realestate economy

"People end up with nothing because they really don't believe we have a system as bad as we do." Consumers are unprotected in Australia's building disaster. "You may have a house that's being demolished, but you still have a block of land. If you've got any superannuation or anything in the bank, at least hang on to that." Anne Paten of Victorian Building Action Group (VBAG) talks about how the system that's supposed to help building consumers actually bleeds the victims of the industry even more. People qualify for insurance, but never get the money. They go to VCAT and are sent away with nothing. The results are bankruptcy, divorces, and suicides. Substantial reports and inquiries are removed from the internet. Australians need to realise that the government won't help them; they have to join together and help each other.

We have transcribed some highlights from the videoed speech full of extraordinary revelations - made at the Victorian Building Activists Group AGM 2019.

Since 2002 there have been mandated payments for builders in all states to take out domestic building insurance (DBI in Victoria), yet almost no owner who has suffered by bad building has successfully claimed their insurance, despite multiple defects. For instance, in 2011, $88m was paid into the Victorian fund, a year when 40% of building consumers suffered financial loss. [1] Yet, for that same year, only three owners had successful insurance claims against their builders. Yet many, many more qualify. The money goes to salaries in administrative infrastructure for the funds. Recently it was reported that owners who suffered in the 2011 Lacrosse dangerous cladding fire disaster had a 'big' win of $7.5m at VCAT. This sum does not even cover the amount paid to get people out of the building on the day of the fire. Owners have borrowed far more than that just to go to court. And the builder was not even held responsible. They system protected him.

At 10 minutes into the video:

"In 2012, the Victorian Omsbudsman found [2] that the [Victorian] Building Commission, instead of being a 'regulator'[...] was taking the big building companies out to dinner, to the best restaurants, with the best bottles of wine then getting them tickets for the tennis centre, for the football, and so on, and giving the money to the HIA, the MBA. [...] the money that runs all of those organisations is from building permits [...] so, in other words, all of us [victims of this system]. [...]"

"[The Victorian Building Commission, VBA] uncovered the registration system. Effectively the registration system is, if you cannot speak English, cannot read plans, cannot write a sentence, know nothing about building, and have never seen a hammer, you would make an excellent builder. So get registered. The book, the Game of Mates, calls it the 'favour system'. It's not like you go to the doctor, the teacher, the school: These people have no qualifications. And, of course, they don't build! So, we have builders who don't build, we have surveyors who don't survey, and we have regulators who don't regulate. So, in a sense, that's it. That's all we have to really understand.

So, by 2015, they had changed the name of the [Victorian] Building Commission. They had removed everything from its 20 year history from the web."

[You cannot even find the Auditor General's 2012 report. The link from TROVE to the pdf at Auditor General's site leads to a page-error.]

In 2015, they're [...] doing the third Auditor General's report, and they've changed auditor generals and they've changed the Ombusdsman, because anyone who is putting all the facts and pointing out has to be moved on.

NOTES

[1] Consumer Confidence and Market Experience Study Victorian Consumers CAV 2011.

[2] Victorian Ombudsman: Own motion investigation into the governance and administration of the Victorian Building Commission 2012-12-12. See https://trove.nla.gov.au/work/175510781?q=Victorian+Building+Commission&c=article&sort=holdings+desc&_=1567828294045&versionId=261204408.

"This report identifies problems in the governance and administration of the Victorian Building Commission and the manner in which it expends monies generated from its regulation.

"In March 2012 the Ombudsman's Office received information from several sources in relation to concerns about the Victorian Building Commission (the Commission). These concerns included that the Commission:

- paid contractors significant amounts for investigative services
- contracted external investigators who were former Commission staff
- made significant payments to external investigators based upon invoices which lacked detail about the amounts charged
- employed former police officers as investigators with little or no building experience
- poorly managed an information technology project which was several million dollars over budget
- operated at a significant deficit.
-This resulted in Ombudsman conducted an own motion investigation into the governance and administration of the Commission.

During the investigation additional issues were identified. These included significant expenditure by Commission staff on hospitality and entertainment and concerns about the administration and integrity of the registration system for building practitioners."

Source https://apo.org.au/node/32338. The link from this source to a pdf at the Auditor General's office results in a "Page not found" at the Auditor General's site. Here is the link, try for yourself: https://www.ombudsman.vic.gov.au/resources/documents/Investigation_into_the_governance_and_administration_of_the_Victorian_Building_Commission.pdf.