Victorian Government cladding plan risks massive cost increases

The Property Council has welcomed the Victorian Government’s plan for the rectification of cladding affected buildings but has warned that a 700 per cent increase in building levies would add untenable costs to new construction projects in that state.

“We welcome the Government’s commitment to take action on cladding rectification and its commitment of $300 million for the task, but we are deeply concerned about the impact of the proposed huge increase in the Building Permit Levy to help fund the plan,” said Matthew Kandelaars, Victorian Deputy Executive Director of the Property Council of Australia.

“The Government is proposing a 700 per cent increase in the levy for new buildings valued at more than $1.5 million.

“For works as low as $800,000, it is proposed the levy rate will double. These are not big building projects by any stretch.

“The increases which are being proposed for new projects are disproportionate and unreasonable when you consider that the buildings being targeted for rectification have previously been lawfully approved under the Victorian building code.

“We understand and support the imperative to strengthen public confidence in construction and building safety and address the looming insurance crisis.

“However, a unilateral and massive increase in construction costs is not the answer.

“We again call on the Commonwealth, state and territory governments to work together on a common set of solutions to the issues of combustible cladding and the building confidence issues identified in the Shergold Weir report.

“Thursday’s Building Ministers Forum meeting in Sydney is the best opportunity for governments to finally get this right,” Mr Kandelaars said.

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