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24 ways to improve the building industry

Better, more competent certifiers might help stem the tide of bad building practice. So might bringing an end to performance-based standards that allows some builders to “turn black into white”. And to stop “registered” training organisations that advertise to become a registered builder in six weeks for just $1600.

This special report reflects the mood in the better part of the industry for solutions.

Reading through reviews of home builders at productreview.com gives some dreadful insights into the kinds of defects buyers are experiencing in brand new homes.

It’s not just the small builders, some of the country’s biggest residential volume builders are also getting ratings of “terrible” with detailed descriptions of shonky workmanship and difficulties consumers have faced in trying to have faults rectified.

So how do we fix the system and ensure buyers are getting what they pay for?

According to Stephen Albin, managing director Oceania of the Royal Institute of Chartered Surveyors, the first step is to have national harmonisation of standards and regulations.

1. Harmonise the standards

Currently, building regulations vary from state-to-state and in terms of who undertakes compliance inspections and at what stage inspections are carried out.

2. A solid assurance regime

The second thing needed, Albin tells The Fifth Estate, is solid assurance regimes from the building industry.

That means avoiding situations where a conflict of interest arises because the rules allow the builder to appoint the certifier.

3. Make the certifier at arms length, use the Queensland “Taxi rank” approach

“We need to make sure the perception of conflict of interest is taken out of it. Being at arm’s length from the builder – that’s where we are heading.”

The Queensland government is currently moving to address this by proposing a “taxi rank” approach where surveyors are assigned by a neutral party.

The idea was raised at the Building Ministers Forum as a possible national approach, however, Albin says it was rejected by COAG.

“But I think it needs further exploration.”

Those certifying buildings also need to be part of an organisation that has a global assurance regime, he says. And they need to be “regulated to the highest standards”.

4. Comprehensive reforms

All three elements need to be addressed – harmonisation, independence of verification and regulation and assurance of those doing the verifying.

“One on its own won’t work.

“We need to look at comprehensive reform.”

5. No compliance, no work (they do it in the UK)

In terms of regulation of surveyors and certifiers, if there was an assurance regime similar to the one operated by RICS in the UK, the compliance procedures mean that if a practitioner breaches the rules, by the end of the disciplinary process they find themselves unable to work.

“We haven’t got to the same level of sophistication in this country,” Albin says.

“We need to get the assurance regime right and it needs to be rigorous.

“It has got to be industry-based, peer-reviewed and have the full force of industry organisations behind it.”

In the medical and legal professions, these kinds of approaches are already established – and malpractice means losing the licence to operate for doctors and lawyers.

“Development is so important to the country – and the quality of that is so important,” Albin says.

6. Early inspections

One of the major weak points in terms of quality he wants to see addressed is waterproofing.

It is the “worst thing” in a building when it is not up to standard, he says.

“If waterproofing comes in as a defect it’s huge.

“In other jurisdictions [outside Australia] authorities are saying ‘we want an inspection as it is being laid’.

“In Australia, inspection is coming later in a project.”

The need is to get the certifiers involved earlier.

Albin says that because building a house is so complex, defects will always occur – but if competent certifiers are involved earlier, problems can be spotted and rectified earlier.

This would mean fewer defects to be found by the end user.

In addition to the certifier being on site watching waterproofing being laid, Albin says there should also be inspections of foundations, footings and slabs.

This is the model used in the USA, where there are milestone events that require overseeing by a certifier.

7. Get rid of performance-based materials

The Builders Collective of Australia represents small builders around the country. BCA president Phil Dwyer tells The Fifth Estate that one of the major things required to fix compliance is for the National Construction Code to remove the ability for developers to consider performance-based materials.

“They can turn black into white,” Dwyer says.

The other thing that is absolutely needed is enforcement of the regulations that already exist, he says.

8. Enforce the rules

“It doesn’t matter how much regulation we have if we don’t enforce it.”

He says the deemed-to-satisfy requirements in the NCC allow a builder to do “almost anything we like so long as we can get someone to sign off on it – it’s not hard.”

The use of flammable cladding on high rises is a case in point – it does not comply with NCC requirements, but those buildings were signed off on as compliant.

Dwyer says that is enforcement was strengthened “we could end up with a good building industry”.

Currently, everyone is “passing the buck”, he says, and neither the federal government or the Australian Building Codes Board is doing enough to ensure compliance.

“We all need to be doing more across the board – and the ABCB needs to be doing more.

9. Regulate and enforce the regulations, nationally

“The states need to regulate and enforce the regulations.”

Regulations need to be uniform across the country and the ABCB needs to have oversight.

10. Mandate footings and waterproofing inspections

Dwyer says footings and waterproofing inspections should be mandatory. Water ingress and mould can see a home start to fail within 12 months.

“Some of these homes we are building are only going to last a year – we are putting people’s lives at risk with rubbish.

“People in the industry know they can get away with murder.

11. Overhaul the occupancy certification standards – one apartment is not enough

Final certificates of occupancy also need an overhaul. Currently, just one apartment needs to be inspected for the whole block to issue a certificate of occupancy.

A single home builder requires a certificate for every dwelling.

“The imbalance is ridiculous.”

12. Get the MBA and HIA to step up (?)

A better running industry needs industry associations such as the Master Builders Association and the Housing Industry Association to step up, he says.

13. Eliminate dodgy training organisations offering a “registered building licence in just six weeks for $1600”

Another idea is a requirement for Continuing Professional Development – provided from outside the HIA and MBA.

It would also help to eliminated dodgy registered training organisations.

“RTOs have been advertising to become a registered builder in six weeks for $1600 – it’s just a farce.

“They are putting people in the industry that don’t know anything.

“For the last six or seven years we have been hounding the government to do something about training organisations.”

14. Stop building for just four or six years

Dwyer says the quality of building is down to the lowest ebb of all time and he predicts some buildings will be demolished in four or five years time instead of them lasting for 100 years.

“We built better 100 years ago.”

It’s also possible to build very successfully with the current code, he says.

15. Take notice of those who understand the industry

“Governments instead of passing the buck should take notice of the people that understand the industry and stop listening to those voices saying ‘nothing to see here’.

National vice president of the Australian Institute of Building Surveyors Wayne Liddy says the institute wants national regulations and a requirement for the licensing of professionals and practitioners in the industry.

“Here’s an example, I was at a site meeting recently, and there were 19 parties around the table and I was the only licensed one.

“We need registration of all the practitioners in the building supply chain.”

16. Stop builders subbing out their licence

He says that while builders are the ones responsible for a building on many projects, the holder of the builder’s licence may not even be on site.

“Nationally, we need governments to understand, listen and act. We need to tackle consumer protection head-on.”

Liddy says that surveyors have been delegated the responsibility by governments to administer the building regulations – but the extent to which on-site inspections to ensure compliance are required varies from state to state.

He says the AIBS believes inspections should be required for footings, frames, fire separation walls and also a final completion inspection.

Wet areas should not be a burden on the surveyors, he says.

Some of the state governments are calling for wet area inspections, and he suggests this could be done as a third party inspection.

17. Register the certifiers

The bottom line is that if everyone was registered and did the right thing, we would have compliance.

However, currently there is an “absence of oversight and auditing by regulators”.

The government is, however, “happy to benefit from a buoyant building industry”.

18. Random auditing

Random auditing and regulation of licensed and registered practitioners would be a solution, Liddy says.

“If you know there is a chance you’ll be audited – if you are aware your ability to act [in your profession] is in the window of the regulator, you’ll do the right thing.”

The “prospect of being hauled over the coals” and losing the ability to practice should apply throughout the supply chain, he says.

He says at the moment, because there is a limited number of registered practitioners in the supply chain, building surveyors are an “easy target” when things go wrong.

19. Take responsibility through the whole supply chain

“We expect responsibility throughout the supply chain,” Liddy says

“We believe there has got to be some early intervention. We have known about the problems for some time – now there needs to be early intervention rather than just [talking about] compliance.

Liddy says the consumer suffers.

“There are more warranties on a toaster [than a house].”

20. Mandatory CPDs for surveyors

He wants building surveyors to undertake mandatory CPD.

The AIBS policy also calls for mandatory auditing of registered surveyors.

21. A designated building minister

The states and federal government also need to have a designated building minister – and keep that function separate from planning.

22. Get regulators to act as regulators

And regulators should be acting like regulators, and enacting their responsibilities of oversight and auditing.

“We don’t want to see a reactionary policy. We don’t want a system of building controls based on a catastrophe [like Grenfell Tower].

“We want to see an industry that provides consumer protection.”

23. Bring the National Construction Code up to speed

The NCC also needs to come up to speed.

“The NCC has not kept up with the ever-evolving building industry and with design,” Liddy says.

“The building industry evolves by the week.”

Examples include the emergence of modular and flat-pack construction.

He says that if the NCC is used the way it should be it can deliver compliance – but it needs everyone in the supply chain to undertake CPD.

Liddy says that while the NCC is a performance-based document, few in the design and building sectors understand that.

“It is so open to interpretation.

24. Bring education up to modern standards

“There needs to be education of the industry. Most people in the building industry are still using terms we used 20 years ago.”

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Comments

7 Responses to “24 ways to improve the building industry”

  • Lee Wilson says:

    David, some wise words indeed. RE: “Trying to fix a system using the same old system, thinking it can be different is madness”, I’d be interested in your views on:

    1. Recommendation 23 and the use of performance-based building codes to deliver flexibility and stay abreast of new technologies, materials and delivery models; and
    2. How much a part the ABCB should play in this?

    I agree with Nicholas that there is a contradiction between Recommendation 7 and 23. Recommendation 7 should be removed from the list, we have quality and compliances issues not just in performance-based materials but in other long-accepted materials(i.e. electrical cable, copper pipe, glass, steel, fixings etc…). This was outlined in the Centre for International Economics (CIE) 2012 report ‘Benefits of building regulation reform’.

    • Tina Perinotto says:

      More good feedback… We will take on board and look to revise. Any more? Keeping in mind we are reporting the views of industry people, not ours.

  • Daniel Wurm says:

    Particularly like points 13 and 24.

    However, point 13 needs to be qualified. It IS possible for someone to become a registered builder after 6 weeks and by paying only $1600, and still be a quality builder. RTOs can assess an experienced builder, who may have many years of experience, and based on this experience, issue qualifications using Recognition of Prior Learning. This process may also be subsidised by the government, costing as little as $500 to the student.

    So, the issue is not how much it costs or how long it takes; it is the amount of time the person has spent in the industry, their experience, and adequate testing of the required knowledge they need to be a licensed builder.

    The reality is that very few people are really eligible to this pathway to a licence, and dodgy RTOs take advantage of the lack of government regulation of the way they do training and assessment of building students.

  • nicholas says:

    Wonderful David. Nailed it. Allow me to further add item 7 appears to totally contradict item 23. Anyone relying on yesterday’s deemed to satisfy solutions to meet the NCC’s Performance Requirements is in my view not delivering a professional service to their client, nor keeping up to date. Fire Engineers deliver performance solution as their bread and butter work.

    BTW Robin Mellon (CEO Supply Chain Sustainability School) talked yesterday about Blockchain and its impacts – a big game changer that the construction industry needs to address in his view. Couldn’t agree more after I read this definition from the AFR: http://www.afr.com/technology/web/ecommerce/heres-a-blockchain-explanation-your-parents-could-understand-20170627-gx00oq, particularly ‘smart contracts’)

  • Fifth Estate, this is a long shopping list. I am not sure the image at the start helps either.

    I assume you have read the Senate Report on Non-Conforming Building Materials. The key take away is the Commonwealth wants this to head back to the states, and the states want the government to fix the non-conforming building materials issue at the border. What we know is that each of Australia’s States and Territories take a different approach to regulation, compliance and governance. The state regulatory institutions have failed. If each elected to accept 6 of The Fifth Estate‘s 24 recommendations what difference would it make?

    The Senate inquiry was dominated by the outsider Nick Xenophon and the government members barely attended hearings. They had already scripted the Senate’s response. Xenophon is a headline grabber who likes the big ‘let’s ban this material’ headline and then move on. The Senate Committee dissented from Xenophon’s call because it was less about solving the systemic problem we have in Australia with building regulation and compliance and more about his profile.

    We are taking a 19th century mentality and culture to trying to solve a problem that needs to be addresses using a 21st century reality. The construction industry (resist it or not) is now part of a fast moving global market. Traditional construction on-site is rapidly moving off-site and in many instances off-shore. The most recent form of general construction contract being used in Australia was written in 2000 (17 years ago – 10 years before Uber and Airbnb started) and informed by the last century’s outdated concepts rather than how construction will be organised in a more modern construction framework. One of the failures of the extreme voices of government is that they get away with being on the ‘globalisation denial’ train. Those who have the larger burden of governing realise that there are bigger issues at play, but they are so compromised that they struggle to lead.

    I am sorry but your 24 point plan to fix construction is as naive as it is prospective. The Fifth Estate would be better socialising the context of a modern industry with the public so when a viable government is elected that some thought leadership will be out there. You know that this industry is now being shaped by the forces of digitisation, industrialisation, globalisation, low cost global transport and most importantly a rising community understanding of what customer fulfilment means. The current generation is growing up with a reasonable expectation that what they buy online or elsewhere are the real goods. Today’s social media is a great regulator when these goods come up short. Vendors in a global construction market will know how fast their brand can be damaged and the cost of resupplying poor quality goods to customers across the globe.

    All of this is knocking on construction’s door. Trying to fix a system using the same old system, thinking it can be different is madness. It really is the time for The Fifth Estate to change its narrative on all of this. Just because the mainstream media has no ability to do long pieces like your article, there is no value continuing to tell the public that ancient remedies are the answer.

    I suggest that you journalist goes to the UK and looks into the Lloyds BOPAS construction assurance model, the benefits to the customers, the benefits being realised by the organisations adopting BOPAS product assurance protocols and more importantly the fact that China, Spain, Turkey and many others are now seeking BOPAS assurance underwrites as a precondition to being part of the UK’s construction supply chain. This was too big an idea for Xenophon and initially, it will be for some of the status quo here in Australia. But there is only so long you can keep you head buried down under.

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