Industry demands action on cladding and building standards to head off crisis

On Thursday the nation's building ministers, including Canberra's Gordon Ramsay, meet to discuss progress on national building reform, but the industry says actions so far have been fragmented and inconsistent.

"The entire building and construction supply chain risks being further impacted by this continued uncertainty," a statement from Master Builders, the Property Council, the Insurance Council, the Industry Group and the Construction Industry Form said.

In Canberra, the building industry said the ACT decision to delay parts of the new national building code had confused the industry and eroded confidence that the government could properly manage building reform.

Master Builders ACT chief Michael Hopkins said the government's own Building Cladding Review Group - set up to examine the use of flammable cladding in Canberra - had not released its findings. And an advisory group set up by the government had not met in 11 months.

The industry says insurance premiums are skyrocketing with certifiers and other professionals facing increases in premiums of up to 500 per cent and insurers refusing to insure for cladding. Mr Hopkins said the industry was worried exclusions might go further and leave people unable to find insurance at all.

"What we're seeing with professional indemnity insurance for building certifiers is just the tip of the iceberg," he said.

"We're seeing insurance companies also responding to other professionals including structural engineers and architects, and we're concerned that insurance companies will respond by effectively pricing certain building practitioners out of the industry and that would have a dramatic effect."

Mr Hopkins called for a nationally consistent building code - with the ACT the outlier at the moment - and national rules on insurance, licensing and other standards.

"Everyone's operating in a fragmented way. There's no national cooperation," he said, pointing to NSW where large commercial builders did not need a licence, Queensland where most trades needed a licence, and the ACT where not all trades needed a licence.

While the ACT had made some changes, including more building inspectors and enforcement, they were "hardly significant" reforms, he said.

But Building Quality Improvement Minister Gordon Ramsay rejected his criticism, saying the ACT had been working on its own reform before the national push last year and it was wrong to characterise changes so far as "hardly significant".

"While the [Master Builders] ACT is critical of the ACT government, it does not suggest any action, urgent or otherwise, for the MBA ACT to make sure its own members are complying with ACT laws and building standards," Mr Ramsay said.

The advisory group would meet next week, he said. The cladding review had not been released because it was not finished, a spokesman said.

At Thursday's meeting, Mr Ramsay will tell the other ministers about the ACT's scheme that forced builders to sit regular exams.

Communications head for the Insurance Council of Australia Campbell Fuller said not one jurisdiction had done a full audit on the extent of aluminium composite cladding in buildings - the cladding responsible for the Grenfell disaster in Britain and the Lacrosse apartment fire in Melbourne. None had a plan on how rectification would be paid for.

The insurance industry had been paying more than $3.40 claims for every $1 collected in premiums over the past decade.

That had left certifiers and other building professionals struggling to get professional indemnity insurance with insurance either being withdrawn or offered with exemptions that didn't cover cladding.

Allowing those insurance polices was not a fix, he said. "This is a stop gap measure to enable the construction and building sector to continue to operate because without that insurance the entire sector would just collapse."

The insurance crisis left apartment owners "dreadfully exposed", he said.

"There been a failure to adopt a consistent approach to detecting and rectifying flammable cladding. That failure to have a consistent approach, including consistent deadlines, is causing insurers to reassess the pricing and availability of insurance for building industry professionals."

Institute of Building Surveyors chief executive Brett Mace said certifiers were being offered insurance policies that excluded cladding - as in the ACT and now elsewhere around the country, with the result that no-one was covered when things went wrong. The problem went beyond flammable aluminium cladding, to water proofing and other cladding problems.

"Basically some of the policies are worthless," he said.

He called on governments to share the cost of fixing the buildings with non-complaint cladding and put in place nationally consistent rules to bring insurance back to an even keel.