Shoddy building work costs ACT almost $1 billion in past eight years

Glynis Quinlan 18 October 2018 3
construction site

Master Builders ACT says that poor building quality is causing significant stress for homeowners. File photo.

Poor building construction has cost the ACT close to $1 billion over the last eight years according to Master Builders ACT which is calling on the ACT Government to take action.

Master Builders ACT CEO, Michael Hopkins said poor building quality is causing significant stress for homeowners and places those sub-contractors and small businesses who don’t ‘cut corners’ at a commercial disadvantage.

He is calling for a range of reforms to address the problem as well as better enforcement of existing building laws.

“Poor building quality has a significant financial cost on consumers, industry and governments, however the financial impact does not factor in the stress on home owners, and the commercial impact on subcontractors and small businesses who can’t compete with operators who cut corners on quality and safety,” said Mr Hopkins.

He said that a report from the University of NSW released by the ACT Committee inquiring into ACT building quality estimates that for every $100 million spent on construction, over $5 million is wasted as a result of poor building quality.

Master Builders ACT has calculated that if this figure was applied to the value of construction work completed in the ACT since 2010, the cost of poor building quality has been $995 million.


Master Builders ACT CEO Michael Hopkins. File photo.

“According to ABS data there has been $19.9 billion worth of construction worked completed in the ACT since 2010,” Mr Hopkins said.

“Based on UNSW research, the ACT Government’s failure to act has cost the ACT community close to $1 billion.”

Master Builders ACT has consulted widely with its members, community groups and other industry professionals to identify possible solutions to the ACT’s building quality problem.

“There is widespread support amongst key stakeholders for a range of solutions to fix the ACT’s building quality problem,” Mr Hopkins said.

“The MBA is calling for the introduction of engineer, building designer and trade contractor registration and licensing, mandated continuing professional development training, and minimum design and documentation reforms to be introduced as a priority.

“The ACT Government should also ensure existing building laws are enforced and a well-resourced and timely complaints process is implemented,” he said.

“The Canberra community deserves a best practice building regulatory system that keeps pace with the ACT’s record population growth and current building boom.”

Master Builders ACT has made submissions to the 2010 and 2015 building quality review and is in the process of putting together a submission to the 2018 Committee inquiry which it will submit before the November 30 deadline (which has been extended from the original September 30 deadline).

The Standing Committee on Economic Development and Tourism is holding the inquiry which began on March 28 and has received 39 submissions so far.

It is specifically looking at the quality of new buildings in the ACT and any potential or actual causes of poor building quality.

In launching the inquiry earlier this year, the committee’s chair, Jeremy Hanson, said there has been concern in the community for some time about building quality, particularly newer apartment developments.

“As Canberra’s population grows and more housing, including medium and high-density housing, is constructed, it is important that our community has a robust regulatory framework governing building quality,” he said. For more details about the inquiry please click here.

ACT Minister for Building and Quality Improvement, Gordon Ramsay, contested the claim the Government had failed to act, saying it had undertaken a range of reforms as a result of the review of the ACT Building Act and regulatory system.

“This includes the introduction of new powers to condition or refuse licences, powers to require licensees to undertake skills assessments or training, increased penalties for major breaches of the building and licensing laws and further options for the regulator to take action against a licensee to protect the public,” Mr Ramsay said.

“The ACT Government has also expanded statutory warranties to all residential buildings, created a public register of information about licensees and released guides for people building and buying in the ACT.

“Licensing reforms mean it is now more difficult to get a builder licence in the ACT, and for licensees to shift operations between licences to avoid meeting their obligations.”

Mr Ramsay said the government has committed resources in both policy and operational areas to improve compliance with building standards, and further increased its commitment this year to fund additional building inspectors.

“Compliance with building laws is a priority for Access Canberra and the Construction Occupations Registrar,” he said.

“There will be more inspections and a more rapid response to complaints as a result of the additional funding Government has provided.”


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3 Responses to Shoddy building work costs ACT almost $1 billion in past eight years
Fiona Caskie Fiona Caskie 6:54 am 20 Oct 18

Gordon Ramsay has good intentions but it is too late for many. Many of units were sold under Stanhopes building self regulation period. They were signed off by the ACT Government and an engineer.

I myself bought a unit with defects in 2006 and paid hideous amounts of money getting it fixed. I sold it recently to move on from the experience. This is 10 years too late.

A well known real estate/property group sold many of these poorly built units and then they go in as Strata manager to appease the developers. These strata managers take huge amounts of money for basically employing a cleaner, gardener, setting up an emergency contact list and sending invoices. Strata companies need to be audited and held accountable for pocketing extra on insurance claims, overcharging of strata fees and interest (especially to those under building defect remediation) and breaching the privacy act by putting people's names all over account summaries. Some strata managers are guilty of unconscionable conduct.

The ACT government knows who the two main dodgy developers are and they are both well known Canberra identities over four decades. They have outed one and put him front page and are trying to stop him creating Phoenix companies. The other developer who was also the builder was mentioned in another article which noted that the building was inadequate and the building was unsupervised.

Some property lawyers in Canberra will not or can not act for owners due to associations with these developers and do not have the guts to take them on. Had some of these owners had a lawyer with a backbone who did not fluff over these developers, this would not be such an epidemic.

Paul South Paul South 8:16 pm 19 Oct 18

More hot air.. been yapping about this for yrs

Veronika Sain Veronika Sain 10:52 pm 18 Oct 18

Open secret regarding shoddy standards of new apartment complexes and cheaper semi skilled labour.

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