SPEAKING ON A BILL | BUILDING AMENDMENT (CLADDING RECTIFICATION) BILL 2019
Mr Melhem: I also rise to speak on the Building Amendment (Cladding Rectification) Bill 2019. The bill basically will enable Cladding Safety Victoria to administer the cladding rectification program which the government announced back in July 2019. The bill also provides for an increase in the building permit levy to partially fund the cladding rectification program as well as the financial management arrangement for administration of this funding.
I just want to pick on some comments that were made by Mr Davis when he was accusing the Treasurer of helping himself to some of these funds which may be raised as part of this program. I think Mr Davis failed to say that it is projected that the rectification will cost around $600 million plus and the levy has been imposed to recover just half of that, which is around $300 million, so the state will still be about $300 million out of pocket. So I am not sure about the logic of Mr Davis, but I suppose you do not expect too much logic from Mr Davis. Basically he cannot help itself in making this false accusations. It is good to be a skeptic about things, but I think you need to sort of be close to the facts sometimes and, you know, not just make things up as you go along. I think it is important to make that point. I do agree with Mr Davis that the money that is raised should be used for cladding purposes not other purposes, so no disagreement there, but do not go accusing the good Treasurer of Victoria, who is doing a fantastic job, of going to do something which is not correct.
The bill enables the government to impose the new levy but also makes provision for the government to pursue the dodgy builders and developers who created this problem in the first place. The government has given—the Premier has personally given—an undertaking, a commitment that the state government, the Andrews Labor government, will pursue these dodgy developers and builders. In some cases I will say that they probably knew they were using dodgy products. Thankfully we have not had any major disaster or loss of life as a result. I can now think about the disaster in London where a significant number of people lost their lives as a result of dangerous cladding and illegal cladding.
I cannot help but mention that Mr Davis in his contribution was sort of having a crack at the state government about being responsible for this problem but he forgot to mention the federal government—his colleagues. The cladding issue is not mostly important, I think all of it is important. It is supposed to comply with the national standard and it is the responsibility of the commonwealth government basically, because last time I checked they are the ones who supposedly are protecting our borders and checking that product that is imported from China and other parts of the world complies with Australian standards, but unfortunately they were not able to pick that issue. That is how we have finished up with this flammable product which is now on hundreds and hundreds of buildings in Victoria, predominantly in Melbourne where at least 15 buildings have been identified by the task force as being in a very serious and dangerous state and that is why they have been given priority to be the first to be rectified.
So the responsibility is on the commonwealth. It is there, and in my view again they have failed. And what has amazed me is that even though they should share some of the responsibility, when the state government, the Andrews Labor government, asked the federal government to chip in to be able to fund the rectification program, the response from the federal government was basically, ‘Go and get nicked, we’re not interested’. That is why we have to impose some sort of levy to help fund the program. And I bet you that if the commonwealth had come to us and said, ‘Look, we will do it 50-50’, probably we could have avoided putting in the levy, because you have to understand the levy only covers 50 per cent of the projected total cost of the rectification program.
The government’s decision to establish Cladding Safety Victoria was informed by the advice of the Victorian Cladding Taskforce led by former Premier Ted Baillieu and former Deputy Premier John Thwaites, two outstanding individuals who did a great job when the task force was established two years ago to investigate the extent of the combustible cladding in Victoria’s building industry. They put out a series of recommendations, and that is where the state government has picked up their proposal. As part of that the government will develop a risk assessment tool to assess buildings with combustible cladding and restrict the use of certain combustible cladding materials. It has also undertaken a statewide cladding audit for both private and government buildings.
Cladding Safety Victoria will have a big job ahead of itself to meet part of its brief, which is to provide guidance, support and funding to assist building owners and owners corporations to rectify buildings. In addition, there will be a fair bit of communication, communicating with affected owners and residents and making sure that we educate the owners and the public on fire safety. A fair bit of work has been happening already, and when this bill passes we can get cracking with making sure we can rectify the 15 buildings identified as top priority so the work can begin and money can pour through.
I think it is important to note the additional amount of building permit levy will be payable for building work relating to buildings that are a class 2 building—apartment; class 3 building—hotels; class 4 building—dwelling attached to a commercial building; class 5 building—offices; class 6 building—shops; class 7 building—car parks and warehouses; and class 8 building—laboratories and factories, within the meaning of the Building Code of Australia and also where the building work is not located in regional Victoria. There will not be any levy imposed in regional Victoria. It will just be confined to metro Melbourne. Domestic dwellings—domestic houses, townhouses—are exempt from this levy, so residential houses in the suburbs and townhouses and so forth are exempt.
There is a scale, which is part of this legislation: under $10 000 will be zero charge; $10 000 to $799 000 will be an additional 0.128 per cent; $800 000 to $999 999 will be an additional 0.256 per cent; $1 million to $1.499999 million will be an additional 0.38 per cent; and property over $1.5 million will be an additional 0.94 per cent. The fund will start generating that income so the government is then reimbursed partially for some of the work that will be undertaken. There was a big question about why taxpayers have to foot the bill. We are faced with a couple of scenarios: we basically sit back and do nothing and just say to the existing owners of these buildings, ‘It’s your problem; you deal with it’, and with that we would be putting people’s lives at risk. Where it is no fault of their own, we could be compromising the health and safety of our residents or our citizens in Victoria. We could say, ‘Go and chase the developers, chase the builders’, and some of these builders and developers are shonky ones who actually set up companies to build particular buildings. Then when the project is finished—some of them are pretty good at this—they declare bankruptcy, liquidate the company and start a new business the next day under a different name. Unfortunately this is quite a common practice and something we are faced with at the moment.
Therefore in order to address the safety issue to make sure we are not exposing people who are living in these sorts of buildings to some serious health and safety risks and major fires and, God forbid, loss of life, the best way is for the government to step in and take charge of the situation, with us carrying out the work and then we go and pursue these developers and those building companies on behalf of the owners of these buildings. Make no mistake, basically the message to the people who have installed that shonky product is: we will be coming after you one way or the other. Hopefully we will succeed in making sure they pay. To me it is a very irresponsible act. If people want to play ignorant, act as if they did not know the product was flammable—there is an obligation to comply with the Australian standard, but obviously one way or the other they have failed to do so.
There is an issue that was raised—not today—that while the state will rectify a building to make sure it is compliant with the Australian standard, particular owners may decide to do something else in addition to that. These are areas where they would have to foot the bill themselves, but at least the state should be able to bring that building up to scratch to meet the current standard and make sure it is safe, but should they wish to go beyond that, that will be a matter for them. It is a long process. It is not going to get fixed overnight because there are hundreds and hundreds of buildings. I know there has been a fair bit of criticism in the media over the past 12 months about why we are not identifying which buildings have flammable cladding. I think there are some serious safety issues there as to why it is important that we do not just put a sticker on every building in Victoria that might have flammable cladding. That would be inviting arsonists and inviting people who basically want to go and just cause trouble and basically have a bit of fun in their eyes through what would be terrorism in my view. That would be an invitation for them to go and light these buildings up. So there is a reason why we are not clearly marking these buildings, but owners corporations and owners of these buildings are, in my understanding, being made aware of the situation they are in.
Mr Davis: Tenants?
Mr Melhem: I am not sure about tenants, Mr Davis, but I assume they might be. I think it is important we do that, but at least we have identified through that report the most dangerous, high-risk, top-priority buildings at risk of fire, and these will be the first ones to be rectified. I think that is a good thing, and then hopefully in the next while we will be able to roll out the program to make sure we can rectify every single building in Victoria which is subject to cladding. I will conclude by saying this: I think that should be a wake-up call for the state and the federal governments to basically make sure we can put in place stringent rules so that we do not continue to import this type of product, which is a flammable product, and that we have got some stringent rules and an inspection regime in place to make sure we do a proper inspection of buildings to make sure builders are compliant with the requirements or whatever permits have been issued and they are meeting all the necessary regulations of the land. With these few words I will commend the bill to the house.