveyors responsible as for the Lacrosse building’s non-compliant cladding. Aisha Dow in The Age in May 2015 quoted MFB Deputy Chief Officer David Youssef as saying “In my 30 years I have not seen a fire spread like this in a high-rise before” and “I actually didn’t expect to see it in my career because I was confident that Melbourne high-rises were built to very high standards. We’ve been caught by surprise with what occurred there.” Youssef’s confidence was clearly misplaced. The VBA’s fictitious ‘very high standards’ led to ‘surprise’ because the non-existent standards were an ‘official Government secret’!
After the fire, the MFB condemned the building, but residents were ‘allowed’ back to live in these apartments. On August 14, Channel 9’s ACA revealed that 66 people have died overseas from this ‘highly flammable cladding’ and VBA’s Jarrod Edwards confirmed that the building could catch fire again, with the danger of deaths next time. Edwards blamed the surveyor. However, it is the duty of the VBA to check and oversee surveyors; this obligation was negated by the VBA and instead consigned to ‘protecting surveyors.’ The CSIRO fittingly labelled this disaster “massive regulatory failure.” Legal liability rests with the VBA, but it has never been punished for its willful negligence. As for financial compensation for residents, will the insurer pay a second time? Not likely!
Life is precarious for those living in this building, but none of us should be surprised. The VBA has a decades-long history of ‘no regulation.’ Its philosophy does not value people’s lives and its paradigm has never contemplated proper insurance cover for owners as of any import.
So where does this leave owners and residents? In May 2015, the VBA announced an audit on 170 buildings to find out how many have flammable cladding, focusing on buildings ‘built’ between January 2005 and 2015.
These dates are significant for the VBA. From 2005, we can chart the beginning of our massive consumer catastrophe, a consequence of the introduction of the ‘No Resort’ insurance in 2002. By 2005, the impact of a lawless industry without the insurers to ‘play policemen’ allowed these rogues to run rampant. Not only were they uncontrolled, they were assisted and defended by the bureaucracy. Not surprisingly, from 2005 the number of reprobates grew exponentially, with the financial consumer detriment increasing as rapidly. Consider that in Tony Arnel’s press release of 2002, there were 35,000 owners who had building disputes that year. This quickly escalated. By 2008, it was 206,000 owners who suffered financial loss, or 16 per cent of all building consumers – the detriment to building consumers was $1.6 billion, up from $706 million in 2006, representing 53 per cent of the total financial consumer detriment for that year.
By 2010, 256,000 building consumers, or 40 per cent, suffered financial detriment, totalling around $3.8 billion.
How long will this VBA audit take and what will it do? From Dow’s article, we learn that as usual, it is unknown how long this audit will take. In a statement, the VBA said when it found non-compliant cladding it would notify the public and relevant fire service and would call in the municipal building surveyor to decide whether there is a risk to occupants. Herein lies the critical part from Edwards: “Once this work is concluded, the VBA will then consider further action which may include disciplinary action or prosecution in appropriate cases.” The key word here, important in the VBA/CAV dictionary is ‘may’ as opposed to ‘will.’ To translate, there will be no action because ‘may equals no action’ is ‘the VBA way.’ Its credo demands protecting the crooks, shielding them from harm and ensuring that they avoid any civil or criminal charges.
In response to ‘slab heave’, Simon Johanson in The Age in April 2014 reported that in Slater & Gordon’s submission to the Department of Treasury’s review on building consumer protection guidelines: “many homes underpinned with a ‘waffle slab’ system had critical defects.” Owners’ common experience reported to Slater & Gordon entailed “making unanswered complaints to their builders for years without resolution.” Johanson went on to say “home owners were unable to get their builder, Consumer Affairs or the Building Commission to look at the problem.”
Officials always refuse to enforce compliance, to discipline, or to deter the cowboys from continuing their non-compliant practices. Simply stated, builders refuse to honor the supposed ‘statutory warranties’ and the ‘officials’ refuse to make them.
What must be done?
We need radical change urgently, with rigorous scrutiny forcibly imposed. All responsible senior officials must be removed immediately and made accountable, and the culture of no enforcement, corruption and secrecy condemned. Most importantly, consumers must reclaim their voice, their rights to consultation and representation, with their legal ‘consumer rights’ reinstated.
This dictates that the responsible Ministers exhibit the virtues of genuine leadership: decency, diligence, discipline and integrity, and act in the public interest, ending this leadership void and long period of licentiousness.
Published on 31 August 2015
CONTRIBUTED BY:
Anne Paten
Anne Paten is a well-known Building Consumer Advocate, who has worked for seven years as a public advocate for the enforcement of consumers’ rights. She has represented individual building consumers through meeting with builders, corresponding with Government agency officials and at th…
COMMENTS
1. Mark Whitby says:

September 1, 2015
Terrific article Anne with some telling arguments and very welcome statistics to really get home the message that consumers are not being looked after at all.
Mark
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2. Michael Faine says:

September 1, 2015
Well said Anne, the slide to the lowest common denominator in all things building and construction has been on for a long time. The authorities don’t seem to want to know and the self regulation by certifiers seems dubious at best. There is also the issue of fraudulent certificates that claim to be code compliant and look like the ‘real deal’. The shame of it all is that the consumer ends up with the problem and those responsible move on to other well paid jobs, not right.
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3. Mick says:

September 1, 2015
Most consumers are not aware of a very important part of the Building Act 1993 under Section 248,
248 Offence for agent to act without authority S. 248(1) amended by No. 33/2010 s. 51. (1) A person must not act on behalf of an owner of a building or land for the purpose of making any application, appeal or referral under this Act or the regulations unless the person is authorised in writing by the owner to do so. Penalty: 120 penalty units.
A lot of builders regard signing of the contract gives them this “authority”. A consumer can get back behind the “steering wheel” by informing their “appointed” building surveyor the “authority” has been revoked, and they will inform the surveyor when the “mandatory” inspection stage has been reached.
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4. Andrew says:

September 1, 2015
Once again Anne has described the completely inadequate control of the Victorian building industry. How can the VBA let people’s lives be in jeopardy. And the politicians let the farce continue. Keep up the good work Anne.
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5. Jenna says:

September 1, 2015
Great article Anne highlighting the extent and consequences of the lack of proper consumer protection for home buyers – needs a government to finally take the bull by the horns and totally overhaul the complete governance of the industry including their own consumer affairs continued inaction and all regulatory authorities now!
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Russell Jones says:
September 2, 2015
The terrible thing is those responsible won’t do anything about it Govt departments staffed by people who are just doing a job. Dept heads don’t take any responsibility all the way to to the top and Govt Minsters let it go till the next election. ((( I had a plumbing problem and it was sorted out on the spot they are the only Dept that did anything for myself ).
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7Mel says:
September 3, 2015
Another great read Anne! Excellent job Sourceable for covering this. It is very telling that although this is a disaster of epic proportions, the full story is not being told to the greater public through the mainstream media. Keep up the good work.
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8Lesley Crouch says:
September 3, 2015
It is clear that there are enormous problems in the building industry that have been allowed to escalate over a number of years. It is unbelievable that successive governments and regulatory building authorities have not done anything to ensure that building standards and regulations are actually being adhered to. Do we have to wait for buildings to fall or burn down and have the photos of the resulting number of bodies splashed over the various media outlets before anything is done to regulate the building industry so that consumers can have faith in building or buying a home or investing in an apartment block. Australia has building and construction standards but consumers need to know that these standards are going to be enforced.
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9Diarmuid Hannigan says:
September 7, 2015
Good Leadership requires Compassion, Intelligence and strength intermingled with a good dose of common sense. Through this leadership trust within our communities is built and we all build a better society. Unfortunately our government system is failing us through incompetence, extreme bias and finally corruption.
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10Anne Paten says:
September 8, 2015
Thanks very much, Mick. This is good advice for owners. You have shown us a little known mechanism that can be invoked to give owners a bit of control in an ‘arrangement’ that otherwise has made them powerless to have any say, control or power over their own building. The fact that owners can be locked out permanently from the land they own and the partial building that they have paid for is a disgrace. Once the con-tract is, if you get the cowboy, it is for the owners, the end of their lives as they knew them. No rights – only as cash cows, to pay and pay and pay for defective work and more defective work. We must publicize this one opening under the unfair legislation and unfair con-tracts!
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11Val Becker says:
September 9, 2015
It is well past the time for genuine reform. Let us hope that we can see some true leadership which has been missing for so long in Victoria as you clearly illustrated in this article. Well said!
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The Truth Behind the ‘Consumer Protection Reform Strategy’

                        The Truth Behind the                        ‘Consumer Protection Reform Strategy’

Anne Paten in Sourceable 6 July 2015 109 shares 23 Comments
https://sourceable.net/the-myth-and-reality-of-the-consumer-protection-reform-strategy/

Mythical reform

After the damaging Auditor-General’s Report of 2011 and the Ombudsman’s Report of 2012, there was much public comment on the disturbing revelations of failed governance and maladministration.
This forced a government response. The public officials were well prepared, and immediately after the release of the Ombudsman’s Report, Planning Minister Matthew Guy announced that oversight of the building industry would be reformed. The reality reveals that the ‘reform strategy’ was once again a misleading myth.
Much was promised in the campaign launch. Guy said there would be “a fresh start for building regulation.” The Building Commission would be gone and in its place, the Victorian Building Authority (VBA) would act as a “strong regulator.” Over the following months, we learned that there was a ‘Reform Strategy’ with the VBA to become a one-stop shop, responsible for everything: practitioner registration and discipline, regulation, enforcement, dispute resolution and even insurance.

After the damaging Auditor-General’s Report of 2011 and the Ombudsman’s Report of 2012, there was much public comment on the disturbing revelations of failed governance and maladministration.
This forced a government response. The public officials were well prepared, and immediately after the release of the Ombudsman’s Report, Planning Minister Matthew Guy announced that oversight of the building industry would be reformed. The reality reveals that the ‘reform strategy’ was once again a misleading myth.
Much was promised in the campaign launch. Guy said there would be “a fresh start for building regulation.” The Building Commission would be gone and in its place, the Victorian Building Authority (VBA) would act as a “strong regulator.” Over the following months, we learned that there was a ‘Reform Strategy’ with the VBA to become a one-stop shop, responsible for everything: practitioner registration and discipline, regulation, enforcement, dispute resolution and even insurance.
have been denied the opportunity to readily find this most basic information on the website of the putative ‘regulator.’ In reality, non-enforcement means that there really are no requirements. This make-believe ‘regulator’ makes a mockery of our laws and the touted ‘reforms.’ The cowboy practitioners are protected and the VBA has been complicit in enabling consumers to be robbed of their legal rights.
In relation to accessing information in the public interest, neither the VBA and Department of Transport Planning nor Local Infrastructure (DTPLI) have shown a willingness to give consumers access to documents. Over the last three years, the VBA and the DTPLI commissioned three reports, two on practitioner registration by Deloitte and PwC (costing $135,000), and one on slab heave. The VBA has withheld all three reports from those seeking access. This would suggest that the reports were very negative, but that does not entitle the public officials to hide such information. Consumers have a right to the facts and to be able to make informed choices.
Since the VBA has been operating as the ‘regulator’ for almost two years, let us review its performance. The Annual Report for 2013-2014 provides the scorecard. The CEO, Prue Digby informs us that the VBA’s core regulatory function is audits. So how many domestic builders, limited or unlimited were audited under Digby’s direction last year? From the look of things, not a one! There were 99 levy audits on building permits out of 164,000 Building Permits issued for $39 billion of building works; this is not only infinitesimal, but focused on collection of monies.
In other areas, how did the VBA compare in 2013-2014 to the Building Commission the previous year? For 2013-2014, the VBA carried out 70 fewer inspections and conducted 80 fewer investigations; with the Building Practitioners Board’s 53 inquiries and the VBA’s 28 prosecutions, the total number of building practitioners disciplined was 81, as compared to 136 under the Commission in 2012-2013.
As the number of registered building practitioners increased and the number of incompetent, unscrupulous offenders increased, the new VBA as the reformed ‘regulator’ decreased the minute number of audits, decreased the number of investigations and inspections, and the number of inquiries and prosecutions. Of 21,186 building practitioners registered, a mere 0.38 per cent were called to account last year. Put simply, 99.62 per cent of practitioners were free to act as they pleased without fear of sanction, for a near-zero probability of punishment! This performance comes as Digby states that the VBA is “working to become a better regulator.” These appear to be empty words, with the VBA’s performance seemingly in stark contradiction to its pledge to reform.
The VBA Mail of 13 May 2014 states: “The aim of the proposed reforms is to deliver improved consumer protection and oversight of building practitioners” and “the VBA will have responsibility for implementing the reforms.”
Yet with 46 more staff and a budget of $42 million to operate in 2013-2014 (80 per cent of this money paid by owners), the VBA has managed to deliver no improvement for consumers and to do less oversight of practitioners than its predecessor.
Consumers are not considered stakeholders by the VBA. They remain locked out of consultation and denied any representation, their rights and protection non-existent. It is therefore unsurprising that the mythical ‘reform’ has not become reality for consumers.
Published on 06 July 2015
CONTRIBUTED BY:
Anne Paten
Anne Paten is a well-known Building Consumer Advocate, who has worked for seven years as a public advocate for the enforcement of consumers’ rights. She has represented individual building consumers through meeting with builders, corresponding with Government agency officials and at th…
*Please refer to our comment policy before submitting Post Comment
1. Mel says:

July 6, 2015 at 10:39 am
Anne has succinctly cut through the spin to highlight very successfully what those in the system have long experienced. Her in depth knowledge should be capitalised on, yet the distinct refusal to allow genuine consumer voices speaks volumes of the current culture in the Victorian building industry. Anne and those like her (rare as they are) are often the only shining light in the very dark process that thousands of ordinary Victorians are enduring for years on end. Let’s see a considered, genuine response to the findings of the Victorian Auditor Generals report released in May, and return Victorias’ building industry to something to be proud of.
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2. Dick Gower says:

July 6, 2015 at 5:01 pm
Depressing reading that nothing has changed. Please keep up your good work Anne.
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3. Andrew says:

July 6, 2015 at 5:11 pm
It is great that Anne has been on the side of consumers. We have been fighting with this and previous governments for change to the system that protects the cowboy builders, inspectors and surveyors for too long. A change in the system is desperately required and it is required NOW. If there is no change NOW then another generation of people will be saddled with a disastrous building system. Keep up the good work.
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4. Peter quartel says:

July 6, 2015 at 8:27 pm
Anne is right. From my own experience it appears that the Building Commission was completely unable to identify, let alone remedy, illegal conduct by builders. I find it extremely hard to believe that an organisation that actually wanted to perform could be as hopeless as the Building Commission or now the VBA. Can the Labour government do any better?
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5. Dee says:

July 7, 2015 at 11:51 am
This does not surprise me at all. It seems these days that anything to do with a government of either persuasion will only do what it wants to do, and the general public are the losers overall. I fully sympathise with all those who have fallen foul of the VBA , keep up the good fight and hopefully you will win through.
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6. Beverley-jane says:
July 7, 2015 at 12:30 pm
Year after year, enquiry after damning enquiry, all the vulnerable consumer receives is yet another name change! When so called professional practitioners can devastate the finances and stability of families through incompetence and outright dishonesty, then legally avoid accountability time and again via liquidation, it is sheer negligence of consumer protection. Simply immoral! Without critical scrutiny of those seeking registration, effective control/enforcement of regulations, any registration and regulatory body is nothing more than a parasite to consumers – in fact impeding and endangering consumers hoodwinked into supposing registration criteria offers assurance of competence, financial accountability and good character. The regulator, recalcitrant builders and all too powerful ‘member associations’ who protect these incompetents with ongoing memberships and legal assistance further abuse consumers and damage the industry, dragging honourable and competent members along with them. Far too many of the ‘homes’ being ‘built’ today will not be sound for future generations let alone those consumers who have risked life savings to build. Disposable homes? Consumer beware!
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7. Graeme Doreian says:

July 7, 2015 at 2:39 pm
Great article that no bureaucrat or politician from any political party want exposed.
It is known that relevant Ministers liaise with the various Departments named, that then gives those Departments comfort knowing they can keep ‘ripping off’ the consumers.
I believe the legal paternity, who have set up this ‘minefield of deceit’, pocket from Government and the consumers, just one big’ boys club’. I bet, if they had building problems their ‘mates’ would silently fix the problem. Because of the, I believe rectification costs, and potential legal ramifications, NO
ONE in any political party will act thoroughly, as has been revealed in VAGO reports since around 2000.
Consumers are too abused, and weak, even when healthy to make a united stand, and until they do the ‘charlatans’ will rule, protected by the bureaucrats, politicians, and vested interests.
Congratulations Anne, I only wish large numbers of people would support your group, and ‘get the bastards’. Until people are hurt no one cares. MAKE A STAND NOW.
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8. Karin says:

July 7, 2015 at 11:44 pm
Great summary of the depressing state of affairs – when will the Government wake up?
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9. Mark Whitby says:

July 8, 2015 at 12:48 pm
Another informative one Anne,
It’s a pity that everyone is so misinformed on so many issues in the building industry. Virtually everyone thinks that anyone who inspects a building is a building inspector… WRONG. They are building consultants… and they do not need to be registered or insured. But if they call themselves building inspectors they are actually guilty of misleading the public.
I think that the misinformation is so widespread that the real Building Inspectors (who look at buildings under permit at each stage of construction) should be called something else… perhaps Building Permit Inspectors?
It’s not unlike the confusion regarding pergolas and verandas. Very few in the public know there is a difference… that verandas have a roof covering and pergolas do not.
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10. Roy Coon says:

July 8, 2015 at 11:21 pm
How true. It took eight years to get an occupancy certificate for a $22k extension which ended up costing over $100k due to a dodgy builder, an incompetent Building Commission and a completely useless VCAT that had absolutely no concern for any regulations or standards that were ignored by the builder as well as multiple surveyors notices. The fact is that the builder broke the rules, went through the kangaroo court system (this was his third time) and was let loose to do it again without conviction.
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11. Diarmuid Hannigan says:

July 9, 2015 at 8:01 am
Australian Consumer Law states that one must not engage in Misleading and deceptive conduct, unconscionable conduct or unfair empowerment in a contract. Surely Mathew Guy and his troops have engaged in all three of these sins in creating this new and ineffective body that they purport will protect the consumer rights of new home owners when in reality this has not occurred. One has to ask where is the Minister for consumer affairs and where is the head of Consumer Affairs Victoria Clair Noone and why are they not doing the job they are paid to do.
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12. Pam says:

July 9, 2015 at 1:32 pm
Anne Patten is one of the only public faces of building reform and consumer rights in the building industry in Victoria. According to the latest VAGO report nothing has changed from those reports cited above. It is most interesting to note in the 2014 HIA annual report amidst the huge economic and well-being losses by building consumers in this state “they rallied against proposed changes to domestic building insurance and the Building Act- and acknowledge their success in having the VBA momentum
stalled. They also recognise the ongoing challenge for the new government, and they also point out they will once again very busy with cross-benchers to influence the Victorian Upper House of Parliament. With very rich lobby groups such as the HIA and similar industry bodies, what hope have consumer and Australian citizens in Victoria have?
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13. Mar says:

July 9, 2015 at 9:20 pm
This is one of the greatest scandals in Victoria and hard to believe that in spite of all the promises nothing changes. Perhaps the government want the political donations that come from the developer world. Have the mafia taken charge of the development world? Whatever it is, it is outrageous that both sides of government sit back, make promises and do nothing .
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14. Dave says:

July 10, 2015 at 12:51 pm
Wells aid, and aint that the truth. Govt regulation – helping to make life difficult for you yet again.
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15. Cheyanne Dumbleton says:

July 10, 2015 at 9:54 pm
Its hard to believe that the VBA are keeping up their end of the bargain in relation to the Australian Consumer Law stating that one must not engage in Misleading and deceptive conduct, unconscionable conduct or unfair empowerment in a contract. Seems its polar opposite when they are removing the ability for consumers to search for suspended builders instead of noting that they are currently suspended due to being found guilty of non-compliance. There is no record anymore kept to state that
they had/were/are suspended. Practically removing any ability at all for consumers to be informed and at best given half a chance to protect themselves against such shady builders. The Building Industry is one of the biggest sectors granted…. but only because there is a demand for business. Now we the consumers, DEMAND to be protected against this corrupted system
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16. Val says:

July 11, 2015 at 1:50 pm
This is disgusting and must be changed.
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17. Lesley Crouch says:

July 11, 2015 at 2:38 pm
The building industry is important for the economy and it is difficult for an ordinary consumer to understand why governments haven’t acted to ensure that the industry is efficiently run and that builders do their job with integrity. We all suffer when building codes are not enforced and when disreputable practices are allowed to continue. Thankyou to Anne and all the people who are fighting to improve this situation so that consumers can have confidence in the builders who build their homes, apartment blocks, public buildings for us and future generations.
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18. katrina says:

July 12, 2015 at 10:12 am
Theses builders are lining they own pockets and not helping fixed they mistakes that they have made on building people houses
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19. Dick Gower says:
July 13, 2015 at 11:25 am
Anne is to be commended for her work in bring such a serious issue to wider attention. Anybody involved is a serious building dispute will know first hand of the serious flaws in the consumer protection or redress.
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20. Andrew Heaton says:

July 17, 2015 at 9:21 am
At the time of introducing the reforms, Matthew Guy stated specifically that consumer protection was not adequate and that the building regulation system was not working.
To then introduce a regime involving fewer inspections seems incomprehensible.
Likewise, I too find the virtual wiping of old information on the VBA web site to be extremely frustrating and poor.
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21. Mary Drost says:

July 18, 2015 at 1:02 am
Wonderful that there are people who bravely attempts to expose the scandal inside the building industry and what it is doing to innocent residents who put all their money into building the home of their only to find so many defects that it is impossible to live in and often they are financially ruined as they pay to have the problems corrected. Why is this allowed and why is not the inspection process not being done properly and why are shonky builders being given the licenses to allow them to build. Something very wrong going on in the Building Commission and it is high time the government took it seriously and really corrected it. Why do they turn a blind eye, is it because they just want to keep building as they have allowed manufacturing to go overseas and all we now make is houses.
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22. Connie says:

July 19, 2015 at 7:25 am
I have heard about how bad the system is from one of my relatives and cannot believe the government allows this to happen. I cannot understand how all these people get paid to do nothing. When is the government going to wake up?
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23. Rob says:

July 19, 2015 at 12:26 pm
Wow if only Mathew Guy did what he said he was going to do. Instead people continue to lose faith in tradies, surveyors, the VBA and ministers. It’s a situation that needs to be corrected as in the long run it’s not good for anyone, least of all the economy. For starters the information needs to be more freely available.
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Mythical Reform and the Reality of No Reform

Mythical Reform and the Reality of No Reform

Anne Paten published on Sourceable 9 July 2015 47 shared 10 Comments
LINK: https://sourceable.net/mythical-reform-and-the-reality-of-no-reform-part-3/

Mythical reform

From a consumer perspective, Parliament’s confusion and lack of enthusiasm to pass the Building Legislation Amendment Bill 2014 was the only good news last year. Emanating from the Consumer Protection Reform Strategy, its purpose was to conceal the reality: there was no reform for consumers.
A review of the proposed legislation reveals no improvement in consumer protection. Worse, it would actually make more consumers more defenceless and more susceptible to damage than is currently the case.
In short, the new ‘strategy’ falls under the same meaningless ‘registration regime.’
Enforcement of compliance
The VBA’s statistics demonstrate that, like the Building Commission, the ‘no touch regulator’ continues with no enforcement. For example, in 2013/14, out of 13,261 registered domestic builders (limited and unlimited), not one was audited for compliance with building and safety standards. The surveyor audits conducted focused on permit levies and not on auditing surveyors’ work.
The VAGO’s findings of 2015 verify that the VBA does not identify ‘risks,’ does not enforce compliance and makes no attempt to prevent harm to consumers. Likewise, the VAGO found that CAV is loath to use its enforcement powers, with a mere four prosecutions in 2012/13, usually of ‘unregistered’ persons. Further protection for the rogues is provided by CAV and VCAT, both supporting the ’strategy’ of not referring any offenders to the BPB for discipline.
Reform
The reform is the VBA in charge of compliance, as was the Commission and the old ‘no enforcement’ mindset is the new ‘strategy.’
In short, the new ‘strategy’ brings about no change and even less enforcement.
Complaints and Dispute Resolution
CAV conducts few conciliations, declaring most disputes ‘resolved’ without providing any assistance to consumers. The VAGO concluded that it was unclear if CAV’s activities were at all helpful in reducing consumer detriment. However, many thousands of consumers have verified that CAV’s ‘helpers’ do not help consumers. CAV officials know the builders and their lawyers well, acting unequivocally as collaborators. These officials have a record of openly demonstrating prejudice, fully aware that by acting to protect the builders, they will cause additional damage the owners and their families, not to mention the blatant injustice.
Reform
The reform here is to move dispute handling from the CAV to the VBA. If a consumer makes a complaint, the mythical strategic boast is that Rectification Orders (RO) will help consumers. If, for example, an owner knows that the slab and frame are defective and complains to the VBA, it may appoint an ‘inspector’ to examine the work. If past practice of the Commission and VBA is a good predictor of future performance, the ‘inspectors’ will omit and or/minimize defects and support the offending builder. If the VBA issues a RO, and it need not, the VBA can compel the owner to pay more money to a builder. Meanwhile, the builder can get a VBA review and if this is unfavourable, he can then go to VCAT for another review.
From past experience, we know that most will do this to avoid VCAT orders against them for failing to comply with the RO. As construction lawyer Peter Micevski notes, the “prospects of appeal are likely to be high” and leading to “an over-crowded VCAT and high demand for construction lawyers to assist in the litigation of building disputes.”
What are the consequences for consumers? First, the RO can be within a ’reasonable time’ – which can be taken to mean months or even years! If the builder fails to rectify, the VBA may issue another RO, extending the time. Then there are two reviews open to the builder (VBA and VCAT). If a breach of the RO notice is issued, the owner may end the contract, but then has to apply to VCAT for an order against the builder. By now, how many years have passed? When the case comes up at VCAT, it can make any order it considers ‘fair,’ including ordering the owner to pay more money to the builder. This ‘strategy’ will allow owners to be legally robbed of more money, whilst years slip away (VCAT cases lasting up to nine years), owners paying the mortgage for a house they cannot live in and rent to live elsewhere, and more VCAT costs. All this because they wanted to exercise their ‘consumer rights’ to get the house they paid for.
This leaves VBA and VCAT in charge, both with appalling records of causing injurious harm to owners. The big winners again are litigation, lawyers and their cowboy clients. Consumers are hammered harder and more heartlessly.
The refusal to improve the scheme, underpinned by conflict of interest, collusion and secrecy is shameful. But to spin a ‘strategy’ to increase consumer harm disguised as genuine reform is truly wicked.
Published on 09 July 2015
CONTRIBUTED BY:
Anne Paten
Anne Paten is a well-known Building Consumer Advocate, who has worked for seven years as a public advocate for the enforcement of consumers’ rights.
*Please refer to our comment policy before submitting Post Comment
1. Beverley-jane says:

July 9, 2015 at 10:59 am
Consumers are nothing more than fodder for this industry Anne and year after year, audit after audit, nobody is listening or cares. The basic survival instincts to provide safety and shelter for one’s family drives us to risk our financial security in believing
our builder’s registration equates to honesty and competence, after all, our red tape clogged society surely they would be monitored by an effective regulator, legislation etc ? Our misplaced trust ensures we will continue to be herded by these wolves in lambs clothing like lambs to the slaughter.
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2. Mark Whitby says:

July 9, 2015 at 9:50 pm
Couldn’t agree more Anne.
Anything over 1 year is an unbelievable time to resolve a dispute. What a defective system we’ve got.
It seems that the aim of the authorities is to simply make disputes go away, no matter if it’s via delays that make people give up, or bullying in VCAT or immune authority appointed so-called experts with no definition of defect commenting on alleged defects. It’s a joke
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3. Branko Mladichek says:

July 10, 2015 at 8:36 am
As Building Expert practising in Melbourne with thousands of pre purchase and building stage inspections behind me I have had a front row seat to building problems and disputes. It all comes down to greed. Builders are really well paid for what they do(or at least they are paid their price) but it seems for some its not enough. Much more money can be made by under delivering on the promise particularly as builders know they can get away with it with impunity. So we have new houses built built with defects in sub standard workmanship because there is no quality control (quality control costs money to implement and maintain you see) Apart from skimping on quality and compliance there is also cost stripping once dwellings are sold off the plan. As I write this I have houses under construction now where builders are simply not complying with engineering recommendations for site drainage, thereby risking foundation damage , all with impunity. So it seems “Greed is Good” where there is impunity.
A lot can be said and we can beat about the bush till cows come home but the stark reality is that building control system without enforced penalties is no defence against greed.
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o Mark Whitby says:

July 15, 2015 at 7:53 pm
Good point Branko,
About the builders not complying with recommendations… it’s the recommending and not requiring that is the heart of this problem, because owners are locked into a maximum amount that they can afford contract… and complying with the recommendations would cost lot’s more. It’s a sort of cronyism I say… with the owners kept in the dark all the time
4. Andrew says:

July 10, 2015 at 12:00 pm
How can these government department justify their existence with absolutely no protection for consumers. After having dealings with VCAT and other government departments responsible for the building industry with my own house, I can’t understand why there is no help and why the unjust system is not changed. The only people that benefits for this system are the lawyers, building consultants and of course the builders. Keep up the good work.
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5. Mel says:

July 11, 2015 at 11:38 am
Slowly but surely the curtains are being drawn back on this issue thanks to Anne and others. The many (and there are thousands upon thousands) of people harmed by the’system’ must stand together to force the issue out into the open. Real reform will only happen when genuine consumer voices are heard.
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6. Val says:

July 11, 2015 at 1:32 pm
This is not surprising to me. I have known of so many people seriously harmed, including close family members. The system has been organized for owners to lose their money and they have no means of recourse.
As for reform, it appears that this has again been orchestrated for owners to lose, but more of them and even worse. This is disgraceful, especially seeing that it has been arranged by government and the officials who are supposed to protect owners. It is time for this to be stopped. People must unite as clearly the government will never take action and it has allowed owners to be so damaged. Good on you Anne for persevering for so long. I look forward to your hard work bearing fruit.
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7. Dick Gower says:

July 13, 2015 at 11:19 am
It is difficult to understand the apathy of both sides of politics on an issue so obviously and seriously in need of reform.
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8. Connie says:

July 19, 2015 at 7:52 am
The spotlight on the government again. It seems the reforms are not reforms for consumers at all. Even more saddening these if passed would make owners worse off than they are at present.
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9. Rob says:

July 19, 2015 at 2:18 pm
This system obviously suits the building enterprise in the short term, but in the long team they are running it into the ground. The more consumers that experience this, the more consumers will avoid building or renovating. They are doing a good job of keeping this secret for now, but that can’t last. Once bitten twice shy.
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‘Hot Potato’ Policy Still Top Secret!

‘Hot Potato’ Policy Still Top Secret!

9 By Anne Paten Thursday, June 2nd, 2016  88 shares

top secret

Imagine that the most burning issue facing Australia today is not on the agenda for the upcoming federal election – again!

Imagine that the most burning issue facing Australia today is not on the agenda for the upcoming federal election – again! The issue is our flawed Building Policy. In political speak, it’s termed a ‘hot potato’! Enjoying bi-partisan support for three decades, it has facilitated a framework for the building industry to construct an ever-increasing poorly built environment. However, this policy has been obscured from public view, with its consequences imperceptible to most consumers and the populace. In 2016, it continues ever more piping hot – and still classified as ‘top secret’!

By contrast, those who work in the industry or offshoot ‘dispute industry’, are acutely aware of this reprehensible policy and its resultant devastation, with Peter Mulherin designating the malaise an “industrial disease”. An apt description given its endemic nature. Appalling building industry practices, combined with decades of uniformly atrocious governance have been thoroughly documented. As well, the destruction visited upon consumers has been quantitatively measured and authenticated in hundreds of reports.

Nevertheless, this remains a fiercely fiery issue, so potentially damaging politically that it has been forcibly and furtively filed away – forbidden from surfacing in public policy debate for two centuries!

An Inconvenient Truth

The most recent example of political contrivance may be the Senate Inquiry into ‘Non-conforming Building Products’. Ostensibly set up to examine the extensive use and ramifications of non-conforming building products, and to make recommendations on solutions, the Inquiry has now legitimately ‘lapsed’. Initially to report in October 2015, this was deferred, and when the Parliamentary double dissolution arrived early in May 2016, conveniently unseating the Senate Committee, no final report was written. One would have to question the timing of the election – most fortuitous for the major parties as the investigation into the building industry’s latest non-conformance calamity was discontinued.

Although an Interim Report was released in early May, if no new Senate Committee Inquiry is inaugurated, the damning evidence accumulated will remain ‘lawfully’ lost!

Instead of dealing with the revelations exposed by the Inquiry, which would serve to exacerbate the already flaming hot policy, political expediency intervened with all disclosures validly vaporized! Was the Senate Committee surreptitiously stymied to conceal the inconvenient truth?

The ‘hot potato’ parade

 

We could fill a book demonstrating the devastating effects of the ‘hot potato’ policy bucketing on our building parade. Suffice here to highlight just a few of the menacing manifestations flagging Australia’s failed built environment.

 

Since 2013, 40,000 buildings across Australia have been identified as containing cheap, non-compliant electrical cabling. Today those in powerful positions remain impassively indifferent as residents in 22, 000 of those buildings remain under threat of electrocution or fire!

 

Over the last 10 to 15 years, non-compliant cladding has been widely used on the exterior of buildings in Melbourne, Sydney, Brisbane and Perth. In the cladding audit conducted by the Victorian Building Authority (VBA Report May 2016), over 50% of buildings were found to have non-compliant cladding – or no permit issued regarding external walls! The NSW Department of Planning and Environment is concerned that up to 2,500 buildings in the Greater Sydney region contain the highly flammable cladding “notorious for causing towering infernos”. In other states, the exposure to harm from this cladding has not been ascertained – such complacency a sign of the Governments’ absolute defiance of their legal and moral obligations.

 

In 2015, the MFB expressed its serious concerns that 20,000 buildings in Melbourne may be non-compliant. In New South Wales, 85% of new apartments are defective (University of NSW Study, 2012), and whilst strata associations in Victoria do not have definitive data, their assessment is that it would be similar to NSW – 85%!

 

Back in 2014, Victoria declared 4,300 cases of ‘slab heave’. However, the VBA refused to release its Report, concealing the real extent of this problem. At the time, industry sources estimated the most plausible number to be 10,000 (cutting corners and cost-saving), but having continued unabated, now the number is probably much higher.

 

Recent findings in NSW indicate a higher proportion of defects in buildings constructed in the decade from 2002 to 2012. This is the same in Victoria where statistics confirm building defects have caused an exponential increase in consumer detriment over the same period – dating from the introduction of Last Resort Insurance, indicative of an Australia-wide pattern.

In sunburnt NSW, there are now more house fires than bush fires! The number of house fires and fatalities ever-increasing, with 4,070 house fires across NSW in 2015, causing 17 deaths!

As if these issues of unashamed non-conformance are not enough, across the country we have a long list of non-compliant products in use – steel, glass, wood, and asbestos, etc., etc. Governments’ collective response has been to employ duplicitous ploys to avoid any slivers of honesty, accountability or transparency. Consider the use of asbestos. Banned in Australia in 2003, today it is still arriving in the country, and since 2008 there have been only two (2) prosecutions! No enforcement means the industry considers it a joke, albeit a very sick joke.

 

Non-compliance

An analysis of statistics from the ACCC and Product Safety Media Releases is shocking. To take one example: from 2010-2015, there were over 913, 000 houses affected by faulty electrical products – this calculation based on only 8 products! The very latest in the long line of unsafe products is the Thermomix – following washing machines, electric blankets, toys, etc. There is varying efficacy in relation to recalls; about 60% for Samsung washing machines (42 fires), down to 10% for electric blankets. The ACCC recently stated that builders and electricians are ignoring recalls. No wonder, given that ‘regulators’ refuse to regulate!

The number of suppliers distributing non-compliant electrical appliances simply beggars belief, with many of the offenders Australia’s biggest companies. But without enforcement, or any penalty, or punishment as deterrence, none of the offenders will change their conduct.

Therefore, even in election mode, it is impossible for Australians to hazard a guess at the totality of hazardous building products or the high probability of harm facing them and their families. Ratified to stay under the radar, Government policy has promoted censorship ‘in the public interest’ – basically buttressing the vested interests!

 

Election Extravaganza

 

This election has seen the politicians out early on the hustings and as the extravaganza rocks on, the stakes are high – those holding privileged positions of power afforded many opportunities and unrivalled rewards!

If we examine the broad brushstrokes, there is little difference between the major parties. Predictably, both are focusing on the economy, acknowledging the building industry is the key economic driver. Building is quintessentially about business and money-making!

Unfortunately, any dialogue on the real building policy is taboo. Thus for this election, the debate has been diverted to ‘housing affordability’. This classic strategy designed as a distraction from the most critical issue and to terminate troubling matters – just like the lapsed Senate Inquiry in May 2016!

So with bipartite support, the public’s attention has been deflected away from building quality and safety, and the tragic consequences for consumers, and instead directed deliberation to house prices, thereby again negating any scrutiny of the shameful ‘hot spud’ policy from this election’s agenda.

Discussions

9

Comment

  1. Mark Whitby

June 3, 2016

Great summary of our virtually out-of-control building industry Anne.

The question is how do the carers in the industry get through to governments… that there is a ginormous looming (poor quality workmanship) economic blight on the residential building industry.

And I wonder how many more new home owners and the new apartment owners with decrepit homes and illegally clad towers will it take to get the message through to all governments.

A small group of home owners hurt by the previous dispute system got the message through to the VIC government in the mid-1980’s railing against the system where an arbitrator was appointed.

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  1. Les Williams

June 3, 2016

Consider the incestuous relationship between building regulators and peak industry groups. Consider also the methods used by the same groups to influence… legislation all over Australia and is happening now. We had a senator in the old house that represented family values that had interests in building companies accused of selling rubbish houses to families and was an ex president of the HIA. Until the questionable influence of peak industry groups over state based legislation and industry regulators is exposed and they are held accountable this will continue unabated. The spectre of “legislation by donation” was highlighted by the 4 Corners TV program only one week ago. The issues you outline coupled with non-payment issues in the industry can only be CATEGORISED as very SERIOUS FRAUD.

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  1. Brett Bates

June 3, 2016

Excellent article Anne. Very detailed and well constructed (unlike much of our built environment!) expose of how our government failed miserably. We… were well on the way to establishing a national occupational licensing scheme for builders after COAG initiatives recognised the absurd porosity of allowing states and territories to have vastly divergent licensing requirements. It would have put in place a far more stringent system of incrementally graded and categorised licences based on higher qualifications to dramatically reduce the number of shonky operators that can enter the system. States and territories shied away from it due to pressure from some disgraceful self interest of supposed industry associations and naturally the federal government of that time (Gillard) had its own self interest focused on other areas such as clinging to power. If its true that we get the governments we deserve then we must be atoning for some very serious sins of the past!

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  1. Joel Nash

June 6, 2016

Notwithstanding the well documented problems, I must say that the idea of this being ‘the most burning issue facing Australia today’ is just a little… bit overblown.

When coming to the election, most people really want to know about the big picture issues, such as the economy, health, education, refugees, law enforcement and so forth. Whilst built asset quality is important – and yes, there are serious problems which must be dealt with – it’s certainly far from the only issue facing Australia today and indeed, there are many other issues which are also important. Think of healthcare, for example. Whilst the standards of healthcare throughout Australia are generally recognises as high from an international perspective, we still hear about very serious issues of malpractice which has massive impacts upon victims in that field – so building is not the only field in which problems occur.

Also, we should recognise that built asset quality throughout Australia remains generally high by world standards. If you think built asset quality in Australia is bad, just look at in places like India, Egypt, Brazil and the like, where building collapses are common and construction of additional floors beyond what is allowed for within the approval documentation happens all the time. Compared to this, Australians should be thankful about the quality of the built environment that we do have.

Also, even other developed countries have problems – witness the leaky homes debacle over several decades in New Zealand. Australia has problems and we mus deal with these, but let’s just keep things in perspective.

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  1. Lucy

June 6, 2016

What a shame that this issue continues to be swept under the rug. Well done to Anne on highlighting very succinctly the taboo topic of our terrible… building system. It’s only a matter of time until it will be impossible to continue hiding the facts from the general public, but unfortunately it seems many thousands will have to be hurt financially, emotionally and physically before this happens.

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  1. Russell Jones

June 6, 2016

Hi. I think the quality problem started way back when AV. Jennings (hope memory right on that name) went from building house frames with stud centre’s… from 18 inch. stud centres to 24 inch.stud centres and Jennings were the biggest volume house builders.A Royal commission to support the master builders association, Old Man Grollo never had these problems he was a working man the lot now running the show have a bit of paper on the wall.The rot is so set in to protect the business \ companys that those who pay have there rights taken away by the self interests of those in control. R. Jones.

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  1. Diarmuid Hannigan

June 7, 2016

A long time ago Australian homes were built to Australian Standards using products that were made in Australian by Australian manufacturers that complied… with Australian Standards. The Geni who inhabit the land in the clouds decided that the principals of free trade and economic rationalism would be a healthy pill for Australia.
Australian bureaucracy has always been known for its laziness but as there was a buck in it they had an effective system for ensuring imported products that entered Australia sort of complied with Australian Standards.
When the tariffs were removed Customs and Excise changed its name to Border Force and has lost sight of one of its major roles which is to ensure that imported building products that are used in our homes must comply with Australian Standards. This role protected Australian Industry and Australian Consumers.
The Gods of Canberra forgot that its government departments have always been a lazy lot who avoid doing hard work and now because the people who Australian Consumers rely upon to protect their consumer rights are not doing their jobs we will inherit a disasterous legacy of faulty homes for years and years to come.
Joel you must understand that your house is your home your home is where your family lives, it is also an Australian family`s main asset and Australian families who work hard to purchase their homes must be assured that they are safe to live in and are not built with sub standard products. Those families also need jobs and the industries that provide those jobs should be assured that they are competing on a level playing field which at present because of the laziness within the public service they are suffering..

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  1. Anne Paten

June 9, 2016

Joel you seem to have missed the point in relation to this issue. Building policy has never been on the political agenda for any election – BECAUSE… it is too hot for the electorate. In other words the people, all of whom are Australian consumers and fund the multi trillion dollar industry, are not allowed the to know the truth, much less have any debate. This building industry causes the greatest financial detriment to consumers by far – much more than any other consumer market sector. Likely to be upwards of $30 Billion in Australia this year. That is too hot!
Remember shelter is our most basic need and for most people it is their largest investment – but for around 50 per cent, their building disaster will not only cause enormous financial loss, it will ruin their lives forever. This is a burning issue – for the pollies and the people. The pollies just have to keep the truth hidden from the public and this is the role of the public officials that we the people pay!
By the way, we are not supposed to be a third world country, and the building collapses in much of the third world are the result of natural disasters – but in Oz ours are all man-made! And you think that this is not something Australians would like to know and discuss? I am sure it is a horrible hottie!

PS Many of our collapses do not make it into the media, especially in domestic building! Just one of the strategies to mask the reality from the ordinary folk!

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  1. Beverley-Jane

June 13, 2016

As long as we have politicians who prostitute themselves for votes instead of truly representing their communities, this issue will be allowed to fester… and further contaminate the construction industry.
Building between the 2002 – 2012 period Anne mentioned, we became victims of a dishonest and incompetent builder. Checking registration is a farce since far too many incompetent and dishonest conmen are repeatedly registered.
Adding to the stress was over seven years of fighting for some form of justice via the toothless, disinterested regulators and so called consumer protection bodies who allow these conmen to proliferate. Justice we never received and time we will never get back.
In response to Joel Nash’s minimisation of this seriously detrimental issue, this industry and it’s conduct directly affects many of the issues he considers more relevant; i.e. the economy, health, law enforcement etc. Building a home for your family, where you are making the biggest financial investment of your life, only to have that hope of security shattered by dishonesty and incompetence of so may in this industry, directly affects the economy, mental, physical and financial health and all too often law enforcement.
Having lived in third world Africa and building three substantial homes there, I can assure you the construction sector, and their delivery in this country is substantially inferior which reinforces the worthlessness of the so called regulatory bodies who, along with politicians/ government, refuse to live up to their responsibilities.
Time to stop the political and industry back scratching and earn their salaries legitimately by dealing with these serious issues by dumping them in the ‘too hard basket’!

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Consumers’ Plight: ‘Buyer Beware’ Information Buried

Consumers’ Plight: ‘Buyer Beware’ Information Buried

Sourceable July 20 2016 ANNE PATEN   66 Shares                   10 Comments

byer beware

When Australians sign a building contract, they know they will be making the biggest investment of their lives, but the truth of the inherent dangers of building and the extremely high probability of serious harm is kept from them.

Put simply, the fundamental facts are buried, and are not ‘discoverable.’ Regardless of their efforts, this consumer class has been consigned to be unaware, starved of all basic ‘buyer beware’ knowledge. Shamefully, no possibility of protection is our consumers’ plight.

 

 

‘Buyer Beware’ charade

For consumers, being educated is the key tool in their ‘protection box.’ All have a ‘right’ to be able to obtain accurate information, investigate realistic choices and to make a judicious decision. But no matter their commitment, for building consumers realizing their ‘right’ is an impossibility.

As ‘caveat emptor’ consumers would envisage, past conduct could be an indicator of future behaviour; hence the importance of sourcing building practitioners’ past history. How frustrating, then, to find such endeavours are futile. For decades, government agencies have collected voluminous information, but almost none of this is available to the public. All consumer complaints information, ‘dispute’ data and detriment statistics are hidden, securely locked away in the Consumer Affairs Victoria’s treasure trove. As for the information held by the Building Commission over its 20 long years, in 2014 this was entirely erased by the ‘new’ VBA. The limited publicly accessible information is fragmented, difficult to find and hopelessly inadequate. The ‘buyer beware’ option is bogus, a contemptible charade.

Consumer protection con

Government spin has been remarkably successful, duping prospective consumers into thinking ‘consumer protection’ exists. But the reality revealed from numerous independent reports and well-documented consumer experiences is the juxtaposition of ‘systemic failure.’ For 23 years, the ‘consumer protection strategy’ has been a ruse, the malfunctioning system calculated perfectly to malfunction (Victorian Auditor-General’s Report, May 2015).

In stark contradiction to its stated purpose and imperceptible to consumers, the ‘protection strategy’ was shaped to ‘protect’ all in the building industry, whilst consumers were designated to be defenceless and without any safeguards inexorably exposed to exploitation. From 2005, we can chart the destiny of hundreds of thousands of owners every year; fated to incur massive financial loss, years of living in limbo, shattered families and if not dead, left lingering under unending traumatic stress.

To describe the cornerstone of ‘consumer policy’ as punishing would be an understatement. Rendered ignorant, consumers are incapable of making informed, wise decisions, their disadvantage further compounded under the Government’s dispute-driven modus operandi. Unknowingly, 40 per cent of owners are compelled into ‘disputes’, powerless to combat the pitfalls of an unfair, unjust legal system and unable to avoid the additional monetary loss. Helpless, their predetermined destiny is patently undetectable.

The truth deficit

Most government reports and records have been withheld from the public. The information obtainable is negligible, tightly controlled, defectively deficient and quintessentially a truth deficit.

Even if a motivated consumer were to locate the Practitioner Disciplinary Register (PDR) on the VBA website, it would be pointless. Few names of building practitioners appear on disciplinary records, since the bulk of real offenders either ‘never appear’ or magically ‘disappear’ – move over David Copperfield!

Consider that there are thousands of consumer complaints every year (the VBA admits to only 978 in 2014-2015), but few are acknowledged, fewer investigated and almost none proceed to an Inquiry. Commonly, owners’ complaints ‘disappear’ and the files are customarily lost or closed. Many owners never receive any response. Only the most persistent, after lodging multiple complaints and hundreds of pages of evidence, will be informed that their complaints are ‘in the bin.’

An examination of the PDR reveals few builders’ or surveyors’ names (no company names) because to get listed, there has to be an Inquiry. Of 21,799 building practitioners registered in 2014-2015, only 94 were summoned to a disciplinary Inquiry or 0.4 per cent. These generally result in a reprimand and sometimes a small fine – though now in the latest VBA Annual Report, the actual outcomes are no longer reported.

Last year, there were 35 registered builders prosecuted – a 0.1 per cent probability of prosecution. In relation to plumbers, of 26,361 registered last year, only 18 were called to an Inquiry and 19 prosecuted – a minute 0.07 per cent chance of a plumber going to Inquiry or prosecution (VBA Annual Report 2014-2015). There is almost no prospect of punishment or deterrence!

Many of those called to an Inquiry will appeal their penalty and thus they never make it onto the PDR list. Finally, even when it comes to those once appearing on the PDR, names can be arranged to be deleted.

In this context, consider that in 2011, 256,000 Victorian consumers suffered financial detriment totalling billions of dollars. One would expect to find thousands of registered builders disciplined in 2011, their names on the PDR and some serious penalties metered out, but no! A review of the 2011 PDR reveals a mere 83 builders and surveyors listed. Of building surveyors (the most criticized group), only 12 appear. As for penalties, reprimands predominate and notably few suspensions or cancellations (not permanent), and most continue operating anyway. These statistics provide pathetic proof of who has ‘protection’ – and it’s not consumers.

Should an owner attempt to find information on cases at the Victorian Civil and Administrative Tribunal (VCAT), it would be another wasted exercise. Thousands of cases go to the VCAT Building List annually, but only a minuscule number make their way to the ‘official’ VCAT list. First, only those cases which go to a full hearing end up on the list – around 30 a year.

Second, all other cases, many dragging on for up to nine years and costing owners a mega fortune, are not listed; generally ‘finalized’ in favour of the building offenders, then ‘disappeared.’ Hence, of many thousands of VCAT cases over the last 18 years, whether volume builders or sole traders, all remain unknown. Most tellingly, VCAT does not refer any offenders for disciplinary action, even the many repeat lawbreakers. Consequently, no matter their aberrant or serial misconduct, all reprobates are protected and their past history covered up.

Deprived of power to control their lives, consumers have been robbed of any opportunity to prevent harm. CAV’s role is purportedly to protect consumers, and as a member of Consumers International, it committed to enforcing the eight basic Consumer Rights – including the right to be informed, to consumer education, to choose, to satisfy basic needs, and so on. Deplorably, and as has been very well documented, CAV elected to work vigorously against building consumers’ interests and artfully voided all their ‘rights.’

Now try to think of being a clueless consumer in a clandestine bureaucratic world. Have a crack at comprehending this imposed gullibility as one part of the whole duplicitous official strategy. Then imagine this combined with the building/consumer protection agencies’ infamous track record. We have the risible regulatory framework, zero enforcement of compliance, the unfair contracts (contracts over $300,000 exempt under Australian Consumer Law), enforced disputes and the notorious junk DDI insurance.

Our consumers’ plight is no accident. It is a direct consequence of a spurious scheme, and minus any ‘buyer beware’, it clearly coiled into to a consumer catastrophe.

  1. John Bolton

July 19, 2016

Certainly, the lack of availability of former Building Commission reports on the VBA’s web site is extremely poor. Anyone trying to find any of those… reports gets no help whatsoever from the VBA web site (I myself have tried to find them – as is stated above, they are not there). Given how bad these reports were, one would have to be pretty naive to believe they weren’t buried on purpose.More broadly the level of accountability in the system is generally poor.

My question to you, Anne, is what to do about it. What form of governance structures would you put in place in order to rectify this? How specifically should things be reformed and changed?

  1. Peter Pike

July 20, 2016

We all agree with you Anne & the propensity for government change is nil. We have seen both parties over the last 2 decades talk it up and employ… public servant who’s main attribute is spin! It is a disgrace and an indictment on our society this can go on. The massive toll & cost on all of us is currently not being correctly portrayed. Add the insurers into the mix and we have a perfect storm!!!

  1. Graham Morrow

July 21, 2016

Hi Ann

There are many issues with the homebuilding industry in Victoria and similar issues are shared with most other states.

People… who are about to enter into usually the biggest contract of their life frequently omit to seek early legal advice in regard to the rights and obligations of owners and builders under that contract and are instead seduced by sales talk and the ‘executive’ finishes of showhomes.

It will be interesting to see what impact the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015 (Cth) will have on these matters; it should assist some mum & dad building contract participants, although they will still likely have no option other than to seek recovery in the court (or Tribunal, or arbitration) dispute resolution process.

  1. Pam Mulready

July 21, 2016

Yes all so true and well stated Anne. The concept of the “public good” has beeen completely ignored to the detriment of citizens. For a fair and just… society, a public register of all building works lnking all contractors engaged in works with outcomes should be available to all. This should be just a basic requirement for “quality control”. Now thats anoher concept seemingly foreign to the industr at the moment. Presently If a builder uses dodgy electricians or plumbers to cut costs they are never linked to the builder concerned and consumers have to take on every apple in their barrel. I did a lot of research on my builder before I signed a contract and could not find anything agaist them in the prior 25 years. It wasnt until after the true situation unfolded that those connected to the industry began revealing how well known they were for bad practices. You are completely right that the regulators know who the repeat offenders are and play out charades with us all. We have a right to know for our health and wellbeing alone. This abhorrent system has existed for two long and it may require those with a conscience from all political parties to standup and be counted for the common good and the future of the housing stock in the state

  1. beverley-jane

July 22, 2016

The whole system is designed to exhaust consumers and the few who have the fortitude or financial ability to keep pushing for justice and common decency… are further penalised financially and emotionally by insane decisions made by so called regulators and court systems.
Immoral insurers repeatedly offer insurance cover to repeat offenders knowing the risk of successful claims are minimal, thanks to a system designed to intimidate and destroy desperate families who have to ‘give up’.
Why is this blatant destruction of consumer protection allowed to proliferate? Because consumers/families are nothing more than expendable financial fodder for the building sector infested with disreputable individuals and the tax grab this generates for government.
Short sighted disinterest/ negligence shown by successive governments will eventually come to bite when these families lose their financial security, mental health and are forced depend on the government coffers for support.
Those we elect to represent us, betray us, couldn’t care less, after all their transient political careers seem to be more focused on their fat political pensions, perks and cushy retirement!

  1. Mark Whitby

July 22, 2016

You’ve stated the problem in a nutshell Anne… well done.

Perhaps there is a reason why the VBA says only 978 complaints were received in 2015… and the 2011 VAGO report stated there were 256 000 complaints… and in 2015 this could reasonably be assumed not to have dwindled with more and more houses being built each year. So the other 255 022 non VBA complaints (99 62%) must not have filtered through to VBA or were handled elsewhere… BACV and Consumer Affair it seems.

Now these organizations have a semi-hidden agenda… “to expedite as economically as possible all building disputes and potential building disputes”. Now expedite means ‘make happen sooner’… than… VCAT hearing perhaps? Therefore most are scared off on the phone (81% in 2002 and today more like 90% I believe). That leaves those home owner individuals who will not be put off lightly, because they know that they have had a grossly inferior (to what was contracted) product delivered to them by their builders… and demand that their alleged defects are rectified.

Then comes the crunch.

Virtually nobody has cared enough to even define defect thoroughly… and so each side fails to convince whoever is in charge of the meetings / mediations / conciliations / Compulsory Conferences and so no awards are made because the Building Act legislation is so strict as to costs being awarded to the winner, demanding that the amount being awarded needs to be substantial.

And yes, the public are not informed of this at any stage before, during or after their homes have been botched by builders who do not supervise adequately. That is why organizations are able to loosely use the word complaint to their (and their government’s) advantage. And so failures are the go

  1. disheartenned

July 22, 2016

Currently we are living the nightmare of being stuck in nowhere land and the injustice of having done nothing wrong except to believe that our research… bringing up nothing on our builder was a good thing. Wrong!! This builder has been allowed to continue to destroy people’s lives because the current system allows him to continue when he should be de-registered! He is not only a dodgy builder but a criminal as well, getting away with falsifying documentation and lying but yet it is the consumer suffering for it! Where is our ‘do not use’ list that should be made available to all?? We should be putting them up for all to see and find then easily and then perhaps not so many unsuspecting families will have their lives ruined. Justice? None that we can find

  1. Steve

July 22, 2016

And it gets even more stacked against the consumer…..

When you give a statement to an investigator, he’ll tell you it’s in confidence. It’s not…. He’s working for the VBA who passes it over, personal information and all, to the BPB. The BPB give it out to the practitioner on every occassion in the brief of evidence. This is the ruse they use to try to get around the legislation.

So now the practitioner knows where you live, your phone numbers, email addresses, opinions, etc. even though you may never even have had any interaction with them.

Why? The only reason I can conclude is so the practitioner can find you and ‘sort you out’!

  1. Jenna Corbett

July 25, 2016

Fantastic Anne! What hope do building consumers have when all the so-called regulatory bodies blatantly collude with industry and not only hide pertinent… information regarding bad practitioners, but after defective and hence, serious economic and, hence, life- allround, damage to the consumer, they then not only deny every form of justice and access to necessary compensation, but actively work against it, including all the so-called Government authorities such as Consumer Affairs Victoria and VCAT with full Government knowledge and support! And the trusting consumer entering into building, not only their Australian dream, but the very basic, of their family shelter, homebase, and also life asset, has no idea of how there is actually: No protection, or fair or timely redress if the tradesmen or pretend or con tradesmen do wrong; how even the industry Building Contracts actually generally totally favor the builders interests; the Building Warranty Insurance is an unclaimable junk product; and with Government orchestration from the top down, it’s well -documented that All the regulatory and compensatory authorities uphold the Builders or even illegal or incompetent pretend con-artists interests! And Mark Whitby makes an excellent point below how with defects not defined, there’s a great place for the authorities to start to deny, minimize and hide from justice! The only solution is to Owner Build with only the most careful selection of tradesmen. VCAn’T, the VBA, BCAV, and Consumer Affairs Victoria must all be completely routed and reinstated with true consumer led representation.

  • Anne Paten

August 2, 2016

Yes John, all documents were buried – the 20 years detailing how badly the BC behaved, and by the 2012 Ombudsman’s Report we learned that this was Govt… approved! Thus, false survey stats on ‘consumer satisfaction’, the policy devised to deliver the exponential increase of ‘disputes’ so damaging to consumers , the stories of the many serial offenders who repeatedly caused horrific harm to many thousands of consumers over decades, etc. But now it is gone – and so it never happened! As for the ‘new’ VBA – new name, but same old ‘culture’!
Re addressing the big questions, the structure is irrelevant. The problems are (i) GOVERNMENT POLICY allowing industry to direct policy, with those to be regulated making up all the ‘regulatory’ Boards and Committees, certifying the ‘regulation’ of themselves! (ii) ZERO ENFORCEMENT by the ‘regulators’ – public officials supporting industry and thus the inevitable enormous pain and suffering to consumers. These two mean that the industry ‘governs’ and there is zero ‘regulation’. (iii) The OFFICIAL PHILOSOPY is based around a cosy, ‘buddy’ culture, whereby the policy and ‘regulatory’ officials are not simply in bed together, they are one and the same. Just imagine the Building Appeals Board meets about a rogue building surveyor. The panel comprises two building surveyors and one lawyer – guess the outcome? Despite the facts and evidence, the surveyor working for a very large volume builder is ‘amazingly’ found to have done no wrong! The ‘official culture’ is to protect all in the business of building – no matter how negligent, how criminal and regardless of the building wreckage/human carnage left behind!
No pollies plan any ‘rectification’ – shamefully, ordinary people do not matter.

Is Victoria Building Authority a Sham?

Is Victoria Building Authority a Sham?

house plan

Number 10 in Top 10 Sourceable Articles for July 2014

8 COMMENTS AND 14 SHARES

Is Victoria Building Authority a Sham? 

A recent Victorian Building Authority media release highlights the sham that is the ‘building regulation regime’ in Victoria.

In the release, titled Costly Lesson in Building Fire Safety, the VBA says that “[a] group of property owners is facing a bill of about $500,000 to fix problems after the VBA issued a building order in response to fire safety concerns.” It sounds impressive, as if the VBA is playing the role of ‘regulator’, but it disguises a significant fact. The builder, surveyor and others involved in building the 55-apartment complex ignored many fire safety regulations and the risk to people’s lives. Yes, this is a “costly lesson for the owners,” but why are the owners responsible for rectification costs when they are not at fault?

For those who build or buy new properties in Victoria, this is a common story and raises all the usual concerns, underscoring the myths and exposing what is effectively an industry without any governance, and one for which consumers bear the financial burden.

Murray Smith from the VBA cites the myth that buildings “must meet fire safety requirements under the Building Regulations 2006.” As this case demonstrates, without enforcement by the VBA, all building practitioners know they can do as they please. With no audits, no enforcement and a minuscule number of cowboys ever given any penalty, those in the building industry realize that no matter how outrageous their conduct, they can ignore all regulations and with complete impunity!

The VBA has now issued an order, but after the fact. Furthermore, the order was not issued to the offenders, but rather to the owners, who are supposed to be protected by the builders’ warranties. This case brings to mind the Childers Palace Backpackers Hostel fire of 2000 in which the hostel did not have working smoke detectors, fire alarms, sprinklers or fire extinguishers, and 15 people lost their lives.

In 2011, the Victorian Auditor General’s Office concluded that “The Commission has not adequately discharged its responsibilities under the Act and its obligations as a regulator” and “there is little assurance that surveyors are carrying out their work competently, that the Act is being complied with and the risk of injury or damage to any person is being minimized.” It is now 2014, three years later and we learn that nothing has changed! “When the plans for the building were developed, there was little consideration for fire safety,” Smith said. “As a result, the owners are now fixing the problem, at a cost of almost $500,000.”

The Building Practitioners Board registered all of the building practitioners, with the VBA’s role to enforce compliance. But be it the Building Commission or the VBA, over two decades, both have failed. They have performed so badly that after two extremely damning reports from the Victorian Auditor General (2011) and the Victorian Ombudsman (2012), they decided in 2013 to put a disclaimer on their website. “Registration with the Building Practitioner’s Board is a minimum legal requirement in order to be able to conduct many building related business activities,” The disclaimer reads: “However, registration does not guarantee that a practitioner has maintained up-to-date technical knowledge or meets the current standards required for registration as a new registered practitioner.” In other words, registration is essentially worthless! What other registration boards would be unable to deliver to the public any confidence in those they registered, such that they would be compelled to make a statement in the form of a public warning? Of course, with building practitioners the public should be warned; whether they are newly registered, or old and ‘grandfathered in,’ consumers are unprotected and in many cases their lives are at risk. However, until 2013 the public was denied this knowledge, with owners unaware of the dangers of building and oblivious to the fact that ‘registration’ was no guarantee of anything. The disclaimer has now been removed from the website and thus owners are once again uninformed, with the truth hidden and consumers exposed to serious harm.

Recently, it was revealed that the Department of Human Services has no confidence in the registration system and it has established its own accreditation board for registering building practitioners involved in Victorian public housing projects. DHS recognizes that the VBA regulation system has been a total failure and abandoned it as ‘not good enough.’ Victorian consumers agree with the DHS. We demand that this sub-standard system be abolished and a new rigorous registration system be established to provide competent builders who can guarantee to construct structurally sound and safe buildings. “It would have saved a lot of money and time for everyone involved if the developers had made sure the required safety measures were installed when the building was constructed,” Smith said. But the fault is not with the developers. It is squarely with the VBA, which failed in its duty of care and allowed the builder and surveyor to construct dangerous, non-compliant buildings.

Smith went on to attribute blame to owners, who he said need to do their ‘homework’ in these matters. “If you are thinking of buying a house or a building, you should consider arranging a professional inspection to make sure it is safe and meets the building regulations before you buy,” he said. This statement is absurd. How can the owners be blamed for not doing their homework when they purchased new apartments that were constructed by practitioners the VBA registered, with the VBA responsible for ensuring that new buildings comply with building regulations?

Second, how would an inspection have helped the owners when, if registered, the inspectors would have obtained their registration from the BPB or VBA? As for self-titled ‘inspectors’ who offer inspections, many are ex-builders, some suspended or de-registered and still others use the title of ‘building consultants’ for which no registration is required. In either case, such an ‘inspector’ would not provide any reassurance to prospective owners.

If the VBA cannot register competent practitioners and cannot enforce building regulations, then no amount of ‘homework’ will protect owners from all the cowboys, whether they are registered or not. The CEO of the VBA, Prue Digby, has said that as the industry regulator, “protecting the safety of the public is a priority” for the VBA. Who could have guessed? Digby is commenting after the building has been constructed, after it was ‘approved’ and after the apartments were sold, after those registered have failed, and after the VBA failed to meet any and all of its obligations!

Worst of all, this case highlights that there is nothing ‘new’ about the VBA. It is a re-named, re-badged Building Commission, with the same old phony registration process, the same old non-enforcement and the same old non-existent consumer protection. The VBA is a sham, camouflaging the scam that is the old policy reinvented as ‘new’, re-branded as the ‘Consumer Protection Strategy.’

Published on 05 July 2014 CONTRIBUTED BY: Anne Paten

Anne Paten is a well-known and highly respected Consumer Advocate and Secretary of the Building Compliance Reform Association…. – See more at: http://sourceable.net/victoria-building-authority-sham/#sthash.fZmzCqYG.dpuf

 

COMMENTS

Heaton says: July 8, 2014 at 3:29 pm Anne, One of the things which strikes me about this whole debacle is the extent to which industry representatives and consumer representatives such as yourself all seem to agree that the process of building industry reform here in Victoria has been shambolic, that there has been a complete lack of genuine consultation on either side, and that neither industry or consumer representatives see these reforms as doing anything to help consumers – only adding costs to builders. Contrast to the situation in Queensland, where reforms there at least at face value appear to promote greater accountability and a new rapid dispute system should reduce the costs and time-frames associated with disputes for parties on both sides. Reply

 

Paul says: July 9, 2014 at 12:26 pm About time someone highlighted this betrayal of trust. A government body whose purpose is to protect consumers through registration of COMPETENT practitioners& take action where proven otherwise. Instead they allow repeatedly incompetent offenders ongoing registration, totally negating their advice to consumers to check registration before engaging a builder but more critically results in consumers being forced to cover the costs of their tardiness & as Anne reminds us, even deaths on occasion. Why were the promised reforms to this regulatory body and Warranty Insurance dropped? Shame on Victoria’s ministers if it was as I suspect, due to pressure from industry groups who stand to lose millions in insurance premium income?

 

Reply Mick says: July 15, 2014 at 7:58 pm Well, what a great description of the current Victorian Building Industry regulator. Matthew Guy announced with great “fanfare” a “new” industry fix regarding the old Building Commission with the Victorian Building Authority. What a great new name change. From an informed and well educated registered practitioner point of view, they failed to bring out the “yard” broom and begin from the top floor and keep sweeping until the building was empty. Replace with industry educated employees that have social conscience and strong moral fibre.

 

Reply Sonya says: July 17, 2014 at 11:22 am A perfect description of the VBA Anne It is disgraceful that such injustice continues at the financial and personal expense of consumers. Purchasing / building a home is one of the single largest investments consumers will make in their lifetime and yet the Government agencies established for the purpose of regulating the building industry and providing consumer protection continue to fail in their duty of care and are not held accountable for their errors! Shame on the Victorian Government – consumers need REAL protection and REAL change, not these phony agencies you have established who offer nothing.

 

Reply Ari says: July 30, 2014 at 3:03 pm Anne there is plenty of merit in what you have said here, and this is coming from a registered building practitioner in the category of Building Surveyor. I do not have any in depth knowledge of the particular matter, but agree wholeheartedly that there are many problems in the industry that have not and are not being properly dealt with. Unfortunately, the VBA does not appear to be listening to sound advice from genuine, unbias and competent industry groups and consumer groups. Many of us from industry have been crying out for years for the real problems to be addressed but to no avail. To make matters worse, there are some very strange proposed changes to the Act that will in my view make matters worse.

Reply Peter says: August 6, 2014 at 9:23 pm A very good description of the regulator(!) in its past and present form. No law seems to apply meaningfully to builders. The question I have is ‘why’? Surly no-one thinks that a Regulator that so blatantly enables practitioners to treat the community with such contempt isn’t encouraged or pressured in this direction very strongly by Industry associations

Reply Andrew says: August 31, 2014 at 10:00 am Home owners have known for years that the VBA was not a regulator in any sense. As for owners needing to pay a ‘Building Inspector’ to inspect brand new buildings, supposedly built by a ‘Registered Builder’ and certified by a ‘Registered Surveyor’, this is crazy. But the lawless domestic building industry is more than crazy. It is outrageous. And as we have learned recently, so many of those posing as ‘Building Inspectors are unregistered, unskilled and numbers of them are failed builders, now unregistered! Prue Digby says that the VBA is “protecting public safety”. Then how are all these cowboys operating outside the law and unpunished? How are so many ‘Inspectors’ masquerading as real and registered? No enforcement of compliance by VBA! Reply – See more at: http://sourceable.net/victoria-building-authority-sham/#comments