HBAG is proposing a 5 Point Plan
1. To Review and amend the Home Building Contracts Act which is not fit for purpose in the present environment. (as discussed with DMIRS – Building and Energy)
Areas to be reviewed include:
Part 9 (1) (a) – 45 days for Building Permit from Contract Signing date
Part 10 – 6.5% maximum deposit. Due to the increased level of regulation, time and cost that Builders need to cover prior to works commencing on site the 6.5% Deposit is no longer sufficient and HBAG believes 10% deposit is appropriate
Part 12 – PC or PS item – This has not been possible to comply with during the past 3 years due to spiralling Price Increases
Part 13 – Price Increases – There is no provisions for Price Increases once works have commenced on site. There needs to be flexibility to protect Builders and home buyers when unforeseen and unprecedented circumstances arise
Part 19 – Breach of Contract – There must be a way of clients terminating a Contract when the Builder fails in their responsibility. Prior to and during construction.
Part 3A – Housing Indemnity Insurance should be discretionary for Contracts above $500,000
Division 3A – 25GB – Indemnity Insurance to be reviewed – in particular, for Apartments and Developments which are not covered under the Insurance Scheme.
Time Extensions – There needs to be an easy and as of right of notification to the client that the Builder is advising them of time extensions due to unforeseen delays. The past 3 years has been fraught with delays outside of the Builders control.
2. The SME Recovery Loan Scheme https://treasury.gov.au/coronavirus/sme-recovery-loan-scheme should be reinstated as quickly as possible; (this can be re-activated by Treasury as a matter of Urgency)
3. Further Government stimulus must be directed through the builders and the trades to keep the industry afloat; (This will be managed by Treasury and other Authorities as required)
4. An intelligent industry assistance package should address: (This will be managed by Treasury)
- The funding crisis resulting from 2 years of losses and that means No and Low interest loans
- Assistance for legacy and loss-making contracts resulting from the shortcomings of the Act;
- Indemnity schemes that work and don’t leave builders and homeowners high and dry; and
- The need for a much closer working relationship between the industry and government.
As an example, the federal government’s plan to build another 1.2 million homes is absolutely unrealistic. In this state, the builders can’t afford to finish the homes they have started and there’s no capacity to take on more orders.
5. Trade Training has to be addressed and reshaped to produce skilled workers quicker.