Second Reading
Danny O’BRIEN (Gippsland South) (14:57): I am also pleased to rise to speak on the Building Legislation Amendment (Domestic Building Insurance New Offences) Bill 2023. As the Manager of Opposition Business has indicated, the opposition will not be opposing this legislation. But he has indeed moved a reasoned amendment, which highlights our view that the government, whilst trying on this issue, has simply not gone far enough to address all the issues in this sector at the moment.
We certainly do not oppose the intent of the legislation, which is to introduce penalties for builders who seek to issue an invoice to seek payment from a client without having provided domestic building insurance. To some degree – and I have been speaking to some of the builders in my own electorate – that misses the point of what has been happening. There have already been requirements on builders to provide builders warranty insurance. The issue is, though, that they have not been doing so – not that the law was not strong enough but that there was very little enforcement of the law and actual follow-up from the Victorian Building Authority and the government more broadly to ensure that that was occurring.
Of course I echo the comments of both previous speakers that this relates to a very small number of builders who are either rogues in a moral and legal sense or who have got themselves into financial difficulty and are seeking any way out of it and trying to minimise their costs, perhaps by not going ahead and getting insurance for their clients. But it is true that whilst this is a step in the right direction, I certainly do not think it goes far enough.
I think the government has had a range of building industry legislation in the last 12 months or so. We had the bill last year that made some changes. I think I am right in saying that there is a review underway at the moment, and that needs to look at a whole range of things. Indeed in our consultation on this legislation the view that the industry has given is that both the Domestic Building Contracts Act 1995 and building legislation more broadly are out of date. That is the message that I have also got from some of the builders in my electorate. They say that they really do not reflect the current practice as to what actually happens.
It is extremely unfortunate what has happened to those people who are trying to build homes, those Victorians who had taken on face value the ethics of the builders in question and everything they had assumed was wrong. I guess it highlights the importance of understanding the contracts you are signing and making sure not only that your builders are reputable but that when you have a reputable builder – or any person you have gone into a contract with – you make sure that they have done what they said they would do and to a degree try and make sure that they have complied with the law.
As I said, whilst this bill introduces penalties for builders who do not do the right thing, it is a concern to me that there were rules around before this and they simply were not being adhered to. It is about enforcement. I appreciate it is a difficult area to enforce, but it is important that the government gets it right, because we know we have a housing crisis in this state on almost every level – from social housing, community housing and public housing to rentals and the ability of young people and older people alike to afford houses. Whilst we need the appropriate regulations and rules around construction to ensure that people do not get ripped off and they do not get left holding the baby and lose money without even having a house built, we also need to ensure that we are doing as best as is possible to encourage house building, to lower the cost of house building and to provide better social housing.
I think we have seen in the last 12 months or so some just unbelievably economically illiterate decisions from this government when it comes to housing, in particular with the budget. I have said a number of times in this place that when you have a housing shortage – indeed when you have a shortage of any product – basic economics tells you that taxing that product is not going to create any more of it; indeed what it is going to do is put up the price. I was just reviewing a debate from last year. I think I spoke then about 49 new or increased taxes. I think we are up to more like 52 now.
A member interjected.
Danny O’BRIEN: Fifty-two or 53; it is hard to keep count. Of those, 23 are on property. Some of them we do not disagree with – foreign investor taxes and increases on those sorts of things – but what was most bizarre was the decision of the government last year to introduce the so-called temporary COVID debt levy, which is in fact a change to the land tax arrangements. It reduces the threshold so that anything worth over $50,000 will straight off cop the $500 fee plus the percentage fee for land tax. There is an increase at the next level up as well, so we are effectively seeing that many people who are subject to land tax are now going to be paying the $900 as well as the percentage fee. We are seeing that increased as well. In a deal done with the Greens the increase is going to go up from 1 per cent to 2 per cent to 3 per cent over the next three years.
It beggars belief and it staggers me – no, it does not stagger me; the Greens are economically illiterate so I am not surprised that they do not understand this – that the government has not understood that if you tax people who have a house, a second property, that they are then in most cases, in many cases at least, renting out as a landlord, or rental provider as per the new terms, if you add a tax on them, that somehow that is going to help with both the rental and the –
Nina Taylor: On a point of order, Speaker, I am just wondering: we are talking about building reform, and I fear that the member has strayed somewhat to other categories and other subject matter, so I am urging and I am requesting that perhaps the member be drawn back to the subject matter of this bill.
The ACTING SPEAKER (Paul Edbrooke): It has been a wideranging debate. I think the member is focusing on the substantive part of the bill, but I would remind all members to keep the focus on the bill at hand.
Danny O’BRIEN: I was talking in broad terms, though, about the issues that we need to be dealing with given we have got a housing crisis – a housing affordability and a rental affordability crisis. This legislation is trying to address a part of that. The point that the opposition is making and indeed that the Manager of Opposition Business has made with his reasoned amendment, which I was in fact talking about, is that this is only a tiny part of the solution and that we actually should not be debating this until we look at the bigger picture. Indeed I think, if I am not mistaken, the timing of this bill is that the commencement provision is 28 November 2024. I heard the minister speaking previously saying that by moving a reasoned amendment we were somehow delaying this legislation. Well, it does not come into effect until the end of the year anyway, Minister, so there is time for you to actually do the work that is needed.
I say again: we do not oppose the aspects of this bill that will increase the penalties for noncompliance in making sure that there is builders warranty insurance for people trying to build a home. But I am very concerned that the government does not understand the fundamentals of our housing crisis and of our rental crisis, which is supply, supply, supply, and that taxing that supply – increasing taxes like the windfall gains tax and like the additional land tax – is in no way going to help Victorians find a place to live.