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Doorstop – Building Ministers’ Forum in Sydney

18 July 2019

Subject: Building Ministers’ Forum, combustible cladding, building industry confidence

E&OE

Minister for Industry, Science and Technology Karen Andrews held a doorstop in Sydney for the Building Ministers' Forum.

Karen Andrews: There is a very strong commitment for a national approach to implementing the recommendations of the Shergold Weir Report. That report was prepared some time ago to deal with a lack of confidence in the building sector across Australia. After these lengthy negotiations and discussions today, it’s very pleasing that there is solidarity that what we need to do is rebuild confidence in Australia’s building and construction sector. The states and territories have worked very cooperatively. They have brought their own views to the table, but they have shown a willingness to work together in the best interests of the building and construction industry, and of course consumers right across Australia. So, there are a number of commitments that have been made, which will deal with processes including the establishment of an implementation team. I’m very happy to commit to an implementation team whether it be called an implementation team, previously I referred to it as a taskforce. The important thing is the outcome that are going to be achieved from that. The implementation team will form part of the Australian Building Codes Board, and will be established as soon as possible, and the parties will work together to make sure that we progress the implementation of the recommendations of the Building Confidence Report as a priority.

I have the state and territory ministers here with me today, and as you can see we are absolutely unified, that we need to work together to increase confidence in this sector. We are also calling on insurers to take on board what we have committed to today, as state, territory, and the Commonwealth Government, to deal with the issues that have been facing this sector for a very long period of time. We are asking the insurers to work with us, to ensure that confidence is restored to the sector, and that insurers are part of the solution.

I’m happy to take questions, whether they be directed to me, or to the other ministers.

Question: Is any Commonwealth funding going to be given to any state or territory to help sort out issues that are currently affecting residents?

Karen Andrews: The Treasurer has made the Commonwealth’s position very clear; that the issues that have been raised previously will be at the cost of the state and territory governments to resolve.

Question: So, what does today’s outcome mean for the residents of Opal Tower, Mascot Tower, and 19 Gadigal Avenue? How does this assist them?

Karen Andrews: Well, I might ask the New South Wales minister to respond to that.

Kevin Anderson: I’m happy to respond to that later. We’ll keep going with the unification; happy to respond to specific questions a bit later.

Question: Is it all 24 of the recommendations that you’re implementing?

Karen Andrews: The first task of the implementation team will be to look at the recommendations, and develop a plan for the implementation of those. The final recommendation which is the most contentious is the requirement or the recommendation for the states and the territories to work together for a nationally consistent outcome. That is the commitment from today. So, consumers right across Australia, and members of the building and construction sector can rest assured that their state and territory governments are committed to resolving the issues that have plagued this sector for many, many years.

Question: There’s no commitment to all of the recommendations, there’s just an agreement to work together on the recommendations?

Karen Andrews: Yes, and that will be progressed as an absolute priority. So, there is a commitment today that the states and territories and the Commonwealth will be part of the implementation team to make sure that we are progressing these recommendations as a priority. But the first part of that clearly is to develop the implementation plan.

Question: The cladding issue is a state issue, that funding must come from the states and the Commonwealth will not come to the party. In your new unity here, have you got agreement from the states that indeed they will fund whatever is necessary to fix the combustible cladding issue?

Karen Andrews: What we have agreed to today is the implementation of the recommendations of the Shergold Weir Report. The Commonwealth's position is clear in relation to cladding; we’ve stated that previously that that is a matter for the states and territories to resolve. The Commonwealth's position has not changed.

Question: When it comes to rectification works for issues outside of cladding, is it the same stance that the states and territories will have to pay for rectification themselves?

Karen Andrews: The states and the territories will be determining their own paths for remediation and for rectification, and the Commonwealth will not be paying.

Question: When it comes to insurers, you've asked them to work with the states and territories and the Federal Government. What do you mean by that? What will be required from insurers?

Karen Andrews: We've had some quite broad ranging discussions with insurers here today. What we have said to them is that we have addressed some of the issues that have been of concern to them. The primary one was national consistency. So we're calling on the insurers to now come to the party, be part of the solution, to look at professional indemnity insurance for building certifiers, but also to look at more broadly building insurance issues.

Question: Can you just unpack what that will mean in real terms for insurers, because it could affect the cost of new projects?

Karen Andrews: So, what the insurers have indicated that they have been concerned about, is the risk profile of particular buildings, and that's based on some of the reports that have come through, including work that has been done by Shergold and Weir. What the insurance sector has been looking for is a level of certainty that the issues are being addressed and that there will be a unified approach.

What we are putting to the insurers, is that the states and territories have moved to address the concerns that insurers have raised. We want them now to look at continuing to remain in the market, particularly for professional indemnity for building certifiers, and potentially for new players to come into the market.

Question: Do you have a timetable for when premiums and excesses might revert to something like normal?

Karen Andrews: That'll be a basis for further discussion. There is a strong willingness for those discussions to continue, so as soon as we have further information from the insurers, we will be in a position to discuss that.

Question: What about a timeline for the actual implementation team to do the work, and for these recommendations to actually be carried through?

Karen Andrews: So, we've had some discussions already today with the ABCB to work out what the forward plans would be. They have been tasked with coming back to the building ministers within a month with what their plans for implementation will be including resourcing.

Question: The Insurance Council’s indicated that one of the best ways to restore faith in the market would be to look at the cladding rectification issues ASAP, but from today it sounds like that remains a state responsibility. So, what actions are going to be put forward to progress that to restore faith more quickly in the insurance market?

Karen Andrews: Each state and territory is looking at the cladding issues. There are a range of options that have either been implemented or are being considered by the states and territories. We pointed out to the insurers that that work is already underway.

Question: It sounds like today's announcement, though, is everyone’s agreed to work together for the future, but not the issues that are currently presented.

Karen Andrews: So, there are two parts – and we need to be really clear on this. What we are announcing today is what the future work is going to be; that there will be a common approach to that. Clearly there are some legacy, some historical issues, that will take some time to resolve, and quite frankly some of them may not already have been discovered. So, we need to be very conscious that this is two-stage approach. One is to deal with the legacy historical issues, and the second is the program for the future. The program for the future will provide comfort to the insurers that there is a pathway to lower their risk profile.

Question: You mentioned uniform kind of action will be taken after this meeting, but Victoria for example has already stumped up $600 million to help with cladding issues. Does that mean that other states will be required to at least offer that same amount?

Karen Andrews: There's a recognition that states and territories have approached the issues in the building and construction sector differently. Each state and territory retains that responsibility to proceed down the path that they had already started. So, what we have committed to today is that in terms of the recommendations of the Shergold Weir Report, there will be a consistent approach; there will be national consistency. But you should direct your question particularly to Victoria and the other states in relation to the announcements.

Question: Has everyone agreed whether any of these decisions will apply retrospectively, or will it just be for future projects?

Karen Andrews: This is very forward planning. As I've indicated, there's two parts. One is the legacy historical issues that each state and territory is already dealing with, and today is about what the future will be.

Question: So, the Federal Government is washing its hands of any responsibility on any issues that are already out there?

Karen Andrews: The Federal Government has never washed its hands of these issues, and there have been a number of comments in relation to leadership; let me be very clear that leadership does not mean that you are going to take responsibility for the actions of others. I think that today what you have seen is that the Federal Government has shown great leadership in terms of bringing together the states and the territory for a consistent approach to the building sector, which has not happened before. So it is in fact a big step that has been taken forward, but clearly it’s up to the states and territories, they have responsibility for building and construction, and they will retain those rights into the future.

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