Member Statement- Building Ministers Forum
19 July 2019
Dear Members,
Ministers commit to reform of building regulations but still no tangible solution to the Professional Indemnity Insurance crisis.
There were encouraging signs at yesterday’s Building Ministers’ Forum in Sydney. Finally, there was acceptance that Australia’s building regulations need reform and, while this will lead to long term improvements in our industry, nothing arising from the meeting will give comfort to building surveyors and other industry professionals faced with unworkable PI insurance policies right now.
The main outcomes are -
• Ministers agree to significant reforms of industry regulations
• No agreement nationally on cladding rectification costs
• No immediate relief in sight on the PI insurance crisis
• Positive outlook for a Professional Standards Scheme
The most encouraging step was agreement to implement the 24 recommendations from the Building Confidence Report by Professor Peter Shergold and Ms Bronwyn Weir. This will be done by a designated team through the Australian Building Codes Board (ABCB), with support from industry. The ABCB will be given more resources to undertake the work.
The big plus is this will replace the current piecemeal approach to reform by each jurisdiction and, if successful, will go some way to returning confidence to the sector in the longer term. Further details of this and other outcomes from the BMF can be found in the BMF Communique.
The commitment to reform through the Shergold and Weir recommendations is something AIBS has been advocating for and taking the lead on for a long time through our public statements and more recently in the news media along with our industry colleagues from the Master Builders Association and the Property Council.
While the commitment to reform will provide long term stability, we are extremely disappointed that despite consistent calls from the insurance industry for a nationally consistent response to cladding rectification, there continues to be a fragmented and less than ideal approach.
AIBS applauds the initiative by the Victorian Government in allocating significant funding to the rectification costs of combustible cladding remediation in Victoria. Other jurisdictions must now follow Victoria’s lead and take a pro-active approach to the rectification of combustible cladding before more building surveying firms are forced to close their doors.
We know members are faced with huge increases in insurance premiums, massive increases in excesses, reduced cover and exclusions. At the same time, there is a steep increase in claims against building surveyors regardless of whether they are directly responsible or simply being joined in disputes and targeted because they hold insurance. This is not sustainable. If the insurance industry cannot guarantee some relief in the immediate future, then the outlook for the profession is grim and there is significant risk of severe impact to the industry.
Unfortunately, our profession will continue to face considerable challenges in the immediate and foreseeable future while the insurance industry considers whether the direction taken by the Ministers is going to be sufficient to entice them back into the market.
The Ministers have taken a very big risk by only looking at the longer term and failing to address the current issues. The Ministers are now on notice and will have to stand accountable if the industry fails in the next 12 months. AIBS will continue to advocate to all jurisdictions to take the Victorian Government’s lead to assist in the rectification costs in the hope that, combined with the long-term commitment to reform, the current crisis can be stabilised.
One final point was the positive response by most governments to a Professional Standards Scheme. As members will be aware, AIBS has been working with the Professional Standards Authority for some time to develop a scheme for building surveyors. The presentation by the Professional Standards Council to the industry roundtable, held prior to the Ministers’ meeting yesterday, reinforced the crucial role a professional standards scheme will play in achieving reform and securing the future of the profession.
In the meantime, we have a long way to go. If this insurance situation is causing you stress, we urge you to speak with your family and friends or contact one of the mental health services in your area or nationally. Some contacts are below.
Beyond Blue – 1300 22 4636 https://www.beyondblue.org.au/get-support/get-immediate-support
Lifeline – 13 11 14 https://www.lifeline.org.au/
Black Dog Institute – 13 11 14 https://www.blackdoginstitute.org.au/
AIBS will now develop a strategy to continue to advocate for a resolution to this ongoing crisis.
Brett Mace
Chief Executive Officer