PROPOSED REFORM of the HOME BUILDING COMPENSATION FUND, Important parts of A.B.S.H.W Submission.

ABSHW is of the view that the current reform agenda should be seen by the Government as an opportunity to finally release the HANDBRAKE imposed on the residential building sector thereby allowing New South Wales to realise its full economic potential and all the benefits that flow from this for the citizens and businesses of this State and all of Australia.

The current scheme utilises outdated,  costly and time consuming underwriting approaches which, in reality Don’t reduce risk of insolvency or defects at all. The Self Insurance Corporation is utilising the same underwriting approaches that failed to reduce risks to acceptable levels for private insurers and Government prior to private underwriting commencing in 1997. A new approach is required, not only to reduce the burden the current scheme imposes upon builders.

The ABSHW model gives builders choice and flexibility, not be unnecessarily intrusive, providing higher levels of consumer protection.

ABSHW Builder Eligibility

Eligibility as it is required under the present requiremnts is not required by the ABSHW model.

To have cover under the ABSHW model the builder simply needs to be appropriately licensed for the work that they are going to undertake and sign an agreement to abide by ABSHW’s quality assurance and progress payment process.

Default / Insolvency Protection

The ABSHW model ensures that the Consumer does not pay the builder for any building work that has not been completed.Under the ABSHOW model the consumer only pays the builder after ABSHW  has completed its inspection process and a qualified inspector has signed off on the qualityof the building work.

If a builder goes into insolvency there is no loss suffered by the consumer as there is always funds remaining to complete the construction of their home with another builder.

The Benefits of the ABSHW model

The Benefits to the industry are substantial.

  • Considerable Red Tape Cost savings for builders, ( Under the ABSHW model buildersdo not need to waste personal time and money to engage an accountant in order to secure eligibility )
  • Assets and capital of the builder are not needlessly tied up for unknown periods of time securing eligiblity. This allows the builder to grow his business and employ more people. Apprenticeships.

The Benefits to the consumer

  • A higher standard of consumer protection than exists today under the HBCF scheme.
  • No loss suffered should a builder become insolvent with a quick transition to another builder to complete the home or renovation.

Implementation of the New ABSHW MODEL

  • ABSHW has outlined in its Submission as an alternative model which meets the needs of the Residential Housing Construction Industry.
  • Provides higher levels of consumer protection.
  • Provides Builders with far more choices and flexibility.
  • Removes Government Red Tape.
  • Allows Government to reduce and ultimately remove itself from the risks and the costs associated with providing their cover. 

ABSHW is in a position to provide Builders with an alternate  consumer protection cover offerings within ( 1 ) one month of Government making an announcement of its intention to open up the market.