Government Scuttles Home Warranty Insurance Inquiry

The government's decision has denied hundreds of disillusioned victims of the defective insurance scheme their chance of justice, according to NSW Greens MP and housing spokesperson Sylvia Hale.

The Upper House inquiry into the scheme was established in September last year and was scheduled to present its report on 27 February 2007.

"There was no legal requirement for the government to prorogue the parliament so long before the election. The government is obviously keen to avoid the criticism it was likely to get in the report," said Ms Hale who was a member of the committee of inquiry.

"The committee conducting the inquiry held two days of public hearings and had received submissions from the Housing Industry Association, the Master Builders Association, the building industry union (CFMEU), the Builders Collective of Australia and the Insurance Council, as well as numerous individuals who have been let down by the scheme when they have encountered defective or unfinished building work on their homes," said Ms Hale.

The home warranty insurance scheme, introduced after the collapse of the HIH insurance group six years ago, has been criticised for leaving home-owners unprotected and has been described as 'junk insurance' by the Australian Consumers Association.

"As a scheme of last resort the current system makes it impossible for a home owner to make a claim unless the builder has died, disappeared or gone insolvent. This leaves the home-owner facing massive legal fees in pursuing builders through the courts. Many individuals have been financially ruined trying to get faulty work fixed through the courts even though they have taken out home warranty insurance.

"Unlike in NSW, the system in Queensland allows home-owners to settle
with their insurers, who then pursue the faulty builders. It is a government-backed scheme that is fairer and cheaper.

"The NSW government has been aware of this injustice for years. Closing down the inquiry and taking no action to fix the problems shows the government is more interested in avoiding criticism than it is in protecting consumers," said Ms Hale.

Contact: Chris Holley 9230 3030 / 0437 779 546

Photo by Dospaz: http://www.flickr.com/photos/59195512@N00/275654476/