Introduction:

Building ministers from across the country have met and agreed to adopt a national approach to solve the construction industry’s insurance crisis. The meeting’s main topic of discussion centred around addressing the countless defects and non-conformance building developments which have led to thousands of multi-residential towers throughout Australia being clad with flammable material.

The Building Minster Forum (BMF) met Wednesday of last week to formulate a national approach of enacting proposals outlined from the Building Confidence report drafted up by former Secretary of the Department of Prime Minister and Cabinet Professor Peter Shergold and Lawyer Bronwyn Weir which had been in the possession of the BMF since February of last year. 

What is to come:

The Australian Building Codes Board (ABCB) will be at the forefront of the national approach, their main focus will be revised to encapsulate prevailing construction industry issues. An implementation team is set to be organised within the ABCB to establish a national framework that will ensure a consistent standard be met for the implementations and recommendations provided within the Shergold Weir report as well as guide the design, construction and certification of complex buildings. 

The board has expressed interest in expanding its member base to include greater representation from the construction industry. While the Commonwealth is still expected to facilitate, this assumption is backed with the understanding that the States and territories will retain the power and responsibility to regulate building matters. States and territories are also expected to bear responsibility for their remediation efforts to rectify building which are clad with flammable material.  

Ministers also formally discussed the ongoing crisis in professional indemnity insurance, addressing the skyrocketing premiums for the building professionals and underwriters demanding exclusion for defective items such as flammable cladding when offering policies. 

A collaboration between Queensland and New South Wales will oversee that an options paper be developed that will advise on targeted consultation with insurers and members of the building industry. This options paper will form the basis for professional standards schemes and alternative insurance outcomes. Consultation outcomes are scheduled to be reported back to the BMF by September. 

Additionally, ministers issued a statement calling for insurers to honour any existing obligations created and to abolish exclusions formed on the basis of professional indemnity insurance.

“Building Ministers agreed to a national approach to the implementation of the Building Confidence report...It was noted that many issues are historical and will continue to be addressed as the need arises. However, Ministers acknowledged the issues of the past won’t cripple the future of the sector and, to that end, Ministers committed to work together to build a stronger building and construction sector in Australia.” - BMF Communique 

BMF’s statement received a welcomed response from construction industry groups, citing that the communique implied that important steps were being made to address issues around building regulation compliance and enforcement at a national level. 

This breakthrough is expected to improve enforcement and compliance with building regulations and standards throughout the building supply chain; however, industry professionals have stressed the importance of adequate funding for the ABCB. Given its expanding capabilities, the ABCB must be equipped to ensure that its governance structure is fit for purpose with an expanding mandate.

Interested in Australia’s building reforms? Check out the non-conformance and defects summit taking place on the building management stage during the Sydney Build Expo 2020.