19 December 2019
If there is one theme that comes up in almost every recent conversation it is – how fast did 2019 speed by? Where did the year go? Certainly, it seems like only yesterday when the Opal Tower incident hit the news on Christmas Eve 2018 and yet, here we are again approaching another Christmas.
Of course, the year was dominated by the PI issue and many of you will have that on your mind as the festive season approaches. Certainly, the PI scenario has been very concerning for many of you and we hope you will be able to put that aside for a few days, enjoy the festive season and recharge the batteries ready for 2020.
From our perspective, we are also looking forward to a traditional summer and festive season holidays this year, but you may rest assured that if something happens like it did last year with Opal Tower, we will again be there to represent you and the building surveying profession.
But before we wind down the year, there are a number of important updates in this communique to share with you before the AIBS office closes for the year.
Building Ministers Forum
The much-anticipated meeting of the Building Ministers’ Forum took place on 13 December 2019 in Canberra and once again we have to express disappointment and frustration with the outcome.
Despite holding industry forums at the previous three BMF meetings, there was no forum held at this meeting and therefore no opportunity to communicate directly with the Ministers.
As a result, AIBS wrote an open letter to all Ministers involved in the BMF urging them to fix the combustible cladding issue with a unified national action plan. Not unexpectedly, the Ministers failed to take any action on that point, the one thing that would actually help building owners faced with cladding rectification costs and also help building professionals struggling with unworkable professional indemnity insurance policies.
The Australian Financial Review’s property writer Michael Bleby summed up the post BMF situation succinctly by writing “the warring state and federal governments kicked the building industry’s crisis of insurance further down the road on Friday, ending their meeting in Canberra with no concrete plans to restore insurers’ confidence in the troubled industry and get them back to restoring coverage.”
Add to that, the scathing commentary by The Australian newspaper’s columnist Alan Kohler last month that the situation had become “a nightmare for everybody concerned, not to mention a complete shemozzle,” and you have to ask just what will it take for the Federal Minister to accept the obvious, which was assessed by Kohler as: ”The only solution, it seems to me, is for someone to step up and show leadership, and that has to be a politician, and it has to be national. It’s simply not good enough for Karen Andrews to wash her government’s hands of it and say it’s the states’ problem.”
You would think that in the face of such strong criticism about their lack of leadership and action, that the BMF Ministers would do something other than announce plans to hold a meeting with the Insurance Council of Australia in February 2020. But that is exactly what they did. We expect that meeting won’t provide them with any information that is different to what AIBS and other industry groups have already obtained by meeting with insurers. And that is, insurers want to see stability restored to Australis’s building industry and that means – fixing cladding and implementing the reforms put forward some time ago by Shergold and Weir in their Building Confidence report. BMF Communique can be found here.
Oddly, some BMF Ministers continue to imply that the PI insurance crisis doesn’t actually exist because the “good operators” will be get insurance but “the bad ones” won’t. Our evidence is to the contrary and such statements simply demonstrate how out of touch with industry some Ministers and their advisers really are. These ill-informed and unnecessarily insulting comments only add considerably more stress and unfairly tarnish those professionals without a claims history or disciplinary action who have been unable to, or are having great difficulty, obtaining insurance.
Victoria leads the way
So far, only the Victorian Government has taken meaningful action and is demonstrating some real understanding of the problem. Minister for Planning Richard Wynne has shown courage and leadership by taking steps to properly get to grips with what is driving the insurance crisis and has put forward a sensible plan for cladding rectification.
But Victoria cannot fix the problem nationally. Once again, AIBS calls on Federal Minister Karen Andrews to unite all State and Territories and broker a deal that would see a nationally consistent approach to the rectification of combustible cladding across the country.
Thank you to the many members who took part in the AIBS survey during November and early this month. The survey involved building surveyors/certifiers throughout all Australian jurisdictions and aimed to measure the impact of the PI insurance situation. We received approximately 350 responses and these represent the views of 1,737 building surveying professionals, both AIBS members and non-members, who conducted around 126,000 building assessments over the past 12 months.
The survey produced valuable insights into how the PI crisis is affecting building surveyors. We will be analysing the details and producing a full report early in the New Year. Until then, the main findings include:
- More than one in ten (11. 24%) building surveyors have ceased providing statutory building surveying services over the past 12 months due to problems with PI insurance. This figure consists of 5.04% who have left the profession, 4.26% who were unable to obtain insurance cover and 1.94% whose cover was not renewed.
- In addition to those who have left the industry, nearly one in ten (8.91%) have reduced the scope of services they offer due to restrictions on their PI insurance cover.
- A significant number of respondents who were able to obtain insurance stated that the costs and other elements of their new policies such as excesses, made it not worthwhile to continue in business in the medium term.
- Respondents said consumers are furious over fees that have been increased to cover higher insurance costs.
Indeed, the point about consumers being unhappy was picked up by ABC News Melbourne and the resulting news report
demonstrated how the flow on effect of the insurance crisis is hitting real Australians including swimming pool owners as well as builders and developers.
Get ready for NEXUS
From January 2020, communication between AIBS members will be easy thanks to an exciting and exclusive new members discussion and information sharing forum – AIBS NEXUS!
Via NEXUS, members will be able to discuss anything and everything happening in the building surveying industry across Australia. Ask questions, share answers, and connect with your professional colleagues. We look forward to seeing you at NEXUS!
More information will be emailed to you in the New Year.
An amended version of the AIBS By-Laws was adopted at the Board meeting of 29 November 2019, facilitating an improved complaints and investigation process.
For reference, the approval of this amendment by the Board, is in line with the AIBS Constitution, clause 26.1. The revised By-Laws can be found here
with the changes reflected within clause 1.12.
AIBS Office Hours for the Christmas/New Year holiday
The office will be closed from 4pm Friday 20 December 2019 and will reopen at 8.30am on Monday 13 January 2020. Urgent contact information during this period will be available via the AIBS website.
Looking forward to 2020
On a final note for 2019, we would like to acknowledge and thank you for your many phone calls, emails and for taking the opportunity to talk with AIBS staff and Board members at our conferences and training events around the country. Your information, comments and input have helped us to shape our plans for the future of building surveying. It might not look like that now, but building surveying does have a positive future once we cross a few more bridges to reach it.
We know from responses to the survey just how much many of you are suffering because of the PI insurance crisis with reports of premiums doubling, tripling and even more. We know this is not sustainable and you can be sure we will not stop working towards solutions. Building on what we have worked on during 2019, we have more initiatives in the pipeline and we will update you on the next steps early in 2020.
In the meantime, we hope you will find a way to put those issues aside for a few days and enjoy a break over Christmas and New Year. After that, we can look forward to the coming year with optimism that we can solve the problems we experienced in 2019. By continuing to work together we strongly believe that we can create a better, more certain future for building surveying in Australia.
||Chief Executive Officer