This week, Victoria’s parliament could pass legislation that would convert the Victorian Building Authority (VBA) into a “one stop shop” for dispute resolution and a new insurance scheme. Industry stakeholders say the scheme for low rise residential buildings would be administered as a government monopoly without participation from private insurers.
“When it was announced back in September we were basically told, ‘You're leaving the industry and this is what's going to happen’,” said Mark Sinfield (pictured).
Sinfield is head of construction warranty insurance for Assetinsure. According to its website, the firm is the only provider of this cover in South Australia and Victoria - where it’s known as domestic building insurance (DBI). Builders operating in both states are required to purchase construction warranty insurance on behalf of the homeowner.
The government’s Building Legislation Amendment (Buyer Protections) Bill 2025 proposes introducing a new statutory insurance scheme (SIS) to replace warranty insurance.
The aim of the changes, argues the Labor government, is to strengthen protections for homeowners against building defects and dodgy builders.
However, the opposition and industry stakeholders, including Assetinsure, while agreeing with the objective of the legislation, disagree with the method.
“I think more protection for apartment owners is an absolute must,” said Sinfield. “Defects cost a lot of money and the easiest way to deal with defects is not to have them in the first place.”
He thinks pushing private insurers like his firm out of the industry is not the answer.
“It's not that homeowners are screaming that private insurers are doing the wrong thing,” said Sinfield. “Homeowners are upset that government departments have failed them.”
Sinfield outlined some of the reasons why his firm is against this bill. One reason, said Sinfield, is the potential cost to taxpayers. Another major concern is that the Bill will not actually reduce building defects and improve building work.
“I actually see that [Bill] as facilitating dodgy operators and punishing good builders,” he said.
Under the current system, good builders pay for premiums but under this new proposal, he said, dodgy operators can avoid paying premiums because, he suggested, this government insurance offering will cover them anyway.
Tackling Victoria’s construction issues, he said, could start by looking at what other states are doing.
He pointed to the regulation of trades in that state. He said in Victoria only plumbers and electricians that are registered trades and water proofers, for example, can be hired without having to offer any proof that they have any skills.
In Queensland, he said, site supervisors are licensed. In Victoria, the site supervisor position is not a registered trade, said Sinfield, even though they can have responsibility for dozens of building jobs at any one time.
Another important change to consider, said Sinfield, is increasing the number of site inspections.
“For building surveys in Victoria, they only have four mandatory inspection stages, which is insane,” he said. “It's footings, slab, frame and then a leap until the final inspection at the end.”
Sinfield said a lot happens on a building site between stages three and four including waterproofing, gutters and drainage. Adopting these rules in Victoria, he said, would help improve building quality because it would make it harder for unqualified and dodgy operators to participate in the industry.
The Assetinsure insurance leader said his firm has received a positive response to these arguments from the opposition - but not the government. This is despite lobbying efforts, he said, “[That are] probably the most we've ever done in terms of lobbying and engaging with ministers.”
Sinfield says he routinely engages with government on warranty insurance issues and has also submitted to multiple government inquiries in both NSW and South Australia.
“We weren't consulted at all for this bill and that's the real worry here, that it's been rushed through very quickly,” he said.
However, he remains hopeful the government will change course.
“We've got a lot of support on our end,” said Sinfield. “Really, all we want from the government is engagement and consultation to figure out how to do this right.”
One of those supporters is Carringvale Construction Management.
“If this bill goes through, I can see us walking away from the residential market in Victoria, because the cost and risk will make it impossible to stay,” said director Bryn McMurray in a statement sent to Insurance Business. “Being dragged into costly claims processes every time there’s a dispute, without any proper fault finding, means we'd spend more time dealing with red tape than building homes.”
He said the Bill will encourage “cowboy contractors to work off book.”
However, other industry groups support the Bill. The Australian Institute of Building Surveyors (AIBS) and the Association of Consulting Architects (ACA) say legislation will ensure that registered builders are held accountable for the work they undertake.
“If implemented properly, we will see more building disputes resolved earlier and less ending up in expensive and prolonged litigation,” said Wayne Liddy, AIBS national president, in a media release.
What do you think of Victoria’s proposed building sector legislation? Please tell us below.
