Submitted in the form of a letter from Bran Black, Chief Executive of the Business Council of Australia
The Business Council of Australia (BCA) welcomes the Government’s commitment to the reform and modernisation of the National Construction Code and its governance. Our members represent the largest businesses across the economy, including builders, property developers, and building products manufacturers and suppliers. The BCA participated in the Treasurer’s Economic Reform Roundtable last year and supported the need to review the Code.
Australia faces a housing supply crisis. The nation needs more homes, and red tape is a major impediment to delivering that supply and providing people with places to live. Over the last several years the cost of delivering a home has risen significantly, well above the level of inflation.
In this context, the National Construction Code must be focused on a minimum set of requirements necessary for the delivery of safe, reliable, and efficient buildings with appropriate amenity and functionality. It should not be the tool that layers on extensive additional elements, with no regard to the cost and implications of doing so. And yet there is real concern that it has become the latter.
The requirement for every building to deliver on ‘best practice’ across every domain creates rigidities that result in an inability to tailor requirements to differing price levels. Obviously, there will be developers that strive to achieve that and deliver for a market that has capacity to pay at the higher end, but there must be scope to deliver quality affordable housing that is accessible to a broad range of consumers. The risk of overspecification is that fewer dwellings are being delivered and are more expensive. That means higher prices and more difficulty for everyday Australians simply seeking a place to live. The consequence of that, along with other regulatory imposts like restrictive zoning and inefficient permitting, has contributed directly to the in ability for Australians to find affordable housing. At the same time, high profile building quality failures have eroded the public’s confidence in new buildings.
The Code must go back to setting the minimum requirement for safety, reliability, efficiency, and amenity/functionality which are absolutes. Improvements beyond that can then be provided through decisions made by the developer, depending on the project’s circumstance, rather than mandated by government. The entirety of the Code should be reviewed to pull back unnecessary requirements.
These changes need to be undertaken in parallel to reforms by state governments in respect to the operation of their planning systems and building systems, to address other systemic issues that limit new housing supply and drive up the cost of housing. This includes tackling quality issues in some parts of the sector where aspects of the Code are not being adhered to, rather than layering on additional state -based requirements and associated costs.
In addition to this broad review of the Code itself, we have identified governance, management of the National Construction Code, change processes, and support for Modern Methods of Construction as areas that we propose as part of the modernisation effort, with our recommendations listed in the full letter.
The BCA will continue to take a close interest in the reform of the National Construction Code. We hope that this process will lead to wholesale reform of both the Code itself and its governance. The ever-expanding, increasingly complex nature of the Code is not sustainable, and if the Australian Government, along with state and territory governments, are serious about tackling housing affordability through supply improvements, then this reform opportunity must be seized.