The Australian economy is gaining $1.1 billion economically a year as a result of building regulation reform, a review commissioned by the Australian Building Codes Board (ABCB) has found.

The report prepared by the Centre for International Economics examined the impact of three major building regulation reforms since the early 1990s.

They are the introduction in 1992 of a national building code reducing differences in building regulation across states; a performance-based construction code in 1996 allowing flexibility and innovation in building design; and the consolidation of building and plumbing regulation into a single National Construction Code (NCC).

ABCB chairman, John Thwaites said: “The report findings confirm the value of building regulation reform to the Australian economy.

“The report demonstrates that the NCC is delivering economic benefits and reducing compliance costs through greater national consistency and by focussing regulations on performance outcomes of buildings rather than on prescriptive requirements” Thwaites said.

“The pooling of effort toward creating regulations at a national level, not only reduces duplication, but also leads to a higher standard of regulation.

“The performance based code encourages innovation by allowing greater flexibility and more efficient design to achieve desired standards. Industry stakeholders interviewed for the study were of the view that performance based standards had led to productivity gains of one to two per cent or around $738 million per year.

“All up, the economic benefits from a consistent national code ($304 million), performance based standards ($737 million) and a joint building and plumbing code ($61 million) total $1.1 billion a year.

Thwaites said that based on industry stakeholder comments there was potential to double the economic benefits from regulatory reform.

“The report documents the potential to significantly increase the benefits already achieved through tackling areas such as ongoing jurisdictional variations; variations in interpretation, application and enforcement of the regulations; local government interventions through their planning processes; and a lack of objectivity in some standards.

“These are issues that the ABCB will continue to work on with the state and territory administrations in particular as it continues to seek greater levels of access to, understanding of and therefore compliance with the NCC,” Thwaites said.

To view the CIE report, visit the ABCB website www.abcb.gov.au