Global Financial Crisis 2008 – Article No 31
by Humphrey McQueen
Regulation-proof builders
Premier Brumby promises building regulations to reduce the impact of bushfires.
Several outcomes are certain. First, numerous consultants will walk away with buckets of fees from the drafting of the new laws. Secondly, lobbyists for the builders determined to water them down will also be rewarded. Thirdly, building firms will generate mountains of paper for their lawyers to use as evidence that the next 2,000 burnt-out houses were designed in accordance with the regulations. If all other defences fail, barristers will argue the meaning of ‘the’ to the High Court.
Regulations are only as tough as their enforcement. For twenty years, Victoria has had occupational health and safety regime which obliges employers to ensure a safe working environment. In 2003-4, only one out of every 300 compensated harms resulted in a hearing. Prosecutions are infrequent, convictions rare and penalties minimal. Judges and magistrates in OHS cases have a proven record of reluctance to punish fellow Rotarians and golfing buddies.
The judicial recidivists were aided by the 2004 Victorian OHS Act which allowed exemptions under ‘so far as practicable’ clauses which define ‘practicable’ in terms of the likelihood of the hazard or risk, its severity, the state of knowledge, the methods available for reduction and the costs of doing so. For as long as ‘practicable’ means ‘still profitable’ the government will waste its time with new building regulations.
After the frolic of self-regulation, from where will the inspectors come? And who will keep them honest?
The foundation for any improvement will to licence not only building contractors but their sub-sub-sub contractors. The corporates employ them to work on the cheap and then to carry the blame when something goes wrong. Will any government dare to strip defaulters of their licences? Will it deny a licence to Dodgy Bros after it has slithered into bankruptcy only to appear as Phoenix Constructions?
Which organisation is more likely to make sure that regulations are followed: the Australian Building and Construction Commission or the Construction Division of the CFMEU? The answer is in their record of action.
By 2006-07, the Commission dealt with only two instances of the underpayment of workers. By contrast, during that financial year alone, the Tax Office collected $ 93m. in unpaid superannuation from 234 offenders, which Deputy-Commissioner called the tip of the iceberg.
In the early 1970s, the BLF appointed one of its organisers as ombudsman for homebuyers who had been ripped off by builders. The union got the repairs done with the threat of driving offenders out of the industry. Were the Construction unions to enforce any regulations today, they would be bankrupted by Gillard’s Construction Stasi.
Beyond questions of enforcement stand the economics of building. If $2-3 billions are needed to install pink bats, how huge will a home-buyer’s grant have to be to stop the erection of McMansions from cardboard and glue?
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