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

06 February 2024

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.