Chris Ketter (Queensland, Australian Labor Party) Share this | Hansard source

I present an interim report of the Economics References Committee on non-conforming building products.

Ordered that the report be printed.

I move:

That the Senate take note of the report.

I rise to table the interim report as part of the non-conforming building product inquiry. It is a sobering report, brought about by the events of the Lacrosse apartment building fire in 2014 and the tragic circumstances of the Grenfell Tower fire earlier this year. It is not acceptable in 2017 that people are injured and killed in their own homes. Homes should be places of safety, laughter, joy and community. To have lives put at risk or even lost in modern times is completely unacceptable. We can do better and we must do better.

Throughout this inquiry, we've heard from a number of different stakeholders, and the number of process failures when it comes to construction is utterly bewildering. As Senator Carr, whom I thank for his participation in this inquiry, succinctly put it: 'Over the last few decades, there has been a plethora of deregulation and privatisation. Proper controls, audits and enforcement were not carefully put in place when deregulation and privatisation was carried out. The issue of dangerous, flammable polyethylene cladding is really just a symptom of much bigger problems.' We will continue to tackle these bigger problems through the rest of the inquiry, but for now we have this interim report, which I think highlights the problems that are occurring, and some sensible recommendations that can protect the Australian people.

I'll turn to the problems that we have found with the use of this aluminium cladding. First, there is little accountability for non-conforming and non-compliant products in the supply chain. We heard evidence that importers and suppliers often have very little knowledge of where this cladding ends up—that it's used only in situations that conform to the National Construction Code. I am heartened by the fact that, in my home state, the Queensland government is moving to put accountability into the supply chain for importers, wholesalers and retailers when it comes to the sale of building products. This draft legislation from Queensland has been well received by most stakeholders, and I hope that it is implemented across the nation. Second, we heard evidence that certificates in many instances cannot be trusted. Fraudulent certificates seem to be rife, and the certificates do not contain significant information to explain where it is appropriate to use these products.

The problems don't stop there. When it comes to product standards, the current cladding standard falls far short. Australian standard AS 1530.1 conducts only small-scale testing and doesn't actually provide a good guide as to how a product will perform under a full-scale fire. At this point, I do commend the Four Corners program this week, which highlighted this particular issue in some depth. The structure of the National Construction Code also has numerous ways in which unscrupulous builders might circumvent reasonable requirements when it comes to fire protections. In the words of one of the witnesses:

The Building Code is too complicated. It is contradictory, with no hierarchy of control for various clauses which compete with each other.

There were also concerns raised about a lack of standards for licensing, with many roles requiring little in terms of education and professional development, and some roles having no licensing requirements at all. In fact, in 2003, the Queensland Labor state government brought in licensing for wall cladding installers, which seems to be an important reason that more of this cladding isn't occurring in Queensland. It was actually one of the suppliers in our inquiry who made the point, I think, from recollection, that around 70 per cent of the cladding installed is done by one of four licensed installers of cladding. Substitution of non-compliant cladding is apparently rife throughout Australia, particularly since polyethylene cladding is slightly cheaper. It seems that cost dominates many of the decisions taken in the building industry, to the detriment of end consumers and the wider public.

When it comes to building surveyors, those entrusted with keeping an eye on builders, we heard about problems there, too. We heard concerning evidence that surveyors are often in a situation where they do only visual inspections on sites and are often unable to verify the cladding type once the cladding is installed and sealed up, so they are not actually able to see if it is fire-resistant cladding or another form of cladding. Other stakeholders shared concerns about surveyors being not much more than certificate collectors, constrained to trusting electronic certificates sent by email.

We also heard concerns that many surveyors are paid for by the builders, which makes it all the more difficult for a surveyor to challenge a builder where they suspect nonconformance or noncompliance. In the end, this leaves much of the risk of nonconformance and noncompliance with the owners. In many cases body corporates are not formed until after the construction is complete and are left with hidden faults that emerge many years after any warranties have expired. The Owners Corporation Network lamented that there is a greater duty of care in the sale of a refrigerator than in the delivery of people's homes. No matter where you turn in this industry, you can find people trying to evade their responsibilities and place the blame somewhere else, and in the case of flammable cladding the process hasn't failed in just one place—it has failed at almost every point of the chain. That is why there needs to be a multifaceted approach to addressing this issue, which I will address now.

Let's talk about the recommendations in the report. Polyethylene ACP cladding can currently be installed in low-rise buildings and signage. We have to trust that people are not using it in inappropriate circumstances, like high-rises. The committee has come to the conclusion that the public risks associated with this product outweigh the benefits that it can provide, so our first recommendation is that the government implement a total ban. For a small additional cost we can remove the risk entirely.

The second major area is licensing. Some accountability needs to rest with the people responsible for installing building products as well as people such as building surveyors, building inspectors, builders and project managers. If there is a threat that people might lose their licence if they don't comply with the codes, then we stand a better chance. It would seem that the federal government has the capacity under the training regime in terms of Commonwealth funding powers. There is a need for national licensing, for a high bar to be set for qualifications and for it to be harmonised across the states to improve productivity. The federal government can and should act in this area. The committee has also recommended that accountability for others in the supply chain be strengthened, with the Queensland legislation—the Building and Construction Legislation (Non-conforming Building Products—Chain of Responsibility and Other Matters) Amendment Bill 2017—being a very good starting point. In fact, I don't think any witnesses in the course of the inquiry provided any negative feedback on the Queensland bill.

When it comes to Australian standards, we heard evidence that the prohibitive costs of purchasing building product and meeting construction standards can also inhibit strong code compliance. I have urged the government to consider making Australian standards free for users. In response to the issue of strata properties, often high-density apartment blocks, I have recommended that a duty of care be extended to strata communities so that builders and developers have the responsibility to deliver compliant buildings to end-user apartment owners. Regarding Commonwealth-funded construction projects, the committee has recommended that the new Federal Safety Commissioner be given adequate resources to carry out audits against the National Construction Code performance requirements for building materials. In addition, there should be a penalties regime for noncompliance. Commonwealth-funded construction should be done according to the national code.

In summary, the issue is a very sobering one. We can debate many issues in this chamber, some more trivial than others, but this report goes directly to the safety of the Australian people. In line with this, I would encourage Minister Laundy to do his job as minister. Along with this report I have tabled a letter in which the minister has bizarrely requested the committee to investigate the claims made throughout our public hearings. Memo to the minister: you are the minister, you are part of the government, you control the regulators and it is on you to fix this mess. It is not the responsibility of a parliamentary committee.