The AIB was invited to participate this week within a smaller group of Industry associations attending the Building Ministers Forum (BMF) in Sydney along with 11 other industry and employer groups as a follow up to the last meeting held in February 2019.
We had a short agenda which included presentations and discussions around Professional Indemnity insurance and Professional Standards. The second agenda item was to receive an update and report back on the Building Confidence Report Implementation.
I am happy to report that the meeting commenced with opening remarks from the Chair, The Hon Minister Karen Andrews MP, confirming a breakthrough with agreement on the eve of the meeting that included all states and territories committing to a high level of support for a national approach to implementation of the Building Confidence report.
Key points of agreement involve:
- The Australian Building Codes Board (ABCB) getting support to roll out the implementation of Shergold-Weir recommendations;
- Ministers confirmed commitment to a national approach;
- Recognition that States will continue to work in local jurisdictions in parallel to address and progress the paths to remediation already identified as issues needing attention now;
- The new work plan for the ABCB is comprehensive and Industry Representation will be required to support the work of the Building Codes Board.
Other significant presentations around Professional Standards confirmed the requirement for better outcomes which involve industry associations having individuals who are committed to professional practice. The meeting encouraged all associations to stop an inward focus on members and grow an outward focused consumer outlook.
Industry Associations will only be part of the solution if they have features that strengthen the skills and support of members. There will be a need for professional standards being linked to registration of individuals. Monitored supervision and discipline mechanisms within associations will be needed to understand their member activity and gather data on the types of services being offered to the consumer.
Association governance and reliable data will play a part in the risks between clients, and consumers. This can then better inform the market around insurance matters, liability exposure and this conceptual change to focus on customers that will bring insurance premiums and excess levels into an area that allows better assessment by insurance providers.
The public is looking for businesses and individuals to have standards and ethics backed by data that produce improved standards of construction.
Professional Indemnity (PI) Insurance discussions involved the recognition that the reality for insurance providers currently is that every dollar collected in premiums when called on to respond to a problem pays out three times the premium collected. Insurance providers have therefore taken a view that the industry is unstable around confidence and this has led to the premium increases which reflect the recent claims history.
For PI insurance to remain viable the insurers and underwriters need real data and improved outcomes from industry. Insurance is provided to the market for specialist practitioners, building constructors and home owners on a prudential basis and the lack of data feeds into the market deterioration.
The Insurance Council representatives welcomed the news of a National Implementation around Building Confidence. A positive step is the news that state and territory action is occurring in parallel on rectification commencements in a climate that includes carved out for cladding exclusions. This improvement and action that de-risks any current installation will be a factor that encourages insurers to reassess and reduce premium and excess values for PI cover in the future that will be offered to practitioners.
I am encouraged that the discussions reflected the outline points offered by the AIB in February 2019 around the need for the BMF to tackle:
- State and Federal ministers who work cooperatively as the lead regulators;
- Universal adoption and use of NCC volumes 1-3 across all jurisdictions;
- National Licencing for all building practitioners;
- Adopting an industry wide approach to continuing professional development as a requirement for all licence holders.
The AIB looks forward to playing a continuing role in the new work of the ABCB implementation team and updating our earlier discussions with both Ministers and departments through their Senior Officers Group (SOG) and the Building Regulators Forum (BRF).
Finally, I have attached the communique from the federal government that highlights the work that is earmarked to be worked up with the Australia Building Codes Board (ABCB) over the coming months and beyond.
Also attached is the Australian Construction Industry Forum (ACIF) media release which was distributed today regarding events over the last couple of days. The AIB is not only a member of ACIF but significantly contributes to its public comment. ACIF is regularly picked up by both Australian and international media and is a strong voice for the profession.
I wish you a pleasant weekend,
David Burnell FAIB