Since terrifying cracks in masonry forced the evacuation of the Opal Tower apartment block in Homebush it has been clear that something must be done to raise the quality of buildings in NSW.
Yet 13 months later not much has changed. The NSW government released a draft bill in November with measures to rebuild consumer confidence, but has yet to send it to the upper house – where Greens and the ALP are calling for changes.
That seems to be why Better Regulation Minister Kevin Anderson this week offered to make some changes to strengthen the bill and threw in a novel plan for a “risk-rating tool” of building standards to be run for profit by ratings agencies.
Given the housing construction slump it would be good to get this done quickly but it must also be done right. Unfortunately, the Herald is concerned the bill will not restore faith in the industry unless it creates a well-funded, independent and powerful regulator to set and enforce building standards, as already exists in Victoria and Queensland.
It will surprise some to learn that NSW lacks such a regulator since the NSW government last year hired with much fanfare David Chandler, a well respected industry expert, to be its Building Commissioner.
In fact, despite the fancy title, Mr Chandler is just another government employee with no statutory authority and minimal staff. The draft legislation released in November does not change that and does not even mention the role of a “building commissioner”.
Yet the regulator will need statutory independence to take on the big developers. The current system of private certification has a built-in conflict of interest because it is paid for by developers. To act as a useful backstop for private certification, the current approach of regulation by several different ministries is too fragmented and too weak.
Once a strong regulator is established it could make full use of some of the extra powers which Mr Anderson has included in the draft bill. They include investigative powers to audit shonky builders and powers to license and regulate certain trades and professions in the building industry.
Mr Anderson this week talked about creating a power for regulators to stop people moving into shonky apartments by refusing to issue an occupation certificate.
That might be useful in some cases too but it would have made little difference to the residents of Opal Tower, where problems only came to light well after the apartments were occupied.
The draft bill also proposes a system of compulsory insurance of builders and designers of apartment blocks, but a strong regulator is important because it will increase scrutiny of developments while they are under construction rather than after the fact when mistakes are costly to fix.
Mr Anderson’s new idea of a risk-rating website is interesting but it is sketchy and fraught with uncertainty. He seems to want private rating agencies to develop ratings by looking at each builder, designer and developer’s track record, based on council filings and any complaints lodged against them.
Yet if the builders pay for ratings of their own projects, the conflict of interest will be fatal. On the other hand, accurate up-to-date due diligence on every builder could cost far more than consumers are willing to pay. And ratings agencies may not want the perilous job of putting a black mark against the name of a Sydney property developer.
For these reasons, the risk-rating scheme is worth exploring but it should not distract attention from the primary task of creating a strong, independent regulator who can keep the industry honest right from the start.
Article By The Herald’s View – Sydney Morning Herald – Source Link