Successive NSW Governments have believed that construction risks are best managed by builders - how wrong they were

This was the position of the NSW Liberal-Nationals O’Farrell Government in May 2013 after reviewing changes made to state building regulations and certification:

As the Government’s April 2013 White Paper – “A New Planning System for NSW” points out, building regulation and certification are a significant part of the NSW planning system.

The general outcomes that regulation and certification seek to secure are two-fold. First, a level of building performance consistent with the needs of an advanced society in terms of health, safety, amenity and sustainability and second, compliance consistent with planning expectations as defined by the planning system.

The current system of certification has evolved from the introduction of private certifiers in 1998, enabled by amendments to the Environmental Planning and Assessment Act 1979 (EP&A) and Regulations. Following the 2002 Campbell Inquiry into the quality of buildings, administrative changes were put in place within the then Department of Urban Affairs and Planning for regulatory oversight of certifiers and in 2005 the Building Professionals Act established the Building Professionals Board (BPB), which took over this function.

Subsequently, there have been numerous legislative amendments and changes to regulations relating to certification. These have been essentially accretive and so the legislative framework has become unnecessarily complex and in some cases no longer relevant. With the establishment of a new planning system, the opportunity presents to take a fresh look at arrangements which have essentially developed as flow-ons from the last major reforms dating back to the 1979 commencement of the EP&A. Accordingly, the well established principles of developing regulatory systems that are efficient in an economic sense, as well as effective having regard to ease of administration, achievement of desired outcomes and minimizing the compliance burden, should now be applied……

It follows that improvements to building regulation must have regard to regulatory impacts such as cost and effective administration and ensure that certifier resources can cope with a higher level of activity.

However, regardless of the effectiveness of improvements that can be made to regulation, building construction risks are best managed by the builder and outcomes for consumers will depend on the clarity with which the roles and accountabilities of all the participants in the process are specified in statutes and regulations. [my yellow highlighting]

By 2013 private building certifiers were estimated as issuing at least 50 per cent of all building approvals, according the NSW Dept. of Planning & Industry.

In 2019 the wheels fell off this particular ill-advised policy change, with reports of private certifiers acting like cowboys and forced evacuations of defective, dangerously unstable multi-story apartment buildings.

The Sydney Morning Herald, 22 July 2019:

It gives me no pleasure, watching the looming disaster that is the NSW construction industry, to say we told you so  ("Toxic secret kept from unit owners", July 20-21).

In the early 2000s, along with my local government colleagues, we begged the NSW Government not to deregulate the supervision of building construction and give it over to private certifiers paid by the developers.

We warned it was putting the "fox in charge of the hen house" and would result in poor quality buildings that failed to comply.

Decades later successive state governments have ignored thousands of complaints from the community and numerous private certifiers declaring themselves bankrupt to avoid liability.

The industry is failing the consumer with all the benefits flowing to developers. The only real solution it to put government back in charge of regulation of the building construction process and that can only be done efficiently by a local authority. - Genia McCaffery, former president Local Government NSW

The Sydney Morning Herald, 15 July 2019:

Professional indemnity insurance premiums have skyrocketed following the discovery of severe defects at a string of apartment buildings in NSW and Victoria's flammable cladding problems, and other types of building insurance products are expected to follow.