Hansard debates

Mr WYNNE (Richmond—Minister for Housing, Minister for Multicultural Affairs, Minister for Planning) (10:23:38): I move: That this bill be now read a second time I ask that my second-reading speech be incorporated into Hansard. Incorporated speech as follows: The Bill amends the Building Act 1993 to further implement the Victorian government’s commitment to improve the building regulatory regime to increase safety and compliance of buildings with regulatory requirements. The use of combustible cladding in Victorian buildings is a critical public safety issue—one that the government takes very seriously and is committed to rectifying. After the Lacrosse building fire in 2014, the government embarked on Australia’s first ever audit to identify buildings fitted with combustible cladding and to assess their risk rating. In 2017, the government established the Victorian Cladding Taskforce jointly chaired by former Premier and architect Ted Baillieu, and former Deputy Premier and Minister for Planning John Thwaites. The Taskforce was established to oversee the continuing audit of buildings to identify where cladding was used inappropriately, to propose options for rectification and to make recommendations to the government on how to improve compliance and enforcement of building regulations to better protect the health and safety of building occupants. The Taskforce released an interim report in December 2017 and a final report in July 2019. One of its key recommendations was for the government to take action to rectify buildings with high-risk cladding and to establish a dedicated cladding agency. On 16 July 2019, the government announced a $600 million package to rectify buildings with combustible cladding. A grants program will provide funding for rectification works on hundreds of buildings found to have high-risk cladding to make sure they’re safe and compliant with all building regulations. The program will be overseen by a new agency, Cladding Safety Victoria, which will manage funding and work with owners corporations from start to finish. The Bill will assist the government deliver these commitments. Enabling Cladding Safety Victoria to administer the cladding rectification program Cladding Safety Victoria has been established as a business unit of the Victorian Building Authority. Therefore, the Bill provides the Authority with additional functions, so that they may be carried out by Cladding Safety Victoria in administering the cladding rectification program. These new functions will enable Cladding Safety Victoria to provide information and advice on cladding rectification work, and to monitor and provide financial assistance in relation to cladding rectification work. An increase to the building permit levy to help fund the cladding rectification program The Bill provides for a targeted increase to the rate of building permit levy to provide $300 million in funding for the cladding rectification program. Additional amounts of building permit levy are to be payable: • for a building that is a Class 2 (apartments), Class 3 (hotels), Class 4 (dwellings attached to commercial buildings), Class 5 (offices), Class 6 (shops), Class 7 (car parks and warehouses) and Class 8 (laboratories and factories), within the meaning of the Building Code of Australia; and • where the building work is not located in 'regional Victoria’ (as defined in section 18(8) of the First Home Owner Grant Act 2000). In these circumstances, the following additional rates of building permit levy will be payable: • for building work where a building permit is required and the cost of the building work is equal to or greater than $800,000 and less than $1 million, an additional rate of 0.128 cents per dollar; • for building work where a building permit is required and the cost of the building work is equal to or greater than $1 million and less than $1.5 million, an additional rate of 0.256 cents per dollar; and • for building work where a building permit is required and the cost of the building work is equal to or greater than $1.5 million, an additional rate of 0.82 cents per dollar. The Bill outlines how the building permit levy increase will apply where applicants seek to use staged building permits. The Authority will be provided with the ability to assess the building permit levy based on the total cost of works, which must be advised on the application for a building permit number for the first staged permit. The applicable levy rate will then be determined and applied to the cost of works for each staged permit. The Authority will have the ability to reassess the rate and levy payable throughout the stages of construction, and once the final staged permit has been approved. Establishment of financial management arrangements for the building permit levy increase The Bill establishes the Cladding Safety Victoria Account within the Victorian Building Authority Fund, to be administered by the Authority. Relevant financial management provisions include: • providing for the payment of appropriated funds and amounts from the building permit levy increase into the Account; and • enabling payments out of the Account to fund administration of the cladding rectification program and a review of the building legislative framework. Review of the building permit levy increase The Bill includes a mechanism for review of the ongoing need for the additional building permit levy to be used for rectification work. Such a review will ensure any levy payable remains appropriate considering any changes to the scope and/or duration of the cladding rectification program. The review must be completed no later than four years from commencement of the relevant provisions of the Bill. The Minister for Planning will be required to table the review report in Parliament. Payment of surplus funds back into the Consolidated Fund At the conclusion of the cladding rectification program, there may be surplus funds in the Cladding Safety Victoria account from the collection of the building permit levy increase. The Bill provides that the Treasurer, after consultation with the Minister for Planning and the Authority, may direct the Authority to pay any surplus amounts in excess of what is expected to be needed to the Consolidated Fund. Providing for subrogation of rights to the State In establishing the cladding rectification program, the government pledged to take tough action against wrongdoers. This includes taking legal action to recover costs from building practitioners or other private actors responsible for the installation of combustible cladding. The Bill provides that the State is subrogated to the rights and remedies of the eligible person against any person against whom the eligible person could make a claim in respect of the installation of combustible cladding. This right of subrogation in the State arises on the occurrence of either of two events: • on the payment by the Authority from the Cladding Safety Victoria Account to a person that the Authority has determined is eligible for assistance for rectification work; or • if a payment was made by the State prior to the commencement of the Bill, a person that it considered was eligible for financial assistance for rectification work. When it comes to dealing with the cladding challenge, community safety has got to come first. The changes to be implemented in the Bill will help avoid the types of tragedies we saw so dramatically at the Grenfell building fire in 2017 in London where 72 people died. The Bill supports the establishment of a world-leading program to fix the buildings most at risk and keep Victorians safe. But this isn’t just about safety, it’s about fairness for people who bought apartments in good faith and were let down by dodgy builders or dangerous building products. I commend the Bill to the house.