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Concerns Arise Over Construction Code Pause Amid Housing Push

The federal government's initiative to accelerate housing development by relaxing certain building regulations has raised alarm within the insurance sector.

Housing Minister Clare O’Neil announced changes on social media, indicating a strategic pause on parts of the National Construction Code to expedite building approvals and encourage the construction of much-needed homes across Australia.

This move comes in response to challenges in the approval process, which often delays construction.

The National Construction Code is a critical regulatory framework that ensures safety, health, and sustainability standards in building procedures. It undergoes updates every three years, with the next set for 2028. However, reports indicate a possible government plan to defer this update by four years, a decision seen as potentially detrimental by industry stakeholders.

Insurance providers, represented by the Insurance Council of Australia (ICA), have expressed concern about this development. The ICA acknowledges the necessity of addressing housing shortages but warns against compromising future community resilience and safety. Insurers emphasise the importance of integrating resilience against natural disasters into the building regulations.

According to the ICA, current and future disasters necessitate homes and businesses that can withstand severe weather conditions such as bushfires, cyclones, and floods. Advocates suggest that enhancing the construction standards to accommodate these risks could collectively save the Australian economy up to $4 billion annually by preventing damage and losses.

As the housing initiative progresses, balancing speed with safety and resilience remains a central point of discussion among stakeholders. The pending pause on construction code updates has put a spotlight on the risk management strategies of both builders and insurers.

The decision to pause updates to the National Construction Code could have lasting impacts on the building industry, insurance markets, and the broader Australian community. While the acceleration in home construction seeks to address the housing deficit, there is a potential risk of building homes that do not sufficiently withstand environmental hazards, which could lead to increased insurance claims and economic burdens in the face of natural disasters.

Looking ahead, the construction and insurance sectors will likely continue advocacy for maintaining and enhancing building resilience standards. Further discussions with policymakers may lead to a balanced approach that meets immediate housing needs while safeguarding against future risks. Stakeholders might expect more detailed government guidelines and potential consultations to refine this initiative.

Published:Thursday, 28th Aug 2025
Source: Paige Estritori

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Premium:
The amount paid for an insurance policy, usually on a regular basis, to maintain coverage.