Today, I'm going to update you on a few things that I've set out on the slide.
First of all, what are we doing at the BPC to improve our own regulatory performance?
Licensing and registration, inspecting and enforcing, those are the key elements of that.
Then I'm going to talk about the new building and plumbing Commission, what it means for you, and how we plan to implement the new powers which will come into effect next year.
So first of all, we're going to start with regulatory uplift.
So this is the term I used to describe the whole range of activities we've had underway over the last 18 months or so at what was the VBA and is now part of the BPC to improve how we regulate our core functions across the three core areas of regulatory operations.
And this regulatory uplift, uplift is focused squarely on the goal of improving consumer outcomes by supporting industry to meet required standards and incentivising you to do so.
So what does it mean across the three core regulatory operations business?
Well, first of all, licensing and registration.
We register about 65,000 practitioners in Victoria.
I don't need to tell you we have clunky, antiquated paper based systems that are incredibly frustrating for building practitioners, building and plumbing practitioners to use and they're very frustrating for our staff to use as well.
So we have a big project on the way, streamlining, streamlining and simplifying these processes and reducing processing times as well as strengthening integrity.
Our first focus is a new online application system for DBU applicants and apprentice plumbers and that will be rolled out before Christmas.
Secondly, the inspectorate, we've been able to increase our inspectorate team over the last year by 20% and recruitment continues.
So we are actually putting more boots on the ground in terms of inspections than we've had before.
But also importantly, we're changing how we do inspections by focusing on specific harms such as balconies, drains, waterproofing and as well as unregistered practitioners.
So this is a huge shift in our approach away from broad based, one-size-fits-all type inspections towards specific harms and specific risks.
I'd also like to emphasise to you as industry members that we take an educative approach wherever possible.
Most of the time practitioners are very keen to fix any issues raised by by our inspectors when they come on site.
But when they don't, we do use our enforcement powers and that's the final column on this slide.
So we're actually using the powers, powers that are in the act that we haven't used much if ever before, like oral directions to fix.
And we're ramping up prosecution activities.
For example, right now we have 60 prosecution activities underway, mainly against unregistered practitioners.
That's the tool that we're using to drive unregistered practitioners out of industry.
And so we've got 60 prosecution activities on underway compared to only 14 two years ago.
So that's a big shift.
We also published publicised the outcomes of our disciplinary and prosecution activities and Nicole Swift who leads our our communications team, we'll be talking about this later today.
This publicity about our use of discipline powers and prosecutions is sending a strong message to industry that there is a proactive regulator and that we're not shy about using our powers when it's necessary to do so.
Overall, when you look at the this the regulatory uplift in the components of it laid out on that slide, the overall impact is to use these tools to make us more effective and efficient at delivering our fundamental goal, which is better buildings and Victoria.
And while recalcitrant operators and repeat offenders deserve to face penalties for poor work, we know that the vast majority of industry aims to do the right thing and we are there to support you to do that.
Example one of our new approach to inspections is a drain blitz that we are undertook in the last week of July and the first week of August.
We undertook 440 inspections right across Victoria, regional, suburban, metro etcetera.
From those inspections 294 drains were compliant and 146 or one in three were not.
And the slide gives more detail about the types of defects that we found.
So what did we do?
We took a range of actions depending on the the nature of the defect.
We we issued 51 orders to fix non-compliant work.
We referred 14 cases for disciplinary action.
We issued 35 fines totalling about $20,000 and we discovered 4 unregistered practitioners who now face prosecution.
The second example of our enforcement and inspectorate uplift that I'll use today is the unregistered blitz.
So we did the last one of these.
We've done two of these.
The last one we did at the very end of last year, and we've got another one coming up very shortly.
This is a map of where we undertook the blitz in metropolitan Victoria, in other words in in Melbourne and Greater Melbourne.
And you can see that these inspections are right across the whole metro area.
Now, we know that unregistered and unlicensed builders and plumbers are a significant risk for defective work with the potential to cause serious harm to consumers.
They also often seriously under quote registered and licensed practitioners.
That's why it's important that we undertake these types of inspections, these focused inspections on specific harms and take action against unregistered operate operators.
This is a vital protection for the rest of industry and for consumers.
So to the new Building and Plumbing Commission, this is so on top of the regulatory uplift that I've spoken about, which is overhauling our licensing and registration, our inspectorate and our enforcement powers, we are also getting ready for the new powers and functions which are coming to us next year.
So on the 1st of July 2025, the Building and Plumbing Commission was established and it it comprises the organisations formerly known as the Victorian Building Authority, Domestic Building Dispute Resolution Victoria and the building part of the insurance, the government's own insurance operator, the VMIA.
So we all came together on the 1st of July.
It required the merger of 119 systems and so far so good.
We haven't had any glitches and it's worked reasonably well.
But now the the hard stuff starts, we are now a single entry point for consumers.
We can provide a more joined up and efficient system for you, but we also need to upgrade our operations and activate our new powers.
So launching the BPC was an opportunity to upgrade our customer service centre, which we've done and we we're still in the process of of further improvements.
But we've seen a significant reduction in call wait times for practitioners and consumers since we went live on the 1st of July.
There are obvious productivity and efficiency benefits to be had from the merger of the three entities under the one roof.
And we're working very hard across our organization to unlock those those efficiencies so that we can deliver better services for you and deliver better protections for consumers.
We've also taken the opportunity to rethink how we use communication.
We're building a completely new website that will make it easier to find the information you need to do your job.
And we're rolling out new industry bulletins and education.
I've already had the opportunity this morning to have a chat with some of you about our industry bulletins.
If you have any ideas of where we can do more or an area where you feel that we need to pay some attention, please let us know.
Nicole, Steve Baxas and I are around all day and we'd be pleased to get any ideas that you have about where we can support you better in terms of industry bulletins and so on.
Now the next slide has a big Red Cross on it and that is because it is highlighting where the current powers of the BPC are limited.
So once an occupation permit is issued in the building sphere, we are not able to issue a direction to fix to a builder to return and fix defective work.
We can do so with plumbers through the plumbing system, but we can't do it with builders.
And you can see there that that's a big gap in what we can deliver for consumers because it basically means that once the occupancy permit is issued in our current regime, if we do find that there are defects or non-compliance, we can, we can issue disciplinary action against builders and and other practitioners.
But we can't actually get consumers what they want, which is their building fixed.
They all end up in VCAT or they, a lot of them end up in VCAT.
And that's not ideal from anyone's perspective.
So the purpose, one of the purposes of the government's reforms that I'm going to talk about in a minute are to make turn that big Red Cross into a big green tick.
And that's what we're planning to do.
So why are the reforms needed?
So not only have we got the new BPC, but as many of you know, there are new powers and new legislation came in to support the new BPC in undertaking its role.
So the previous slide highlighted a significant gap in our current powers, but there's also other deficiencies in our system.
We used to have, we before we joined together at BPC, a fragmented system where consumers were hand passed between DBDRV and the VBA and so on.
And that meant that they would just ping pong from one agency to another.
It's confusing.
It was expensive and as we have seen it was not very effective too many cases at VCAT which has contributed to lawyer wealth, no doubt about that, but at a cost to consumers and practitioners.
So these are the reasons are summarised on this slide, which were the main drivers of the government's reform program.
So the 4 key elements of reform as set out on this slide.
First of all, the new integrated regulator, which is the BPC.
Secondly, domestic building insurance as a first resort product.
Thirdly, new powers for the BPC including a post occupancy permit rectification order to fix that Red Cross into a green tick.
And then finally, the introduction of developer bonds.
But in delivering these reforms, it is worth underscoring some key points.
First, the overall goal of the new approaches is to send a strong signal to industry to get it right first time.
The BPC's approach is to regulate where we need to and be proportionate to different circumstances.
In other words, we will regulate with judgement.
The BPC recognises the difference between flagrant non-compliance by practitioners and a practitioner who makes a genuine mistake and we will act accordingly.
So I want to recognise at the outset of talking about these additional powers and so on that this is a complex industry.
There's many players, many people on site doing different jobs.
Mistakes happen and as a regulator we need to differentiate, and we will, between genuine mistakes and intentionally cutting corners.
So the first power I'm going to talk about is the rectification orders.
As I've said, this new power addresses that gap in our current system.
And I don't need to tell this audience that the cost of rectifying defects is high.
There's the rework and then there's the impacts and delays to your other projects.
So this rectification order is a very powerful tool which the BPC must use carefully and not recklessly.
Key approaches which we need to consider as we use this power include things like focusing on poor practices through a targeted approach.
So supporting that inspection approach that I talked to you about before, which is based on where we see the risks, early engagement with practitioners to resolve issues before we need to issue any, any orders or anything like that.
The timeliness of issues, fairness, proportionality and attribution.
Now the detail of how the rectification order will be activated is still being developed and industry consultation will continue to be a foundation of that process.
The next two, two things which are big differences compared to the current system.
The 1st is DBI as a first resort product.
Currently, as you all know, domestic building insurance claims can only be made if the builder dies, goes bankrupt or otherwise can't be found.
The reforms announced by the government earlier this year and and which have now gone through Parliament, will make domestic building insurance a first resort industry product for residential buildings, three stories or less.
Under this scheme, the BPC will be able to arrange for the rectification of defective work and it will be funded through insurance.
The specific workings of what is called the new statutory insurance scheme, including the triggers for insurance and what is covered, will be set in regulations and again as subject to consultation.
Developer bonds.
So a developer bond scheme is going to be set up for buildings, for residential buildings, 4 storeys and above.
This is intended as an interim step on the way to providing better protection through a new decennial liability insurance product which is already being rolled out in NSW, and we're taking a lot of lessons and guidance from that experience.
Under the Developer Bond Scheme, developers will pay a bond that will be held by the deep, by the BPC and it will be returned to the developer based on independent assessment of the build.
The bond will be introduced at 2% of the total cost of works.
And again, the exact detail of this scheme is still being worked through and further consultation will be underway very shortly.
So just before I finish bringing all this work together, our regulatory operations uplift and the new powers and functions is a massive task, but one that the BPC staff are committed to and are driving and are working very hard to deliver.
But what does success look like? From our point of view?
It looks like a reduction in the costs and incidents of defects, weeding out shoddy players, fewer cases at VCAT and a regulator with a strong remit doing its job in partnership with industry to make a big difference to consumer outcomes.
I look forward to continuing to lead this work to improve the building regulatory system in Victoria for all of us.
Thank you very much.