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Legislative Assembly for the ACT: 2003 Week 5 Hansard (8 May) . . Page.. 1686 ..

MR CORBELL (continuing):

The effect of change would be less than in New South Wales and Victoria, where insurers provided first recourse against all defects and might then recover from the builder. Secondly, the insurer asked that the value of work that does not require insurance should increase from $5,000 to $12,000. This range of values represents minor additions and alterations. If badly carried out, the work involved might have serious effects on other parts of the dwelling, but the work itself is on a small scale.

Thirdly, the insurer expected limitations on the height of buildings to which warranty protection applies. The ACT legislation already limits cover to three residential storeys and garages. The bill clarifies the wording of this provision. Finally, the insurer proposed that insurance should apply to structural works for a period of six years and to non-structural defects for two years after completion, instead of applying to all defects for five years, as is currently the case.

The term "structure"as defined in the New South Wales and Victorian legislation, and in the bill, includes not only the frame or other load-bearing elements but also the external walls and roof. In practice, it is structural defects that might not become apparent for prolonged periods.

The bill also follows New South Wales and Victoria by excluding developers from statutory warranty cover. Owners or buyers of individual residential dwellings are the class of consumer with the best claim to statutory protection. In contrast, developers in search of a profit are normally informed participants in the marketplace, like owners or buyers of commercial buildings. Past experience in the States has shown that claims by developers can have a significant impact on insurance funds.

Most of the proposed reforms clarify the present position or modify it without reducing protection for consumers. Where they do affect existing consumer rights in the ACT it is in the context of a larger crisis in the insurance industry.

Statutory protection, it should be remembered, is only one element in the maintenance of standards for residential building, and in the ACT it has been a last resort. The insurer's emphasis on this limitation underlines the responsibility of government to take action against builders and building certifiers for inferior design or inadequate standards of work. I intend to bring forward reforms that strengthen the regulation of building work.

Mr Speaker, I commend the Building (Residential Building Warranty) Amendment Bill 2003 to the Assembly.

Debate (on motion by Mr Smyth ) adjourned to the next sitting.

Planning and Land Legislation Amendment Bill 2003

Mr Corbell, pursuant to notice, presented the bill and its explanatory statement.

Title read by Clerk.

MR CORBELL (Minister for Health and Minister for Planning) (11.09): I move:

That this bill be agreed to in principle.

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