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A key issue for Beechwood consumers and unsecured creditors has been the failure of NSW Fair Trading to monitor the financial viability of Beechwood and its ability to complete its contracts.
Why did Fair Trading fail to detect problems after the blaze of publicity surrounding the builder's loss of $72 million on his racehorses?
The answer is our licensing system failed, and our Home Warranty System, which is supposed to manage risk and compensate consumers, has also failed.
The NSW Home Warranty Scheme is compulsory for all home building and major rennovation projects. It is arranged by the builder and paid for by the consumer. The current scheme has been described by Australia’s leading consumer advocates, CHOICE as being “junk” insurance which is too limited to benefit anyone except the insurance companies and their agents.
For 6 years the NSW Liberal and National Parties have been fighting for a better deal - see John Ryan MLC's Speech in 2002 which predicted many of teh problems we are suffering today. Since that time, builders facing financial ruin have committed suicide and consumers who find they cannot claim or afford the ruinous legal action required by the scheme are losing everything – their jobs, their families and even the house they were fighting for.
We are posting information about NSW Home Warranty because the Beechwood collapse has again highlighted how unfair the current arrangements are. The need for reform is desperate – and equally important is the need to compensate past victims whose lives have been destroyed by this dreadful scheme.
For a detailed analysis of the problem and information about the Queensland system favoured by many to replace our NSW scheme, see the Sydney Morning Herald's "Horror Storeys" special "Money" feature. The documents below show how NSW consumers and builders came to be lumped with such a bad deal. They do not explain why the Iemma Government continues to defend it, and has deflected the findings of nearly 30 reports urging reform. The latest round of minor changes proposedby the Government will not alter the fundamental flaws and unfairness of the scheme. Most recent reports include the NSW Legislative Council Inquiry into the Home Building Service - click HERE There is currently a Senate Inquiry into Inquiry into Australia's Last Resort mandatory home warranty Insurance Scheme - its website is available HERE
Please note, this page is a work in progress. Click on the following documents to view source material: Government Promises After HIH Collapsed Minister for Fair Trading Minister for Fair Trading Home Warranty Insurance Scheme Home Warranty Insurance Home Warranty Insurance Scheme Home Warranty Building Insurance Home Warranty Insurance Help For Builders Opposition Policy to Reform NSW Home Warranty dates back to 2003 John Brogden MP
News Clippings The Daily Telegraph The Australian Financial Review
Information links: Australian Senate Inquiry into Australia's Last Resort Mandatory Home Warranty Insurance Scheme Phil Dwyer The Builders Collective Australia NSW Office of Fair Trading Home Warranty Insurance Information
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