Chandler to set up enquiry into builders’ insurance

By ERWIN CHLANDA

 

Housing Minister Peter Chandler (pictured) is setting up an enquiry into the home buyers’ insurance scheme, the Fidelity Fund, which he says appears to be “not as good as we had first hoped”.
He says he is responding to builders, especially small ones, who have voiced strong concerns, including many in Alice Springs.
He will be calling for expressions of interest from people who would like to serve on the enquiry, which will be largely at arm’s length from the government, a “desktop study” and not “a multi million dollar affair,” and have a time frame of three to four weeks.
Mr Chandler says he envisages that people from a company such as KPMG or Deloitte, from the construction industry, Treasury and the Department of Justice will be included in the enquiry team.
He said he did not want to preempt the findings but suggested one approach could be to “tighten up regulations at the front end” so as to “mitigate the reasons” for falling back on an insurance scheme, and there is less need to deal with victims of defaulting builders.

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11 Comments (starting with the most recent)

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  1. Rod
    Posted June 19, 2013 at 8:50 pm

    I think Peter Chandler will be tested as a Minister as he attempts to unravel the HIA Insurance scam. Why don’t we have an insurance run by TIO as before, then the profits can go back into TIO and make home insurance cheaper for the consumer. Isn’t this what it is all about – the consumer?

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  2. Alan Hauff
    Posted June 19, 2013 at 1:10 pm

    It’s great to hear that this Government is looking into this so called insurance scam.
    Keith Phelps asked the question of who is the insurance company the MBA uses and do they re-insure, I also would like to know the answer to that.
    My best guess is that they would broker it out to the lowest bidder and keep the difference.
    The TIO’s Home Builders Certification Fund had (from what I’ve heard) well over $10m in the HBCF trust fund when it was closed down, which clever person in the last Territory Government (Labor) deemed it more practical and profitable to hand the insurance scheme over to a private entity and why?
    Another thing I’d like to know is, who chose the Master Builders Association to implement the insurance scheme now called the “Fidelity Fund”?
    They say the MBA was chosen after “consultation with the industry”, that’s funny, no one “consulted” with me or any other builder that I know, and it’s probably a good guess that NONE of the other 623 registered small (restricted) builders were “consulted” with either.
    One question that I have is why didn’t anyone ask me if I wanted to take over and administer this “Cash Cow” scheme?
    I mean I could find a broker who would get me the best deal and run the “Fidelity Fund” and pocket the profits just as well as the MBA could, what makes them so “special”?
    And as one of the builders pointed out to a government representative at the Alice Springs meeting, “you don’t have to put your house up as collateral every day you go to work.”
    Why should we have to? The sooner this scam is dealt with the better!

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  3. Dean Summers
    Posted June 19, 2013 at 9:16 am

    I just hope that our new MLAs and CM can remove this bogus deal as quickly as it was sprung on the NT consumers and builders over Xmas and New Year whilst most were enjoying the festive season holidays.
    I am in full support of a Government that listens to the consumer and the small business sector.

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  4. Keith Phelps
    Posted June 18, 2013 at 5:13 pm

    Mr Chandler well done for responding to the building industry concerns over this bogus “last resort insurance” … is it insurance?
    Who is the insurance company and do they have re-insurance? If not then it is not insurance.
    If these changes to legislation have been made to protect the consumer, when was the consumer going to be asked for their input?
    Did the builders have their input listened to? Has this scheme failed anywhere else in the country? Where do the funds collected from the “last resort insurance go”?
    Who profits most from this “insurance”? What are the justifiable facts and figures behind the implementation of this scheme when the TIO fund seemed to be working fine?
    When were consumers going to be informed or notified of this new scheme by the government?
    Or is this up to the Master Builders Assoc that have now become unelected policy makers, it appears?
    This whole scheme is an insult to mine every other other hard working Territorian’s intelligence to benefit a select few at the expense of many!
    GET RID OF IT!
    Concerned consumer.
    Keith Phelps

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  5. Kristina Lamb
    Posted June 18, 2013 at 10:45 am

    Could not agree more with everyone’s comments especially Lionel Grady. We are in the same boat and we really don’t want to do something else as this is what my husband knows and has been doing for the past 20 years.
    The TIO fund worked. Why change something that worked into something that has not worked else where! It’s really simple, it’s not rocket science.
    Thank you Erwin Chlanda for helping us small builders who are just trying to make a honest and decent living for ourselves. Let’s just hope that the Ministers hear us and does something to make it right again.

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  6. Posted June 17, 2013 at 8:16 pm

    Well done Alice Springs, any idea when Darwin builders have the same meeting?
    We raised our questions at the information sessions, and voiced our concerns with this new insurance, the impact that would have on increases costs of construction, which would then be passed onto the consumer, the additional paperwork also required to submitting to verify progress payments, but we where just shrugged off. All this talk about protecting the consumer, when the consumer just ends up paying more!! HBCF insurance was working – why change?

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  7. Lionel Grady
    Posted June 17, 2013 at 5:42 am

    It’s about time – why does it take so long for government to act?
    Let’s face it they are fooling around with people’s livelihood.
    I went to all of the meetings when the fund came about and all of the genuine concerns just fell on deaf ears.
    They copied a piece if rubbish that has absolutely disastrous effects all over the country. There are horror stories down south, of not one successful claim to the fund.
    Why does the government think it can just create an insurance fund and think everything is all right and walk away? Insurance companies are there to take money, not give it back. That is how they make a profit and they can go to enormous lengths to get out of paying. The TIO fund worked brilliantly as it was government backed and all they had to do is extend the cover under the same arrangement.
    The MBA has made millions of dollars and they won’t give it up easy, they will invent all sorts of legal rubbish to keep it going as long as possible.
    This fund is a fanatical cancer to my business as the restrictions won’t allow me to keep a constant client flow.
    I have already lost four clients this year. Being down to one house at a time isn’t sustainable.
    I can’t find a client to build a house for any time I need one. I am only a small builder it’s by choice, as I can keep control of everything I do.
    I have been building for 30 years and never had a dissatisfied customer and have made a lot of friends over the years and if something isn’t done soon I will be closing up and taking all of my knowledge and resources, no more apprentices, and do something else.

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  8. Paul Winter
    Posted June 16, 2013 at 9:28 pm

    I agree 100% with Mr Dwyer’s comments. I have noted first hand the cost increases that this system is causing the clients, ultimately they are the ones who will pay more for building and yet receive less insurance cover than the old system through TIO (HBCF).
    I find it astonishing that we removed a working system to be replaced by a broken one. I applaud the builders in Alice Springs for holding this meeting, well done.

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  9. Erwin Chlanda
    Posted June 16, 2013 at 4:31 pm

    POSTED BY THE EDITOR UPON REQUEST OF THE WRITER:

    While it is commendable that the Government is listening nothing alters the fact that this inquiry is number 48 over the past 10 years into the secretive LAST RESORT warranty insurance that surely must ring alarm bells let alone Choice, the nation’s top consumer advocate, stating these are JUNK policies making a mockery of consumer protection.

    Minister Chandler refers to small builder concerns with the new fund however we would remind Minister Chandler that small builders make up 95% of the registrar of building practitioners in the Territory as they do across the nation.

    The building industry and its consumers want a FIRST RESORT scheme (insurance as we know it) in the Territory to be delivered by Government on our behalf, and if we cut out the middleman that can be achieved as we will fund it without cost to the Government or the taxpayer.

    We ask the Government to be mindful of the fact that the wider building industry funds every cent of consumer protection and agencies such as the Building Advisory Services therefore the builders and consumers alone are the most important entities in this matter as all others are tainted by vested interests.

    Open and transparent consumer protection for the building industry is the way forward. It’s simple, and it’s not rocket science!

    Phil Dwyer
    National President
    Builders Collective of Australia
    http://www.builderscollective.org.au

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  10. Helen Lopinski
    Posted June 16, 2013 at 8:30 am

    Congratulations NT and to all the people who stood up to express their concerns. You now have a chance to create a fairer scheme for consumers and builders. You have given me some hope that there are Ministers out there who are prepared to listen and take action!

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  11. Steve Brown
    Posted June 15, 2013 at 1:58 pm

    That’s fantastic news thanks Ed! And how nice it is to have a government that’s prepared to listen after so many years of silence. All in all I don’t think you cant ask for much more than an open mind from government. Good on you Peter Chandler! Get some good heads involved in this enquiry, bypass the middle management supposedly representative groups like Master Builders and go directly to builders and consumers. Master Builders won’t mind because they only pass on the wishes of builders anyway, don’t they? Best to have nobody in the middle I say, after all it just room for more misinterpretation.

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