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Builders make mutual decision

AN action group has been formed by local builders to ensure the establishment of an industry run mutual fund to provide indemnity insurance.

The Housing Indemnity Action Group includes small to medium sized builders who are increasingly frustrated with the indemnity insurance options available in the local market.

HIAG chairman John Woodford said the group was formed because its members had lost confidence in the Housing Industry Association (WA).

“I’m of the opinion that this whole problem could have been sorted out if the HIA had been a bit more supportive of its members’ needs,” he said.

“The Master Builders Association has been very supportive of the industry but HIA, because of its vested interest, wants the situation to stay the same.

“There are builders who have waited eight weeks or six weeks or longer just to get revised [by an insurer].”

During this revision process some operators have had to knock back work because they didn’t have cover, Mr Woodford said.

Insurance companies have asked some operators to reduce their turnover in order to secure indemnity insurance.

“The conditions they were trading under previously have, in some cases, been halved,” Mr Woodford said.

“HIA has acted to totally negate the argument that the MBA put up to the Government.”

HIAG has attracted 100 members, including major suppliers such as CSR Giprock.

“The major suppliers are concerned, and the suppliers are interested in making sure it gets resolved,” Mr Woodford said.

“Our aim is to lobby the Government to ensure a proper fund is set up. We’ve got a couple of financial institutions interested and we will be lobbying [Minister for Consumer and Employment Protection] John Kobelke to ensure that can be set up as soon as possible.

“We see the establishment of a mutual fund as a must; it needs to be owned and operated in WA so that it isn’t affected by things that are happening over east.”

HIA executive director John Dastlik said he regretted the criticism that had been levelled at the association by HIAG.

“About 20 years ago HIA’s members said they wanted a broker to supply insurance to the members,” he said.

“It’s a shame. I sit here as an employee of the members and the members ask for services.

“If, we said, when HIH collapsed, that we weren’t going to supply indemnity insurance, imagine what the members would have done.”

Mr Dastlik said a vocal minority was fuelling the indemnity issue.

“We’ve built 19,000 homes in the past 18 months and yet I hear the industry is in dire straits,” he said.

“That’s not to say that some builders haven’t had problems.”

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