Australia: NSW Government Bulletin: Wanted - A Building Commission for NSW

Last Updated: 25 July 2019
Article by Peter Holt
Most Read Contributor in Australia, August 2019

Wanted: A Building Commission for New South Wales

One of the essential elements of any new model for building regulation in New South Wales is the establishment of a Building Commissioner as the consolidated regulator for the construction industry.

This tranche of the reform is essential, not only to address the fragmentation and lack of accountability inherent in the regulation of the NSW building industry but also to ensure that sufficient resources are committed to solving the problems that continue to plague the system.

No state approves and builds more complex buildings than NSW, by which we mean multi-storey mixed use development typically comprising basement car parking, street-level commercial premises and residential apartments above. It is these types of buildings that are at the very heart of the public debates about defects and combustible cladding.

The essential features of our current building certification system were cast in 1998. At that time, the type of buildings commonly being built were very different, typically characterised by dwelling houses in a suburban streetscape.

While the existing NSW Government commitments, particularly around requiring building designers and builders to be registered and requiring buildings to be certified that they have been designed and constructed in accordance with the Building Code of Australia, are part of solving the problem, many of the problems that exist are because NSW has traditionally under-resourced the regulatory and compliance functions.

On this issue, the NSW Government has previously said that it will appoint an expert building commissioner to act as the consolidated building regulator in NSW 1. However it has not, as yet, committed to the establishment of a NSW Building Commission.

The role of the Commissioner is to:

  • act as the consolidated regulator for the construction industry
  • administer all building laws that are or will be in the Minister for Innovation and Better Regulation's portfolio
  • building plans need to be submitted to the Commissioner
  • building practitioners need to be registered with the Commissioner
  • conduct risk-based audits of practitioners
  • investigate and take disciplinary action against building practitioners that engage in improper conduct.

Most industry participants anticipate that the Building Commissioner would be supported by a Building Commission as a stand-alone statutory body with the resources and powers to regulate the industry.

The situation today

Responsibility for administering the current system is split between the Department of Infrastructure, Planning and Environment reporting to the Minister for Planning and Public Spaces, and the Department of Customer Services reporting to the Minister for Better Regulation and Innovation.

Michael Lambert, the author of the Independent Review of the Building Professionals Act 2005, has recently pointed out that neither agency had people with professional skills in the building area and also had very limited inspection and enforcement powers 2.

One of the central concerns of the Lambert Review was the fragmentation of building regulation and the inadequate resources applied to it.

In October 2015, there were seven people in the Building Policy Unit of the Planning Department and 28 people in the Building Professionals Board. Each year the Board cost around $3.5-4.5 million to run 3.

In 2018 the Building Professionals Board was dissolved and its regulatory functions were moved across to the Department of Finance, Services and Innovation (now Department of Customer Services).

Administrative functions previously carried out by the Board are now carried out by the Commissioner for Fair Trading 4.

Collectively there are no more than 50-60 people responsible for building industry regulation in NSW and none of those people have relevant qualifications 5.

The situation elsewhere

In contrast, in 2013 the Victorian Government established the Victorian Building Authority. Last year, it had a total full time head count of 298 employees, an income of $69 million and total expenses of $63.2 million. The majority of that income was derived from building permit levies and registration fees 6.

Similarly, in 1991 the Queensland Government established the Queensland Building and Construction Commission. Last year, the Commission employed 429 staff with an income of around $257 million 7.

The need for a capable regulator

Michael Lambert identified the need for a capable regulator–someone with the right resources, skills and systems to operate an efficient and effective regulatory system. He also identified that while the establishment of a Commission would not 'guarantee success,' it would serve to provide for a more consistent and consolidated approach to building regulation.

Michael Lambert has also identified that it is essential that the NSW Building Commissioner is suitably resourced and tasked with responsibility for establishing an implementation program to progress the reforms as part of an integrated package. This should be undertaken in a manner which is consistent with other jurisdictions, with the implementation program to be made publicly available to ensure full accountability to the community 8.

The position of Building Commissioner

The NSW Government has recently advertised to fill the role of the Building Commissioner 9. The role is to provide strategic oversite of building regulation and regulatory changes, and also to be an advocate for building policy reform to the Secretary of the Department of Customer Service.

The role sits within the Department of Customer Services within the Better Regulation Division and reports through to the Minister for Innovation and Better Regulation. It is to be supported by a staff of four people which will function as a secretariat.

No Commission, no money, no change

In our view, the proposal for a Commissioner supported only by a secretariat and not by a Commission with dedicated funding allocated in the budget will mean that NSW will have little more than an advocate for building reform for the foreseeable future, and no way of overcoming the inertia and lack of resourcing inherent in the current fragmented system.

Footnotes

1. NSW Government Response to the Shergold Weir Building Confidence Report, Department of Finance Services and Innovation, February 2019.

2. Building in Quicksand: A look at the building industry, private certifiers and the case of the Opal Tower, seminar held on March 2019.

3. Independent Review of the Building Professionals Act 2005 (Final Report), Michael Lambert, October 2015.

4. Building and Development Certifiers Act 2018 (NSW).

5. Building in Quicksand: A look at the building industry, private certifiers and the case of the Opal Tower, seminar held on March 2019.

6. Annual Report 2017-18, Victorian Building Authority, 12 November 2018.

7. Queensland Building and Construction Commission Annual Report 2017-2018, Queensland Building and Construction Commission, 2018.

8. Submission on Building Stronger Foundations Discussion Paper, Michael Lambert, July 2019.

9. NSW Government 'I Work for NSW' accessible at [https://iworkfor.nsw.gov.au/job/building-commissioner-164184].

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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