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NSW Government Draws Up 6 Pillar Plan – Is this A Concrete Solution?

NSW Update: Legislative Reforms

In a Nutshell

Ahead of the upcoming Building Ministers Forum to take place in February 2020, the Minister for Better Regulation and Innovation the Hon. Kevin Anderson issued a press release on 21 January 2020 outlining six different reform workstreams that the government proposes to implement – titled “Pillars of Reform”.

The Minister proposes presenting the proposed “pillars” at the next Building Ministers Forum in February 2020.

Key reforms being proposed to shake up the industry include:

  1. Introduction of a ratings system to rank the track record of industry participants – builders, developers, certifiers across a range of criteria.
  • Providing the NSW Building Commissioner with a large stick to wield against dodgy operators by stopping building works and removing an occupation certificate for problematic projects.

The New Workstream Pillars

The “pillar” concept referred to in Minister Anderson’s press release involve the formulation of work streams that will be actioned by working groups the government will populate with participants from different areas of the construction industry.  It is envisioned that the separate workstreams will work independently of each other.

  1. “Building a Better Regulatory Framework” – through legislative reform with a strong customer focus. 

The government introduced the Design and Building Practitioners Bill 2019 on 23 October 2019, however, the bill failed to pass and debate was suspended on 19 November 2019.  The government will be hoping that when debate resumes on the bill in the last week of February 2020 that consensus will be reached. 

The proposed ratings system for construction industry participants and the increased powers of the Building Commissioner David Chandler to block building projects and remove occupation certificates which have been suggested do not form part of the current Design and Building Practitioners Bill 2019 and it remains to be seen when and how those reforms will be introduced to parliament.

  • “Building Ratings Systems” – identification of risky construction industry stakeholders by working with ratings agencies, insurers and financiers to rank industry participants.

The government is likely to look at tracking construction industry participants across a range of metrics such as: customer complaints, financial viability, years in the industry, workplace health and safety record, phoenixing activity.

Lower ranked stakeholders will likely attract the steely gaze of the Building Commissioner.

  • “Building Skills and Capabilities” – through accreditation of educational programs and modules.
  • “Building Better Procurement Methods” – the government has identified that a target action for this workstream is to “establish clear standards for engagement and outputs” with the outcome deliverable target being “viable risk allocation and performance accountability”.
  • “Building a Digital Future” – While this sounds like the government will be investing in a Tron remake, it is unlikely that Jeff Bridges will reprise his role of Kevin Flynn and squeeze into an LED lit futuristic suit in the new “digital future”.  Rather the government’s goal is to move from analogue record keeping in favour of shared industry wide platforms with electronic records.  A move that will be welcome and should assist rapid transfer of data and streamline information sharing.
  • “Building the Reputation for Quality Research” – The government action plan for this workstream details that this will be an “evidence based approach to accessing and closing the gap via case studies and other research”. 

It remains to be seen what form this proposed research will take and the measures that will be implemented to encourage innovation in the construction industry while improving consumer confidence.

We are monitoring developments and will provide an update following the building ministers’ forum in February 2020 to see how reforms progress.  The other important issues to be dealt with at the building ministers forum which were absent from the announcement this week were:

  1. What action is planned to address the professional indemnity crisis in the construction industry with increased premiums and higher excesses for building surveyors, certifiers and engineers driving some smaller industry participants out, potentially leading to some businesses being unsustainable in the medium term, and driving up costs for consumers.  This action item has been carried over from the building forum ministers meeting in December.
  • What action is being taken to achieve a unified national approach to the combustible cladding issues that have been on the legislative radar since at least 2014 when the Lacrosse building fire occurred in Melbourne, and were identified by some construction industry participants much earlier than the Lacrosse fire.  To date there has been different legislative approaches taken across the different states and territories, and the audits and action plans across the different states and territories are at different levels of implementation.

If you have any queries or require any assistance in relation to construction matters please do not hesitate to contact:

Ben Robertson, Partner – Construction & Infrastructure

Email: ben.robertson@madisonmarcus.com.au

Phone: (02) 8022 1222 | Direct line: (02) 9762 0463.

Nicolas Rovolas, Special Counsel – Construction & Infrastructure

Email: nicolas.rovolas@madisonmarcus.com.au

Phone: (02) 8022 1222 | Direct line: (02) 8022 1269

The content of this article is intended to provide a general guide to the subject material that is discussed here and does not constitute legal advice.

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