Presented by Robert Clark MP		www.robertclark.net

HIH COLLAPSE: GOVERNMENT MUST ACT SO BUILDING INDUSTRY CAN KEEP WORKING

News Release - Saturday, 21 April 2001

The Bracks Labor Government must act to ensure builders left uninsured following the collapse of the HIH insurance group can obtain temporary insurance cover to enable to them to keep working and provide protection for consumers, Shadow Planning Minister Robert Clark said today.

The collapse of the HIH insurance group last month has left thousands of builders insured with HIH without effective insurance cover.

"If the Bracks Government fails to act, a large part of the Victorian building industry will grind to a halt, putting $600 million of building work at risk," Mr Clark said.

State Government legal requirements mean builders must have valid insurance cover before they can obtain building permits or start work on any building projects. On April 5, the Building Control Commission instructed building surveyors that they were not to issue building permits unless the builder had cover with an insurer other than a HIH group insurer.

However, the remaining insurers providing cover to the building industry are struggling to cope with the flood of applications for insurance cover, resulting in long delays in issuing new policies.

"In the meantime, builders can't start new projects and their right to keep working on existing projects is in doubt," Mr Clark said.

Mr Clark said the Bracks Government should enable the building industry to obtain global temporary insurance cover for all builders working in Victoria who previously had coverage with the HIH group, so they could keep working while the paperwork was processed for them to obtain new individual insurance cover.

"The Bracks Government, together with building industry associations, needs to move urgently to negotiate such temporary global cover with the insurers concerned," he said.

"If necessary, the Government should either recover the cost through a levy on building projects benefited from the cover, or allow builders to obtain the benefit of the cover through a fee collected through their building industry association.

"The Bracks Government must also amend the Ministerial Order setting out the insurance requirements for the building industry so that this global cover will be accepted to allow builders to keep working.

"The State Government is not responsible for the collapse of HIH insurance, but if it fails to act it will be responsible for the collapse of builders across Victoria, leaving thousands of building industry workers out of jobs and hundreds of families with uncompleted homes.

"The Minister for Planning, John Thwaites, bungled the last crisis he was left in charge of and Victorians suffered unnecessary power blackouts as a result. This time he must not be allowed to black out the building industry," Mr Clark said.