Scheme to stamp out home building defects in Victoria delayed 14 years

An overdue promise to lift standards for tradespeople and reduce the prevalence of building defects in Victoria could be delayed by as much as 14 years.

The Department of Transport and Planning made the revelation at a meeting of the Building Industry Consultative Council, conceding a registration and licensing scheme for building trades could arrive as late as 2034.

This would be 14 years after the change was initially due to take effect. The regulatory impact statement was due in 2020 but was delayed by COVID-19, then the 2022 state election, and now the creation of the new building watchdog.

Minutes of the December meeting of the industry council, and subsequent meetings, were obtained by the opposition under freedom of information laws and provided to The Age.

Under current regulations, only plumbers and electricians have to be licensed to work on a Victorian home building site. Head contractors need to be registered in some circumstances, and are responsible to customers and the regulator for any failures.

But their employees and subcontractors who do the majority of domestic building work are, in effect, unregulated.

Under the proposal, employees would need to be licensed and subcontractors would be registered.

While legislation was passed in 2018 and again in 2021 to allow for the change, a consultation page was inexplicably deleted from the Engage Victoria website last year.

The industry has since endured labour shortages, inflation and insolvencies, culminating with the high-profile collapse of one of the country’s largest home building companies, Porter Davis, in 2023. The crisis supercharged debate about consumer protections and shoddy work left unchecked by the regulator.

The government ultimately abolished the Victorian Building Authority and replaced it with the Building and Plumbing Commission.

Department of Transport and Planning bureaucrat Megan Peacock told industry heads at the December meeting that its creation would delay the registration and licensing of trades.

“Ms Peacock noted that the delay could be 3–10 years,” the minutes said.

This means the regulatory impact statement may only be ready in December 2034.

“Members expressed concern that this matter has been further delayed and called for the immediate release of the [regulatory impact statement] and for the government to make progress towards implementing the registration and licensing scheme for carpentry trades,” the minutes stated.

“Members noted that government has an opportunity to lead broad industry reform which has bipartisan support of employers and unions. By implementing the reform there will be less defects and a safer industry. This can be seen through the registration and licensing of electrical and plumbing trades.”

The Property Council, Master Builders Victoria (MBV), Master Plumbers, Lendlease, Multiplex, WorkSafe and Development Victoria were among the members in attendance.

In March and July last year, members again stressed its importance, according to the minutes, agreeing to write to Housing Minister Harriet Shing and to establish a working group.

But a Master Builders Victoria spokeswoman said the proposed framework was now out of date.

“It needs to be reviewed and updated, and should not be rushed,” she said in a statement to The Age. “We need to get this right for both consumers and industry.”

MBV supports registering builders but not licensing individual workers, which the spokeswoman said would push up costs with no guarantee that work would improve.

Multiplex Regional managing director Ross Snowball said the construction company supported any scheme that improved trade skills and building quality.

“A clear, consistent licensing framework would not only improve standards, it would also make trades a more attractive long-term career, with proper accreditation providing professional recognition and greater certainty for tradespeople and the end user, particularly as it applies to housing,” Snowball said.

The CFMEU, which is in administration following The Age’s Building Bad investigation, has been campaigning for the change to recognise worker skill, lift standards and workplace safety.

A spokesman for the construction union said: “One of the best ways to attract and retain apprentices is by giving them the career certainty of a licence for their trade, which will lift the quality of construction, deliver better builds for consumers and help the state government deliver homes and infrastructure for Victorians.”

Housing Industry Association executive director Keith Ryan said it did not support the framework and claimed it was the embattled construction union’s baby.

“We don’t support the CFMEU’s proposals and desires for this to happen, and we would be pushing back very strongly,” Ryan said.

He said the Housing Industry Association, which is not a member of the industry council, could consider supporting the requirement for some trades “where there is a genuine consumer need”.

At the March 2025 meeting, MBV chief executive Michaela Lihou had argued waterproofing should be prioritised because of the prevalence of those complaints.

The phased rollout, as proposed, would begin with carpentry and expand over five years to other trades.

A 2020 options paper estimated Victorians wasted about $1 billion a year on non-compliant building work.

“The rate of consumer problems in the Victorian building industry is high relative to other sectors,” the options paper said. Poor-quality workmanship was the most common complaint.

The department hoped the scheme would reduce the rate of non-compliant building work, ensure accountability, encourage workers to develop skills, and build consumer confidence.

It would “ensure that only qualified, competent and suitable trades are authorised to operate”, the paper said.

Victoria is the only jurisdiction that does not require any registration or licensing for individual trade subcontractors. Obligations vary between other states and territories.

Opposition Leader Jess Wilson said home builders, home buyers and construction firms were exposed to greater risks in Victoria because of the registration and licensing gap.

A Victorian government spokesman said the state was delivering nation-leading reforms to strengthen consumer protections and reinforce confidence in the building industry.

“Trade registration and licensing schemes have already been introduced for critical trades like plumbing and electrical, and, as outlined in the building statement released in March 2025, we will expand this to other trades,” he said.

The government said it would do so once it had finished progressing a home warranty scheme, a developer bond scheme, and new powers to fix defects.

“Before finalising the broader trade registration scheme, we took strong action to protect consumers when they need it most by creating a powerful new regulator with the powers it needs to hold dodgy operators to account when things go wrong.”

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