Tuesday, 6 February 2024

Bills

Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023

Second reading

Debate resumed.

Gabrielle WILLIAMS (Dandenong – Minister for Government Services, Minister for Consumer Affairs, Minister for Public and Active Transport) (14:54): Before the break I was talking about the two new offences that are being introduced through this bill, which will update the Domestic Building Contracts Act 1995 and apply where a builder has entered into an insurable domestic building contract ‍– that means where domestic building work costs more than $16,000 and where they receive money before obtaining the required insurance. In recognition of the varying experiences of Victorians who have fallen victim to collapsed builders and whose experiences have informed these changes, there are two penalty levels that will apply that are based on the seriousness of the conduct, with a higher penalty rate to apply where the offence is committed knowingly or recklessly. That higher penalty rate will sit at 500 units, which is approximately $96,000 for an individual, or 2500 units, which is approximately $480,000 for a body corporate.

For offences that are committed under a standard of strict liability, individuals will face a penalty of 240 units or $46,000 while body corporates will face 1200 units or approximately $230,000. These penalties will send a strong message to industry on the importance of adhering to insurance requirements, giving consumers greater confidence in the building industry and greater confidence that their investment is being protected.

To further complement these reforms, my department is also conducting a review into the Domestic Building Contracts Act 1995, which I referred to earlier in my contribution, to ensure that our legislation is contemporary and reflects the needs of the building industry while also appropriately protecting Victorian consumers. Consultation is currently open for this review on Engage Victoria until 28 February, and I encourage all Victorians with experience in this area to participate, whether that be from a consumer standpoint or from an industry perspective. The review will consider issues including the practice of contract-splitting, as we saw with Porter Davis Homes, or monetary thresholds for deposits, and also the definition of ‘domestic building work’ and the issue of progress payments. I recently met with Master Builders, and I am aware that we have some more work to do to ensure our legislation sets very clear guidelines for builders as to their responsibilities in this space in the same way as we want consumers to be well informed about their rights and reasonable expectations as well.

The legislation we are discussing today goes some way to addressing the challenges being experienced, but we will be continuing to work with stakeholders through the review process that I have just outlined and to do further targeted consultation to ensure that we can not only rebuild consumer confidence in the industry but also support builders who are doing the right thing, through creating a solid and transparent legislative framework that allows them and makes it easy for them to be compliant.

We have heard some really awful stories from Victorians that have resulted from their builders failing to protect them as they are required to. We have backed those Victorians and we are continuing to back those Victorians, and this is the first step towards better protections for all Victorians as they build or renovate their homes. We want Victorians to engage with our building industry with confidence, and we want our building industry requirements to be clear and well communicated. This legislation is a really important first step in that direction as we embark upon some incredibly complex work to ensure that we get this right. On that basis, I commend this bill to the house.

Danny O’BRIEN (Gippsland South) (14:57): I am also pleased to rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. As the Manager of Opposition Business has indicated, the opposition will not be opposing this legislation. But he has indeed moved a reasoned amendment, which highlights our view that the government, whilst trying on this issue, has simply not gone far enough to address all the issues in this sector at the moment.

We certainly do not oppose the intent of the legislation, which is to introduce penalties for builders who seek to issue an invoice to seek payment from a client without having provided domestic building insurance. To some degree – and I have been speaking to some of the builders in my own electorate – that misses the point of what has been happening. There have already been requirements on builders to provide builders warranty insurance. The issue is, though, that they have not been doing so – not that the law was not strong enough but that there was very little enforcement of the law and actual follow-up from the Victorian Building Authority and the government more broadly to ensure that that was occurring.

Of course I echo the comments of both previous speakers that this relates to a very small number of builders who are either rogues in a moral and legal sense or who have got themselves into financial difficulty and are seeking any way out of it and trying to minimise their costs, perhaps by not going ahead and getting insurance for their clients. But it is true that whilst this is a step in the right direction, I certainly do not think it goes far enough.

I think the government has had a range of building industry legislation in the last 12 months or so. We had the bill last year that made some changes. I think I am right in saying that there is a review underway at the moment, and that needs to look at a whole range of things. Indeed in our consultation on this legislation the view that the industry has given is that both the Domestic Building Contracts Act 1995 and building legislation more broadly are out of date. That is the message that I have also got from some of the builders in my electorate. They say that they really do not reflect the current practice as to what actually happens.

It is extremely unfortunate what has happened to those people who are trying to build homes, those Victorians who had taken on face value the ethics of the builders in question and everything they had assumed was wrong. I guess it highlights the importance of understanding the contracts you are signing and making sure not only that your builders are reputable but that when you have a reputable builder ‍– or any person you have gone into a contract with – you make sure that they have done what they said they would do and to a degree try and make sure that they have complied with the law.

As I said, whilst this bill introduces penalties for builders who do not do the right thing, it is a concern to me that there were rules around before this and they simply were not being adhered to. It is about enforcement. I appreciate it is a difficult area to enforce, but it is important that the government gets it right, because we know we have a housing crisis in this state on almost every level – from social housing, community housing and public housing to rentals and the ability of young people and older people alike to afford houses. Whilst we need the appropriate regulations and rules around construction to ensure that people do not get ripped off and they do not get left holding the baby and lose money without even having a house built, we also need to ensure that we are doing as best as is possible to encourage house building, to lower the cost of house building and to provide better social housing.

I think we have seen in the last 12 months or so some just unbelievably economically illiterate decisions from this government when it comes to housing, in particular with the budget. I have said a number of times in this place that when you have a housing shortage – indeed when you have a shortage of any product – basic economics tells you that taxing that product is not going to create any more of it; indeed what it is going to do is put up the price. I was just reviewing a debate from last year. I think I spoke then about 49 new or increased taxes. I think we are up to more like 52 now.

A member interjected.

Danny O’BRIEN: Fifty-two or 53; it is hard to keep count. Of those, 23 are on property. Some of them we do not disagree with – foreign investor taxes and increases on those sorts of things – but what was most bizarre was the decision of the government last year to introduce the so-called temporary COVID debt levy, which is in fact a change to the land tax arrangements. It reduces the threshold so that anything worth over $50,000 will straight off cop the $500 fee plus the percentage fee for land tax. There is an increase at the next level up as well, so we are effectively seeing that many people who are subject to land tax are now going to be paying the $900 as well as the percentage fee. We are seeing that increased as well. In a deal done with the Greens the increase is going to go up from 1 per cent to 2 per cent to 3 per cent over the next three years.

It beggars belief and it staggers me – no, it does not stagger me; the Greens are economically illiterate so I am not surprised that they do not understand this – that the government has not understood that if you tax people who have a house, a second property, that they are then in most cases, in many cases at least, renting out as a landlord, or rental provider as per the new terms, if you add a tax on them, that somehow that is going to help with both the rental and the –

Nina Taylor: On a point of order, Speaker, I am just wondering: we are talking about building reform, and I fear that the member has strayed somewhat to other categories and other subject matter, so I am urging and I am requesting that perhaps the member be drawn back to the subject matter of this bill.

The ACTING SPEAKER (Paul Edbrooke): It has been a wideranging debate. I think the member is focusing on the substantive part of the bill, but I would remind all members to keep the focus on the bill at hand.

Danny O’BRIEN: I was talking in broad terms, though, about the issues that we need to be dealing with given we have got a housing crisis – a housing affordability and a rental affordability crisis. This legislation is trying to address a part of that. The point that the opposition is making and indeed that the Manager of Opposition Business has made with his reasoned amendment, which I was in fact talking about, is that this is only a tiny part of the solution and that we actually should not be debating this until we look at the bigger picture. Indeed I think, if I am not mistaken, the timing of this bill is that the commencement provision is 28 November 2024. I heard the minister speaking previously saying that by moving a reasoned amendment we were somehow delaying this legislation. Well, it does not come into effect until the end of the year anyway, Minister, so there is time for you to actually do the work that is needed.

I say again: we do not oppose the aspects of this bill that will increase the penalties for noncompliance in making sure that there is builders warranty insurance for people trying to build a home. But I am very concerned that the government does not understand the fundamentals of our housing crisis and of our rental crisis, which is supply, supply, supply, and that taxing that supply – increasing taxes like the windfall gains tax and like the additional land tax – is in no way going to help Victorians find a place to live.

Sarah CONNOLLY (Laverton) (15:07): I too rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. I am going to start my contribution by saying I most intensely object to the previous member’s comments in relation to this government not understanding the housing and rental crisis for the simple fact that the member may not realise that on this side of the house we actually have MPs, backbenchers like me, who are renting, who are stuck and living a rental crisis, moving from house to house each year, for many different reasons. Those on this side of the house most intensely understand the rental crisis, because we in fact are part of the community in Victoria that are very much living this crisis. But I do digress, because I am really happy that this bill is before the house.

This bill is a really big deal for folks in my electorate, because so many of them were affected by the collapse of Porter Davis and subsequently the collapse of a number of other companies in the building industry. I do have to say I clearly remember being at Laverton station – I think the day after this happened – early in the morning. I had many people coming up to me. I was actually shocked. They were from Tarneit, they were from Hoppers Crossing, they were from Truganina and they were from Williams Landing, and they had come to Laverton station to get a car park and commute on into the station. They saw me there, and they came up and they were begging for assistance. These people’s dreams – their dream to build a home for their family, a roof over their head – had been completely shattered. These people were incredibly distraught, and I think it is really important to start my contribution today to say: this one is for you. We have got your back. This will make a difference. This is going to make sure that this does not happen again. This bill aims to strengthen protections for folks like mine in the Laverton community in the domestic building industry, and I have to say there are not thousands, there are tens of thousands of them.

Following the lessons learned from the Porter Davis collapse last year, this bill has now been introduced into the house to try to deal with some of the issues that that showed to us. There is absolutely nothing more devastating for families than finding out that the money – the deposits they have paid – is gone. These are not small amounts of money. This is money that has usually had hardworking mums and dads for years in the workforce saving to put down a deposit and build their dream home.

My electorate office was inundated with calls for help, desperate calls for help, with really tragic stories ‍– outrageous behaviour by Porter Davis. I get calls to my office many, many times during the month and emails talking about behaviours of developers and builders. This bill says, ‘Enough is enough. You are not going to get away with this kind of behaviour anymore.’ Folks in my community have done nothing wrong. They pay their taxes, they work hard, they save up to get what they can only dream of and they hope to provide a great house, a roof above their heads, for their kids.

I am very pleased to say, my office having been inundated with calls for help, that as soon as we picked up the phone and called the minister at the time to talk about this, they were incredibly receptive. They were onto it straight away. We were able to let people know that we were listening to their stories and we were going to do something, and I was basically just saying, ‘You just hold on. Just wait. We’ll get there in the end.’ I do want to acknowledge the work that the Victorian Managed Insurance Authority have been doing quietly behind the scenes to assist those who did have insurance coverage, because believe me, there are a lot of folks out there who are still waiting to have their claims processed.

But what we have learned from all of this is that we need tougher laws to ensure this does not happen again. This is the sort of stuff that causes so much grief within families, when they think they have lost tens if not hundreds of thousands of dollars in deposits. Porter Davis was not the only building company to go under and leave prospective home owners out in the cold the way they did. It came out soon after that Snowdon, Hallbury Homes and I think most recently Montego, which has been mentioned by previous speakers here this afternoon, have collapsed in a similar fashion. The really weird thing is I get around out and about in my community and talk to a lot of people and I happened to be talking to a bloke that worked just recently for Montego, and the stuff that he was telling me about the way in which that was being managed and the response was quite outrageous. That is why bills like the one here before us today are just so very important to so many people in the Victorian community and not just those that have been affected by this, because let us face it there will be a whole other generation to come through and there are people right now looking to put down deposits and build their family home. This is also going to protect them. So I am very pleased to say that our government has a track record of making strong and sensible reforms to Victoria’s building industry. This is but one that we are doing right now, and I knew at the time that it was just a matter of time before we would see legislation like this before the house.

The bill before us today sets out two brand new offences that apply to builders and relate to domestic building insurance. These offences will mean that a builder cannot enter into a major domestic building contract and demand and receive money from the home owner to carry out works without ensuring that domestic building insurance is held when it is required. To help enforce these new offences, strong and most importantly significant penalties will be introduced for breaches of the offences. A previous member talked about some of these people being referred to as rogues. People in my community refer to them as criminals. That was the kind of impact it had on the families that found themselves absolutely out in the cold when Porter Davis collapsed.

When the offence is committed knowingly or recklessly the maximum penalty will be about $96,000 for an individual or about $480,000 for a body corporate. In the instances where the offence is committed under a standard of strict liability the maximum penalty for a person is about $46,000 and the maximum penalty for a company is about $230,000. These penalties are harsher, but they need to be. This should not have happened. Builders without the necessary insurance in place are effectively gambling with their clients’ money, sometimes to the tune of millions of dollars. These offences provide a necessary deterrent for builders and building companies to take this seriously and treat their customers – the families in my community – and their money with the care and the respect that they deserve.

To ensure the proper enforcement mechanisms are in place the Victorian Building Authority will also see its powers and importantly its authority expanded to cover these new offences. The bill allows for the VBA to commence proceedings against a builder who contravenes this new legislation as well as take disciplinary action against a registered builder who does not comply with the legislation. In some instances this may in fact lead to a registered builder having their registration suspended if they do the wrong thing. These changes send a very strong message to the industry: if you do the wrong thing and you leave families like those in the west completely vulnerable, you will be punished. It also tells families like the ones who are affected in my patch by the Porter Davis collapse: if your builder does the wrong thing by you, you will be protected. We have got your back.

There are so many things that I could talk about with this legislation. I do want to say to people in my community, who I hope will listen to and watch the video of this bill debate: I really hope that you have been able to get your deposits back – your money. I really hope that you have been able to find the strength to go forward and build your dream home. I know that just across the road from my house, ironically, there was someone building their dream home – a Porter Davis home – and it was locked up for weeks. I used to watch the family drive by to make sure the place was not being trashed and their hopes and dreams further completely ruined. This bill is for you.

Wayne FARNHAM (Narracan) (15:17): Acting Speaker, it is good to see you again in the chair, and it is good to be back. I am happy to rise today to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. Although this side of the chamber does not oppose this bill, I feel as though, being one of probably the few people in this chamber that have actually been in this industry, for 30 years, this bill does not go far enough.

First and foremost, I would like to thank the staff for the bill briefing. It was quite informative, and I can appreciate they probably put a lot of work into this bill. But I do not see this bill in any way, shape or form protecting consumers. I can appreciate that we will have differing views on this, but what we are doing here is we are meant to be introducing a bill that is protecting consumers from, unfortunately, a very small proportion of the industry – the dodgy sector of the industry. I get pretty annoyed with this. We always hear the dodgy builder stories, and it gets under my skin because there are a lot of builders in this industry that do do the right thing and they do have their clients’ best interests at heart. I actually feel really sorry for consumers when they get caught up in this, to be honest, because building a house should be a great experience. It is singly the biggest investment most people will make in their lives, and you should be able to open the doors and be excited and watch your kids run into their bedrooms and enjoy the space. Unfortunately, the few absolutely dodgy builders in this industry spoil that for many.

I do not think this bill goes far enough. I am going to be a little bit brutal in the assessment, but at the end of this I am going to make a statement and maybe the government may listen, because I believe I have a solution. I believe we quite often debate with the government but never give a solution. At the end of this I am going to give a solution, because I think you could tear this up and start again. I will say why I do not think it goes far enough. Unfortunately this will never stop while the money goes into the hands of the builder. You will never stop the dodgy sector exploiting the consumer. This does not protect the consumer’s deposit; what this bill does is fine builders. That is all it does. Yes, their building licence may get suspended. My personal opinion is if a builder is that dodgy, do not suspend his licence: cancel it. Get him out of the industry to protect the industry. I would go further.

The problem with this bill is that this is so arduous for the Victorian Building Authority to police. On the government’s own figures of wanting to build 80,000 homes a year, that is 1540 applications a week that the VBA would have to investigate to make sure that the warranty insurance was issued before the deposit was taken. 1540 – that is a huge amount. You are nearly going to have to set up a call centre in the VBA to police this. And how do we police it? This is the next question: how do we police it? Are we asking the builders to disclose their bank account details, their deposits into their bank accounts, their financials? It is a pretty invasive process for people to go through that, and then you have to correlate the deposit with when the insurance was taken out. This will upset a lot of people.

I understand the intent of the bill; I do. I understand the intent is to try and protect the consumer, but it does not do that, not one bit. In any industry unfortunately we have these people that will do the wrong thing. What we need to do in this Parliament is to build trust back in the construction industry, because nobody trusts it anymore. They do not. It is story after story, week after week, of builders going under, builders taking deposits. Just last week with Montego Homes another 60 people lost their deposits.

I pointed this out in the bill briefing. I said, ‘If I’m a dodgy builder, even with this bill in place, what stops me signing up 20 or 30 people, taking their deposits and then going into liquidation?’ Nothing. There is nothing that stops that process, and that is the problem with the bill. I know I am critical, but I can see the fault in it. I cannot see any protection for the consumers, none at all, because we are only protecting them from the dodgy builders. We are not protecting them from the good ones. And if you think this is not going to happen again before November this year, I think you are wrong. It will happen again.

Now I am going to come to the solution. My team might be a bit angry with me, but I am going to be the goose that gives the golden egg. I am happy for the government to listen, and I am happy for the government to take on board my advice. They may like it, they may not, but I like to be constructive, and I like to think if I only do one term in this Parliament and I have made a difference in this space, then I have done my job.

Here is my solution. The best solution for people not to lose their deposits is for the deposits to go into trust through the VBA – very simple. The deposit goes into trust. The consumer pays the deposit into the trust; it does not go to the builder. When you generate the Victorian Managed Insurance Authority insurance, that deposit is released to the builder. That is 100 per cent protection. That is the only way you can protect the consumers from the dodgy builders in this industry. It is simple, and it is simple because everything is address driven. Everything is by address. Every house has a lot number; every house has a street number. It is easy to release that deposit to the builder. And if the builder is organised, it does not take long to get the insurance. You go online, you put in the contract amount, they tell you what your premium is, you pay the premium and it spits it out. It is literally a 5- or 10-minute process. So if a builder is organised, he will know. He will have a client signed up, that client has put that deposit into trust – produce the insurance, deposit released. That deposit never goes into the builder’s hands until the insurance is done. That is the simplest solution to the current problem we have.

To the government and to the minister, I hope you listen, because I am here to actually get the rogues out of the industry so people can have confidence in building again, because there is no confidence in the construction sector at the moment. That is why our dwelling numbers are down. That is why we have 21,000 less trade workers today – 21,000 – because people have lost confidence. We need to get the confidence back so the consumer has the confidence that their house is insured.

I can tell you now this bill will not stop the rogue builders in the industry. It never does. Every industry has rogues – accountants have rogues, doctors have rogues, builders have rogues – and they are the ones we need to weed out. I will repeat this again: if a builder does the wrong thing – if a builder deliberately takes deposits and does not have the insurance – do not suspend his licence, cancel it. He should not have been in the industry in the first place. If he is that dodgy, he can get out. That is where I am going to leave this contribution. I hope the government has listened, because I think my way is a better way. I think it should help the government, but my way definitely helps the consumer.

Dylan WIGHT (Tarneit) (15:27): It gives me great pleasure to rise this afternoon to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. This bill makes a significant stride forward in reinforcing consumer protection within Victoria’s building sector. I think it is entirely appropriate that we take a minute to acknowledge the pain and the anguish experienced by many Victorians – the reason for this bill coming about. It has come about on the back of, unfortunately, a few unscrupulous builders doing the absolute wrong thing by consumers. As the member for Tarneit, one of Australia’s fastest growing areas, you could imagine – and you would imagine right – that many of my constituents were affected by these actions. Imagine the trauma that you would suffer from having a situation where you are a working- or middle-class Victorian family and you have toiled away and saved money for a house deposit, just to have your dream ripped away by somebody doing the wrong thing and breaking the law. Those builders – and I am not afraid to name a few, like Porter Davis, Snowdon and Hallbury Homes – left consumers and left many of my constituents incredibly vulnerable and facing the loss of significant deposits. That was due to the lack of domestic building insurance, and that was due to them ignoring a fundamental duty in their roles.

This is a bill born out of necessity. It frankly is not one we should have to be here debating. I will concur with the member for Narracan: the vast majority of builders, the vast majority of companies in this sector, absolutely care about consumers. They care about their customers and they care about Victoria. But the actions of a minority have meant that we have to now sit here in this place and make it easier for us and regulators to protect Victorians’ dreams and make it easier for us to prosecute and to go after that unscrupulous minority.

This bill is tailored to prevent the recurrence of such distressing scenarios as I have just been through for Victorians embarking on the exciting journey of building or renovating a home. At its core the bill introduces two new offences into the Domestic Building Contracts Act 1995 specifically targeting builders who engage in domestic building work exceeding $16,000 without securing the mandatory domestic building insurance (DBI). This move is a robust step towards accountability, ensuring that home owners are not left in the lurch should their builder fail to fulfil contractual obligations due to insolvency. This is a bill that is fundamentally designed to protect Victorian consumers that have worked hard over a number of years to save for a house deposit. As I have already been through, it was an absolutely horrible situation that these people found themselves in in 2023. The Labor government at the time set up a scheme to help compensate those that were affected. Honestly, countless constituents came through my office looking for information on how to apply for that scheme, and we helped many constituents in Tarneit who were going through an incredibly terrible, terrible time.

Moreover, this legislation empowers the Victorian Building Authority, who is the regulator, with enforcement capabilities, enabling it to take decisive actions against noncompliant builders. It is an incredibly important component of this bill. The member for Narracan spoke just prior to me about who will be regulating this, who does this empower and how will this bill help stop this from happening again, and I think this bill makes it incredibly clear who that regulator is. It is the VBA, so it is the VBA’s responsibility to chase down those unscrupulous builders, to make sure that they are doing the right thing and to make sure that they have taken out DBI for Victorians and for families that are just pursuing their dream. The bill enables the VBA to take decisive actions against noncompliant builders. This includes pursuing legal proceedings and imposing disciplinary actions up to and including suspension and deregistration. This bill also extends liability to individual directors and practitioners, ensuring accountability remains uncompromised even in cases where a building company enters liquidation.

The introduction of this bill is just the first step in a series of planned reforms aimed at bolstering the integrity and reliability of Victoria’s building industry. It is an embodiment of the government’s resolve to place consumer protection at the forefront of the building process, ensuring peace of mind for Victorians investing in their homes. This legislation not only addresses immediate concerns brought to light by recent industry events but also paves the way for a more robust, transparent and consumer-focused building sector right here in Victoria.

The construction industry at the moment faces many challenges, and we are committed to addressing those challenges in the construction industry, particularly in rapidly developing communities like mine, Tarneit. This, as you can imagine, is of paramount importance to me, and I know that it is of paramount importance to my constituents in Tarneit, particularly those looking at building their dream homes.

The building regulatory system has been largely unchanged since the 1990s and is now struggling to align with modern design and construction practices. This growing gap has led to significant issues, including high-profile building failures both in Australia and abroad, which understandably shake public confidence in the building regulatory framework, and that public confidence can sometimes extend itself to less homes being built, which is obviously absolutely not what we want to see in Victoria over the next decade.

I think we can all remember the situation with the use of combustible cladding, which was highlighted by fires at Melbourne’s Lacrosse apartment building in 2014, London’s Grenfell tower in 2017 and Melbourne’s Neo200 building in 2019. Those instances underscore the severity of the challenges that we broadly face within this industry. The financial and human costs of such oversights are immense, with home owners facing hefty rectification bills and enduring considerable stress over the safety concerns. Just like we came to the aid of those people that were affected by the likes of Porter Davis, the Allan Labor government’s investment of over $700 million to rectify high-risk cladding in Victoria is also a testament to not just the scale of this issue but our commitment to fixing this issue and to addressing the challenges that we find within our construction industry. This is an incredibly important bill, incredibly important to the people of Tarneit, and I commend it to the house.

Brad BATTIN (Berwick) (15:37): In relation to the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023 it has been interesting listening to the debate. Obviously there are going to be many people here who live in or represent growth corridors, and I note the member for Tarneit, who just spoke about the growth in Tarneit, which we see down in our area in Bass and Pakenham. I will not refer to it as Gembrook – I know I was Gembrook before, but I do not take anything to heart on it. Down our way we have seen that growth, and the construction industry in our areas is not just about a new home for a family; it is jobs, it is employment for so many, and all of us would have so many tradies moving into our areas.

The challenge that we have got now is as we see this growth and some of the challenges we have had with the economy and as some of these builders go, we have seen an unearthing of some practices that should be definitely penalised, and obviously this bill is designed to do that. But as the member for Narracan said, we should be really finding ways that we can prevent this happening and ensure this does not happen, because once someone has put themselves into liquidation and effectively declared themselves broke, there is no money there to be taken through this bill. You can go after any builder you want, but the one thing we have seen quite regularly in the past is where a builder will go through the process and declare themselves as going through liquidation, and not more than six months later you see them out constructing a new home under a different name. These are the things that we need to review on how that happens.

I think it is important to put into perspective that sometimes when we speak on these bills in this house we are going by notes we are given or communities we have spoken to, and sometimes you do have a personal attachment to or understanding of what happened. In 2000 my wife and I built our first house, and we built through a builder called Warburton Homes. About halfway through that construction Warburton Homes went into liquidation. It was a challenge. The bigger challenge was I was a salesperson for Warburton Homes, so not only did the house not get finished, I did not get paid. We went through a process where obviously as a young couple in 2000 we had some pretty big financial decisions to make. We went to claim our insurance. Now, it was a little bit different to this because they were insured but they were insured by HIH, who went broke the day after our claim went through. So the challenge from a perspective of what a person faces – and I can only imagine again that these families are dealing with that now – is it puts you in a position of saying ‘Can I or can’t I afford this? What can I or can’t I do? Do I have to declare myself bankrupt, and how do we work from there?’ In the most unfortunate circumstances we did find another builder who, believe it or not, declared himself broke about four weeks before handing over our certificate of occupancy, and it took us about 12 months to get that certificate of occupancy after someone had come and pinched our kitchen. So it was a fair range of time that was a real challenge. That is why, listening to the member for Narracan, I do understand having a penalty after, and whilst it is what has been put forward today, I think in the last 12 months the discussion should have been: ‘How can we put things in place to prevent this happening for any family in the future?’

I know we are going to put this back to the Victorian Building Authority, and I understand from listening to the member for Narracan, who has had experience dealing with the VBA, some of the pressures and constraints that are on them. I am not going to have a go at them as an organisation, but I think there are some real challenges that VBA face currently, let alone without putting this responsibility on them to investigate the government’s target of 1500 homes every week to ensure that those deposits are paid.

One of the challenges they already face is that VBA do compliance for tradies across our whole state. At the moment, with all the new training for plumbers, we would expect most plumbers to do a good job. They come out to your house, and they effectively sign off their own work. VBA on occasion will go out and inspect that work. The people going through doing their licensing will be told that they should expect their work to be inspected roughly 5 per cent of the time. So 5 per cent of the time someone will come out, do an inspection and sign it off. If you comply, obviously you will keep your licence. If you do not, there will be some issues raised, and there are consequences and circumstances surrounding what happens from there. Currently the VBA will tell you they are reaching nowhere near that 5 per cent because of struggles with funding, having staff available to do that and getting out and doing those jobs. Therefore it is those dodgy ones that can get away with it.

When I refer to ‘dodgy ones’, there are some dodgy builders out there, and it was said before that there are dodgy ones in every organisation and every occupation. Of course we would like to think ‘Not in here’, but the reality is that over time there are dodgy people in every organisation we go to. I think we have got to be a little bit careful when we talk about the building industry and the trades. Those that on occasion are getting caught up in this are not dodgy. They have got themselves into financial positions, and they, in their own minds, work out a way to get out of it and do not succeed in that. Yes, it is trading insolvent and, yes, there is a whole world of corporate law around this, but I understand how a person who is a builder or tradie can tie themselves up in knots trying to get themselves in a position of taking deposits and thinking they will be able to build their way out of it. And as I said, from experience, it is exactly what Warburton Homes did. They thought, ‘If we can get that cash flow back in, we’ll get back in front.’ Money comes back in – they had worked out how they were going to get out of it. But in business, most would know, cash flow is king. Without cash flow a business will not survive, and that is what happens to a lot of these businesses – because of poor management, not because they are dodgy. I think we have to be careful. Not all of them are dodgy.

What we saw, though, over that period of time when Porter Davis went under, and with the amount of builders that have gone under, was the amount of families that were impacted by that, and through the growth corridors you still see some of these houses partly finished or started or where they cannot get anyone else to come in and finish that work. It is a huge concern.

I am going to speak about a couple that are just in our area out in the Berwick electorate, and I am going to refer to them by first names only. I have got Tiana and Matthew, and they were building with Montego Homes, who have gone into administration. The liquidation was advised by the administrators at the last meeting, and this has caused a major blow to them building their dream home in Clyde North. They got to the position that they wanted to build in Smiths Park estate. Those that know Smiths Park know it is a beautiful estate, a wonderful place where you can raise your family. They have gone through and done everything correctly, paid their deposit, but the builder did not take out any insurance or anything to secure that money. And now that they are going through the administrators, they have been advised it is unlikely that any creditors will receive any refund due to the fact that Montego has no assets and only $20,000 in the bank. Again, this is the sort of thing that needed to be prevented, and fining Montego after this is not going to fix the problem. I do not even believe the threat of a fine would have stopped them. It is exactly the same as an 18-year-old driving down the street, and when they are speeding, they are not thinking about the fine. We have got to get in the way to prevent this, and I think there have got to be circumstances where we can start to work with the building organisation. Housing Industry Association and Master Builders would be very keen to find ways to prevent this happening in the future. The comment from them was:

It is so hard to save for an initial deposit let alone losing it and trying to save for another deposit.

That is a comment I am sure most in this house have heard from someone along the way, where they have worked so hard. Young couples get in there and they do everything they can. They do not go out. It is a group that do not go out with their friends. They do not go to the pub as much. You make a lot of sacrifices only to be told that you are going to get nothing for that.

If I went to Tiana and Matthew, they would probably appreciate the fact that there is legislation coming in and that there could be a penalty. They would also understand that the reality is this penalty is not going to prevent what happened to them from happening in the future.

There is also Paul, who in March 2023 signed a contract with Montego Homes for the construction of his first house, in Clyde North. He paid the 5 per cent deposit and was waiting for the land to be titled; he was just waiting for the title to come through. Obviously with them going into voluntary administration he reviewed the contract again and dug more deeply and found out the laws around what would happen and how the deposit should have been paid and protected. He has now obviously found out that that did not happen. He states:

Obviously, that’s a malpractice and evasive act from the builder, which tells that they had a bad intention from the very beginning.

Paul understands that that was again a builder who knew they were doing the wrong thing but continued to take those deposits and put people in this circumstance. Both of these will get no support.

I say to the government as they are putting this legislation through that I know there was a scheme in place for those with Porter Davis. The government have got to consider the ones between now and when this legislation comes into effect as a matter of urgency, because there are too many of those young couples out there, young people who have put sacrifices on the line, and older people going into their last home, which will be their dream home where they are going to live and bring their grandkids around – that they get that support from government as well, not just those from Porter Davis and the builders last year. I think that needs to be extended.

In finishing, I think I join many in the house who have been meeting with constituents and hearing about their dreams being broken, and I am glad something is happening. As I said, I do not think that at the moment it is quite enough. I do support what the member for Narracan has said – he is someone with experience in this – that we should be considering in a bipartisan way how we can work our way forward to ensure that we can prevent this from happening in the future rather than waiting for it to happen. Someone declaring themself bankrupt and never paying the fine is going to be put in their way through the act.

Darren CHEESEMAN (South Barwon) (15:47): It is with some pleasure that I rise this afternoon to make my contribution on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. I must say in reflecting on this bill that I have put a great deal of thought into my own community. As many MPs in this place have noted during their contributions on this bill and also on other bills previously, we have a significant number of growth corridors around Victoria at the moment, and indeed many, many thousands of families over the last decade have successfully engaged tradies and building companies to build their dream homes. That is certainly the circumstance in the Armstrong Creek growth corridor, where some 10 years or so ago now there were literally no homes and now there are literally thousands of homes and tens of thousands of people living in that area. I must say that the absolute majority of those who have built houses in that Armstrong Creek growth corridor have enjoyed a productive working relationship with the companies that they have employed to build their dream homes. The absolute majority of the tradies that have built those homes have always sought to do the right thing by those that they have been working for and have always sought to protect the reputation of the companies that they work for by doing the right thing and making sure that the quality of their workmanship is first-class and of a high standard.

Unfortunately, though, in the last 12 months or so we have seen a number of examples where companies have sought to do the wrong thing. In my part of the world we first saw the Porter Davis circumstance, where some 90-odd families in my community got caught up in dodgy behaviour and dodgy practices by the Porter Davis company. In more recent times we have seen Montego Homes, where some 30-odd families have been caught up in that example, particularly in the Mount Duneed part of that growth corridor.

In reflecting on these measures and in reflecting on the circumstances in my part of the world, and I am sure others have reflected on this, a very substantial portion of the set of legislative arrangements that we have in place in Victoria have indeed existed by and large in their current format since the 1990s, since the Kennett government. There was a raft of different arrangements that were put in place back then that I think have been detrimental, really, to how our building regulation works – the oversight, the arrangements to make sure that builders do the right thing and to make sure that consumers are protected. And what I would say is, with the circumstances that we have seen over the last couple of years, what has really become very apparent to me is that the arrangements that have by and large been in place since the 1990s have not had, to anywhere near the extent that they needed to, an eye to the rights of consumers. What has very much been apparent to me is that it has been exceptionally difficult to prosecute builders when they do the wrong thing, and that is not good enough.

As has been stated in a few different contributions in this place, clearly people work for years to save for a deposit. They in good faith go and find a builder that they want to build the home that they and their family deserve, and when things go wrong, to find out that the legislative arrangements that are in place are not there to protect them, are not there in a useful format for them to be able to access rights that they might have as consumers in other parts of the economy, from my perspective is not good enough. The perfect storm that we have seen in so many ways in the economy has very much exposed the regulatory flaws that exist in the state of Victoria with respect to this particular part of the economy.

I think we have got a substantial amount of work to do to re-regulate and put in place a set of laws that work for consumers and work for practitioners, and there is a lot of work to be done. This is a journey. This is not something that we are going to be able to fix overnight. There are a lot of complex issues at play, and we need to get it right. I very much commend the direction that our government is going on that journey, but we have got a lot further to go on that journey.

I can remember back in 1999 when I was given the opportunity to be a councillor. Back then we had a Kennett government, and we were going through the processes to see the building surveying part of the building sector privatised, and I can remember thinking at that point in time of the significant challenges that we might find by privatisation of this part of the building process. I still have grave concerns with respect to this, because what we see is builders establishing long-term relationships with building surveyors where we actually do not see the surveyor working to the extent that they should independently to make sure that there is the quality of work done so that the consumer has a good quality product at the end of all of this. I think there is a lot more work to be done in that space to make sure that work is done and inspected and practitioners are held to a high account. That is an example, and I look forward to seeing, championing and advocating for further work.

To see in my community over the last 18 months or so, perhaps even the last 12 months or so, some 120 families who have worked and saved for years to be able to get into the building market, to get their own home, and who have gone through the process of selecting builders – builders who have generally had good reputations – only to find themselves in this circumstance is appalling. I think there is a lot of work to do to re-establish faith and trust. I think there is a lot more work to be done. I look forward to continuing to advocate to make sure that we have a set of building laws in this state that is fit for purpose and that has an eye to the rights of consumers, and to make sure that we have a system in this state that sees quality homes built for Victorians. That is what I look forward to. As I say, most tradies work hard to protect the reputation of the builders they work for and very much want to do the right thing.

Martin CAMERON (Morwell) (15:57): Acting Speaker Edbrooke, what a pleasure it is to have a former valley boy in the driving seat in the chamber while I get up to speak. I stand today to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, and I would like to thank the Manager of Opposition Business for his bill brief. I do note that we do not oppose the amendment, but the Manager of Opposition Business has moved a reasoned amendment, and in particular he wants to do that because, yes, we do need this amendment to go through as part of this legislation, but yes, there is more that needs to be done. We only have to hear from everyone that is standing up and making contributions that this is just one small part of a bigger issue. I concur with the member for Narracan, who did speak on some points that he brought up, that we are not trying to tarnish all builders in this. It is a very, very, very small minority of builders that are causing some grief, and there are a multitude of good builders that are out there right across the state and around Australia.

As a former tradie that used to work for a few of these builders, I did take on notice the member for Berwick when he was talking about the Victorian Building Authority and how plumbers now self-regulate when we actually do our work. Instead of having someone come out and check our work, we actually self-certify and we sign off. Whether it is doing a sewer or gas or roofing, we can actually self-certify that that is done. We may have a 5 per cent chance of actually being audited, so it just shows you that we do have the VBA in place to be able to come and do it. But in doing so and making all these changes here we need to have that back-of-house stuff done for the VBA to make sure that they have the people that can come out and police that this is actually going on. It is one thing to put it in place; to be able to check and make sure that it is happening is another thing, and we need to make sure that we are doing that.

The purpose of the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023 is to amend the Domestic Building Contracts Act 1995 and the Building Act 1993 by mandating that builders obtain domestic building insurance before accepting payments from building owners under any major domestic building contract.

As we have been told and as everyone has been articulating fantastically here in the chamber, when we do engage with a builder and we pay our deposit, we do that in good faith. If something does happen along the journey – as we have seen with some major building companies around Victoria and around Australia – and they go into liquidation, then as people that have paid our deposits and are making payments along the way with the house, if we are not going to get that house, we would like that money back, because realistically we have put that money up in good faith. We find when it does happen that we get to that point where we want to know why we are not covered, and changing this building legislation goes a tiny way to getting to that.

The principal amendments to the Domestic Building Contracts Act 1995 insert new offences for a builder to demand or receive money under a major domestic building contract if the builder has not ensured that the domestic building work to be carried out under the contract is covered by insurance, so they need to do that work. Have they done it? We do not know; we are taking that in good faith. This means that builders may be liable for penalties for domestic building contracts undertaken without insurance. The bill also makes other consequential amendments to the act.

As we heard the member for Narracan and other members that were standing up here talking about, if the penalty is going to be a monetary penalty and the builder does go broke and they collapse, what is the point of giving them a fine? They are not going to be able to pay that fine because their business has gone into liquidation. It is really just a token gesture to do that. Although that fine is written there, how are they going to recoup that money? It is just a sort of token gesture to have it there. I think the people that have put in their deposits on the houses would much rather get their bonds back.

For the 2023 calendar year there were 123 new residential dwellings built in the Latrobe Valley. That is my patch. I am sure if you were brave enough and wanted to go skydiving over the Latrobe Valley, as you jumped out of the plane you could look across the Latrobe Valley and see all these houses being built. Some members down here do that sometimes. From Moe, Morwell and Traralgon, our major centres, to Glengarry, which is booming with new houses, up to Yallourn and right across Churchill there are houses being built everywhere down in the valley. We need to make sure for our young people that are saving up to pay their deposits or, as I heard before, our more mature people that are going into their final place of residence, probably, that they are going to own, that all these steps are in place.

Most of the builders, as I say, are fantastic. There are some small boutique builders that might do five homes a year, new builds, and you move up to your major ones, like what Porter Davis was doing, doing hundreds of houses per year. We need to make sure that we have all this legislation in place. It is an exciting time if you are a young couple and you are building a house, and I think even if you are an older person and you are building your second, third or fourth house to live in. As you have built and you have sold, you have moved up from different estates and at different times of your life, from building family homes to then building a smaller home or unit, you want to make sure that it is done, and it is a great thing to go through to be able to go through the process of building a house, from having a look and purchasing a block of land to engaging with your builder and seeing it on virtual tours, which you can do now on computers. You can sit virtually now in the garage of their display homes and they take you on a virtual tour of what your special house is going to be like.

We need to get this right, this legislation. But in saying that – that we do need to get it right – we need to get it right the first time. A couple of members have said that this is going to be a moving beast as we work through to actually change the building legislation and make sure that it is brought through. But I do take the point that one of the members said before: that this will not come into effect until the end of the year. So we have got that time frame. Why don’t we take our time and actually look into it. We are having the building practitioners give us some warning signs of what we need to do, so I am sure we will go further, but why can’t we go further now and make sure that we are protecting and having that safety net around our young folk that are struggling to save and the ones that are working a couple of jobs each to get that deposit. Let us make sure that they have the confidence in the builder and, if something goes wrong, they have got confidence in the Victorian government that we have got the correct legislation in place to protect them.

According to some 2023 data from the Australian Securities and Investments Commission, 619 building companies in Victoria collapsed over the past year – 619. It is not a minor thing that is going on, it is a major thing, with 619 over the past year contributing to the nationwide spike in construction industry insolvencies. The September quarter was the worst for the industry in 2023, when 785 construction businesses traded as insolvent – so they are still working, they are still doing everything but they are trading as insolvent, which you cannot do. We have heard about the Porter Davis debacle and now Montego Homes collapsing, which is tragic not only for the tradies that are working on these homes but also for the people that have the homes.

So we do need to get it right. In moving forward, maybe this is coming to a head where the building industry is knocking on the door of the minister, saying, ‘We have a bigger problem; can we get these amendments in?’ These amendments are a small part of fixing the problem.

Lauren KATHAGE (Yan Yean) (16:07): There is something very exciting about going through a display home. I have a lot of them in my electorate, and I have been through many over the years. There is something about looking to the future, imagining for yourself the type of lights you would choose and maybe the type of patio that you would have, and your mind begins to wander as you dream this vision for yourself, the excitement of it. There are lots of display homes in my area because there are lots of new homes in my area, and the display homes help you turn this vision of a house into a home. It is when all your hard work pays off – because we are talking today about deposits. But really it is a lot more than a deposit. It represents time spent away from your family working extra shifts. It might be no piano lessons for your daughter as you seek to bring the money together or maybe not flying home to visit your family for Christmas or for other holy festivals.

That sacrifice that goes into making a deposit must be honoured and it must be respected, especially because with the cost of living as it is now it is even harder to pull together a deposit. But it is not just in these recent years of higher inflation and harder cost of living. In the 1950s the value of a home was 3½ times the average income. Now it is 7.4 times, so people are having to pay a lot more for homes already. And then over the last 23 years – so since the turn of the century – the value of houses has increased by 6.6 per cent compound annual growth, whereas for wages there has only been 3 per cent growth per year over that same period. So the cost of housing is really getting away from people and away from us compared to what our incomes are.

It is the biggest expense in people’s lives. Considering how hard it is to get that money together, considering how precious the dream of creating a home is, it is terrible when that dream is ripped away, especially if it is done in a way that is unscrupulous or on purpose. How sad that somebody could take that away from a family. As we heard from the member for Morwell and the member for Barwon South, the vast majority of builders do not fall into this category, so this legislation is aimed at those who would seek to take part in that sort of behaviour and at people who under strict liability fail to follow the act as they should.

What this bill does to assist in that is introduce an offence relating to the taking of deposit moneys. We heard previously from the member for Morwell. He was concerned that this is a bit tokenistic because these builders are in liquidation anyway. I am really happy to reassure the member for Morwell that individuals are liable under this act. It is not just the idea of the company but directors as well as individual building practitioners who will be held directly liable for contravention under these offences. It has been an offence under the Building Act 1993 for a builder to carry out actual building work without holding the required insurance. What this does now is make sure that as soon as the funds change hands, as soon as the deposit is paid, there is an offence if insurance is not taken out. The bill strengthens the Victorian Building Authority’s powers and abilities to monitor and address any instances where this has not occurred.

We have got a lot of work ahead of us, because there are a lot of houses that need to be built. I want to go back in time a little bit for why we are doing that. The years I was finishing high school and starting university, 1999 and 2000, were when we saw an action of government – the federal coalition government took decisions at that time, at the turn of the century, that turbocharged demand for housing. They absolutely cooked it. They turbocharged demand for housing without balancing out the scale in terms of supply, and in the 23 years since that turning point the cost of housing has soared. We have seen that an action of government can have a real impact, but that is not a lesson that this government needs to learn.

We are a government of action, which is why we have committed strongly to addressing the supply side of the equation. We have boldly committed to rise to the challenge of building 800,000 homes over the next 10 years. We know that if we are going to build so many houses, we need to make sure that all of the settings and all of the protections and all of the consumer focus is in place to make sure that all of those additional houses that are built are built in the way that the consumer would expect and to the quality that they would expect and that they have protection throughout the process. We are making sure that those houses are where people want to live – that they are close to their families, that they are close to their work – and we want to make sure that we are doing all we can to make sure that they are receiving the product that they are paying for and that unscrupulous builders are not able to take advantage of them.

But as with many of the pieces of legislation debated in this house and introduced by this government, this is one step in a broader reform. As others have said on both sides of the house, there is more to do, and we are absolutely committed to doing more. I recall the story of a woman who was 50, and she thought about studying medicine but she said, ‘Oh, I’ll be 60 by the time I finish, so why would I start?’ And someone said to her, ‘Well, you’ll be 60 anyway.’ So for people saying it is going to be the end of 2024, well, it will be the end of 2024 anyway. Let us just get the work going and done now so that we are in the best place that we can be for Victorians.

The future reforms will be guided by the expert panel that has in fact guided this legislation – and that expert panel was assembled rather swiftly following the collapse of Porter Davis, and everyone knows the terrible impact that that collapse has had, including on people within my electorate. And so that expert panel has been providing a series of updated recommendations to government, and this amendment acts on the first of those recommendations. So as that expert panel continues to provide us with the very best advice on how we can protect Victorians, how we can promote a healthy and fair building industry, we will absolutely take those on board and action them where we can, because we are a government that takes big, chunky problems and makes them better. We are a reforming government, and we recognise that the building legislation from the 1990s needs to be totally addressed. And that is what we are doing, because in every house there is a person and sometimes it is a family, and we want to make sure that for families in Victoria the roof over their head has not cost them all of the money out of their pocket.

Richard RIORDAN (Polwarth) (16:17): I rise too to speak to the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, and the first comment I make on this particular piece of legislation is that the government have had a two-month holiday and they have come back first up to deal with this issue, and it is an important issue. It is an important issue because lots of innocent, hardworking Victorians have paid a big price for the poor management of this important and crucial sector in Victoria. And you would think that in a month where yet another home builder has collapsed in Victoria this government could do better than to bring in a piece of legislation which is essentially waving around a potential solution but having no solution – no solution at all – for those extra families and hardworking Victorians that have been caught up in yet another building collapse through poor management and a government instrumentality in the Victorian Building Authority (VBA), one of whose key jobs is in fact to monitor the behaviour and regulation of things such as keeping proper and accurate and truthful insurance records for customers who pay in good faith many tens of thousands of dollars in deposits.

And it is disappointing to think that this government over the course of the last 12 months have seen fit in some cases to cashflow to bail out builders; we have seen them prepared to come and refund the insurances to others. But most recently and most disappointingly and sadly for people in my own electorate with the recent collapse of Montego Homes, this government has failed to offer a solution to those people, and I would have thought there was a unique and fantastic opportunity for the government to say, ‘We are very serious about the welfare of hardworking Victorians who are investing in new properties, and we will ensure that they in fact can sleep comfortably at night and that this legislation will make a difference.’ And to think that the piece of legislation that is coming in that would hopefully solve the problem into the future is leaving a big window of people high and dry who will go to bed tonight with no confidence that this government is actually caring about them or more importantly taking this issue very seriously.

This bill is designed to help protect consumers from poor practice. The VBA exists to protect consumers from poor practice and poor behaviours. And one of the debates we should be having is: how is it that after a year of cataclysmic building failures in Victoria we can still be here months and months later, outside the windows of opportunity for householders to get some recourse on this, but this government still has not got a system in place that will protect hardworking Victorians?

I want to table for the record the case of Emily from my electorate. Emily is a young woman. She has been working hard and saving like so many other first home buyers. She entered in good faith, back in 2022, a house contract with this particular company. Through no fault of her own she had been contacted on numerous occasions by the builder instructing that she needed to continue with the contract and that she really needed to continue to commit money to this cause. All the while this government had the problem unfold with Porter Davis and other poor Victorians were left in this situation. In the case of Emily, she believed that she had her future house development covered by insurance. She had documentation and certificates to tell her that it was covered by insurance. Yet this government has managed to let, despite everything that happened last year, companies continue to falsely assure their customers that they are insured. Now, all this time later, when the government has actually officially recognised that they had a problem, because they brought this bill to the Parliament, they still have not been prepared to step in and give relief to people like Emily.

Emily signed the contract back in November 2022, and on 17 January this year she was notified, first by the administrators, that she no longer had a deal going because the company was no longer going to go forward. Emily was not overly worried, because she had a contract – she referred to it – clearly stating that she did have insurance, only to find out on 24 January that in fact she had been deceived and that there had never been insurance taken out. This has all occurred under the VBA’s watch. This has occurred after months and months of huge publicity around this issue. Quite frankly, the question has to be asked of the minister and of the government: what have the regulators and what have the government – the people that the people of Victoria have entrusted to make sure this system works – been doing for the last 12 months? Were there no audits undertaken? Was there no inquiry of the various companies that had registered new house buys?

As we know, because of a lack of supply and the building crunch that has occurred, there are projects, as in this case with Emily, with contracts signed in 2022. People have been waiting a long time. These contracts and deals have been in place for many years. What the government is admitting is that with these contracts people have been misled for a very long period of time and that in a year when the government has had to bail out companies, bail out people’s insurance, no-one has sought to do an audit and check-up and see if anyone else is in a terrible pickle or a terrible predicament. It is simply negligent and not good enough of the government.

While the opposition absolutely welcomes the government doing something, this legislation still does not seem to offer the transparency that is obviously required to keep Victorians safe from people who do not do the right thing. For example, Emily, who has now suffered great loss from this failure, in her long letter to me suggests one thing that is apparent to her and would be obvious to anyone looking at this bill: why, for example, is there not a public register where someone can pay a deposit themselves, like we do with rental tenancy bonds, to an independent person so everyone knows it is safe and secure, it is registered, it is there and it is public? This legislation is still relying on the system that has failed Victorians staying in place without due change or proper consideration and without a system that is going to be fully transparent and guarantee new home buyers the security around their home deposit that is so desperately needed in Victoria.

One would want to know why this legislation does not provide for the full disclosure of what the insurance options are for people. As Emily found out too, sadly, in her dealings, the builder just put any old insurance name on it, which turned out to be non-existent or not a bona fide insurer. Is that system still going to be able to continue under this new regulation? There is no point having a system that penalises poor performance after the incident has already happened.

We need a system that is transparent, where at any point in time new home buyers can go online, most likely, and see a public record that assures them that their many tens of thousands of dollars is safe from unscrupulous practice and unscrupulous operators who will seek to take advantage of people. This bill is an important first step, but it is by no means comprehensive enough, and sadly it is really well after the bull has run for the gate for many, many Victorians and most recently of course for Montego Homes people.

I plead with the government on behalf of Emily and others in her cohort. This government, by the fact that this bill has come before the Parliament today, are accepting that there has been a problem, and it is unconscionable that in accepting that there has been a problem, brought about by a lack of proper regulation and management by this government, they are then prepared to not continue to support innocent young Victorians who have made that big leap into first home ownership who have sadly fallen between when the government finished its scheme with Porter Davis and when the effect of this bill comes in. Sadly this bill will not deliver relief to Emily. It will answer one of her queries, and that query of course is her concern that she never wants this to happen to anyone else. That may help. But unfortunately people like Emily and others into the future will not know whether this bill helps them until after they have had the crisis. We need a legislative framework and we need changes to this particular problem that are far more transparent, far more easily accessible to people making the investment in their first homes.

While the opposition and I welcome the fact that we are at least accepting there is a problem and trying to do something better about it, so much more needs to be done. There needs to be greater focus on this problem, and I would urge the government as this bill passes through Parliament to put thought to how people in Montego Homes and others can be supported by this government and given a fair deal like other Victorians have had.

Nina TAYLOR (Albert Park) (16:27): I think in this context I consider it to be an issue of trust – trust in services being delivered, of course moneys that are transacted being respected, and being able to see an outcome as a result of the transactions that have taken place. Of course it can be, as we have seen, absolutely devastating when that trust is fundamentally undermined – devastating emotionally but also financially. I was reflecting even on my parents, who have had renovations at different times in the past as I was growing up. Thankfully, at least with the first two renovations, the builder that we relied on was trustworthy and was able to deliver a really quality product. I remember you go through a lot of hard work getting from the beginning to drawing up the plans and delivering the particular build and all the sacrifices you make financially and otherwise and the inconvenience along the way, but thankfully, as a result of that trust being honoured, they were able to have those renovations delivered. On the other hand, of course, and particularly what is the subject matter of this debate today, we have seen where that trust has been dreadfully traversed, to say the least, and I know we have been reflecting throughout the past hour or two on the devastating consequences.

I did hear the member for Berwick saying, ‘Well, they’re not dodgy, it’s just poor management,’ and I do wonder what signal that sends when you are sort of flurrying in different spaces about what bar is acceptable or not acceptable. I think actually for the benefit of the debate and perhaps for those who may be taking note of what is discussed today it might be better just to speak to more the specific problems that we are addressing rather than perhaps lowering or wavering that bar – just an observation from when I heard that particular point being made in the chamber.

If we are talking about the problem which this bill is seeking to address, the bill responds to the collapse of Porter Davis Homes Group last year, when more than 500 home owners or prospective home owners were at risk of losing their entire deposit due to the failure of Porter Davis Homes to take out the required builders insurance. Problem – okay, so that is clearly and specifically identified. What is the remedy? This bill will give the Victorian Building Authority stronger powers to take action against builders who accept deposit money without first taking out the required insurance. Very clearly we can see the identified problem that this bill is targeting and the solution it is offering.

I know that there has been a sort of repetitious argument run in the chamber by the opposition that this bill does not go far enough and whatever else, and it is a little bit confusing because on the other hand they are saying they want to pass a reasoned amendment, which would of course delay the passage of the bill. There are very confusing positions being taken by those opposite: ‘Yes, it’s good you’re taking action, but please delay the bill.’ I would suggest that rather than fulfilling the request of the opposition that we agree to the reasoned amendment, which would have the net effect of delaying the bill, let us get this reform through. It is not precluding the work that is underway, the review that is underway, to bring about more reforms in this space, much-needed reforms. I do not think you can have it both ways, and I think they are just sort of –

Steve Dimopoulos: They always want to have it both ways.

Nina TAYLOR: They do. I think it is a little opportunistic on their part, and I am not sure –

A member interjected.

Nina TAYLOR: It is cynical. The other part that I think is concerning is that it could be alarming for consumers. They could be wondering why we are passing a bill if it is not going to have a benefit, when we have clearly identified the problem and what the bill is seeking to resolve. Let us get on with it. Let us pass the bill. I do not see the point in holding back a reform simply for the point of raising some sort of opportunistic argument for the sake of this debate. If we truly want to respect Victorian consumers, then we should move ahead with this reform and at the same time acknowledge that there is good work well underway right now, excellent work underway. We are not saying ‘Pass this bill and job done. That’s the end of the matter.’ Not at all.

In fact I was just going to list some of the other issues that have been identified. The collapse of the Porter Davis Homes Group revealed a practice of some builders using multiple agreements, often avoiding the threshold for the requirement to obtain domestic building insurance policies. That is another problem identified. Further work is underway, as I was saying, right now as part of a review of the Domestic Building Contracts Act 1995 to explore further legislative options to address this issue. The review will also consider related issues, including whether there should be any changes to monetary thresholds for deposits, the definition of ‘domestic building work’ and progress payments at various stages of a construction contract.

Above all else, this bill is the first in a suite of reforms to deliver stronger protections to Victorians building or renovating their home. Rather than sending a signal that we should just delay this bill and wait, wait, wait, wait, wait until we have whatever it is that they are proposing, we are very clearly here and now putting forward a very important reform, and we have very specifically identified further problems. The necessary work is being done right now, and it is being guided by an expert panel to ensure that consumers are at the heart of the changes being undertaken now and into the future. We know, as we have discussed, the devastating impact when things go wrong. It can go, as we know, horribly wrong for those who have put their hard-earned money, their savings and their dreams into a home of the future.

There was another point I wanted to make about the fact that directors as well as individual building practitioners will be able to be held directly liable for contravention of the offences introduced in the bill even if the company itself has entered into liquidation. I know there was some discussion about that point here, and I just want to emphasise that it has been factored into the reforms being undertaken.

There was another point I did want to make with regard to concerns that the opposition have made about ‘Oh no, we must not pass this reform; we need the reasoned amendment so we can delay the passage of the bill.’ Well, the opposition delayed measures to strengthen oversight in the building industry by opposing the Building, Planning and Heritage Legislation Amendment (Administration and Other Matters) Bill 2022 prior to the last election. So being consistent in this space is really important, particularly when we want Victorian consumers to have confidence in how this industry is being reformed now and into the future when they put their hard-earned savings into a respective investment, whether it be a home or otherwise. I think that the opposition might want to have a more consistent position because I am seeing a lot of positions – very many positions on this particular element of reform – and I think ‘Come on this journey’ rather than delaying Parliament with regard to the passage of this bill. It seems nothing more than an opportunistic element at best in order to undermine the significance of the reforms being undertaken, when we can see very precisely that a rather massive problem has been very thoroughly investigated and identified and a specific solution has been put forward here for us to pass for the betterment of the Victorian community. I think that is the right and proper thing to do.

Finally – I think I can just get it in here – Anna Cronin, the former Better Regulation Victoria commissioner, was appointed as the new CEO of the VBA in 2023 to lead a refresh of the regulator, driving improved culture and performance. So I hope that acquits some of the concerns of the opposition. I would hope that they would not have an issue with the work that she is undertaking as we speak, because I think that is highly relevant in the context of this debate as well.

Brad ROWSWELL (Sandringham) (16:37): I also rise to address the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, and in doing so I acknowledge the contribution of the coalition’s lead speaker the member for Brighton, who as Shadow Minister for Planning has taken charge on this particular bill on behalf of the coalition and has done a power of work to work through the detail within it.

I start with this: Victoria at the moment is in the middle of a housing crisis. We are in the middle of a housing affordability crisis. We are in the middle of a rental availability crisis. And the government’s response to this is to tax Victorians more and to make home ownership more difficult, more out of reach than it ever has been before in this state. Labor are determined to turn the great Australian dream of owning your own home into the great nightmare for many thousands of Victorians – Victorian families, Victorian singles, some of our most vulnerable Victorians. And here is the bottom line: Labor’s tax introduced during the last budget, which came into effect on 1 January this year – Labor’s rent tax – is putting the availability of a home, a rental property, further and further out of reach for some of Victoria’s most vulnerable families. Those who are impacted by Labor’s housing taxes are not necessarily the rich and the famous – those people who can afford a second or a third property on the cliffside of some very well known locations around the bay. Some of these people who rely upon the roof over their head of a second property that is owned by a mum-and-dad investor may be vulnerable Victorians fleeing domestic violence, needing the safety and security of a roof over their head to get back on their feet, to re-establish themselves perhaps in a new community and to be a net contributor to our state. I contend that adding greater barriers to rental availability, to housing affordability, as this Labor government has done over the last 10 years, is putting that great Australian dream further and further out of reach.

We know the origins of this bill. We know that the origins of this bill come from the collapse of Porter Davis during the course of last year. We know that since the collapse of that construction company there have been many others who have gone under, many others who are building homes for Victorians – families, singles and others – who have gone under. We know just recently that Montego Homes has affected some 60 families, leaving dozens of families without domestic building insurance taken out on their behalf. Just like Porter Davis, this is yet another example, in my view, of the Allan government failing to ensure builders are taking out appropriate insurance on behalf of new home owners. We knew the problems at Porter Davis. We saw the tragedy of the collapse of Porter Davis and the way that it affected our Victorian community and since then what has been done to ensure that with further collapses Victorians will not be impacted in the same way that those families were in the first place, which is why it is entirely appropriate for the opposition – Victoria’s alternative government ‍– to be calling for the government to extend the same scheme that was extended to those victims of the Porter Davis collapse to the victims of Montego Homes and others who have collapsed since. I think that is entirely appropriate.

I want to be very clear, because if we are going to solve the housing crisis in this state, we cannot be simply demonising one against the other. We cannot be playing personality politics. We cannot be playing one part of the system against the other. What we do need is for everyone to be working together. We need the government to be working together with those who need housing, those who create housing, those who develop housing, those who build housing, those who sell housing, those who develop in small amounts and those who develop in large amounts. Simply demonising those who bring more stock to market, I think, is a terrible, terrible thing. Those are the people who the Victorian government need to be partnering with in order to help solve the housing crisis that Victoria is currently in. So demonising those in the building industry, in the construction industry and in the development industry is simply wrong – demonising those mum-and-dad investors who have made through the freedom of their own actions and the freedom of their own choices the decision to invest in a second property, perhaps a third, in place of other investments. A lot of these mums and dads, as well, are not the rich and famous. These people are on modest incomes. They are making a choice out of their own free will to invest in a second property to offer another Victorian an opportunity to have a roof over their head and all of those things that come with it – the safety and security of having a roof over your head and the opportunity to build from that roof that is over your head and create better outcomes for yourself, for your family and for your broader community. And this Labor government seems intent on putting that further and further from reach for many, many Victorians.

Some statistics that I was looking at just recently are absolutely and utterly staggering. We all know in this place that Victoria, Australia and some parts of the world in fact are under a cost-of-living crisis. That is absolutely true especially here in Victoria, where the median rent has risen by 550 bucks a week – a 17 per cent increase in the last 12 months alone. You add a rental increase to a school fee increase to a grocery bill increase to the cost of putting clothes on your back, the cost of putting food on the table, the cost of energy – a 25 per cent increase in energy costs in the last 12 months – and the cost of kids’ sport, and some very basic things very quickly become out of reach for many, many Victorians who are doing their best to try and make ends meet.

Rental vacancies are at an all-time low in Victoria. In December last year – absolutely staggering – in the Geelong region there was but one property available for rent. In the Geelong region in December 2023 – but one property available for rent. Geelong is a growing region of our great state. It needs investment. It needs certainty. It needs government to get out of its way. It needs government not to be taxing mum-and-dad investors and not to be making it harder for those that bring stock to market to help solve the housing affordability crisis and the rental availability crisis that we are in at the moment. It needs government to get out of its way and for industry and Victorians to do what they do best – and that is a lot better than what this government is currently doing.

I also support wholeheartedly the member for Brighton’s reasoned amendment:

That all the words after ‘That’ be omitted and replaced with the words ‘this house refuses to read this bill a second time until the government commits to comprehensively protect victims and their families from rogue behaviour from a small minority of dodgy builders and the potential loss of their deposit if a building company collapses’.

Unlike the previous Labor speaker, who contended that the member for Brighton’s reasoned amendment was a political delaying tactic – far from it – we believe that this bill, although it is a step in the right direction, does not go far enough. It does not give the Victorian people – nor the opposition and the people of this great state that we represent in this place – the assurance that we need that this will not happen again. I do not say that lightly. Look at this government’s history. They knew that there was an issue with Porter Davis. There were victims that came out of that, and all this time on – after collapse after collapse after collapse – we are still in a very similar position to where we were previously. Again, Labor is turning the great Australian dream of owning your own home into a great Australian nightmare, because the system is broken, and frankly, we do not trust them to fix it.

Steve McGHIE (Melton) (16:47): Deputy Speaker, nice to see you in the new year, so welcome back – and everyone else. I rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. I would like to start by acknowledging the work of the Minister for Planning and her office and her team, and of course all the stakeholders that have been included in this bill – that is the Housing Industry Association, the Master Builders Association of Victoria, the Urban Development Institute of Australia and the Victorian Building Authority. I offer my congratulations to Anna Cronin as the newly appointed CEO of the VBA, and I wish her well in improving the VBA and its regulation of this industry. Certainly things need to improve.

This bill will amend the Domestic Building Contracts Act 1995 and the Building Act 1993 to make sure builders are covered by domestic building insurance, as well as enabling the Victorian Building Authority to be the lead regulator to ensure that builders comply with this insurance requirement. This is just the first in a series of reforms to better protect consumers who are building or renovating their homes. Certainly we have seen examples that have been highlighted today of why the consumers need that protection, in particular the reference to the Porter Davis situation. People save for many, many years to get to the point of putting a deposit on building a new home, and if things go wrong – and certainly at times things do go wrong – it becomes quite devastating for those consumers.

We definitely have a substantial amount of work to do. As I said, this is just the first reform and there are many more to come, and this will be part of a total package. Putting into place safeguards and protections is important work, and I want to thank the minister and her team again for the substantial amount of work that they have done and have yet to do with the other bills that will come forward. Of course this is not a complicated business, and to put it simply, builders just need to take out the domestic building insurance or they will face some penalties – it is simple as that. I have got to say this has been a growing problem. I know many speakers have said there are some fantastic builders out there and this is only a minority of builders that act in this way and do not take the insurances out. But I have got to say, in my experience in my electorate – one of the fastest growing electorates in the state – the dodgy builders are more prevalent than the great builders.

I have seen many, many examples in my electorate, and I have got to say it appears to me that the dodgy builders are doing this just based on total greed. They think they can build houses and pump houses out very quickly – I will not say cheaply. They sign up people. They deliver the end product with many, many defects. They think they are untouchable. They use unlicensed and unregistered tradies. They do not care about the dispute process, and they just sit on their hands and basically bat consumers away. You can go through the dispute process and try and resolve it through Domestic Building Dispute Resolution Victoria, and if it cannot be resolved, then the punters are off to VCAT. It takes a long time to get into VCAT to try and get your building dispute resolved, and it costs a hell of a lot of money – engineer reports, legal representation. And in a lot of cases the consumer cannot afford those things. Sometimes there have been offers of resolution even at conciliation, and then the builder is not coming forward with the final resolution to the dispute. In one particular case that I have got in my electorate the physical and mental anguish that it caused to this particular consumer actually put her life at risk. That is how damaging it can be with your life savings going into building a new home, and then you get a dodgy builder taking for granted that they can take advantage of you and thinking that they can get away with it.

I think this bill is really important in regard to the insurance, and at least the consumer can have some confidence that things are being done by this government. Again as I say, this is only one measure of trying to improve things, but there is a lot more to do. Of course the collapse of the Porter Davis group ‍– we all know, and it has been spoken about before – led about 560 of their customers with homes that were not even under construction to learn that they had not taken out the domestic building insurance for their contracts. There have been other builders that have collapsed since Porter Davis – Snowdons and Hallbury Homes. They also did not obtain the domestic building insurance to protect their customers’ deposits. Of course, this insurance is mandatory for contracts where the contract price for domestic building work is over $16,000, and it provides protection to home owners in the event that their building project cannot be completed or has defective works which cannot be rectified by their builder. In some cases, even if it could be rectified by the builder, would you really want them to repair the damage that they have created or the defects that they have caused? I think I would be looking for someone of better quality. But that is even more difficult, because who takes on these defective builds?

In April last year we compensated the Porter Davis customers without domestic building insurance for their lost deposits, and in July last year we set up the liquidated builders customer support payment scheme to support customers of other builders who had not obtained domestic building insurance and whose businesses collapsed between 1 July 2022 and 30 June 2023. Of course the Allan Labor government is always willing to help out Victorians in any way we can, and we would not have needed these payment schemes if these builders had taken out domestic building insurance. Again I come back to the point about the dodgy builders. The reason why they do not take out this insurance is they do not want to pay the money. It is all based on them making profits and probably in a way scamming the consumers and dragging money out of their pockets to fill the builders’ pockets and not delivering a good product.

So of course out of this bill there will be two new offences which will apply if a builder enters into an insurable major domestic building contract and if the builder receives money from or on behalf of the building owner before holding the required insurance. There are two different penalty levels that apply based on the seriousness of the conduct, with the higher penalty to be applied if the offence is committed knowingly or recklessly and the lower penalty to apply when the offence is committed even if there was no intention to commit it. Of course if they do commit these offences, they could face a fine of up to 500 penalty units, which is around $96,000, with fines of up to 2500 penalty units, or approximately $480,000, for body corporates.

I am sure everyone is sick of me talking about dodgy developers, which I have done in the past, but in some cases, in particular in fast-growing electorates like the Meltons, the Wyndhams, the Tarneits and areas like that and even in the northern suburbs and the southern areas down Cranbourne way – Clyde and all those areas – a lot of these developers have got a lot to answer to: signing people up to deals with builders that they use knowing that they may be using unlicensed and unregistered tradies and doing it on the cheap trying to make massive profits and that in the end collapse and unfortunately are not covered by insurance.

I want to make reference to – and I have only got a short time – the Melton TAFE. That is being set up primarily to provide construction-trained workers. I am talking about up to 600 construction-trained workers out of the Melton TAFE. That is also an assistance going forward. It is about training people appropriately, and they will be proud of what they do within the construction and building industry and they will be proud of the products that they deliver. Hopefully part of that will be not ripping people off. That is the key issue: avoid the greed. This is a very important bill, and I commend it to the house.

Annabelle CLEELAND (Euroa) (16:57): I rise today to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, a bill that we do not oppose. The bill was introduced as part of a response to the collapse of Porter Davis Homes and dozens of other domestic builders in Victoria. Just last month we saw another Victorian building company, Montego Homes, collapse. More than 60 buyers who paid deposits to Montego Homes have been left without domestic building insurance, and the earlier state government support program deal to deal with the fallout of collapsed builders has just ended. Sadly, with many of these businesses going under, it is the consumer, the everyday Victorian, that has been left in financial pain. Among these are retirees, young families and more who have parted with their life savings, all trying to achieve something that has, sadly, become increasingly difficult in this state – that is, buying a house and owning a home.

So far we have not seen this Labor government do enough to support those suffering at the hands of collapsed building companies, because when things do go wrong it is devastating for the people impacted and can ruin their financial position forever. More needs to be done to stand up to the rogue behaviour of these companies and how they have financially ruined so many families, couples and individuals because of the lack of consumer protection.

While the bill works towards addressing these concerns with intentions to increase consumer protections against poor practices within the residential construction sector, one of the poor practices considered in this bill is builders failing to obtain domestic building insurance before accepting deposits on any major domestic building contract. This is something that was seen with more than 60 Montego Homes purchasers, over 560 at Porter Davis and many more across other failed building companies in Victoria. So far some consumers have been able to receive deposits back, but not without suffering from a strenuous and often unfair insurance process. Claims have been refused, reduced and stretched out across time, with many consumers receiving insulting quotes and facing increased out-of-pocket expenses. Mandating this insurance will be done through this bill by amending the Domestic Building Contracts Act 1995 and the Building Act 1993.

New offences will be inserted into the Domestic Building Contracts Act 1995 for situations where a builder demands or receives money under a major domestic building contract when the builder has not made sure the domestic building work to be carried out under the contract is covered by insurance. This means that builders may be liable to penalties for domestic building contracts undertaken without insurance. The amendments also make other consequential changes to the existing legislation. The bill provides information about how and when investigation and enforcement powers may be exercised, as well as detailing how and when proceedings may be commenced. Amendments also note that builders who are found guilty of contravening certain offences under the Domestic Building Contracts Act 1995 may become ineligible for registration for a period of time. Lastly, there are a series of administrative changes to update terminology and definitions throughout the bill, including the definition of ‘builder’ and ‘major domestic building contract’ in the bill.

This is not the only bill that has been introduced in recent times to address concerns about our state’s building industry. Last year the Victoria Parliament passed the Building Legislation Amendment Bill 2023, which implemented recommendations of an expert panel’s review and report into Victoria’s building industry. This report focused on practitioner registration, building approvals, regulatory oversight and consumer protection. The report set out 14 recommendations to enhance accountability, including to developers; to improve dispute resolution and prevention; to increase compliance and enforcement; and to improve insurance coverage in the domestic construction industry. While this bill certainly leaves a lot to be desired, it takes some steps in the right direction to resolve this ongoing issue that is impacting so many Victorians.

The two primary concerns I have with this bill are that I do not believe it goes far enough to protect Victorian consumers from the damage caused by those failing to uphold the necessary standards within the building industry and, secondly, it does not act fast or efficiently enough. I do want to commend the member for Brighton for addressing these concerns in the reasoned amendment to this bill. The limited scope of this bill revolves around how it only legislates in areas regarding insurance, which many industry stakeholders, such as Master Builders Victoria, claim does not address the many concerns about the current state of the act. In our consultation with Master Builders Victoria there were calls for a thorough review of the act to better protect all parties and support the industry to deliver homes for Victorians. They stated the act needs to be improved and requires further clarity for industry around who is captured by the penalties and to clarify basic amended definitions, including ‘builder’. Many businesses and consumers have noted that the act is out of date and is no longer fit for purpose to suit current building practices. This bill also introduces concerns over the Victorian Building Authority’s investigative powers. Under the bill the VBA has explicit powers to enforce disciplinary actions against builders who breach their responsibilities under the Building Act 1993 and the Domestic Building Contracts Act 1995. Consultation with those in the industry has also revealed that there remains some confusion around the different levels of disciplinary action to be taken against builders found in breach of the act. This may cause significant challenges with the execution of amended and inserted provisions outlined in this bill.

Like with all legislation being introduced, there is also a key need to ensure sufficient community knowledge to make sure those in the industry understand the new obligations outlined in this bill. Questions remain over how the government intends to ensure that both the building industry and consumers are aware of changes to this act. This may pose issues regarding implementation – something that could occur with the proposed changes to the definitions of the word ‘builder’. The proposed changes to the definitions, specifically the definition of ‘builder’ to exclude the explicit mention of managing or arranging directors, may lead to confusion regarding builder obligations. This bill, just like the existing acts, has failed to sufficiently define who is a competent builder. No sufficient registry is maintained of builders with adverse findings against them in builders warranty insurance claims. There also is no registry for individuals purporting to be builders who have breached the Building Act 1993, the Domestic Building Contracts Act 1995 as well as acts including the Crimes Act 1958 and other criminal acts and codes.

The opposition’s consultation for this bill has been extensive, with peak bodies, industry professionals and other stakeholders within the building and contraction sector all met with. The opinion shared by all of these groups has been resounding: as it stands this bill does not fix the current issues within the system. Master Builders Victoria recommend first reviewing the Domestic Building Contracts Act 1995 as a whole, prior to some of the amendments in this bill and the offences it will impose. MBV also states quite clearly that both industry and consumers have indicated that the act is out of date and no longer aligns with contemporary building practices. They have also requested further clarity around the application of the new clauses, specifically that there is a need to determine whether the clauses extend to preliminary agreements or holding deposits paid before the formal signing of an actual domestic building contract.

They have also called for reviews into domestic building insurance as a whole and the process involved with it, as well as raising concerns over the loose definitions given. The Association of Consulting Architects also has concerns with the definition of a registered builder, among other things. I look forward to the additional bills to come that will address the broad issues within our construction and building industry, particularly improvements to the consumer experience within the building and construction industry as well as the potential of addressing planning concerns at a local government level.

With increasing cost-of-living pressures and a rise in homelessness, it is essential that this government oversees a system that ensures Victorians can safely build homes without the risk of business collapse. While there have been some builders doing the wrong thing, there are several more that have not. In my electorate our local developers, prospective consumers looking to buy a home and construction companies have raised several concerns about roadblocks within the system. Developers in towns like Euroa and Benalla have shared their concerns about the planning capabilities of local councils, with many dealing with permit delays, a lack of transparency and difficulty in receiving council approval. Some of these concerns have pushed developers out of certain regional communities, preventing much-needed development in these towns.

Last year I called on the Minister for Planning to introduce a planning squad that could help relieve some of the pressures that our local councils are facing when it comes to approving developments and construction of residential projects. These developers are not asking to build massive mansions or shopping centres. Most of these projects are for modestly sized residential options that are desperately needed through these communities. We are currently in the middle of a housing crisis, particularly in regional areas, and we must look at ways to increase the opportunity for more affordable options in our communities. Over the last year the Strathbogie shire, within the Euroa electorate, saw the largest rise in median rental prices across the entire state, up 19.1 per cent to $420 a week. While this bill still has issues and could certainly do more, it is generally a step in the right direction.

Tim RICHARDSON (Mordialloc) (17:07): It is a pleasure to rise and speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023 – and what an important piece of legislation to come forward after some of the significant concerns that were raised in our communities with the collapse of Porter Davis Homes in 2023 and ongoing concerns around building standards and outcomes.

I wanted to share with the house in my contribution a lived experience out in my community, like so many have – examples of residents, many of whom are first home buyers or first-time families, who are trying to make a go at home ownership in their communities and have that uncertainty and vulnerability that the biggest asset they will take on in their lives has such uncertainty and brings so much stress, anguish and mental health impacts as well.

Before I do that, I find this a bit of a perplexing position that has been taken in this house where the coalition are in support of the bill but have put forward a reasoned amendment. Now, last time I checked, that is not supporting the bill, to have a reasoned amendment. Maybe it is a half-reasoned amendment or an unreasonable amendment – who knows what it is. I was hoping for a bit more depth to their contributions this time, but it sounds like it is a bit more of the same. Rather than having a legislative reform agenda and talking more practically, just use reasoned amendments to push things off into the never-never again and delay important legislative reforms that will bring protections to Victorians.

I note the contribution of the Shadow Minister for Finance, the member for Kew. Who could forget that first speech, where it was the market-based mechanisms – that was it, small government. I thought it was a libertarian-type speech that was made at the time – just step back and just let the markets go. But the member for Kew and her colleagues are some of the biggest champions now of government policy intervention. I am just thinking, ‘Is that small L coming through? Is that a bit trendy with the teals coming through now? Or is it a bit of a Labor vibe, that the government stepping in to support their communities, to support vulnerable Victorians, is actually the point of us rocking up in government?’ I am really happy that in the good year and a half that the member for Kew has been here those free-market principles of just letting everything go – imagine if we just let the markets go in the building industry. Forget the Victorian Building Authority, forget the legislative reform program here – just see what happens, off it goes. I am glad they have come to their senses and they want more protections, more interventions.

The member for Malvern is up and about. Look at that blue tie, look at it. He is just the style guide. Both the member for Kew and the member for Malvern – blue style guide. Not sending any signals, are we? No. Looking fantastic today.

This bill is a really critical part of our whole building and legislative reform, because the Minister for Planning and my great colleague on the Frankston train line is leading a power of work in the planning and building space. The legislative reforms and building and policy work that the Minister for Planning will do will set up our Victorians for the future. This will have generational significance: 800,000 ‍homes over the decade – such transformational reforms – the rebuilding of substantial public and affordable housing assets to make sure that more Victorians have a roof over their head. What could be more powerful, what could be more impactful, than the Allan Labor government’s contribution in this space?

Home ownership and affordability is trailing off into the future. We see in some areas the median income for people to access the housing market is getting into the hundreds of thousands. Kids are literally being priced out of the suburbs that they have lived in and grown up in. They do not have an option but to move further out. Growth corridors are bursting at the seams, and PSPs – precinct structure plans – are under pressure. We need to be aware of those challenges, and the Minister for Planning has fronted up with a really concise and important reform agenda that looks to pump out more growth in infill areas but also provide important protections, because when we enhance and increase the building and development outcomes, we need to make sure that every single individual is protected and has that assurance.

I said before that we had a similar lived experience in our local community. We have seen this troubling example where developers, builders, take deposits and hold onto them for years and there is just radio silence or the council becomes basically the scapegoat for any sort of challenges or issues. We had a development on Sixth Avenue, Chelsea Heights, that was to get underway in early 2021, and only just recently deposits were returned to residents, at the end of 2023. Many of those residents were renting at the time, fronted up to their banks, got guarantees from their family members or had higher interest rates to get access to their deposits – they took on risk and were basically paying those rates as well as paying for rentals in a really squeezed market environment. That uncertainty went on for years, and it was not until the council’s intervention, and ours, that we got answers and held them to account. Facebook posts that were put out to Chelsea Heights residents saying ‘It’s coming soon’ were done for 36 months.

Some of the anxiety, some of the mental health and wellbeing impact and the stress that those families faced in an already significant cost-of-living crisis with interest rates where they were was despicable, and they knew. We called them out that the information that they were sharing just did not stack up. The council’s briefing of residents and the collaboration of residents to share their information and know that it just was not true exposed this for what it was. Then suddenly, without any warning, they returned deposits – not with interest earned. They could have had some kind of bank interest returned or held onto that deposit or released those funds to buy into the Kingston or Greater Dandenong region within that period of time. They could see their aspiration going away, and that is a big concern where we have developers or builders that take those funds and then hold onto them and do not act upon them.

One of the biggest challenges in this space is how we get more to market at the price point rather than saying you can buy it back at market rate now for an extra $200,000, and good luck to you in an already significant affordability challenged environment as well. Median home ownership is getting more and more towards the late 30s. You will find more people in their early 40s now that are first home owner grant recipients than people in their 20s. We are at a point where we really need to act within our infill council areas and really pump up affordable housing and make sure that we are supporting people into the future.

It is why the opposition to the Suburban Rail Loop does not make any sense, because the catalyst for that reform, the catalyst for that build that has been taken significantly to two elections, is the catalyst for that development and that discussion. That corridor will transform the end that I am at with the member for Bentleigh and the member for Clarinda. The Cheltenham end and the Highett end will transform over that time. Kingston council for a decade has got the community ready.

When I first started as a member of Parliament, we had a lot of opposition to any sort of development around the Cheltenham and Mentone areas. People get that now because there has been a long consultative journey, and they know that their kids and our community will be priced out. They will not have an option. But my community is quite unique, where you have got Chelsea through to Parkdale and into Keysborough South. When the Suburban Rail Loop comes online kids will not be priced out and go towards the south or to growth corridors; they will go north toward the Suburban Rail Loop corridor where they will get their first go in affordable housing around Cheltenham and around Moorabbin, which is one of the dedicated precinct areas, rather than just going out kilometres and kilometres. I grew up in a growth corridor out in Berwick and through Beaconsfield and absolutely loved those communities through there, but for people in that Frankston train line area that community is a lot further on. It is not connected to where they are, where they have gone to school, where they have grown up and where they have spent their time. So we need some nuance in that, where we have infill council area discussions, where our councils are empowered to make those decisions and where we have the protection for our residents as well and they can get the confidence that the buildings that are being put forward are of the highest quality.

Just going back one step, when people criticise this government for the planning reforms they put in, who was the government that brought forward those apartment standards and changes? It was our government. It was a Labor government under the leadership of Richard Wynne, the planning minister. I mean, the previous government had planning reforms where you would have borrowed light – so a few mirrors might get you a few bits of light so that you might see sunlight, which was seen to be acceptable – or really warped triangular apartment styles, so you got the last bit of affordability that was a horrid type of construction on the end floor. That was the standard. You might get it for $500,000 or $600,000, and that was the standard put forward. Some of those planning reforms and building reforms go to the heart of the values that underpin this housing statement. It is not just like ‘Here, it’s come through’ and we have just acted. We have had a journey – residential tenancy reforms, supporting renters, giving them more certainty and more support. We have a track record of being on the side of people wanting to go after home ownership who are renting, who need that affordability, and this is just another part of this journey into the future. So this bill is a great first step in a huge legislative program of reform, and I commend it to the house.

Chris CREWTHER (Mornington) (17:17): I rise today to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, a bill which amends the Domestic Building Contracts Act 1995 to add two new offences, namely section 43B(1), which stipulates that it is an offence for a builder to demand or receive money for a major domestic building contract where they know or are reckless as to whether the domestic building work is covered by insurance, and section 43B(2), which provides that it is an offence if a builder who has a contract for a major domestic building project requests or receives money from the home owner if the builder has not arranged the necessary domestic building insurance for the project. There are also administrative changes made by this bill.

Much of these changes come after the Porter Davis Homes collapse, a shock which caused Victorian individuals, couples and families great pain and uncertainty. While the bill intends to increase consumer protections against poor practices within the residential construction sector, there are several areas of concern outlined by stakeholders. While we are not opposing this bill, given it does do something, the vast majority of stakeholders have contended that, as it stands, the bill does not fix the problem or does not do enough. For instance, the bill seeks to legislate only around insurance, which those like Master Builders Victoria state does not address the ‘many concerns about the current state of the act’. In its consultation with us, MBV called for a thorough review of the act to ‘better protect all parties and support the industry to deliver homes for Victorians’.

Also, the proposed changes to definitions, including the definition of ‘builder’, exclude the explicit mention of managing or arranging directors, which may lead to confusion regarding builder obligations. This bill and existing acts fail to define sufficiently who is a competent builder or any statutory performance monitoring.

Bill feedback has revolved around the following concerns: the lacklustre definition of ‘builder’; a prioritisation of reviewing the Domestic Building Contracts Act 1995 as a whole; that the current structure of domestic building insurance is not conducive to trade and smaller scale projects and not fit for purpose; that the definitions and requirements under sections 135 and 137AA do not sufficiently describe domestic building insurance coverage; and that the Victorian Building Authority, despite having expanded powers, does not have the capacity or expertise necessary to cover the workload required of an authorised person described in clause 11 and that this should be extended to industry professionals with a capacity to act independently for owners. The government must respond to this feedback, starting by supporting the reasoned amendment brought by the member for Brighton.

Within the remit of this bill I want to now discuss the dire circumstances of the owners and residents of 33 apartments at 5 Culcairn Drive in Frankston South. I started helping these residents when I was the MP for Dunkley in late 2018, early 2019, and continued even when I was not an MP, and then again since I became the MP for Mornington in 2022. While the building and home owners do not fall within my electorate, I am compelled upon humanitarian grounds to assist in one of the worst injustices I have seen. Thirteen days before Christmas in 2018 the 33 owners at Culcairn Drive, which was only a few years old at the time, were informed that their apartments had fatal cladding issues posing a ‘danger to life’ arising out of the condition of the building. Further, the building contained many defects, including balcony collapses, significant cracking, water leaks rotting out carpets and wall linings, mushrooms and black mould growing at an alarming rate, a collapsing underground car park that residents could not park in and more. The owners learned that they would have to foot the bill for the building works, which were initially approximately $150,000 but have now stretched into millions of dollars that residents cannot afford.

When I was first approached by owners, the serious failures by government departments were obvious, and VBA responded to residents, claiming insufficient grounds to pursue the issue further. This response was given, I understand, without any site visits or credible investigations and despite the builder previously having been fined on multiple occasions dating back to 1998. In 2019 I got the then state shadow minister involved, and the disaster was publicised in national media including the ABC, Herald Sun, Age, Channel 9 news and The Project. The builder in the media then said he would get it fixed, but he did not do much at all – words to appease the media. The builder did eventually do some minor repairs. But these were also substandard, and none of the issues of significance were rectified.

On 1 March last year Kerry Ould, one of the building owners, came to me, as she had tried everywhere seeking help, and provided me with a full updated history of the ordeals owners had been through since 2019. After the media coverage in 2019 Ms Ould noted that the owners and residents had met with the Minister for Planning at the time, Richard Wynne, when Cladding Safety Victoria was established. Shortly afterwards they were informed that they would be provided with financial support to fully cover the cost of cladding removal and rectification, but this is only a small part of the cost that they are facing.

A fortnight ago today the Shadow Minister for Planning, the member for Brighton, came out with me to see the apartments in person. He was equally shocked. We met with not only owners and residents from Culcairn Drive but also owners from another disastrous apartment build by the same dodgy builder in Noble Park, who also has two more dodgy builds in Dandenong, plus an owner from a Shangri-La build in Caulfield. We looked through the apartments again. It is worse now than in 2019, with water coming up through the tiles, cracks and unaligned doors and windows. We went into one property owned by an older gent. Even before entering in the stairwell the mould smell was rank. Inside his home the mould smell was even worse. His bedroom had been ripped apart. The balcony was inundated with water and on the verge of collapse. He was rotating between sleeping on his lounge room couch and a caravan. We heard about the worsening mental health issues with owners and residents across these builds. Residents have gone, and are going, bankrupt. One has suicided. They have had health impacts. Children have been impacted.

It is so wrong, and it is so wrong that injustice has prevailed for these owners that I am naming these builders under parliamentary privilege, which I know puts me at risk but is the right thing to do. The builder of 5 Culcairn Drive is Emad Farag of 4S Constructions. After the media coverage in 2019 he had his licence suspended. He has since had his licence revoked; however, he continues to effectively operate via his son, who has a licence with current active projects. Emad’s loss of licence relates to many issues across multiple projects and comes after decades and tens of thousands of dollars of fines issued to Farag since 1998 – fines that mean nothing, given greater cost savings by cutting corners. In 2019 Emad publicly admitted that:

I’ve been in the business since 1991, with the same company 4S Constructions, and definitely during that journey, I’ve done mistakes …

Farag has not learned from his mistakes, recently finding himself in hot water with Greater Dandenong Council for failing to fix a litany of alleged fire safety risks at a development at 229 Thomas Street. The council also charged both Farag and a company he now operates, E & M Farag, with occupying the building’s first floor offices while it was still allegedly defective and without an occupancy permit.

The building surveyor engaged by Emad Farag for Culcairn Drive in Frankston South, Kamran Basiri, also had his licence to operate suspended, and I am informed he may be related to Emad. The building surveyor signed off on all the critical stages of construction, and based on this sign-off a certificate of occupancy was issued. This put the onus on the home owner for future rectifications, including the removal of the cladding and any defects that would not be covered by the builder’s warranty period. Indeed the relationship between Emad Farag the builder and the building surveyor is longstanding and includes collaboration on other noncompliant buildings, eventually resulting in their respective licences being revoked. Ironically, Mr Basiri, the then surveyor, is now working as a building inspector. Also, the developer funding or part funding these Emad Farag builds, Effat Farag, is a doctor who happens to be Emad’s brother – a doctor whose involvement in these dodgy builds has led to much injustice, health problems, mental health impacts, therapy, medication, bankruptcy, financial disasters, broken families and more.

Cladding Safety Victoria have agreed to contribute $1.2 million for the removal of the hazardous cladding material at Culcairn finally happening now. However, with associated works this leaves a $2.4 million balance required to rectify some of the key defects, to be paid by owners. With 33 apartments, according to Ms Ould each owner’s share of the $2.4 million loan they have had to take out to repair this is over $70,000 to begin with, at a rate, with a loan from Lannock, of 10.7 per cent per annum being initially interest only for five years. The cost to repair all issues is an estimated $12 million or more, so this initial spend is a drop in the bucket. That is added to the many other cost-of-living pressures that they are facing, with the interest rates, owners corporation fees, which are already at arrears of more than $40,000, and more. The building’s state has worsened since 2019, including many more cracks. The balcony is all being supported by Acrow props, engineering supports and more.

It is also a similar case for another Shangri-La build in Caulfield, which also has builds in Footscray and Hampton. These owners, the residents and the builder have also been in media, including the Age and 60 Minutes. I am informed that Shangri-La have now phoenixed their company and the son has a building licence now. I urge the government to take more action to help these residents beyond this bill today.

Alison MARCHANT (Bellarine) (17:27): Acting Speaker Mullahy, great to see you in the chair. I rise to speak on this crucial bill, the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, this bill being a significant step and stride towards the safeguarding of the rights and investment of home owners and home builders of this great state. As a government we have been working. As the member for Mordialloc has explained, this has been a long-term journey for this government to have reforms that are for our home owners, our renters and those who are building. We have talked about in this term and heard in this chamber today how this is not about just building frames, bricks and mortar; this is about people building their dreams, building themselves a future, investing in their communities and building in their communities to invest and be part of their communities. So it is a really important investment and decision for families when they are building a home or renovating a home. Just as a little side note, though, this building industry is really important for our economy here in Victoria. We need to have trust in the industry as well, and that is what this is about.

We know that there is no bigger issue than housing in the state at the moment, and with our landmark housing statement that we released last year we are setting bold targets and doing bold reforms to make sure that we are investing in that and delivering affordable housing in this state. As we work on this issue and continue to work towards this, we want to ensure that Victorians enjoy those vibrant and livable communities that they call home. I love where I live. I love the Bellarine electorate, and I know that so many who have moved recently to my electorate and those who have been there for a very long time love where they live, but it is the livability and standard of living that we have on the Bellarine that people want protected.

These building planning reforms that we are undertaking also provide opportunities to review the role of the regulators and improve the information that is given to consumers of the builders’ obligations, particularly, in relation to this bill, domestic building insurance. This initiative, as I have said, is part of an ongoing program to reform our building system. The vision is pretty simple but powerful: we need to instil confidence in those who are undertaking a build or renovating. It is to safeguard them and their aspirations and, in doing so, to build trust in this industry. The vast majority, as many have indicated, do the right thing. But we have seen issues here, and we have seen where there are issues this has exposed some gaps that we have in our system. This obviously is in response to the Porter Davis Homes Group last year and the realisation that hundreds of home owners were left very vulnerable. They had risked their deposits due to the absence of that building insurance. The commitment of this government really is to protect those consumers that are embarking on their journey. This government is resolute in holding people to account and that they face the appropriate consequences if they do the wrong thing.

On 31 March last year, as I have indicated, 500 home owners shockingly found themselves facing the loss of their hard-earned deposit with the neglect of their building insurance, but this was not an isolated incident, and it has unearthed some other really concerning trends with other builders as well. In response to that we took action. We compensated customers left stranded, and subsequently we had the liquidated builders customer support payment scheme, which was established to help those customers. Those initiatives were vital, but they also underscored the urgent need for reform, as this bill does.

I will just talk a little bit about the objective of the bill. This bill will give the VBA, the Victorian Building Authority, stronger powers to take action against builders who accept deposit money without first taking out insurance. It sets two new offences, to be inserted into the Domestic Building Contracts Act 1995, to apply if a builder enters into insurable domestic building contracts for work costing over $16,000 and receives money on behalf of the building owner before holding and requiring insurance. Two different levels of penalties will occur, and that just talks to the seriousness of the conduct. A higher penalty will apply, obviously, if the offence is committed knowingly. Individuals who commit an offence could face a fine of around $96,000, and there are fines of $480,000 for body corporates. Obviously, after this bill and the reforms that we are implementing, a vigilant monitoring mechanism has to be put in place. We need to give that confidence to consumers. This bill, as I said, will give substantial powers to the VBA, empowering them to take decisive action.

Last year when the Porter Davis collapse unfolded, like many MPs in this place I had constituents reach out to me who were affected and caught up in this. They all talked of the stress that this had caused. It was immense, and it was not just the financial stress but the emotional stress that this caused. One constituent said to me – and I could not put it better – ‘It felt like I hadn’t just lost money, but I had lost our dream.’ My husband and I have done renovations on homes and engaged with builders, and it can be a difficult process to navigate. I am very fortunate. I have a husband who has been in the construction industry as a plumber and who understands a lot of the regulations around these things. If I did not have him, I think it would be a really difficult process to actually understand. What I think is the key here is that you put a lot of trust in the builder. It is almost a trust factor. You read the contracts, you sign them and you think you are doing the right thing. You kind of have a hope that you are doing the right thing, and you trust the builder is there for your best interest. We have been very fortunate. We have had great builders and we have had great conveyancers and people to support us in any of the work that we have undertaken, but we have seen that that is not always the case for everyone.

As I have said, we are working towards a larger reform. This is just one piece of reform that we are doing. But if we continue to do nothing, the cost of the rectification work to building that is happening in Victoria will just become out of control.

It costs Victorians $675 million each year just in residential building costs when there are defects, so we need to do this work. But for this reform to happen we need a workforce that is skilled and experienced, and we also need enforcement of compliance. We are doing that work. We have introduced a building manual, where builders now have to provide more information and be more transparent to their customers. This is a positive change, not only for home owners but to give that trust for the sector.

We have heard some horror stories today, and I have got constituents who have gone through renovations who have explained the horror of their experiences. I will not go into the building details, but they have expressed to me the emotional stress that it causes the family. I will quote one of my constituents, who wrote to me and said:

The cost of defect rectification, the differences between contract price –

the old ones –

and the new contract, financial losses occurred whilst resolving the issues, as well as the toll it takes on peoples mental health, families, relationships and futures. All these costs these victims of the industry have endured.

It is absolutely important that we have this bill, a comprehensive approach to this and the safeguards. Work does not end here. We know that more needs to be done, and this bill is one part of reform to deliver stronger protections to Victorian builders and building owners.

In conclusion, this bill marks another step in our journey towards a safer and more accountable and transparent building system. In supporting these reforms, we are improving the system for a future robust and transparent building industry. We all here should be united and committed to protecting the dreams and the investments of our constituents. I know I am here for the residents of the Bellarine and future residents of the Bellarine who may be building in my electorate. I wholeheartedly commend this bill to the house.

Jess WILSON (Kew) (17:37): It is a pleasure to rise on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. From the outset can I acknowledge the work by the Shadow Minister for Planning James Newbury and of course a member in the other place, Mr Mulholland, a member for Northern Metropolitan Region and the Shadow Minister for Home Ownership and Housing Affordability, for their work in this space, particularly around the recent collapse of Montego Homes and shining a light for those victims on the failings by this government.

I support the reasoned amendment that the member for Brighton has put forward today, because I do agree with the member for Bellarine and the member for Mordialloc that this has been a long, long journey and a long time coming. Unfortunately, it is the many, many victims across Victoria of builder collapses that have been along this journey and have not seen the results that they have been hoping for. Previously I was in the role of shadow minister for housing affordability and had the opportunity to work with many of the victims of home builder collapses over that time. These people had worked very, very hard to save up for deposits to build their own homes and to make – as many in this place today have acknowledged – one of the biggest financial decisions they will ever make in trying to put down a deposit to build their own home and set them up for life in their own home and to give themselves that financial stability. But in doing so they trusted the system. They trusted that when they paid that deposit, the system was there to make sure that domestic building insurance (DBI) was being taken out on their behalf.

We have heard a lot about dodgy builders, rogue builders. Absolutely – we have a problem in this state with rogue builders, dodgy builders, that are causing problems. But let us be very, very clear. While the legislation today creates a new offence for taking a deposit without taking out DBI as a builder and penalties will be in place, it is already a requirement in this state to take out domestic building insurance before taking a deposit from an aspiring home builder. It has been very, very clear since the collapse of Porter Davis in March last year that this is a problem right across the board in the building industry.

In the Porter Davis collapse there were over 500 victims where domestic building insurance had not been taken out, and in that situation it shone a light on a much bigger problem. But while the government knew then this was a problem, they also knew at least nine months earlier that there were risks in the domestic building insurance industry, that there were risks when it comes to insolvencies, when it comes to residential construction companies, and we know from documents that have been exposed from that time that they did not act. Indeed there was a working group at that time chaired by the Department of Treasury and Finance that called for more transparency around domestic building insurance, including training for regulators on how to check the insurance status of a home build project and the option to make that function available to customers. That was a suggestion that was worked up by a group of experts working with the Department of Treasury and Finance months before the collapse of Porter Davis – months before many thousands of Victorians lost their hard-earned deposits and were left with half-built homes. Many of them are left with half-built homes today.

What the collapse of Porter Davis showed was that the government reacted to a high-profile situation. The government belatedly came to the table after realising that the cop on the beat, the Victorian Building Authority (VBA), had not been doing their job – they had not been enforcing the requirement that builders take out DBI before a deposit was paid – and came to the table with a relief scheme. But in doing so they did not allow that coverage to all home builders that had been the victim of home builder collapses.

I worked very closely with the victims of Hallbury Homes – about 10 victims from Hallbury Homes. Hallbury Homes went into liquidation early last year, and when they heard the announcement from this government that relief would be provided for Porter Davis customers but not for Hallbury Homes customers – people who were in the exact same situation as those who had lost their deposits under Porter Davis – they were in complete disbelief that they would be excluded from that scheme. People like Sushant and Anamica, and Cameron and Chris and Claudia lost hundreds of thousands of dollars combined in giving their deposits to Hallbury Homes only to see that builder go into liquidation and for the government to exclude them from a scheme whereby others who were in the exact same situation were permitted to access relief. That situation is playing out again today.

After months of fighting on behalf of the Hallbury Homes victims we saw the government come belatedly to the table once again and extend that scheme to others who had lost their hard-earned deposits through the collapse of home builders. But then today and over the last few weeks – and, once again, credit to the member for Brighton and in the other place Mr Mulholland for fighting for the victims of Montego Homes – we have got over 60 victims under Montego Homes who are once again in the exact same situation that Porter Davis customers were in, that Hallbury Homes customers were in, where they have been in a situation where the builder has not taken out domestic building insurance before accepting their deposit.

Looking at this legislation today, I refer back to a piece of correspondence the Victorian Building Authority put out on 1 May 2023, so a few months after the collapse of Porter Davis but well before this legislation was brought before this house or even announced. It makes clear to all builders that there are penalties for carrying out, managing or arranging the carrying out of domestic building work under a major domestic building contract without that required insurance and that there are penalties up to 500 penalty units for a person and 2500 penalty units for a corporation. It was already a requirement to take out domestic building insurance for aspiring home builders before a deposit was made. That has already been a requirement in this state. What this legislation here does is it just creates another offence in doing this.

But the problem in this space, as we have seen time and time again, is the VBA is not doing its job. It is not capable of doing its job. Looking back at how the VBA has actually tried to enforce the law in this space, and under the previous reports released by the VBA just three practitioners were reprimanded last year for failing to comply with domestic building insurance and only one in 2020–‍21. This just highlights the problem in this space. While we are creating a new offence here today, and it goes some way to giving greater hope to people that there are consumer protections in place, if the VBA as the cop on the beat, as the regulator, does not have the resources nor the power to enforce this, then we are not going to get any further down the track. We have to make sure that we look at the VBA and its ability to make sure that builders, when they are going to people who go and look at display homes, get excited and put forward their deposit, are taking out DBI at the time, and that is why on this side of the house we have consistently called for an independent review of the VBA and its ability to enforce its regulatory powers. We called for an audit of all contracts that have been taken out by residential construction companies to make sure that builders were taking out DBI.

We saw the problem with Porter Davis. We saw the problem with Hallbury Homes and many other construction companies that have gone into liquidation over the past 12 months. Yet over recent weeks we have seen Montego Homes go under and we have seen 60 people left without their hard-earned deposits because this government is failing to act to make sure that builders are doing what they are already required to under this law.

As many in this place have highlighted today, we are in the midst of a housing crisis in Victoria. We are in the midst of a housing affordability crisis caused by supply issues, and that is flowing right through to the rental market. Many hardworking Victorians aspire to not only own their own home but to build their own home, and the problems in domestic building insurance over the past 12 months have highlighted for many Victorians that they do not have the confidence to put down a deposit and build their own home. If I reflect on the conversations I have had with many victims in this space, they have completely lost hope that they will ever see their homes built or that they will ever see their deposits returned, because time and time again they have been let down by the regulator and let down by this government failing to enforce the laws that are already in place.

Anthony CIANFLONE (Pascoe Vale) (17:47): Acting Speaker Mullahy, congratulations on your elevation for today’s session. I rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. In doing so I would like to acknowledge and commend the work of all the relevant ministers, their offices and their departments for having brought this bill to the Parliament, including of course the Minister for Consumer Affairs, the former Minister for Consumer Affairs, the Minister for Planning and all the other relevant cabinet colleagues and their teams.

It has long been the great Australian dream, as we know, for people to own their own home. It has been the dream of so many previous generations and a driving force for so many successive waves of migrants, who have come to Australia and Victoria to build a better life for their families and their grandchildren, to work for, buy and own one’s home and leave a legacy for their children and their grandchildren. Owning one’s home or contributing to the cost of one’s housing is for many of us, as has been pointed out in today’s debate, likely the biggest and most important asset or investment contribution we will make over the course of our working lives. Indeed housing continues to remain a high priority for many young Victorians, young families and people across both the state and of course my electorate which covers Pascoe Vale, Coburg and Brunswick West, because we know there is no more important issue anywhere across the state right now than housing.

Whether it be first home buyers, families, young people, retirees or renters, or whether it be people experiencing housing stress or homelessness, every Victorian deserves an affordable, accessible and safe place to live. In this respect I am proud to be part of an Allan Labor government that continues to elevate housing as a top policy priority whilst taking real action to lift and improve housing supply and the quality of homes and provide better protections for consumers across the building industry, including through the bill before us today, which I will get to in a moment.

Some of these key housing initiatives that this bill does build on include the development of a new plan for Victoria, which will set out the next steps to address the state’s future 2050 housing and land use needs; the recently released Victoria’s Housing Statement, which puts forward an ambitious plan to tackle housing affordability and supply by setting a bold target to build 800,000 new homes across the state over the next decade; the $5.3 billion Big Housing Build, which is delivering a pipeline of 12,000 new social and affordable homes and community homes across the state, including the 198 ‍new homes at the Brunswick West Harvest Square big build project in my electorate; and the previously introduced rental fairness package, which cracked down on and reformed renting to make renting fairer for renters. That is why we have also been supporting and investing to grow the construction industry’s worker pipelines through game-changing initiatives like free TAFE, incentives for apprentices and investments toward new skills and technology hubs, including the $17.8 million Coburg technology hub and the Plumbing Industry Climate Action Centre, which will and do service my community.

However, notwithstanding these positive measures, we know that as demand for housing grows and demand on the housing construction industry continues to grow as we build more homes we must keep ensuring that protections for consumers keep being strengthened and that the conduct and craftsmanship of builders delivering these new homes continue to adhere to the highest possible standards whilst protecting consumers, and in doing so we must ensure that we continue to place the consumers, the hardworking families and people who invest their hard-earned savings towards building or renovating their first or forever homes, at the heart of the building and construction sector’s standards and protections, particularly as we strive towards that 800,000 new homes target.

As many of us know, our building and construction industry is one of the biggest and most important sectors in terms of economic, business, jobs and skills outcomes across the state. According to some data the parliamentary library has just supplied me there are 127,000 firms across Victoria; the largest number of firms of any industry is in the construction industry. 79,000, or 62 per cent of those, are sole traders, and in terms of workforce and workers it is 361,000 construction jobs across the sector. In my own community it is just as important, with 16 per cent of local registered businesses, or over 2600 local businesses, involved in construction – the biggest of any sector in my community – and 7 ‍per cent of local residents employed in construction, or over 6500 local workers, which is also one of the biggest sectors that local residents are employed in. Again, notwithstanding all the positive contributions that the sector makes and that the workers make, there are of course, as we have heard through today’s debate, some of those rogue elements throughout the industry that do need to be called out and made to comply with regulations, which this bill will seek to do by protecting consumers first.

As outlined in the Victorian Building Authority’s most recent annual report, the VBA performs an average of around 12,000 inspections of buildings that are under construction annually, with waterproofing and weatherproofing continuing to remain the areas of highest compliance risk. During 2022–23 the VBA reported that it received over 1700 plumbing complaints and over 1700 building complaints. Plumbing complaints increased by 21 per cent on the previous year, while building complaints actually reduced by 3 per cent. But according to the VBA one of the main reasons for the increase in plumbing complaints has been consumers seeking plumbing compliance certificates after building works on their site ceased as a result of builder insolvencies and collapses last year, and in this respect that is why we have arrived here of course with the bill before us.

On 31 March 2023 one of Australia’s largest home builders, Porter Davis, collapsed, with Grant Thornton partners appointed as liquidators of the Porter Davis group, which covered 14 companies. With around 1500 homes in progress at the time by Porter Davis in Victoria and 779 customers having also signed contracts with building yet to commence, many Victorian Porter Davis customers were very much shocked, to say the least, that their builder had gone under. However, it was following the collapse of Porter Davis that it was revealed that more than 560 building owners or prospective building owners were at risk of losing their entire deposit due to the failure of Porter Davis to obtain domestic building insurance whilst they continued to accept deposits for projects that had not started at the time the company entered or was heading into liquidation. Subsequently, during this period the government became aware of other builders who also did not obtain DBI for their customers’ deposits.

As we know, DBI is a crucial step in maintaining integrity and confidence for community members and individual consumers engaged in those construction projects in the industry. DBI is mandatory for contracts where the contract price for domestic building work is over $16,000. Current practice to date has been that DBI is taken out by the builder on behalf of the home owner. Home owners are covered for up to $200,000 in policies issued before 1 July 2014 and for up to $300,000 in policies issued on or after 1 July 2014. DBI provides some level of protection to home owners in the event that their building project cannot be completed or has defective works which cannot be rectified for various reasons, but upon the collapse of Porter Davis, as I mentioned, there were 560 owners or prospective owners who had not had DBI obtained on their behalf by Porter Davis. It was an absolute disgrace, to say the least. It was an unforgiveable act that caused significant financial and emotional distress, trauma and uncertainty for hundreds of Victorian families across the state, including in my own community, which I will touch on if I have the time.

In response to these actions the Victorian Labor government stepped in on 20 April 2023 to help hardworking and honest Porter Davis customers to get back on their feet by compensating those customers who were left without insurance through no fault of their own. In July 2023 the government subsequently set up the liquidated builders customer support payment scheme for customers of other builders whose businesses had collapsed between 1 July 2022 and 30 June 2023 where those customers were at risk of also losing deposits because the builder had not obtained DBI.

That is why am so pleased to be here to support this bill. It is a bill that is designed to ensure that protections are enhanced for building consumers and stronger powers are provided to the VBA to take actions against builders who accept deposit money without first taking out the required DBI. In terms of those reforms contained in this bill, there will be increased penalties for those builders who do the wrong thing, with individuals who commit an offence facing up to $96,000 in fines and $480,000 for body corporates. It will also provide the VBA, as I said, with stronger enforcement powers.

I would just like to turn to three cases, if I may, of constituents that have contacted me in relation to being impacted by this issue and other building issues in my community. Alex, a local Coburg resident who was one of the victims of the Porter Davis collapse, contacted my office in September 2023. Alex bought land in Craigieburn West independently as part of a new estate and started building his home with Porter Davis. The builders had only completed the concrete foundation when the company went into insolvency. Alex subsequently has engaged and followed up with the Victorian Management Insurance Authority, the VMIA, accordingly to pursue a claim, which my office continues to assist with. Local young mum Belinda from Pascoe Vale and her family had well and truly been in the construction phase of building their home locally with Porter Davis in Pascoe Vale until its collapse. In their case Porter Davis had actually taken out building insurance; however, the policy stipulated that it would cease 60 days after the works on the project had stopped. This meant that from the collapse of Porter Davis at the end of March 2023, Belinda and her family were extremely distressed about ascertaining clarity on the status of their works, appointing a new builder and seeking new insurance certainty over their project before the original Porter Davis policy was due to expire in May 2023. We continue to assist Belinda through her experiences. Local dad Hamish from Pascoe Vale has been in touch with my office in relation to his family’s home building case, which also hit uncertainty following his builder’s collapse and liquidation, and we continue to work with Hamish in engaging with the VMIA process.

This is a bill that really is about fairness in the construction industry. It is about transparency, and it is about rebuilding the integrity and trust that Porter Davis took out of it. I commend the bill.

Kim O’KEEFFE (Shepparton) (17:57): I rise to speak and make a contribution on the bill before the house today, the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. There have been great contributions across the chamber. What is apparent is the absolute need to progress this bill. However, we need to get it right. Whilst this is a step in the right direction, it does not do enough.

The bill is for an act to amend the Domestic Building Contracts Act 1995 to insert new offences for a builder to demand or receive money under a major domestic building contract if the builder has not ensured that the domestic building work to be carried out under the contract is covered by insurance and to make other miscellaneous consequential amendments. In addition, the bill is for an act to amend the Building Act 1993 to amend the purposes of that particular act to include regulating builders and enforcing offences under the Domestic Building Contracts Act 1995 in relation to demanding or receiving money under a major domestic building contract if the builder has not ensured that the domestic building work to be carried out under the contract is covered by insurance. Also the bill will provide that investigation and enforcement powers may be exercised and proceedings may be commenced in relation to the contravention of certain provisions of the Domestic Building Contracts Act 1995, will provide that builders who are found guilty of certain offences under the Domestic Building Contracts Act 1995 may become ineligible for registration for a period of time and will make other miscellaneous and consequential amendments.

The bill before the house inserts two new offences with tough penalties, ensuring that domestic builders will comply with the insurance requirements, and will provide strong powers for the Victorian Building Authority to enforce compliance with the insurance requirements so no more Victorians will have to fall victim of building groups collapsing or going into liquidation for failures. As such, the two new sets of offences within the bill will apply where a builder enters into a major domestic building contract and demands or receives money from or on behalf of the building owner to carry out work under the agreement without ensuring the builder holds domestic building insurance when it is required. In addition, the bill will ensure that significant penalties are introduced for any violations or abuse of the new offences.

It is very important to note that following the collapse of the Porter Davis Homes group in March last year, more than 500 home owners or prospective home owners were at risk of losing their entire deposit due to the failure of the group to obtain builders insurance on their behalf when it was required. This is just wrong and devastating for all those individuals who are caught up in the collapse of the Porter Davis Homes group. The bill before the house brings a set of penalties and protections so that Victorians cannot be punished like during these events we have witnessed in the past.

We need to have a framework that ensures transparency and adequately protects those everyday Australians who are building a home. We need this bill proclaimed a priority so that no more Victorians can be victims of building groups collapsing and lose their own money from the failure of building groups to obtain builders insurance – but we need to get it right. Whilst this is a step in the right direction, as we have said, it does not go far enough.

Just last week my office was contacted by a constituent who had been caught up with a home builder collapsing and going into liquidation earlier this month. The home builder group, Montego Homes, has approximately over 80 homes in either the construction phase or contract phase and has left the constituent and their family with significant financial loss and no home. The constituent was told that most of the 80 creditors were uninsured. The builder had failed to provide insurance to the constituent and his family. The builder was still taking money from the customers up to and including the day of being put into administration, when the group had no funds left in equity to give back to the constituents or fellow creditors. As a result, the constituent has been deceived and left out of pocket by the builder, who knew that there was going to be a foreclosure. The anxiety and stress inflicted on those affected is simply wrong. No-one should be put in this position, where their dream of having a new home – something they have worked hard for – is now placed in limbo.

In addition, on 25 January it was reported that a total of 63 home owners had been affected by the collapse of Montego Homes; they did not have insurance. At the recent creditors meeting the administrators revealed that their investigations had found that Montego Homes had taken out a $200,000 loan just before they went under. There was only $21,000 left in the group’s bank account when external administrators were appointed, and there appeared to be minimal assets. As a result of external administrators coming in, they have already started selling company property like iPads and phones at auction.

Jessica, who is a 40-year-old woman, was hoping to help her mother and be close by her side as she headed into her later years by organising to have two homes built next to each other. Jessica committed a $30,000 deposit and is unsure if she has lost her deposit entirely. As you can imagine, this has caused enormous stress and uncertainty. In addition, she said Montego Homes tried to hit her up with a $45,000 increase in the cost of building, in a sign of the company being in financial trouble for a substantial period of time.

The scope of the bill before the house does not protect Victorians enough. Whilst the damage and actions are caused by a small cohort within the Victorian building industry, the offences and penalties that are included in the bill do not stretch far enough. The government must commit to extending the support scheme until the issues that are plaguing domestic building insurance are resolved. Buying a home is tough, and new home buyers should not be fearful of a building company collapsing and losing the deposit that they have worked so hard for.

Following the bill being proclaimed as law, the operation of these new offence provisions as proposed in the bill before the house will be monitored to ensure that consumer protections are upheld and appropriately balanced with industry interests. It is important that we as a state have the protections in place for consumers so that we do not have to witness another event like Porter Davis Homes Group and more recently Montego Homes occurring again, but also that we consult with industry, involving and including them in the process so that we can get this right by introducing and putting in place measures protecting Victorian homebuyers, ensuring that they are covered by insurance prior to paying any money to a builder under a contract for domestic building work.

However, there are many areas of concern with the bill, as it does not do enough to protect Victorians from the damage caused by a small cohort in the industry itself, and it does not do it fast enough. As such, there is limited scope in the bill. The bill seeks to legislate only around insurance, and many industry stakeholders like Master Builders Victoria claim that the bill does not address the many concerns about the current state of the act. In part of its consultation with the opposition, MBV called for a thorough review of the act to better protect all parties and support the industry to deliver homes for Victorians, stating that the act needs to be improved and requires further clarity for industry around who is captured by the penalties. In addition, many businesses and consumers have noted that the act is out of date and no longer fit for purpose to suit current building practices, according to the former Master Builder Victoria’s CEO.

Under the bill, the Victorian Building Authority has explicit powers to enforce disciplinary action against builders who breach their responsibilities under the Building Act 1993 and the Domestic Building Contracts Act 1995. Of course the effectiveness of these new powers of the VBA are unknown, which does create some doubt and uncertainty about whether it will allow for the VBA to be the lead regulator in taking strong action against a builder for noncompliance with any of the new offences. It is unclear generally how the government intends to ensure that industry and consumers are aware of changes to the act that apply to them. This, as a result, may pose many issues regarding implementation. We need more houses built, but consumers need confidence that their money will not be lost.

Lastly, in regard to the proposed changes to the definitions in the bill, specifically changes to the definition of ‘builder’ to exclude the explicit mention of managing or arranging directors, this may lead to confusion regarding builder obligations. Neither the bill nor the existing acts sufficiently define who is a competent builder or provide for any statutory performance monitoring, which would facilitate better performance. Further, no sufficient registry is maintained of builders with adverse findings against them in builders warranty insurance claims, nor is there one for individuals purporting to be builders who have breached the Building Act 1993 and the Domestic Building Contracts Act 1995 as well as acts including the Crimes Act 1958. However, in essence I now support the bill as far as the amendment that has been put forward from our opposition goes.

Meng Heang TAK (Clarinda) (18:05): Acting Speaker De Martino, it is good to see you in the chair in this session. I am delighted to be back for the first time in 2024, and I am proud to rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. Welcome back to everyone and once again to the Acting Speaker and to all colleagues here. I am looking forward to another fruitful year here in Parliament delivering the legislation that Victorians need, such as the bill here today.

That begins here today with the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, another important bill – one that responds strongly to what we saw last year with the collapse of Porter Davis Homes. Building a new home can be a stressful process at the very best of times, but I can only imagine the stress that was placed on more than 500 building owners, prospective building owners and families that were affected after being caught up in the collapse of Porter Davis in March last year.

This bill responds to ensure that we do not see a repeat of this, and it does this by introducing a set of new offences into the Domestic Building Contracts Act 1995 (DBC act) to be triggered when a builder receives money from a building owner in relation to the carrying out of domestic building works under a major domestic building contract without having obtained the required insurance for that work. This bill will close the legislative gaps that were identified last year wherein there was no offence provision that enabled the relevant regulators – Consumer Affairs Victoria and the Victorian Building Authority ‍– to prosecute a builder who had not obtained domestic building insurance before building work had commenced but after the money had been received in respect of the domestic building work to be carried out under a major building contract. Additionally, the bill will make amendments to the Building Act 1993 to ensure that the Victorian Building Authority – VBA – can enforce and take disciplinary action in respect of the set of new offences in the DBC act.

These are two important objectives that will protect consumers as they undertake what is likely the most significant purchase in their lifetime – building a new home, a dream home. So this is one less thing Victorians will have to worry about. It is the last thing that anyone wants to have in their mind when they are making such a significant decision and such a significant outlay. Consumers and families need to be protected and safeguarded so that they have security during that exciting but often challenging time. So it was great to see the announcement last year that tough new penalties will apply to builders where insurance requirements are not met, and we are delivering on that promise here today.

Just in terms of the specifics, the bill inserts a set of two new offences into the DBC act. The set of new offences will apply where a builder, like I said before, who has entered into a major domestic building contract receives money from or on behalf of the building owners under the major domestic building contract before the builder holds any required insurance in respect of the domestic building work to be carried out under that building contract.

The first offence, as we heard before, will apply where the conduct has been committed knowingly or recklessly. The maximum penalty level for this offence will be set at 500 penalty units, which is approximately $96,000, for a natural person and 2500 penalty units, which is close to half a million dollars, for a body corporate.

The second offence will apply where the conduct has been committed under a standard of strict liability. The maximum penalty is 240 penalty units, approximately close to $50,000, for a natural person and 1200 penalty units, which is $230,000, for a body corporate. These are significant penalties and ones that will act as strong deterrents and better protection for Victorian families and for their hard-earned savings, protecting the dream of building and having a house to call home, which is a dream home.

More broadly on that point – on the dream of owning a dream home, having a place to call home – we know the challenges that we are facing with so many Victorian families right now, and that is why Victoria’s Housing Statement is really important for many people in my electorate and across the state. We are setting a bold target of building 800,000 new homes across the state over the next 10 years, delivered through the affordability partnership with the housing industry. We need good planning decisions made faster, cheaper housing closer to where you work and live, more social housing, more rights for renters and also long-term planning as our state continues to grow. That is what the Allan Labor government is delivering.

There are also exciting developments in and around my electorate with the initial activity centres in Moorabbin, which is not far away. As we have heard, work has already started on new planning controls to deliver an additional 60,000 homes around an initial 10 activity centres across Melbourne by the end of 2024, with the Minister for Planning taking over the planning work from councils in this area. The activity centres plan will guide investment in things that growing suburbs need, like community facilities, public space and parks. The program will also consider the best way to incentivise more affordable housing. As mentioned, we have an initial activity centre in Moorabbin as well as in other identified centres in many other places, including the neighbouring suburb of Frankston plus North Essendon, Preston and Ringwood. It is really exciting for our local community, and I am also looking forward to working with everyone, engaging with everyone, on the activity centre to get the most out of it and for our growing community, boosting housing supply and giving the local community greater certainty over how our suburbs grow. This is exciting and challenging at the same time. I am looking forward to what is to come.

I am also looking forward to the speedy passage of this bill here today. It is an important bill and one that will better protect all Victorian families building their dream homes by delivering these two new offences into the DBC act, making sure families are protected and their hard-earned money is also protected. We cannot have a repeat of the collapse of Porter Davis homes and other domestic volume builders. The collapse exposed the uncertain practice of companies not taking out the required insurance before accepting deposits under a major building contract. That practice ends here today, with this bill closing the legislative gaps. The bill and these penalties send a very strong message to industry on the importance of adhering to insurance requirements, giving families greater confidence in the building industry and delivering stronger protections to all Victorian families and, once again, their hard-earned money. I commend the minister and all those involved for bringing this bill forward, and I commend the bill to the house.

Sam GROTH (Nepean) (18:14): I rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. I note that the bill amends the Domestic Building Contracts Act 1995 and the Building Act 1993 by mandating that builders obtain domestic building insurance before accepting payments from building owners under any major domestic building contract and introduces new offences for a builder to demand or receive money under a major domestic building contract if the builder has not ensured the domestic building work can be carried out under the contract as covered by the insurance. I also want to thank the member for Brighton, the Shadow Minister for Planning, for his work on this, and I note his reasoned amendment, which I support. I also want to thank a member for Northern Metropolitan Region in the other place for his work in the home ownership space as well as the member for Kew for the work that she has done with victims of some of these collapses – the people who have been directly affected by the collapse of some of these builders and the lack of insurance that was held on their behalf, which has seen a devastating loss in what is for many people the great Australian dream: to be able to own a home.

I will also say that for me and my community down on the southern Mornington Peninsula, we have got a growing population, whether it is younger families moving down or older ones who have decided to take a seaside retirement place, and we are absolutely committed to ensuring that people who make a decision to invest in a home are protected and that they can do so with confidence and security around those deposits that they make.

While there are certainly reforms that are necessary in many cases, what we are seeing in this bill probably does not quite go far enough. I know the government has flagged a number of changes, and this is just the first in a range of reforms that are to come. But with what we have seen and the number of builders going under, it would have been nice to see this a little bit quicker and a little bit more being done straightaway.

Victoria is a state that has been built on home ownership. As far back as Liberal Premier Sir Henry Bolte, Victoria had the highest home ownership of any state in Australia. It is something that we were proud of as a state, and it is something we should be striving to get back to once again. But what that means is that we should make sure that Victorians feel safe and comfortable in investing in domestic construction – in investing in a home here in this state – and that they feel safe and secure when they do so. We want to make sure that home ownership is the great Australian dream, and that is what we are striving for. At the moment, unfortunately, what we have seen over the last couple of years is that it has turned into an absolute Labor nightmare when it comes to trying to invest and build a house in this state.

Like many people, I know what it is like to go through the roller-coaster of building a home. Fortunately, I have not had any of the encounters of some of the people that we have seen who have been affected by these collapses. I cannot actually imagine the pain of having that dream – you put in the plans, you pick out all your finishing and your fixtures – ripped away by cowboy developers who have not done their due diligence, who have not gone and purchased insurance and put that away so those people are secure. That is why I believe, and we believe, the government should be going further with these protections so that Victorians who do seek to build that dream can do so and we do not see the heartbreak that we have seen with Porter Davis and recently with Montego and others. Protecting consumers should be at the forefront of the government’s mind, and ensuring that Victorians can go about their daily lives and make the biggest decisions. I mean, buying a house is probably the biggest financial decision that any Victorian, or any person, will make in their lifetime, and when they do so they should have absolute confidence when they put their deposit down – the money that they worked hard for and that they have saved for. This is not just something that for a lot of people appears in their bank account and they have been given. A lot of people work very hard to get that 5 per cent or 10 per cent, whatever it is, to put down. We have got to make sure that they are confident that when they do so they are actually going to see that house built.

I know that we will not oppose this legislation. It is important that we do start to see things happening in this space. But we need to make sure that more is being done and that we do not continue to see these collapses of builders that have taken people’s money without the necessary precautions and insurances put in place. So yes, it is a step in the right direction, but I ask the government: do more to make sure Victorians have that great Australian dream of being able to buy their own home.

Chris COUZENS (Geelong) (18:19): I am pleased to rise to contribute to the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. The Victorian government is committed to building a system with consumer protection at its core, ensuring Victorians can have confidence when building or renovating their home. We know the difficulties and challenges that families have faced who have been impacted by builders who have not taken out the necessary insurance to protect them. It is only a small number of builders. I think most builders do the right thing, and people across our community expect to be getting the right things done by them when they sign up to buy their home. They do not expect builders to be doing the wrong thing, and these challenges are really shocking for those families. I have spoken to many families who have been impacted. What it means for them is their dream of home ownership is gone. There is an impact on their family, and the fact is that they have worked really hard. We have heard many members talk about that today on this bill, about how it has impacted on families so much.

As we have heard, we have growing populations in many areas, including in my electorate of Geelong, across the region in fact. There are many people who are very excited about the thought of saving up and buying their own home and moving in, and we know that we need more affordable housing in our communities right across the state. As a government we have been doing a great deal to support that, to assist families and to provide affordable and social housing in our communities. And those families that are impacted by dodgy builders that have not done the right thing are facing all sorts of dilemmas in terms of what they do after having experienced losing their deposits.

This bill responds to the collapse of Porter Davis Homes Group from last year, when more than 500 prospective home owners were at risk of losing their entire deposit due to the failure of Porter Davis Homes to take out the required building insurance. Subsequently we then learned that several other builders that had previously collapsed, including Snowdon and Hallbury Homes among others, had also not obtained insurance to protect their customers’ deposits. Only last week we had another one in the Geelong region where the insurance had not been paid, so those families are now looking at what they can do.

Many people put their trust in builders, particularly well-known builders, and they expect to have the right thing done by them. The consumer does not necessarily go and check that they have that insurance. They just trust in what they are signing up to, and generally there are no problems. We have many great builders in my community of Geelong, but as I said, there are a small number of builders that are not doing the right thing by people.

In April 2023 the government stepped in to help Porter Davis customers to get back on their feet by compensating those customers who were left without insurance cover for their lost deposits through no fault of their own. Since then the government has also set up the liquidated builders customer support payment scheme for customers of other builders whose businesses collapsed between 1 July 2022 and 30 June 2023 where those customers were at risk of losing deposits because the builder had not obtained domestic building insurance.

This bill will give the Victorian Building Authority stronger powers to take action against builders who accept deposit money without first taking out the required insurance. A set of two new offences will be inserted into the Domestic Building Contracts Act 1995 to apply if a builder enters into an insurable major domestic building contract for domestic building work costing more than $16,000 and receives money from or on behalf of the building owner before holding the required insurance. Two different penalty levels will apply based on the seriousness of the conduct, with a higher penalty to be applied if the offence is committed knowingly or recklessly. The lower penalty applies at a standard of strict liability, which is where the offence is committed even if there was no intention to commit it.

Individuals who commit an offence could face a fine of up to 500 penalty units, around $96,000, with fines of up to 2500 penalty units, which is approximately $480,000, for body corporates. The bill will also give the Victorian Building Authority (VBA) the power it needs to take strong action against a builder for noncompliance with any of the new offences, including to take proceedings against a builder who contravenes any of the new offences, and take disciplinary action against a registered builder for noncompliance with any of the new offences, including immediate suspension of their registration if warranted.

These are the sorts of things that my community want to see government doing. I know there is a lot more work being done, but I think these first steps in this bill are really important for all of our communities to know that this is unacceptable and that builders who are doing the wrong thing should be penalised. Importantly, we need to put a stop to it. We need to make sure that those builders are doing the right thing so that our constituents are not having to face the traumatic consequences, the impacts, of having saved up for that dream home and then ending up with nothing. For many there are consequences around where they move on to and where they are going to live. These are really important areas of the bill that will help support our community and help prevent any further impact on our constituents.

The directors as well as individual building practitioners will be able to be held directly liable for contravention of the offences introduced in the bill, even if the company itself has entered into liquidation. To support the new offences the VBA is continuing to audit compliance with domestic building insurance requirements, and these new offences will give them the powers they need to hold builders to account for failing to meet DBI requirements.

While the new offences in this bill have been introduced as quickly as possible to deliver greater protection for consumers, we know that there is more we need to do to ensure that Victorians can build or renovate with confidence. The collapse of Porter Davis Homes Group revealed a practice of some builders of using multiple agreements, often avoiding the threshold for the requirement to obtain the DBI policy. Further work is underway right now as part of the review of the Domestic Building Contracts Act to explore further legislative options to address this issue. The review will also consider related issues, including whether there should be any changes to monetary thresholds for deposits, the definition of ‘domestic building work’ and progress payments at various stages of a construction contract.

This bill is the first in a suite of reforms to deliver stronger protections to Victorians building or renovating their home. This work is being guided by an expert panel who are comprehensively reviewing Victoria’s building system. The panel’s work is being done in stages. The Labor government has already acted on foundational recommendations from the expert panel’s stage 1 report with the passage of the Building Legislation Amendment Bill 2023 last year. In December 2023 the expert panel’s stage 2 report was released, providing 14 recommendations to deliver greater accountability, strengthen compliance and enforcement and improve insurance cover in the home building sector.

This work is forming part of the broader building reform program to ensure that Victorians have access to safe and quality homes. The reform program will deliver a building system with consumers and home owners at the centre, with clearer roles and responsibilities; greater accountability; access to insurance and consumer support throughout the life cycle of a build; stronger regulators, ensuring that the people who oversee building projects have the powers that are needed to protect consumers and hold builders to account if they do the wrong thing; builders and contractors with the right skills to build homes and that operate with the transparency and professionalism Victorians expect; and a better approvals process to make sure that all buildings in Victoria are safe and built to last. As I said, these are really important changes. I commend the bill to the house.

Nicole WERNER (Warrandyte) (18:29): Acting Speaker De Martino, glad to see you in the chair and I am glad to have the opportunity to rise to speak on this bill. I look forward to the cut and thrust of debate as this parliamentary year begins; I have missed it greatly. I love fighting for my constituency and standing up for my community. I rise to speak in support of the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, a bill title so long that one is reminded of the constant delays from the Victorian School Building Authority (VSBA) caused by the lack of legislation in this area.

I would like to address the comments from the member for Albert Park, who said, ‘Let’s get this reform through. Let’s not delay it with a reasoned amendment. What’s the point of holding back reform? We shouldn’t delay this bill and wait, wait, wait.’ I ask the member for Albert Park: if she is so passionate about her view that this legislation should not wait, could not wait, then why is the commencement of the legislation 28 November 2024, more than eight months away? The members sitting opposite are suffering from such cognitive dissonance that they want the Victorian people to believe that this legislation cannot wait for a reasoned amendment but can wait another eight months while those opposite sit on their hands – as the member for Albert Park thought was so precise she said it thrice – while they wait, wait, wait.

Acting Speaker De Martino, I was glad to be part of the recent inquiry into employers and contractors who refuse to pay their subcontractors for completed works with you and the member for Ripon, who are sitting in this place – I think that is all today – and while I was late to the party, I was honoured to be part of it as part of the Environment and Planning Committee. The committee recommended legislation to protect tradies in my electorate, just as this bill seeks to protect Victorian families, and I thank the members for Wendouree, Bass, Morwell, Monbulk, Nepean, Ripon and Croydon for their fantastic work in this area.

While the coalition will not be opposing the bill, there are some serious issues with it that the member for Brighton’s well-written reasoned amendment addresses, and I thank him for his amazing work in this place. First and foremost, the limited scope of the bill, as highlighted by industry stakeholders such as Master Builders Victoria, falls short of addressing the substantial concerns about the current state of the acts. The builders in my electorate need more clarity on penalties and definitions, and this cannot be ignored by those opposite.

The bill entrusts the Victorian Building Authority, VBA, with expansive investigative powers purportedly to strengthen enforcement of disciplinary actions. While those opposite say their intention is to protect consumers, there is a total lack of clarity on the proportionate disciplinary initiatives to be taken against builders found in breach of the act. Furthermore, the proposed changes to the definition of ‘builder’ raise serious questions about competence and accountability. Excluding the explicit mention of managing or arranging directors may lead to confusion regarding builder obligations. The bill fails to define who qualifies as a competent builder or establish any statutory performance monitoring to ensure better performance. To be fair, you cannot blame those opposite – measuring competency is not exactly a forte of theirs.

There is a glaring absence of a sufficient registry of builders with adverse findings against them, leaving consumers vulnerable to unscrupulous individuals operating within the industry. The lack of a comprehensive strategy to communicate changes in the act to both industry and consumers is another significant flaw in the bill. Without a clear plan for community knowledge and understanding of new obligations, the implementation of the bill may become a source of confusion and potential issues.

Consultation with peak bodies, industry professionals and stakeholders has revealed widespread discontent with the bill. Master Builders Victoria has explicitly stated that the bill does not fix the underlying problems and has called for a prioritised review of the Domestic Building Contracts Act 1995 before imposing new offences.

This legislation hits particularly close to home in my electorate of Warrandyte because the government’s failure to do anything about the constant failure of building companies has had real consequences and has impacted the lives of our most vulnerable people at Heatherwood School, an amazing school in my electorate which endeavours to give young people with learning disabilities the same educational opportunities as anyone else. Although I have spoken many times in this place about the fire on 26 August, which occurred on the day of my by-election, this fire was only an exacerbating factor of the builder falling through in May of 2023. After the builder fell through, the VSBA was so slow one parent at Heatherwood School wrote me the following:

The apparent lack of effort in pushing the Victorian School Building Authority to secure a builder for Heatherwood School not only raises serious concerns but also gives the impression of discrimination against a vulnerable community.

It is disheartening that our repeated attempts to communicate our urgent needs and concerns have gone unanswered, leaving us feeling unheard and marginalised.

Straight from the words of a parent at this school that was affected. Another parent said:

The delay in putting our building works to tender until September has left our community questioning why our children, who are equally deserving of quality education facilities, seem to be treated differently. We believe that every child’s potential, regardless of their educational path, deserves equal attention and support. The delay in addressing our situation only deepens the sense of discrimination, as it jeopardizes the futures of the students at Heatherwood School who aspire to achieve their educational goals, just like their peers elsewhere.

And finally, another parent who wrote to me last year said:

Furthermore, I would like to draw your attention to the fact that some of our students are set to complete their secondary schooling this year, and their educational journey has been marred not only by the COVID-19 lockdowns but also the prolonged construction delays and the devastating fire. These young individuals deserve a positive conclusion to their academic journey, and we must do everything within our power to ensure that they have access to the best possible learning environment.

This was because in May of 2023 a builder collapsed and this school, which teaches children with learning disabilities, felt totally out in the cold.

When the builders fall through without consequence, without punishment, without anything stopping them from taking the Victorian people for a ride, these are the consequences, and that was the relevance. So I ask those opposite to consider our reasoned amendment to this bill so that we can protect Victorian families from the marginal few builders who do not act with the high standards that the majority of builders do. It is they that are putting Victorian families through a horrific cost-of-living crisis, and we need to protect them from the cost blowouts and the building company collapses that their mismanaged budget is part of causing.

Katie HALL (Footscray) (18:37): I am very pleased to be making a contribution to the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. We are speaking about domestic building insurance. I feel like I was a little bit lost in the web of confusion that just took place and feel somewhat confused by the member for Warrandyte’s great leap with the Victorian School Building Authority and the Victorian Building Authority, but hopefully we can clear a few things up. I will note that – obviously not relevant to the bill – this government, the Allan Labor government, is upgrading every single special school in the state. That is a really significant reform that we are delivering. Only a Labor government would do that. We do not close schools – we upgrade them. I am happy to have a discussion with the member for Warrandyte about the difference between the VSBA and the VBA at some point in time.

But the number one issue in my community is housing, and I have twice the state average of renters in the electorate of Footscray. We are a growing community; we are expected to grow by 140 per cent by 2040. So the growth in Melbourne’s inner west is huge. One thing that we really need in the community is confidence in the building sector and in developers to do the right thing. Sadly, my electorate is no different to many of the other issues that have been raised today where constituents have experienced the complete heartbreak of having their dreams taken away from them, whether they have moved into a building and discovered that perhaps it has not been waterproofed properly or indeed they have lost their deposits from shonky builders who have done the wrong thing. I know that it is a minority of builders and developers who have done this, but I am very proud to be part of a government that is undertaking root-and-branch reform in this sector to make sure that we have confidence in the people who are building the most important assets that any of us will ever invest in, and that is our own home.

We started this process many years ago in terms of better design standards. My electorate has a very high density of apartments. It was really interesting actually listening to the member for Brighton’s contribution today and his concern around the work of building surveyors, and I just want to touch on that briefly. It was the Liberal Party who privatised building surveyors back under the Kennett government and left us in this situation. This sudden concern after advocating for letting the free market rip for so long is quite astounding, but we have of course introduced better design standards.

In my electorate of Footscray, where apartments are a really dominant form of housing stock, we had a situation when the member for Bulleen was the planning minister and he approved a whole range of very high density apartments in Footscray, which is known as the Joseph Road precinct, and in this precinct in Footscray – this was completely scandalous; we talk about Fishermans Bend as an example of what not to do when you are the planning minister – these developments were approved and some of them have been built. Some of the builders have gone into liquidation and have not completed their builds, but they were approved with no developer contributions for community infrastructure. So we had these enormous towers that were built in Footscray against the advice of the state government architect and against the urging of the community and the local council, and now of course we are dealing with the impact of these poorly designed apartments where the residents who have invested everything that they are going to have into moving into one of these homes now do not have the necessary infrastructure at the ground level or in the public realm that they should be entitled to, because there were no developer contributions. So the former planning minister had to take those developers to court. I will always be grateful for Minister Wynne’s involvement in this. He took them to court – of course they fought the government every step of the way – to make them pay, retrospectively, developer contributions so that these poor people could have footpaths or roads or, heaven forbid, some public open space. Basically, the developers were allowed to build to the maximum yield possible, and we are still dealing with the consequences of those decisions now.

Only recently I took the Minister for Planning, Minister Kilkenny, down to this precinct of Footscray where we discussed the impact of this decision-making on those residents, and I will continue to stand by those residents and advocate for them as council has taken on all of the public realm improvements that we need in that growing precinct of Footscray where we will have 7000 residents.

Apartments are obviously, as I said, a bit further down the track in terms of where we are headed in terms of this suite of reforms to deliver stronger protections for Victorians who are building or renovating their home. That work is being guided by experts – we believe in experts on this side of the chamber – who are comprehensively reviewing Victoria’s building system. The panel’s work is being done in stages, and the Labor government has already acted on key recommendations from the expert panel stage 1 report with the passage of the Building Legislation Amendment Bill 2023 last year. In December the expert panel stage 2 report was released, and that provided 14 recommendations to deliver greater accountability, to strengthen compliance and enforcement, and to improve insurance coverage in the home building sector.

I have heard the name of a developer mentioned a couple of times in the chamber, and that is Shangri-La Construction, who have also built developments in my electorate of Footscray. What I hope to see in the future through our work, through our root-and-branch reform of the building sector, is that developers like that cannot continue to operate and rip people off and provide a substandard product for people to move into. I feel like residents in my electorate are not averse to density. We live in the inner city, and one of things we love is our vibrant and growing community. But people must have confidence in the market to deliver the product that they have purchased, and I have every confidence that this government’s reform of the building sector, led by our extraordinary Minister Kilkenny, will deliver that for our community so we can get on and build the homes that Victorians need.

Mathew HILAKARI (Point Cook) (18:47): Acting Speaker De Martino, it is great to see you in the chair. I rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023, as so many others have so far, but I think I might be the first to be paraphrasing Darryl Kerrigan when I say your home is your castle. If I am ripping someone else off, then I apologise in advance, but your home is your castle. And I think it is fair to say that when things go wrong with your home – the home being built to be your castle – it has a huge detrimental effect on your life and the life of your family, because people make their plans about their future partly based on where they live.

The schools that you go to, the work that you undertake and the community that you build around yourself are fundamentally linked to your place of residence. When those plans are dashed it has a significant effect on families and communities, on children and on relationships. It puts lives on pause. It puts people into financial ruin with nowhere else to go, and too often we have heard those stories through the contributions this afternoon. It affects people’s mental wellbeing, and I know this because I am in contact with a number of constituents at the moment who have been suffering because of the result of builders not taking out insurance as required by law. The collapses were of course bad, but they were compounded by the deceit and by the financial loss.

In all honesty we should not be having to legislate for decency in this house – just to treat your customers fairly. This Parliament should not have to be required to make builders take out building insurance to protect their clients who they are building for; builders should just be doing the right thing. Most builders do do the right thing, fortunately. But for those who do not, I would have thought it would be in their best business interest to treat people fairly – those people who are paying builders to build their homes. You would have thought this would be just a normal part of doing business, because if you look after your clients well, as those who have run businesses know, you will get more clients. When you do the right thing by them during the build, you will have more building to do.

This is how you build a business, not by preparing to rip people off and hoping that no-one notices on the way through. Too often in this industry organisations and builders are not doing the right thing – we see it and we have seen it regularly for a little while now – so we are required to introduce a bill into this place. It is with great frustration that we revisit this, because builders simply should have done the right thing in the first place and protected the interests of people supporting their businesses. It is simply wrong to take money and not have appropriate insurance. It is also against the law. We are changing these laws and giving more incentive to builders to do the right thing, and that is for the minority of those builders. Those who make deliberate choices to disrupt and affect people’s lives must change their ways. For any builders listening, I encourage you just to do the right thing because it is good for your business, but now we will be giving you more encouragement to do the right thing in terms of updated laws.

This bill seeks to introduce two new offences into the Domestic Building Contracts Act 1995 to be triggered when a builder receives money from a building owner in relation to the carrying out of domestic building work under a major domestic building contract without having obtained the required insurance for that work. The bill will also make amendments to the Building Act 1993 to ensure that the VBA, the Victorian Building Authority, can enforce and take disciplinary action in respect to a set of new offences in the DBC act. Of course the appointment of Anna Cronin to support the industry and make it better is something to be welcomed, and I encourage her to undertake a great deal of activity in this space.

I thank the minister and her office and the department for the work that they have done. It is a power of work in difficult circumstances, dealing with people who are quite frankly scared for their future, and I thank them for the work that they have been doing this space. I also thank the minister for engaging the industry to make sure that organisations like the Housing Industry Association, the Master Builders Association of Victoria and the Urban Development Institute of Australia have all been consulted in the development of this bill and are supportive. They are supportive because it is also in their interest as organisations to be supportive, because it improves the assessment that we have as a community of this industry. No-one wants to be back here in 12 months or two years or anytime in the future to try and refix these problems that should have never existed in the first place if people just treated people with decency. The selfishness of builders trying to increase their margins at the expense of the interests of people building a home and at the expense of the industry as a whole is deplorable.

The Victorian government is committed to building a system with consumer protections at its heart because we want and need Victorians to have confidence when building or renovating their homes. The Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023 is not the last piece of change that will come to this place but the next step in a reform effort to better protect Victorians building or renovating their home, to better protect their castle.

This bill does respond to the collapse of Porter Davis Homes Group last year. Many members in this place would have had contact from constituents, particularly those people in outer suburban communities like the communities that I represent. More than 500 homes were being built and the entire deposit was at risk because Porter Davis Homes failed to take out the required building insurance. Further builders have done the same thing, including Snowdon and Hallbury Homes, amongst others. They had not obtained the correct insurance that they were required to to protect their customers. All the way back in April 2023 – some of us here can even remember that time – the government stepped up to bring Porter Davis customers back to the table when they had been failed by the builder, to get back on their feet, by compensating customers who were left without insurance to cover their lost deposits through no fault of their own. Since then the liquidated builders customer support payment scheme has been set up for customers of other builders whose businesses collapsed between 1 July 2022 and 30 June 2023. Those people building their homes were also at risk of losing their deposits because further builders had not obtained domestic building insurance – an outrageous state of affairs.

This bill will give the Victorian Building Authority stronger powers to take action against builders who have done the wrong thing and accepted deposit money without first taking out the required insurance. A set of two new offences will be inserted in the Domestic Building Contracts Act to apply if the builder enters into an insurable major domestic building contract – that is, those costing more than $16,000 – and receives money from or on behalf of the building owner before holding the required insurance. Those who commit the offence in a knowing or reckless manner face a higher set of penalties to reflect the seriousness of their offending. The lower penalty applies at a standard strict liability, which is where the offence is committed even if there was no intention to commit it. These offences come with large fines: $96,000 and 500 penalty units for those individuals and 2500 penalty units or around $480,000 for body corporates. This is particularly important for the community that I represent. It is still growing. It is still seeing homes built across the community all the time. For those who know the suburb of Point Cook, it was just 50 people around 30 years ago in 1996. It is more than 70,000 people today. That is a lot of homes being built. The community has grown up throughout Point Cook and there are new homes and new parts of the community still to come. Residents making the greatest investment that they will ever make deserve our support and deserve that these bills be approved. I am so pleased to see that the opposition is supportive of that too.

Further, this bill will give the Victorian Building Authority the powers it needs to take strong actions against a builder for noncompliance with any of the new offences. It allows for disciplinary action against a registered builder for noncompliance with the offences, including immediate suspension of their registration if warranted. It also takes on those directors and building practitioners to be held liable for contraventions of the offences even where the company is in liquidation. I know that was a matter that was raised by some in the opposition earlier today. This does allow for people to take action against those in liquidation, which I think is a really important element of the bill. I think it was the member for Morwell who might have raised that, so I hope that gives him some satisfaction.

I am going to run out of time reasonably soon, so I might just come back to the Minister for Planning, who has been to the community that I represent. I would like to keep going on, but I am also working against the clock here. She has been to the community that I represent in Point Cook and East Werribee where there are plenty more houses to be built. People in my community deserve bills like this to support them and give them the comfort to make their home their castle.

Paul HAMER (Box Hill) (18:57): I also rise this evening to make a short contribution on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. If I have time at a future date, I might make a particular reference to a constituent matter that arose in the electorate of Box Hill that pertains to this matter particularly, but in the time that I have this evening I might just focus on some more general observations. Reflecting on the contributions from other members from both sides of the house, it really resonates how many people have been affected by these failures by a number of companies. We should reiterate that there are many builders out there who are acting honourably and definitely do act for their clients, but the Porter Davis collapse, the Probuild collapse and the Hallbury Homes collapse have captured many, many people from across metropolitan Melbourne and regional Victoria. As the member for Footscray reflected, it is also an issue in growing inner suburbs similar to Footscray and Box Hill. There will be a lot more housing that goes into areas in and around Box Hill, and many of those new houses will be using registered builders and people expect to have a product that will provide them with a solid home once that product is finished. People do work very hard to be able to save the money to put in a deposit and start that dream of theirs –

The DEPUTY SPEAKER: Order! The time has come for me to interrupt business. The member for Box Hill will have the call when we next return to the bill.

Business interrupted under sessional orders.