Builders have hit out at Government plans to licence developers, saying its divisive language was undermining the industry and a lack of consultation was hurting the reform process.
Master Builders ACT CEO Michael Hopkins said Minister for Building Quality Improvement Gordon Ramsay’s continual reference to ‘dodgy’ builders was only adding to the loss of confidence being felt in the industry due to the building defects issue.
He said many high-quality businesses were sick and tired of being called dodgy and the Government should work with the industry to achieve change, including looking at the building industry as a whole when it came to licensing, not just developers.
“If the ACT Government is committed to exploring a licensing system for property developers, it should conduct this investigation holistically and consider the entire building supply chain including designers, engineers, trade contractors, principal contractors and their clients,” he said.
“A holistic review of licensing should also consider training standards for new entrants to the industry which is also highlighted in the expert report as a critical element to the improvement of building quality.”
Mr Ramsay has confirmed that the Government intends to create and implement a property developer licensing scheme to put on notice those doing the wrong thing, an idea that was first proposed by the CFMEU at an ACT Labor conference.
He said the Government would begin an extended consultation period with the community and industry on the issue, looking at issues such as contracting for the sale of off the plan units, the practice of phoenixing between builders and developers, and security of payment for workers and subcontractors.
(The ATO defines phoenixing as when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts, including taxes, creditors and employee entitlements.)
“We have seen too many instances of property developers forcing builders to cut corners and save on costs, only to eventually wind up projects and leave owners with the bill,” Mr Ramsay said.
It would also clarify what constitutes a developer for licensing purposes.
Mr Hopkins said builders shared the Government’s goals of dealing with phoenixing and improving building quality but Master Builders had always called for the Government to implement reforms across the entire building supply chain, consistent with last year’s Building Confidence Report from Peter Shergold and Bronwyn Weir.
The ACT Property Council says licensing developers was never recommended in the Shergold-Weir Report or in the Government’s own Building Act review.
Executive Director Adina Cirson said the government was attempting the unachievable, saying it should be focused on compliance and enforcement in a nationally coordinated way.
“How do you define a developer? Is a homeowner on a large block able to be unit titled who decide to build a second dwelling on their property for elderly parents or their children a developer? Is a shop owner who is refurbishing or extending a developer? Is a mum and dad investor buying an apartment as an investment and building a property portfolio a developer?” Ms Cirson said.
She said a new licencing scheme for developers would not deliver a single improvement if the Government did not uphold its own standards.
“The Government’s fragmented approach to this issue is unhelpful and diverts us from the addressing the core issues in a collaborative and coordinated way,” Ms Cirson said.
Canberra Liberals spokesperson Andrew Wall said the Government was using a very blunt object to target a very small number of individuals who operate in the Territory.
“The vast number of developers and people working in the construction industry are doing the right thing,” Mr Wall said, saying there were a couple of rogue operators who had got away with it for too long.
Mr Wall said the licensing would only mean more red tape, the cost of which would be passed on to homeowners.
“By the ACT coming up with thought bubbles and trying to be nation leaders it seeks to make the ACT a less affordable place to do business and, when you’re talking about construction, less affordable housing,” he said.
He said the Government should be focusing on the core issues that will see an improvement in building quality such as boosting inspections and workforce training.