Insurers welcome national approach to building sector reforms

Insurance Council of Australia (ICA) CEO, Rob Whelan, has welcomed the agreement between the states and territories on implementing nationally consistent building standards is a step in the right direction, but action is now urgently required to restore confidence in the building and construction sector.

Federal Minister for Industry, Science and Technolog, Karen Andrews has indicated that she has brokered the agreement after a meeting to discuss industry complaints about insurance costs and the response to safety concerns, “After these lengthy negotiations and discussions today, it’s very pleasing that there is solidarity that what we need to do is rebuild confidence in Australia’s building and construction sector.

“The states and territories have worked very cooperatively. They have brought their own views to the table, but they have shown a willingness to work together in the best interests of the building and construction industry, and of course consumers right across Australia.

“So, there are a number of commitments that have been made, which will deal with processes including the establishment of an implementation team. The implementation team will form part of the Australian Building Codes Board, and will be established as soon as possible, and the parties will work together to make sure that we progress the implementation of the recommendations of the Building Confidence Report as a priority.”

Whelan said that he was pleased that the Insurance Council was provided the opportunity to discuss its concerns at industry roundtable and that the ministers were aligned in seeking a positive outcome. However, he indicated categorically that the blame game has to end, and governments must now prioritise the enactment of this national approach.

He said, “Insurers are pleased the Australian Building Codes Board will play the key role in overseeing implementation of the 24 recommendations of the Shergold-Weir report. However, the ICA believes the insurance industry must have a formal role, including permanent representation on the ABCB, to ensure insurance perspectives are heard.”

The ICA has indicated that they would like to ensure the following:

  • Urgent design and implementation of a nationally consistent audit and risk assessment regime to enable an accurate register of at-risk buildings to be developed
  • Introduction of nationally consistent ratings, so that the risk rankings of buildings means the same in each jurisdiction
  • Design and implementation of a national cladding and Non-Conforming Building Products rectification program using consistent standards and approach

Whelan stated that though this agreement is generally positive, insurers remain concerned any delays in implementing the Shergold-Weir recommendations and action being taken by the ABCB will further undermine public and industry confidence in the construction sector.

He said, “The ICA is willing to engage with governments and regulatory authorities to ensure the restoration of confidence and stability in the construction industry is achieved as soon as possible.
The current compliance regimes are failing to deliver results and certainty for consumers and insurers.

“Insurers accept they have a key role to play in the risk management process, but the acceptance of risk will depend on appropriate action by the building industry, governments and regulators.”