ANZSOG report into governance of the Queensland Building and Construction Commission

ANZSOG’s Research Insights series has published a report into the governance structures of the Queensland Building and Construction Commission (QBCC) which provides an analysis of their current structure and its risk-based regulatory approach. 

The research project, commissioned by the Queensland Government as part of a review into the QBCC’s governance arrangements, covers the background and context for regulation of the building and construction sector in Queensland, sets out comparative practices in other jurisdictions and best practice evidence drawn from OECD research. The research was undertaken by ANZSOG’s Andrew Bushnell, Patrick Brownlee and Subho Banerjee. 

The report outlines some background context for the regulation of the building and construction sector in Queensland, and the key features of the QBCC governance model compared to practice in other jurisdictions, and regulatory best practice evidence drawn from OECD research. It discusses the QBCC’s interpretation of Queensland’s risk-based regulatory approach in light of some of the relevant literature, and finally, considers the capabilities and values appropriate for a regulator like the QBCC with that kind of regulatory approach. 

The report makes the following observations arising from the analysis of the QBCC’s governance model: 

• That the QBCC is structurally a one-stop shop with a range of related functions although with internal separation of its insurance fund management as part of statutory requirements.  
• That QBCC’s overall financial position seems adequate to its functions but only because the statutory insurance fund performs well. QBCC has also relied upon grants to help it adjust to meet demand in a rapidly growing construction sector with competing stakeholder demands.
• That the mandates for regulatory strategy given to the Board and the Commission could capture more fully the complexity and demands of the sector.  
• The QBCC is unique in that it is a regulator that directly administers an insurance scheme. Nevertheless, each jurisdiction addresses insurance in different ways; there is not a consensus model 
• QBCC is also unique in that it does not raise a building levy, although calibration of levies always should be sensitive to jurisdictional context and needs. 

The Report stresses that the values embodied in a regulator like QBCC, should reflect the desirability of decision-makers at all levels being empowered to develop their understanding of the regulatory environment and exercise the discretion inherent in their roles in furtherance of the regulator’s mission. This is vital for protecting the regulator’s credibility and shaping the regulatory environment. 

Overall, the critical underpinning of good governance in such a complex sector is to have an insights-driven approach, as is borne out by the ongoing regulatory reform process in response to recent events in Australia and internationally. It is therefore crucial to ensure that the governance, resourcing and capabilities of the QBCC enable it to be set up for success on this basis into the future. 

ANZSOG has not put forward recommendations in the report, but instead offered a number of observations for further consideration in the review process, which have relevance for other jurisdictions considering reform in this area. 

The full report, and other Research Insights publications are available here.