Kim O’KEEFFE (Shepparton) (17:18): I rise to make a contribution on the Domestic Building Contracts Amendment Bill 2025. The bill is for an act to amend the Domestic Building Contracts Act 1995, the Building Act 1993, the Australian Consumer Law and Fair Trading Act 2012 and the Building Legislation Amendment (Buyer Protections) Act 2025 and for other purposes. Primarily the bill makes amendments to requirements for domestic building contracts, implied warranties for domestic building work, limits on deposits under domestic building contracts and domestic building work disputes as well as dispute resolution orders.
We need to do all that we can to ensure that there are the right structures and legislation in place to support and protect consumers as well as the building industry. We want consumer protections so that when purchasing or building a home, the consumer is getting what has been paid for. We want people to be able to own their own home and to get more people into homes. There has never been a more important time to support and stand with our building industry and to build more homes. I have a close friend who is a builder. He is very busy, which is wonderful to hear – he is a small business owner – but he does tell me often about the red tape and the confines that he often finds he is confronted with. He has three people that work with him. I think when we talk about homes we should also really be mindful of the hardship of small businesses and the struggles that they do face. We have to do as much as we can to make sure that they can keep their hands on the tools and that their businesses are viable. I am doing as much as I can to really chat to our local builders and the industry more broadly to make sure that we are doing as much as we can. We understand their challenges, and there has been some feedback to this bill, which has been really important.
The bill makes many pro-consumer changes, but they are probably not as sweeping as they could be and will mostly tighten up regulations of the building industry and seek to improve consumer protections as a result, particularly like the Porter Davis collapse that we saw.
This was a result of the poor business practices of Porter Davis, which have resulted in more red tape for other building companies. In order to ensure that a repeat of what happened in 2023 does not happen again, we do not oppose most of the things in this bill, but we do have some concerns. We have heard in this place before and in our own electorates the horror stories of people who have had devastating experiences when things do go wrong and the significant impact when a company does collapse. As we saw through the collapse of Porter Davis in 2023, more than 500 home owners or prospective home owners were at risk of losing their entire deposits due to the failure of the group to obtain business insurance on their behalf when it was required, and for many that was a risk to their life savings. As we know, when people are looking at perhaps building their first home or even moving forward in their lives, it takes a lot of time to save that money and to have that money at hand to do that. To think that someone is confronted with losing their life savings – think about that – is devastating.
So the type of legislation that we are talking about today is so important to make sure that we protect people out there that are actually building a home and also work with our building community, as I have mentioned. It was devastating for all of those that were caught up in that collapse. I did know a few people that knew people very closely. Those discussions were terrifying when they were looking at what was actually happening whilst they were experiencing that. It highlighted the need to do more so that we can have regulatory frameworks and protections in place that, first of all, protect Victorians but, secondly, punish those that fail to comply with the law. We must always continue to do more in this space and ensure that we have an effective, fit-for-purpose and contemporary regulatory framework in place. But also any such reform needs to be carefully balanced with the need to cut red tape and reduce the cost of operating in Victoria in order to reach a sustainable and cost-effective medium for both builders and developers, as well as home and builder owners. We also know that the building industry is already struggling – and we have heard that today in this place – with ongoing financial pressures, material costs, staff shortages and the restraints and frustrations of bureaucracy and red tape.
We have a housing crisis, as you know, and we need to do all that we can to address all tiers of housing productivity and availability, including social and affordable housing. As you know, I am very passionate when it comes to housing, and it is an issue very broadly for this state. It is really distressful when you look at the figures when it comes to the housing shortages and particularly the rise in homelessness. The figures speak volumes when you consider that one-third of Australians experiencing homelessness are in Victoria. It is extraordinary and a direct failing of this government.
Social housing I raised this morning in my members statement. We have 1600 people on the waiting list that do not have a home. I know we are not specifically talking about social housing. However, we are talking about people’s lives, and it is extremely distressful. I work very closely with a few organisations back in my electorate. We look at ways that we can support people that are homeless and people who are sleeping rough – there are very complex mental health issues – to have a direct impact on them and try to get them the support that they need. It all comes back to the core business of having more housing. We have an extremely high shortage of social housing, and it is something that I really continue to work hard for. We have to acknowledge in this place that tonight people are sleeping outside, they are sleeping in cars, they are sleeping rough. Everyone, every single person, deserves a home and a roof over their head and a place to call home. We need to help those people in whatever way we can.
We also want people, though, to achieve the Aussie dream of owning a home, but it is getting harder and it is getting out of reach for many. Cost-of-living pressures and rising costs and increasing taxes are making it impossible for many to own a home. I have got a friend at the moment who was chatting to me about her daughter and her fiancé. They are working two jobs. They are working really hard to try and get that deposit. She was telling me every time they seem to get to that milestone, suddenly there are more increases that they are experiencing, whether they are insurances or other costs that they are experiencing. It is basically one step forward, two steps back. It was interesting chatting to her. As parents, we want to help our kids. I have got a daughter who has been recently looking at going into the housing market. She is 37. It has been a long haul for her, and she is looking at buying a little apartment.
She also works two jobs. She is a vice principal at a school and also has a fitness centre. She says to me, ‘Mum, to have saved how I have saved’ – and we want to help her, but she does not want us to do that right now. She says it makes her proud to think she has actually saved that deposit. But again, it has been hard. At 37 years of age she has got to that point now – she is getting married in October this year – to finally go into the market, but it has not been easy. I think when you look at people that make sacrifices, they work two jobs or they cut back on things that normally they would like to perhaps do, like going out with their friends on a Friday night for drinks and having dinner and socialising. She said that was costing her 100 bucks a week, so she cut some of that out. That is the thing that really concerns me – that often people are so busy, heads down trying to save to get the Aussie dream, but sometimes they are just sweeping along and missing out on normal things that they should be enjoying. So we have to work harder. We have to try and work out ways that we can get people into housing and to own a home.
Getting back to the bill, the bill does seek to protect Victorians building or renovating their homes, and there are a few ways it does that. Some relate to strengthening requirements and protections for domestic building contracts and major domestic building contracts, authorised deposit limits, progress payment stages and progress payment limits to be prescribed in regulations, with any payment for work completed subject to a general proportionality requirement for any MDBC and any exemptions. There are some rules through this bill around how builders get paid under a major domestic building contract, which have not been updated since 1995, so that has been quite some time. I am sure many within the industry will be welcoming that amendment. The bill will amend the act to insert a new regulatory head of power that will enable regulations to prescribe deposit limits, progress payment stages and limits specific to different types of contracts. So there are quite a few changes in here.
One of the others is that the bill seeks to take a balanced approach by allowing cost escalation clauses to be used, but only in contracts where the contract price is $1 million or more in conjunction with new strict consumer protections. But also, these cost escalation clauses must not be used to increase the price of a contract by more than 5 per cent in total, which I think is really important. A builder who breaches either of these requirements will commit an offence and be subject to a penalty. For a cost escalation clause to be valid, a warning notice must be given by the builder before the contract is entered into explaining the effect of the clause, and the building owner must place their signature, seal or initials next to the clause in the contract. Builders will also be required to warrant that any increased costs are calculated with due care and skill considering all reasonable information and to provide the building owner with a copy of any invoice, receipt or other prescribed documents and evidence that the increased costs are valid.
In my final few moments, I think it is really important we have really strong legislation in place, but I always get back to the point that we need to do as much as we can to get more homes on the market, get more affordable housing, get more social housing and get the builders the skills that they need. We need more people with skills on the ground, and we need to keep doing as much as we can to support the building industry and the housing industry.
