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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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DEVELOPMENT (PRIVATE CERTIFICATION) AMENDMENT BILL

Second Reading

Adjourned debate on second reading.

(Continued from 31 October 2012.)

The Hon. I.F. EVANS (Davenport) (11:09): The house might recall that I sought leave to continue my remarks. We gave a commitment to the planning minister that we would be ready to deal with this bill this morning, and we are. We adjourned the bill so that the LGA could have an opportunity to put its case to the opposition and, indeed, other parties and Independents.

The LGA submitted a series of questions to the opposition yesterday I think, from memory. With the agreement of the shadow minister, I forwarded those to the minister's office yesterday so that the minister could prepare detailed answers, and not claim to have been ambushed by the matter, so that in between houses those people who have an interest in this matter and exactly how it is going to work can further consider the minister's responses so that we can see whether all the holes are covered or whether there still needs to be work done on the minister's proposed model.

The Hon. J.R. Rau interjecting:

The Hon. I.F. EVANS: Yes, we will go into committee and do all that. That is why we are here. The opposition supports the principle of the bill. It is really a matter of just looking at the answers to the questions between houses to make sure that all the issues that have been raised have been covered off so that the system works. It is not about stopping the proposal: it is about making sure that the system works and making sure that everyone is clear on the roles and responsibilities and what happens if—and when, as they surely will at some point—things go off the rails on one application or other.

The LGA put out a discussion paper. The one I have is a draft discussion paper dated 2 November 2012 which raises a whole range of issues in relation to this particular bill. One issue is the authorised functions, and the discussion paper sets out some issues as to what functions are going to be authorised. Some LGA officers have contacted my office directly suggesting that an add-on to this particular bill could be a joint authorisation of council officers to do both building and planning approvals, so that that provides another suite of people to undertake the function.

That would provide councils with, if you like, a dual resource and therefore provide a quickening of the process, possibly, or a simplification of the process through council officers. It seems to me logical that, if you are going to essentially jointly authorise private certifiers, you could easily jointly authorise local government officers to undertake the same role. If there is some logistical issue that council officers cannot be jointly authorised, then it would be interesting to argue why private officers could be jointly authorised if council officers could not. Some people have written directly to us in relation to that.

The other issue the LGA raises is what qualification, if any, the private certifiers are required to have in relation to planning matters, and that will be something we will tease out during the committee stage. Other issues are what level of insurance they need to have and what happens if the private certifier goes bankrupt or ceases to exist and a planning decision is found to be in error some years down the track—and that has happened during the term of this government.

A constituent of mine who had been fighting for a decade about a rezoning matter for a block in the Hills Face Zone finally got then minister Paul Holloway to look at it. To his credit, having worked back over nearly 10 years of documents, I think, he discovered that a block of land had been wrongly placed into the Hills Face Zone and he took the appropriate measures to take that out. I know this does not go to that particular matter, as in zoning, but the reality is it illustrates errors can happen. The question comes here: what happens if a private certifier makes an error and down the track it is found to be an error and the private certifier does not exist? What recall is there against whom? Councils always exist if an error is made, and there is also always a local government authority; so that issue needs to be teased out.

Other issues were raised by the LGA. Local councils have to accept the decision under the bill, as I understand it, but are they required to check it and do they suffer any liability if they do not check it and an error is found down the track? If they do check it and find an error, are they obligated to send it back to the private certifier to have it corrected, or under the legislation are they obligated to accept the error? That is an issue that needs to be teased out during the committee stage.

As I say, the opposition supports the principle. We adjourned it purely so the LGA could make their submissions. Although they were late in making their submissions, we have managed to forward some questions on to the minister so that we can get them on the record between the houses. In fairness to the LGA, to my frustration, I must say, we got an email this morning from the LGA at 9.25 in regard to this bill in the House of Assembly today and seeking an amendment.

The opposition does not intend to move an amendment today based on an email this morning. We will consider between the houses the answers to the questions raised with the minister and then work out whether there is any requirement to do anything to the bill other than support it between the houses. I do not need to say anything or other than that. I look forward to raising the questions formally in the committee stage that I have already provided to the minister.

Mr GRIFFITHS (Goyder) (11:17): The minister looks somewhat frustrated that I stood up, but I do wish to put a few points on the record. I recognise the presence of the LGA and the EDIA in the chamber today as witnesses to the contributions to the debate. As a former local government chief executive officer and as the recently appointed shadow minister for local government, I have a rather keen interest in this bill.

Like the member for Davenport, I certainly support the intent and I clearly understand that there is an industry expectation that this bill be passed quite soon and that an opportunity for it to be implemented is put in place. My desire, though, is to ensure that there are checks and balances and that the system that is created is workable and one that, while it offers surety for the development industry to get an approval process that is at its optimum best timewise, also gives protection for local government and adjoining property owners to developments. That is the emphasis I want to make.

I do have a couple of issues that I wish to raise which are not explicitly contained within the bill, but I would like the minister to consider them. One is about inspection requirements. I note that local government has in place policies for a mandatory requirement of something in the range of 20 per cent of development applications that have to be inspected. I understand that has been somewhat confused for some time with the private certifiers. It is very rare for them to do inspections, particularly in regional areas, with local government having previously held the planning responsibility attached to development approvals, but that is now being proposed to be transferred across to the private certifiers.

With certifiers performing both aspects of the development approval, are these developments to be considered amongst the applications that have to be determined for an inspection to take place? How will the fee structure be put in place for that? Will the certifier do those inspections or will it be a local government requirement to do those inspections and, if so, how will they be compensated for that? My understanding is that they still have to maintain files on development proposals that are approved under this process, but I would be interested to hear from the minister about how that is going to work. It is clear to me that some changes need to occur.

I can quote a personal example of a home that I have in Adelaide which I use when parliament sits. I am having a verandah put onto that. The company that is doing that has told me that it takes something like 12 weeks for development approval for what is a relatively basic structure. I would hope that the opportunity to have a private certifier, because it fits within the residential code, would ensure that process is quicker. Like everybody—big and small businesses, individuals and their homes—when they make a decision to invest in property, they want it to occur as quickly as possible.

Putting this process in place is a forward step, I recognise that, but I would want to make sure that the protections are there for local government which has had statutory obligations and been responsible for this for many years and for adjoining property owners. I raised the question in the Liberal Party discussion about that. For instance, a private certifier approves a development through a planning and development process but an adjoining property owner is aggrieved by the structure that is either intended to be constructed or has been constructed, what opportunity exists for them to an appeal and how will that work?

They are some general questions, minister, which I am sure you will be able to answer at the committee stage, but I also look forward to the swift passage of the bill.

Mr PEGLER (Mount Gambier) (11:20): I also support the intention of this bill, but I have some major reservations on what it will actually achieve. Probably only about 6 per cent of properties will comply with this, and I do not know if it is necessarily the councils that often hold up these developments but more so the applications themselves and the form in which they come to councils. I do have reservations about the grey areas on what private certifiers can assess and which ones they cannot. I think we have to be very careful in making sure that everybody understands what those private certifiers can and cannot do.

There is also the problem of who is going to be responsible when they do get it wrong and naturally it will normally fall back onto local government, so I have some major concerns there. I also have some concerns about the property owners that adjoin some of these properties and what say they have on what those private certifiers can and cannot do.

I think if we can make sure that all the questions that LGA has are answered—and there may be some minor amendments—that this bill should be able to go through. Until I have heard the answers to those questions, I am a bit apprehensive but we will wait and see.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Business Services and Consumers) (11:22): I am very happy to deal with particular questions members might have at the committee stage of the bill. In a moment, I will move that we do go into committee and we can technically start off with clause 1, and then I am happy to take whatever questions come up.

I do want to place something on the record again. I am not going to repeat what is already in the Hansard from 31 October when this matter was supposed to have been debated in the house, but here is the time line: as I understand it, the member for Davenport received some communication from the LGA on 30 October or the Friday I think, perhaps, before that. Anyway, we did not find out about the adjournment application until the matter was literally in the chamber on that day and I do not think the member for Davenport had much warning either about being asked to do it, but never mind. So that is the first instance, which is a fact.

The second instance, which is a fact—and remember, the adjournment occurred on 31 October and the member for Davenport, as he quite rightly said a moment ago, undertook to the parliament that he would be ready to go with this today and clearly he is and that is fine from his point of view—is that the LGA has had since 31 October to get its act together and what has the LGA done with that time? I can tell you that on 6 November they posted to me correspondence which was basically a three-page missive. Evidently, their time between 31 October and 6 November was consumed in writing a letter aimed at telling me what my defects were and then—

Mr Griffiths: It was only three pages.

The Hon. J.R. RAU: Only three pages, that's right—they obviously left something out. On 12 November, which as I recall was yesterday, late in the day my office received—I think courtesy of the member for Davenport, although I am not sure, but certainly very late in the day—a series of questions that the LGA wanted answered in relation to the bill. They had had a fortnight to get their act together on that and give everybody plenty of time to consider everything, but true to form they decided to land into that space at the very last minute and drop these questions in yesterday. Then, of course, just to underscore their whole attitude to the passage of legislation in this parliament, this morning at 9.30 they sent a fax or something to the member for Davenport urging him to move an amendment here.

Unfortunately, this behaviour is entirely typical. Whilst this parliament has been held up, entertaining their delicate sensibilities over the last couple of weeks, I think if they want to be engaged with what I am doing, what the government is doing, this business about leaving everything to the eleventh hour and dropping things in at the last minute is just not the way to proceed, nor is sending me correspondence which is in the tone of a missive. That is not helpful and not constructive. That is all I have to say about the bill. I think we should go into committee.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The CHAIR: Member for Davenport, I understand you are speaking on behalf of the opposition. Which areas would you like to look at?

The Hon. I.F. EVANS: With the chairman's blessing, the minister and the opposition have had a quiet discussion and agreed that all the questions will be at clause 1 and then, once we have finished those, we will put the whole lot through if the committee is happy with that; all members are aware.

The CHAIR: Minister, is that your understanding?

The Hon. J.R. RAU: Yes.

The Hon. I.F. EVANS: We have already provided the minister with a series of questions yesterday, which he has undertaken to read into Hansard with prepared answers. In fairness to the LGA, I should just clarify that since my comments to the house the LGA has advised me that the email this morning is consistent with amendments discussed with the shadow minister in another place and they simply put them on the record with other members so that they were aware of what is being proposed to the shadow minister for his consideration. So, in fairness to the LGA, I just put that on the record. My understanding is that the minister is now going to read the questions and the answers we sent him yesterday.

The Hon. J.R. RAU: As the member for Davenport has indicated, that is how I intend to proceed. I will just say a few general things that set the tone, if you like, and I will read the questions and the answers as I have them. Then, if the members have any other questions I am happy, obviously, to take those as well. This is in terms of an overview, and a number of questions have been put to me by the member for Davenport which, in effect, have been relayed, as he has said, quite transparently through him from the LGA and, at the end, I might say a little about what their particular interest in this matter appears to be.

Before answering those in detail, I would like to make some very brief global observations about the bill. Firstly, it needs to be said that this is fundamentally an enabling amendment. That is to say that the bulk of the rules relating to private certification will, as now, be provided in detail in the regulations—the code of conduct and the guidelines issued by the department. Of course, as members would be perfectly aware, regulations are capable of being disallowed should that become necessary. So this is an enabling provision; it is not intended to be the actual provision. For this reason I have asked parliamentary counsel to prepare a draft of proposed regulations likely to be made to inform the debate in the other place. I expect to have that draft available for members shortly.

Secondly, as I previously stated upon introducing the bill, the government's intention is to extend private certification to the residential code by what amounts to a very minimalist approach. That is, we are not proposing to create a new class of certifiers. Instead, we believe that we can simply extend the ability of existing certifiers to include assessment against the code similar to private certification in Victoria. This means that all of the existing code of conduct insurance auditing and related regulations will remain unchanged.

Also, based on the current system, it will be clear that the liability for assessment decisions rests with the private certifier, not with the council. Private certifiers will be subject to stringent oversight including auditing, codes of practice and obligation to have professional indemnity insurance. They will also be subject to all of the normal complaint and anti-corruption requirements relating to any persons exercising delegated statutory power. Finally, I must note that it has been put to the government that assessment decisions by private certifiers should not involve 'planning judgement'. This is relevant to a number of questions that have been raised by the opposition (and for the opposition, read the LGA).

It is not a position that the government accepts in relation to the residential code which is essentially a tick-a-box process. Moreover, I should point out that the so-called planning judgements are routinely made by persons who have no formal planning qualifications whatsoever under the current statutory framework—they simply work for a council. Development assessment, at the end of the day, is not really what planners are trained for. It is essentially a species of regulation approval based on what has already been planned for a neighbourhood as expressed in zoning. That is why we believe that the current private certifiers, who have authority to give approvals for structural integrity of buildings, have the expertise and skills suitable for a residential code certification.

After all, the consequences of error in relation to the building code certification could result in death. If we trust certifiers with life safety decisions, we can surely trust them with residential code decisions. In my view, good planning and the exercise of planning judgement should happen up-front in the choice of zoning and in the writing of zoning policies. Leaving 'planning judgement' to the end of the process rather than at the beginning is a recipe for ensuring that housing approvals take months rather than days. We believe that private certification will be a major enabler of more efficient decision-making. This is because, by enabling new housing approvals to be undertaken by a private certifier, it will reduce waiting times for council approval.

In some cases, this could be substantial—up to 20 or 30 days for full merit approval. Coupled with recent changes to the state's residential development code, the government believes this initiative could result in a one-off stimulus of up to $17 million in cost savings equating to about 150 jobs. In the long run there is the potential for this reform to have an ongoing benefit of up to $30 million a year equating to up to 270 jobs. This is because the change will make housing approvals simpler and easier, providing a real incentive for more landowners to use the residential code. Councils and applicants will save money as a result of this reform, which will help the industry and will also ensure downward pressure on house prices, maintaining our state's reputation for housing affordability.

I will now turn to the specific questions put by the LGA, through the opposition. Question 1: is it the minister's intention to limit the authorised development plan consent to functions of a private certifier to residential code development? If yes, is it necessary to delete section 89(3) (which is the disenabling provision in the current legislation), as proposed by the bill, or can it be amended with additional wording to give private certifiers limited planning authority to certify residential code development only? Are you starting to get the flavour of this? There is a lot more of this flavour, but we will keep going.

The answer is yes. As I have already stated in my second reading remarks, we intend to apply private certification to residential code only. In relation to limiting the availability of private certification, the government takes the view that it is best to enable the head power to be broad and leave matters of limitation to the regulations. I want to make that really clear: we want a broad power which will be a broad enabling power, not crippled by LGA concerns about only ResCode, but it is my intention, as will be demonstrated when you see the draft regulations, that we are only talking about the ResCode at this point in time.

Should there, at some future point in time, be an attempt to change that, that will be a matter to be dealt with in this place, and if there is an objection to it then this place is capable of disallowing the regulation. This is also, I should say, the best way to avoid unintended limitations that would necessitate further statutory amendment—for example, in relation to limited assessment, we believe that there could be a case for enabling this to occur if a certifier was appropriately qualified. In any event, we do not want to rule this out at this stage.

I want to make it clear that we have no intention to expand private certification beyond the code. We believe the amendments represent the simplest and most effective way to do this. Finally, of course, I point out that the provision is subject to disallowance by parliament, as I have said, and that is an appropriate safeguard against an extension into an area the parliament does not want. That is the answer to that question.

Question 2: does the minister believe that a private certifier should be able to make decisions on matters relevant to residential code which required the exercise of—and here are those words again—'planning judgement'? If no, decisions made under section 35(1)(b) and (1)(c) need to be excluded from the functions of a certifier because these sections require the exercise of judgement about what constitutes a minor variation from a complying development or require an aspect of the development plan to be assessed against its merits against the relevant development plan. If yes, the LGA is seeking an amendment to the bill to put a limit on the extent to which a certifier can determine a variation to be minor. There it is, more of that same flavour—restrictive trade practices and so forth.

Can I point out again that people who make these decisions right now, today, all over Adelaide in councils, are not necessarily planners. They are simply employed by a council, so the mystique around the 'planning judgement' eludes me because there is no planning judgement in the sense of something which is particular to be exercised only by a person who has planning qualifications, because that is not happening now at all. In other words, it is a red herring.

Development assessment is not really what planners are trained to do. In fact, I am told by the Local Government Association that there is a shortage of planners, so anything we can do to ensure their skill set is directed towards higher level planning functions—in other words, getting the code right or the zoning right—would be a good thing. That said, I need to make it clear that the government's policy in relation to the residential code will be to allow private certifiers to approve minor variations in accordance with section 35(1)(b) of the act. We are not minded to include the powers of limited assessment under 35(1)(c) at this stage. However, we wish for that option to remain available should it prove necessary in the future. These matters, again, will be spelled out in the regulations. We will also issue appropriate guidelines to assist private certifiers and councils in the judgement of minor variations under 35(1)(b). I should point out that, in this respect, it would be problematic to define what a minor variation is in a regulation as this is, in fact, a fact and degree question that must be determined on a case-by-case basis.

Question 3: the bill says that the council must accept a certificate given by a private certifier. Is it the minister's intention that a council will have a responsibility to check the accuracy of these certificates? The answer is no. The same rules that currently apply to certification against the building code will apply to residential code certification; that is, councils are obliged to accept a certificate of the private certifier.

If members will think it through, the logic of that is very simple: if a decision is able to be second guessed by the council, we have achieved no real efficiency in the process and the commerciality of private certification will be diminished. Private certifiers, as I have already stated, are subject to strong oversight, including auditing, code of conduct obligations and professional indemnity insurance. They can also be taken to court and are subject to anti-corruption oversight.

The Hon. I.F. EVANS: If I can just ask a question on that answer. What is the position of the council if they find an error? Are they under any legal obligation to notify the certifier that they have discovered an error—I am assuming they are under no legal obligation to second-guess the decision—and where does it leave the public if a private certifier makes a decision that is in error and, down the track, that certifier's business no longer exists?

The Hon. J.R. RAU: Just to make it clear: the private certifier will stand in a position of a delegate and will be exercising authority in their own right. There is no council implication, one way or the other, from that; it is nothing to do with the council. So, the council is not involved, not liable, not responsible, in the same way as building certification now occurs in that fashion.

In respect of the possibility of an error, aside from the various disciplinary matters to which I referred, the insurance premiums, I am advised, for this would be by reference not to whether or not the person is currently trading at the time of a claim being made but as to whether they were, at the time of the decision being made, covered by a policy of insurance.

That, I think, is pretty well exactly what happens with the building certification process now. In other words, if you discover several years down the track that there has been an error and the person is no longer trading and does not have any current insurance, it does not matter because the error is referable back to a point in a time when they did have a policy of insurance, and the claim is made against that policy. Does that answer the question?

The Hon. I.F. EVANS: And the insurance company does not exist?

The Hon. J.R. RAU: And the world is hit by an asteroid? How far back up the chain do you want to follow that? I make the point, though, that we are already quite comfortable having private certifiers making building approval decisions in circumstances where an error in that certification can lead—and, in the past, has led—to the death of individuals.

In this particular instance, the worst thing that is going to happen by reason of the planning certification, if it is completely wrong, is that a noncompliant development might be built in a particular zone. That is the worst thing that can happen. The question is, if you are following your insurance question through: who would have standing and by what cause of action would they be able to complain about that? Presumably, the owner of the property, or the person who engaged the certifier, has engaged them to certify their proposal. If they mistakenly did certify that proposal and the building is built, that person is not presumably going to be unhappy about it because they wanted the building.

The Hon. I.F. Evans: The neighbours might.

The Hon. J.R. RAU: The neighbours might be, but I do not know of any cause of action by which a neighbour can—let us leave private certifiers out for the minute. Let us assume that we have a council that has a person working for it who, as we have already established, is probably not a planner and is making these so-called planning judgements, and that person makes a mistake and allows a completely inappropriate development to go through by reason of them not understanding the zoning or whatever. In that instance the council is liable because it is the body corporate that has made the decision, not the individual. I do not know of one single case where a neighbour has brought a cause of action against a council for making a planning decision in respect of an inappropriate zoning. I know of plenty of cases where—

The Hon. I.F. Evans: Zoning?

The Hon. J.R. RAU: Sorry, approval. I know of plenty of cases where people have argued about the approvals through the ERD Court. The question then is: what damage has the neighbour suffered? They might say, 'I don't like the look of that place,' or something like that, a visual amenity thing maybe. The point I am trying to make, member for Davenport, is: No. 1, I cannot imagine what the cause of action would be; No. 2, I am not aware of any such claims having occurred against councils that are presently making these decisions—and that cannot possibly be because they have never made a mistake; No. 3, these people are insured anyway; No. 4, the policy of insurance covers the period during which they make a decision; No. 5, there is a statute of limitations for these actions in any event; and, No. 6, the only thing the member for Davenport has raised that I cannot answer is: what if QBE goes belly up? That was the insurer at the time. I do not have an answer for that. We are not setting up some indemnity fund.

I do not believe there is any risk of any loss which is not covered by insurance and, quite frankly, I am struggling to think what claim against any insurance policy might be made under any cause of action known to the law.

The Hon. I.F. Evans interjecting:

The Hon. J.R. RAU: Pardon? Maybe you can ask whatever that was later. I have just had a point brought to my attention, which I perhaps should add. Major insurers are also covered by financial regulations by the federal government in terms of prudential arrangements and other things. We are getting down to the most infinitesimally small point of risk, where there is no cause of action I can think of, nobody has standing to bring the action, no damage, there is a statute of limitations, there is insurance anyway, and the insurers are covered by prudential regulation at a commonwealth level. You need a hell of a lot of dominoes to fall over before you are even going to be within cooee of an issue.

Mr GRIFFITHS: I am not a believer in conspiracy theories, so I hope it is going to be okay, too, minister. If I come back to the emphasis that I took from the member for Davenport's question: if an error is observed, what does the council do? Does the council make some form of submission to the development assessment auditor, the person who actually checks off on the certifier's credibility and authority to actually make decisions?

The Hon. J.R. RAU: Yes; I thank the member for Goyder for that question. I do not think I can probably do more than actually quote from a letter sent by the planning department to the chief executive of, strangely enough, the LGA on 30 October. The relevant section is headed 'Errors, discrepancies and complaints'. Incidentally, this is an example of us not consulting, but anyway:

Your paper states that section 35 subsection (6) of the act will mean that councils will not have oversight function for or responsibility over private certification process. In this context, you have requested clarification regarding the liability of councils in relation to residential code assessments that are privately certified. I point out that the statutory framework will be no different to that applying to private certification for building rules assessment, which includes recent provisions relating to auditing of private certifiers. Similar provisions will be inserted, enabling auditing to extend to residential code matters.

Complaints relating to private certifiers can be acted on through the registration and auditing function. If a council believes a private certifier is acting in a manner, or making decisions, that may be in breach of the act, councils should be encouraged to make a complaint in writing to the minister or the department. In addition, complaints may also be made to the Ombudsman and private certification decisions will be subject to court oversight, pursuant to section 85(1) of the act.

As is the case with private building certifiers, section 89(6) of the act makes it clear that a council acting on the issuing of a certificate by a private certifier incurs no liability for acting on the basis of the certificate. I also point out that private certifiers remain subject to professional indemnity insurance obligations under the regulations. It should also be noted that private certifiers will remain subject to the duties set out in the legislation and code of practice and are subject to the penalties set out in section 97 of the act for any breach.

I think I now go to question No. 3—I think I have done that; that was about being the same as a building code. We have covered that, haven't we?

The Hon. I.F. Evans: We've done No. 3.

The Hon. J.R. RAU: Okay; No. 4: notwithstanding that a council may not have a formal role to check the certificates—it actually has no role at all—issued by a private certifier, will a council or the community be able to challenge a decision made by a private certifier if it believes an error has been made, and what is the intended mechanism resolving these? I think I have just answered that.

The next question: if yes, will council be allowed to withhold the issuing of a development approval? They are completely missing the point. They just do not get it. They get the certificate; that's it. They do not have to second-guess anybody. They get the certificate, it is not their problem. If the certificate is wrong, it is the certifier's problem; it is not the council's problem, so they do not have to spend time second-guessing it. All they have to do is cite the certificate, make sure that it appears to be whatever the certificate looks like, and then move on.

The Hon. I.F. EVANS: Minister, with the local government decisions, there is judicial review if there is an error. Will the same process be in place for decisions of the private certifiers in relation to this bill?

The Hon. J.R. RAU: My advice is that yes, that will be the case, because the private certifiers are in fact exercising delegated authority under the act. This is why we are repealing section 89(3), which presently prevents them being people who can exercise delegated authority. In the context of this decision, they are a public officer exercising a statutory duty. The next question: given that councils must rely on the integrity and accuracy of a certificate provided by a private certifier, will councils incur any liability if it issues a development approval and an error has been made? I think I have already answered that.

Question 6: minister, currently you receive any complaints made about a private certifier and an alleged breach of the code of conduct. Will private certifiers be captured by the ICAC legislation, and will complaints against them be investigated by the Ombudsman or ICAC commissioner?

It is my understanding that private certifiers will be covered by the ICAC Bill—if we are able to pass it this week, which would be nice—as they are, under that bill, a public officer. In the context of their exercising this delegated authority, they are, at that time and in that context, a public officer, so they are exercising a public officer's function. Specifically, the bill defines a public officer in schedule 1 to include:

a person to whom a function or power of a public authority or a public officer is delegated in accordance with an Act.

That is in the ICAC Bill. Section 89(5) of the Development Act provides:

A private certifier is subject to the same duties and requirements as the relevant authority that would otherwise be exercising the function under this Act.

I am also advised that certifiers would be similarly subject to an Ombudsman's complaint and to litigation before the ERD Court. Next question—

The Hon. I.F. EVANS: I just want to try to get this right in my own mind. A private certifier is a public officer because he or she has been delegated these powers by the act. Is it possible then for a building company to employ a private certifier to do the building and planning approvals for their company? For instance, Hickinbotham, could they go out now and say, 'I'm going to employ someone as a private certifier and their job is going to be to do the approval work for my company'?

The Hon. J.R. RAU: That is a very good question. I am advised that section 92—Circumstances in which a private certifier may not act, of the Development Act provides:

(1) A private certifier must not exercise any functions of a private certifier—

which in this context would include this—

in relation to a development—

(a) if he or she has been involved in any aspect of the planning or design of the development (other than through the provision of preliminary advice of a routine or general nature); or

(b) if he or she has a direct or indirect pecuniary interest in any aspect of the development or any body associated with any aspect of the development; or

(c) if he or she is employed by any person or body associated with any aspect of the development; or

(d) if he or she is excluded from acting pursuant to the regulations.

Subsection (2) states that this does not apply to the Crown. It continues:

(3) A person must not act as a private certifier in relation to development in the area of a council if he or she is employed by the council of that area.

(4) A person who contravenes...is guilty of an offence.

Maximum penalty: Division 4 fine.

The Hon. I.F. EVANS: Just so I am clear: there have been various court decisions about the role of contractors versus employees and there is a general acceptance that you are an employee once 80 per cent of your income is from one source, even if you are under contract. Am I right in saying there is no offence committed? In other words, the private certifier could act and receive 75 per cent of their income from one source and, assuming they have not been involved in the design of the development and all those things, they are simply carrying out their function? Is there anything stopping a private certifier getting the vast majority of their work just from one source even though they are acting as a contractor; in other words, a service provider and not an employee?

It seems to me that what the government is doing is, essentially, privatising a regulatory function. There are some big project builders that do lots and lots of development, some of them would build thousands of homes a year, which would keep a private certifier busy. Just as they go to one bricklaying company and say, 'We'll give you 2,000 homes, what's your price? We'll give you 1,000 carpentry, what's your price?'—I am from the building industry—I suspect the builders will be saying, 'We've got 2,000 homes to be certified this year, what's your price?' At what point does that become a problem?

The Hon. J.R. RAU: First of all, again, that is an interesting question, but can I respond initially by saying that the same could be said of the current certification of building arrangements, and that is either functioning properly or not as the case might be. I have not had any particular complaint about that drawn to my attention.

At a certain point, the person becomes de facto a person caught by the provision that I have read out. The question is: at what point does it cross from one to the other? That is going to be a question of fact and degree. I can, however, say that the code of practice which applies means that each of these people, irrespective of what their relationship with a particular builder or developer might be, still has their own professional standards that they are expected to observe.

An example I am probably a bit familiar with is in the legal profession where there are a lot of lawyers who have the ANZ Bank, for example, as pretty well their only client, but that does not mean that they are lifted from having the responsibility of observing their professional standards in respect of work they do, and the same with accountants and so forth.

With respect to the actual guidelines, the code of practice, I will just read some of these things out because they might be helpful:

1. All registered Private Certifiers and council officers to whom this Code of Practice applies must:

(a) recognise that the public interest is paramount in all considerations to the extent of the relevant authority's statutory responsibilities under the Development Act;

(b) at all times have regard for the interests of their clients and employers provided always that such interests are not contrary to the public interest;

(c) not knowingly or recklessly act contrary to the standards of propriety that ordinary decent members of the community would generally and reasonably expect to be observed by public officers of the relevant kind;

(d) have regard to their general responsibility to contribute to the quality and sustainability of the natural and built environment and the health and safety of the general public;

(e) not breach public trust or the specific trust of their clients and employers, acting at all times with honesty and integrity;

(f) be objective, impartial and free of any actual conflict of interest in the performance of their duties.

I am reasonably confident that there are both code of conduct standards and the explicit prohibition in section 92 (to which I have taken the honourable member) that work against that problem. Obviously there is going to be a question of degree, but that is no more or less likely to be a problem in respect of certification for planning purposes than it is certification for building purposes, and the consequences potentially for people are significantly less because obviously a building certification that is defective could result in someone dying.

The other thing is that the honourable member characterised what we are doing as effectively privatising this process. I would take issue with that. We are not privatising this: we are simply giving individuals an option.

The Hon. I.F. Evans interjecting:

The Hon. J.R. RAU: We are giving individuals an option. We are not denying councils this role; and, in fact, if councils actually embrace the residential code they are going to be probably the easiest place to find someone who can do the job and they will continue to do the job. I can say to the honourable member that, without naming particular councils, there are some councils that do this very well right now, and I do not think that anything we introduce here is going to make much difference to them.

We dealt with the ICAC commissioner. Next one: will a council be able to request that a certifier be subject to a development plan assessment audit under 56C if there are consistent issues with their decisions? The answer to that is yes. A council would be able to request an audit to be undertaken of a specific private planning certifier—and I imagine that anyone else could, too—if a regular programmed audit is not required for sometime if the council had sufficient reason to request that one be undertaken. This will then be a matter for the auditors to consider.

I point out that the statutory framework would be no different to that applying to private certification for building rules assessment, which includes recent provisions relating to the audit of private certifiers. Similar provisions will be inserted enabling auditing to extend to residential code matters. Complaints relating to private certifiers can be acted on through the registration and auditing function. If council believes a private certifier is acting in a manner or making decisions that may be in breach of the act, council should be encouraged to make a complaint in writing to the minister or the department (I think I have covered this before). In addition, complaints may also be made to the Ombudsman, and private certification decisions will remain, as I said before, subject to court oversight.

The next question: will a private certifier be required to undertake training and receive accreditation of their planning competency before they are authorised to issue development plan consents? I could ask rhetorically whether the people who do that presently in the employ of councils have that requirement imposed on them. I will leave that one sit there for a minute, but the answer, happily, is yes, they will. Training in residential code development will be required as part of the registration requirements for private certifiers undertaking residential code assessments.

Next question: when an application is assessed by a private certifier, councils must still create records, issue paperwork and provide data. Will there be a fee payable to the council for these administration responsibilities or will these costs need to be subsidised by all the ratepayers? The answer is yes, a private certifier will be required to pay the standard development application lodgement fee upon engagement to privately certify a residential code development. I point out that the current development assessment fees are not set on a cost recovery basis for residential development. In practice, therefore, private certification of residential code applications is likely to result in less administrative work for councils and lower cost burdens overall for assessment services. In other words, it will be good for the ratepayers.

Mr GRIFFITHS: As an extension to some of the answers provided, I am interested in how many certifiers are out there practising currently for building rules consent and how many do you expect to transmission over? Has there been any contact with industry to ascertain those figures?

The Hon. J.R. RAU: That is one I will have to take on notice because we do not have the number of building certifiers presently, but we can get it. I will undertake to get it for you and you will be provided with that between the houses. As for how many will transition, again I assume we would, to some extent, be guessing that one, and it will be a demand issue I expect. If I can get anything useful to say to you on that one I will also.

Mr GRIFFITHS: I ask the question in the context that the minister was able to provide, as part of his preliminary comments before the answers to the LGA questions, an estimate I think of $17 million in initial savings and $30 million per year in ongoing savings. I presume some numbers have been done on the number of applications that will be considered. You have made the estimates on job outcomes from this also. Do you have that information available about the number you think will go through certifiers?

The Hon. J.R. RAU: I thank the member for Goyder for that question. I will give the honourable member the advice I have received from the department that made the modelling to which I referred. Private certification of ResCode applications will deliver economic benefits in two parts: first, the existing ResCode applications will be processed more quickly. Typically, every ResCode application will be processed between two and nine calendar days faster than currently occurs. This time saving will result in a once-only positive economic impact arising from bringing forward of construction estimated to be in the order of 150 jobs and $17 million improvement to the gross state product arising from additional incomes. Secondly, more applications will be lodged as ResCode rather than as full merit assessments. This will deliver a typical saving in processing timing of between 12 and 34 calendar days.

The proportion of assessment being res code is expected to increase by at least half. This will result in a benefit in the order of 270 jobs per annum and $30 million gross state product each year. These are conservative estimates and the actual benefits are expected to be higher. No attempt has been made to quantify the economic value of other benefits. These estimates are net of the benefit already anticipated from improvements to ResCode that took effect on 1 August this year. In other words, they include an allowance for the positive impact of the new ResCode that will arise, irrespective of who certifies the application. Given the time and constraints, these estimates have been made at a high level and no detailed modelling has been undertaken.

Mr GRIFFITHS: I respect that the numbers the minister quoted are far more important than the questions I asked because he talks about job outcomes and economic activity, so I understand that. I believe the minister gave an indication to provide the basis of answers to that as some of the debate that might occur in the other chamber.

Minister, I do have a question in relation to clause 5, if we can still deal with it in clause 1 where the general question is, and it is just about the development assessment auditor. Are those positions that currently exist or is this some new role that is going to be established?

The Hon. J.R. RAU: I thank the honourable member for that question. I am advised that section 56B of the act presently already provides for auditors but in the context of building certification. What we are doing here is basically replicating that 56B but for the purpose of the certification that we are talking about here.

Clause passed.

Remaining clauses (2 to 7) and title passed.

Bill reported without amendment.

Third Reading

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Planning, Minister for Business Services and Consumers) (12:12): I move:

That this bill be now read a third time.

Bill read a third time and passed.

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