Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Economics References Committee
02/08/2018
Non-conforming building products

HARRIS, Mr Rodney, Acting Manager, Building Industry Section, Department of Industry, Innovation and Science

MAHER, Miss Kate, Assistant Manager, Building Industry Section, Department of Industry, Innovation and Science

POWER, Mr Trevor, Head, Industry Growth Division, Department of Industry, Innovation and Science

[16:08]

CHAIR: Welcome. I'll read out my statement. I remind officials that the Senate has resolved that an officer of a department of the Commonwealth or of a state or territory shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. I invite you to make a brief opening statement, should you wish to do so, then we'll open it up for questions.

Mr Power : I'll be very brief and just give the committee an update on where we're up to. As you know, the BMF released Professor Shergold and Ms Weir's final report about building confidence in the Australian building industry on 27 April 2018. From the government's perspective, this report provides a roadmap for reform for the sector. We also note that there are a number of international reviews currently that have been reported on, including the UK's Hackitt review, and that some of the findings of those reports are broadly in line with the report of Professor Shergold and Ms Weir. As you know, I think the BMF has provided in-principle support for the report and has agreed to examine the findings and recommendations in detail at its next meeting, which will be held on 10 August this year.

That meeting is also going to include an industry forum where the ministers will hear directly from industry about their views on the report and the key priorities. It's certainly our expectation that that meeting on the 10th will consider priorities for reform at the national level, and also the priorities for each jurisdiction and the actions that are already underway in each of the jurisdictions across Australia.

As you're aware, there are already a number of actions going on in relation to the misuse of ACPs in Australia, including building ministers using their available laws and powers to prevent the use of polyethylene-core composite panels on buildings of more than three storeys. There has also been consultation undertaken with industry on a new permanent labelling system to prevent product substitution. I think that, since we appeared at the last Senate estimates, that paper has been released and consultation has been undertaken and submissions have been received on that paper. Also a new fire-testing standard for external wall-cladding products has been introduced into the NCC. The BMF has also directed the senior officials' group to report on information on existing statutory duties, in building and planning legislation, for parties to meet the rectification costs of non-compliant cladding. Work has commenced on that piece of work but is not yet complete. I hope that's useful for the committee.

CHAIR: Thank you very much. Just on that cladding issue, can you tell me when that discussion paper was released in relation to the permanent labelling for cladding products?

Mr Power : Yes. We will just get that date.

Miss Maher : It is 19 June.

CHAIR: So at the moment it's out for consultation with industry?

Mr Power : No. It's closed for consultation now and we've received submissions.

Mr Harris : It closed on 15 July and we have received about 22 submissions, and the Senior Officers' Group is currently collating those.

CHAIR: Were there any from any of the unions involved in that? Were they invited to—

Mr Power : I believe the unions were invited to submit. I'm not sure whether we have actually received a submission. We can check.

Mr Harris : It doesn't appear so.

CHAIR: Okay. But you're saying to me that they were invited to make a submission?

Mr Harris : Yes.

CHAIR: You have touched on a number of things in your opening statement. I'm grateful for that. What are the formal consultation mechanisms that exist so that the BMF can be informed by stakeholders and industry groups? How regularly does that occur? Who is invited? How many relate to building products?

Mr Power : I did mention probably the most imminent of those processes, which is a forum to be held with industry, immediately preceding, I believe, the BMF meeting next week, where industry's invited to give their direct views and priorities on the recommendations of the Shergold—

CHAIR: So is this consultation ad hoc, or does it occur on a regular basis?

Mr Power : I believe that's the first industry forum we've had on that particular issue, but my colleagues might add—

Mr Harris : Do you mean consultation directly to ministers on the Building Ministers' Forum, or a specific subject?

CHAIR: For the BMF group to be directly informed by stakeholders—industry groups and employee representatives. That's what I'm talking about.

Mr Harris : There's an industry forum scheduled to discuss the Shergold and Weir report, the Building Confidence report, and the recommendations, on 10 August, preceding the Building Ministers' Forum itself. The last one, I believe, was held in 2015. It's unknown. Ministers may choose to make those a reoccurring event. However, we've also consulted with industry via the other bodies that support the Building Ministers' Forum, such as the Australian Building Codes Board, the Senior Officers' Group and the Building Regulators' Forum.

CHAIR: Are you able to tell me who's invited to the forum on 10 August?

Mr Harris : Yes. There's a range of industry groups and professional associations that wrote to the Building Minister's Forum about the Building confidence report and expressed an interest and a desire to have an industry forum. I can give you a list. I should just point out that we're still finalising arrangements and we're still not certain yet just how many will appear, but we've invited the Property Council of Australia; the Australian Institute of Architects; the Australian Institute of Building; the Australian Institute of Building Surveyors; the Australian Institute of Refrigeration, Air Conditioning and Heating; the Building Products Innovation Council; Consult Australia; Engineers Australia; the Fire Protection Association Australia; Master Builders Australia; the Master Plumbers Association; the Housing Industry Association; the Plumbing Products Industry Group; the Air Conditioning and Mechanical Contractors' Association; the Australian Construction Industry Forum; the Society of Construction Law Australia; the Insulated Panel Council Australasia; the National Fire Industry Association; the Royal Institution of Chartered Surveyors; and the Australian Industry Group.

CHAIR: No employee representative groups?

Mr Harris : Not at this forum. This was a response to invitations from the associations to have a forum.

Mr Power : I think it's worth adding that, of course, during the process of putting together their report, there was extensive consultation undertaken by Professor Shergold and Ms Weir. So I think there has been quite a lot of consultation with a very wide range of groups.

Mr Harris : And the list of the associations to be invited to the industry forum was also circulated to all ministers to be added to.

CHAIR: There's also an offer from the Department of Immigration and Border Protection—this was in their original submission—of an information sharing arrangement with state regulators. Are you aware of whether that has been approved?

Mr Harris : Is this the non-conforming building product project?

CHAIR: Yes.

Mr Harris : That project has been underway now for quite some time. I believe it was piloted in 2016 and then brought into effect in 2017. I believe that information-sharing arrangement continues, and the states and territories have kept in place the existing information sharing on the existing tariff codes. As yet, I'm unaware of whether or not there has been any variation to that at a state and territory level.

CHAIR: In terms of the work plan for the BMF for the next 12 months, are you able to tell us what the priority areas are?

Mr Harris : Yes. One of the major programs of work will be the response to the Building confidence report itself. Another major agenda item is the BMF response to the national review of security payment laws. Also, another large body of work will likely be the release of the National Construction Code 2019, in addition to the existing work programs on non-conforming building products and aluminium composite panels.

CHAIR: On the issue of cladding, one of our recommendations was for a national licensing scheme, and I note that the Shergold and Weir review has touched on this issue of a form of registration for different building practitioners. Has the government responded to the Shergold and Weir report, particularly recommendations 1 to 4?

Mr Harris : No, but we'll be working, through the Building Ministers' Forum, with our state and territory counterparts to put forward a BMF response to that report, rather than an Australian government response. That's because the Shergold and Weir report was a BMF initiative.

CHAIR: So there won't be a federal government response to that report?

Mr Harris : No, not in its own right. There will be a collective response, though. The BMF response will set out the priorities of reform at a national level as well as the priorities of reform that jurisdictions will undertake, as well as the work of the national bodies such as the Australian Building Codes Board and the others.

CHAIR: Do you have a view as to when the BMF will be providing that response?

Mr Harris : The BMF will be considering that response at its next meeting, but I wouldn't be able to provide an ETA.

CHAIR: Is it fair to say the government is not planning to do anything at the moment in relation to developing licensing for building practitioners?

Mr Harris : No. We'll be working with our state and territory colleagues on those recommendations themselves, and the BMF will be considering it in detail. It's just whether or not it's the immediate priority or is considered a medium- or long-term priority. However, from an Australian government point of view we understand it's a key recommendation, and work can be undertaken.

CHAIR: Okay. I realise the BMF has its own program, but does your department have a view on the role of building surveyors in the process going forward?

Mr Harris : Yes. Recommendations 9, 10 and 11 of the Shergold and Weir report go to the role of building certifiers and surveyors. We consider them to be major priorities, including recommendation 9, which I believe goes to the code of conduct—sorry, that's 10. Recommendation 9 is on integrity of building certifiers, and recommendation 11 goes to the role, powers and responsibilities of the certifiers themselves.

Mr Power : I think it's fair to say that—as all of the BMF has, including the Commonwealth—we support all the recommendations put forward there. The process of working that through in a cooperative way with the states is the one which is going on now, and it is going to be progressed significantly further, we hope, on the 10th. It's a matter of the cooperative way in which the BMF come to the view and prioritise the implementation of those.

CHAIR: Some stakeholders have called for a national portal on building products as a sort of one-stop shop, akin to recommendation 10 from our asbestos report. What's the department's view on this? Does it have merit? If so, who should be responsible?

Mr Harris : What's meant by 'portal'?

CHAIR: Basically, I guess, a register online of building products.

Mr Harris : There are existing registers in place. CodeMark is one of them. It is managed by the Australian Building Codes Board office. It is a voluntary certification scheme that lists what products can be used and in what circumstances they may or may not be used.

CHAIR: To clarify, it's a one-stop shop for illegal importation issues.

Mr Harris : Oh.

Mr Power : There is the discussion that was just had with our colleagues from across the Commonwealth. As I think you're aware, a website to both record non-conforming building products issues and provide information on that has already been implemented. So that's clearly one way that is already underway to address some of the issues. I think that's what you're driving at, Senator.

CHAIR: Okay.

Senator PATRICK: I think that, product-wise, one of the companies was looking at a register that would tell you not what was non-conforming but what was conforming, to facilitate people getting access to accurate information about products. Is that being looked at or progressed in any way?

Mr Harris : Not from our department. We are aware that there are quite a few industry-led initiatives to provide tools and resources like that, and I believe some of the national associations have information and guidance material that they circulate to their members on what products they work with day in, day out and how they should and shouldn't be used.

Senator PATRICK: Noting the magnitude of the problem we have with non-conforming building products and people saying that it's a function in some instances of ignorance, would the government entertain assisting in those sorts of programs? Are any grant programs available for that sort of activity, or does that require some special funding initiated by a minister or a crossbencher?

Mr Harris : We haven't had any expressions.

Mr Power : I think some of the recommendations in the Shergold Weir Report start to approach the issue—possibly from different angles—of information and training, and also questions about certification of products. Your questions about: where does new funding need to come from; are there existing programs around? I'm not sure if there are. More than likely, they may well need to be allocated from the budget, if that was one of the actions taken out of the interpretation of the Shergold report and actions that either the Commonwealth or other jurisdictions would take.

CHAIR: Earlier today we talked about a national register. There's been some support for some sort of register or product certification scheme for high-risk building products. Do you have any updates on that? Is that being considered?

Mr Harris : The senior officer's group continues to work on that issue. It's been a difficult and complex problem as it's taken some time to identify what would be considered a high-risk product. It's a difficult threshold to try and pin down, because of the complexity of the nature of the products and how they're used. It goes to the application of those products which will determine the level of risk associated with them, and therefore there are quite a few variables at play. The senior officer's group continues to work on that. However, I don't have any—

CHAIR: It doesn't sound like there's a lot of chance of success with that policy.

Mr Harris : It's a very difficult problem with a lot of complexities.

CHAIR: What about the issue of the development of guidance to sit beside the National Construction Code? There was talk about the ABCB developing something, and one of the earlier witnesses said something has been issued to assist people to interpret and understand the code. Does this have merit in your view and, if it does, who should be responsible?

Mr Harris : The Australian Building Codes Board office generally provides guidance associated with the National Construction Code and they have released quite a few different guidance materials and handbooks on how to use and apply the code. The technical committees that support the Australian Building Codes Board also have a large role in the development of such products. I believe the references may have been referring to the Development of performance solutions guideline, and work continues to be progressed on that. From our point of view, yes, there is merit in that continuing, and further education and material being developed. I believe recommendations 1 to 4 of the Building Confidence report go to the heart of increasing education and awareness amongst the building supply chain and practitioners. We're certainly supportive.

CHAIR: What about the issue of making all of the Australian standards free to access? Are there any developments there?

Mr Power : That issue, I believe, is under continuing investigation. I don't think I have an update here for you today on that issue.

CHAIR: I think the government, in responding to our report, supported in principle that recommendation.

Mr Power : Without having that in front of me, I think that is generally the view. The mechanism then to go and give effect to that is the question.

CHAIR: Thank you very much for appearing before us this afternoon. That concludes today's hearing. On behalf of the committee, I'd like to thank all of those who have made submissions and sent representatives here today for their cooperation in this inquiry. The subcommittee stands adjourned.

Sub committee adjourned at 16:29