Andrews calls out Porter Davis after hundreds of victims rally for support at Parliament House
The Premier called out the collapsed home builder’s “shameful” behaviour as he offered hope to victims after an emotional protest on the steps of Parliament House.
Victoria
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Support for victims of the Porter Davis collapse and major building industry reforms are looming, with Premier Daniel Andrews slamming “shameful” behaviour that meant customers who paid deposits were not insured.
It comes after a rally at Parliament House called for major changes to the industry.
Mr Andrews said his government had met on Monday to discuss what next steps they could take in response to the Porter Davis collapse.
He said it was too soon to say exactly what was on the table but flagged support for uninsured customers and tightened regulations to ensure people were not caught out again.
“There’s been some appalling practice go on,” he said.
“There’s a very significant issue that has to be dealt with and my commitment to each of those customers is we will provide you with whatever support we can.
“I know it’s deeply frustrating that I’m not going to make an announcement. But we have to understand what’s going on.”
Mr Andrews said the government would stand with customers who had been treated “appallingly” but would also take on those who had created the problems.
“There is a mounting case to demonstrate that there’s some people in that business who have done the wrong thing,” he said.
“That’s a very serious issue … We are accountable for everything that goes well and everything that doesn’t.
“It is simply unacceptable to me and I think any fair minded person that you pay a deposit, part of that deposit includes an insurance premium, it’s mandatory insurance and then that money is not paid to buy insurance policy for you.
“It’s instead used as an interest-free overdraft on the quiet under the table by a business that’s about to go belly-up.
“The price-baiting stuff is a real concern to me, too. Going into the market and saying, we’ve got a cut price deal for you when you know that you really got no likelihood that you can ever build that home.”
Referring to Porter Davis, Mr Andrews said it was very rare that companies went from a “going concern” to liquidation without going into administration phase.
“It seems that this business has fallen over for want of $35m,” he said.
“That is a lot of money to all of us but for a business of this size with 1700 properties on the deck … That pretty big show to fall over for $35m.
“That speaks to something’s gone wrong here.”
Mr Andrews said it was “shameful” that customers and the state would strengthen or reform the current system if needed.
“We’re going to have more to say about this soon but we just have to do the work first and we are working around the clock,” he said.
“It was meetings all afternoon yesterday, between my senior staff and a whole lot of people in this sector.
“Ministers are working hard on this.”
Victims were ‘left in the dark’
Victims of the Porter Davis collapse have described being unable to sleep at night, forced to pull their children out of school and enrol them in cheaper alternatives and pressured to take on extra work as they assess their financial losses.
About 150 victims and their families gathered on the steps of Parliament House in a peaceful yet emotional protest on Sunday.
They called on the state government to make changes to building insurance schemes as up to 700 families remain in the dark and at a loss.
Amil Vemula, who lost his $33,000 house deposit, broke down as he told of his family’s struggles.
“We made a lot of sacrifices. They didn’t even build a single brick,” he said before he was reduced to tears. “They robbed us, they cheated us, they left us in the dark. We don’t know what to do now. We need help. We need our deposits back.
“I have a dream, I want my family to live in a house we love. The liquidators said we lost our deposit, who will help us here?”
Magan Sarna, who is in a wheelchair, said he was working shift work and was “starting from scratch again”. Mr Sarna has lost his $29,000 deposit but one day hopes to build a home in Manor Lakes.
“With luck and a lot of hard work I’ve started to walk a little bit again, so I started building a double-storey house, so it would give me an excuse to work hard,” he said.
“This was going to be our dream house, my first house. This was everything to me.”
He said it would take years for him and his young family to save enough money to put up another house deposit.
“Everything is so expensive now like groceries and petrol, so saving money now is just so hard,” he said. Premier Daniel Andrews said on Sunday the state government had not ruled out providing support to victims of the collapse, but confirmed it would not bail Porter Davis out.
“I know it’s very challenging. We will work through these issues and we will have more to say very soon,” he said.
He said the government was considering making “lasting reforms” to the sector, including building insurance schemes.
Push for better protection
Earlier, victims of collapsed construction company Porter Davis demanded major changes to the state’s building regulators, saying aspiring homeowners aren’t properly protected from building company collapses.
Devastated former customers of the failed building giant will protest on the steps of parliament on Sunday, and will ask the state government to make urgent changes to building insurance scheme which have left them financially ruined.
Among those attending will be people who paid Porter Davis a deposit but were not insured when it went under.
Protesters say the widespread practice of builders not taking out insurance until a building permit has been issued — rather than when a customer pays a deposit — has made it “not safe to build a home in Victoria”.
They say the government allowed the practice to thrive, and should cover the cost of the deposits many Porter Davis customers have lost.
The group also wants an investigation into Porter Davis and whether they have breached industry rules.
Richard Williams, one of those who paid the company deposit and has since learned that he was not covered, said there were major flaws in the system.
“Regulatory failings have allowed Porter Davis to take our money without issuing insurance,” he said.
Mr Williams said the regulator, the Victorian Building Authority, made surveyors check a home was insured when a building permit was awarded.
“No one checks except private building surveyors … all the major builders take money well before a building permit,” he said.
Victims have also raised concerns that there are ongoing conflicts of interest between private building surveyors and major construction firms.
Builders can’t appoint a surveyor directly, but large firms to regularly use the same providers and it is feared this encourages both sides to work together or risk losing out on work.
In an extraordinary broadside, the Australian Institute of Building Surveyors last year declared it had lost faith in the regulator to do its job.
Mr Williams said he and others had lost more than their deposits, with thousands of dollars spent on town planning and preparing their block of land for construction.
“We just want our money back,” he said.
“Construction costs have gone up 20 per cent. What was a $500,000 home when we signed up is now closer to $600,000.”
The protesters warn that hundreds of families have been hurt by the Porter Davis saga and that many more will be affected unless changes are made.
Another victim, Eric Poon, said he would never build a home again.
“If you want a home, the only guaranteed way to get one is to buy an existing house,” he said.
“Building a new house is a gamble where you risk losing everything.”
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