Investigation Into Governance and Administration of Victorian Building Commission (06.02.2013)

Written on the 20 February 2013

I am pleased to rise to speak on the Victorian Ombudsman's Own Motion Investigation into the Governance and Administration of the Victorian Building Commission -- December 2012. I do so because this report has raised some very alarming aspects in relation to the Victorian Building Commission. I am very pleased that the Minister for Planning, Mr Guy, has taken steps towards restoring integrity to the process and is putting confidence back into the building industry. That is a great thing.


The report provides a devastating account of some very serious issues. In his executive summary the Ombudsman says:


In March 2012 my office received information from several sources in relation to concerns regarding the Victorian Building Commission ...
He highlights three areas: the registration process, governance and administration, and recruitment. I will speak briefly to those three areas.


In relation to the registration of building practitioners there are a number of key issues. The investigation identified that the registration process for building practitioners was poorly administered and contained a number of gaps and integrity risks. There are a number of case studies in the report that highlight how appalling some of these situations were. One particular case study relates to an applicant who was identified as overstating his building experience and who submitted supporting documentation with his application containing fictitious building works. That is just one example.


The next area, governance and administration, makes extraordinary reading and is quite alarming. As the minister has said, quite rightly, it is just not good enough. The report says:


This investigation identified that:

  • Significant public funds were spent by the commission on industry bodies. This included:
  • over $200 000 on meals and entertainment over a three-year period
  • over $100 000 in 18 months on entertaining at sporting events
  • over $300 000 incurred by the former commissioner and another director over a three-year period in relation to overseas travel
  • nearly $950 000 expended in less than four years on sponsoring various events and awards of bodies such as the Master Builders Association of Victoria and the Housing Industry Association of Victoria.
  • a substantial increase in the cost of developing the commission's e-toolbox customer relationship management system -- from an initial contract amount of $698 000 to over $4.65 million.
  • It is a damning report. It demonstrates once again the project overruns that occurred under the previous government. But more concerning was the blatant abuse of public taxpayer funds, which should be absolutely condemned. I am pleased that the minister has overseen this matter.


The last area I will mention is recruitment, termination and contractors. Again the Ombudsman's investigation found some damning evidence. The report says:


This investigation identified:

consultants and contractors were engaged by the commission and paid up to $350 000 a year without competitive or open tender processes
managers and directors knowingly employed people with questionable backgrounds and a criminal history ...
This report is quite extraordinary, and there are a number of recommendations in relation to those three particular areas. I commend the minister for acting on the concerns raised by the Ombudsman in this report, in particular through his announcement of a new Victorian Building Authority, which will incorporate the functions of the Victorian Building Commission, the Plumbing Industry Commission and the Architects Registration Board of Victoria. In a media release last


year the Minister for Planning, Mr Guy, stated that they will be absorbed into a single entity for the governance of builders, plumbers and architects. The minister has moved to restore integrity to Victoria's building industry, and I commend him for his actions so far.

'Business interrupted pursuant to sessional orders.'

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