The Insurance Council of Australia (ICA) has issued a pointed submission to the Queensland Productivity Commission’s inquiry into the state’s construction sector, outlining six key reforms it says are critical to lifting productivity, reducing risk, and protecting communities from mounting natural disaster costs.
With Queensland recognised as the most disaster-prone state in the country, ICA CEO Andrew Hall says government action can no longer lag behind the realities builders and homeowners are already facing.
“Insurance prices risk, and to lower the risk we need stronger homes that are out of harm’s way,” Hall said. “The Queensland Government must take the severity and frequency of natural disasters into account when it considers the productivity of our construction industry.”
The Six Reforms on the Table
In its submission to the Commission’s draft report Opportunities to Improve the Productivity of the Construction Industry, the ICA called for change across six fronts.
1. Scrap Stamp Duty on Insurance
Queenslanders paid $1.66 billion in stamp duty on insurance products in 2024–25, roughly $265 per resident. The ICA wants the nine per cent levy abolished, calling it a “tax on resilience” that actively discourages people from insuring properly.
For builders, higher insurance premiums flow through the system, adding costs to projects, contracts, and client handovers.
2. Smarter Land Use Planning
The Council is pushing for planning systems to explicitly factor in current and projected extreme weather risks. Developments in flood-prone or high-risk zones should be ruled out entirely, with growth directed to low-risk and zero-risk areas.
That stance is likely to trigger debate across Queensland, where housing demand continues to push urban expansion onto floodplains and bushfire-prone corridors. For builders, it could mean both opportunity and constraint, tighter planning controls on one hand, and stronger long-term certainty for new estates on the other.
3. Resilient Housing Stock
ICA wants industry-wide engagement; builders, regulators, and insurers at the same table to ensure today’s homes aren’t tomorrow’s liabilities. Extreme weather already costs Australians an average of $1,500 per year, and future-proofing homes is seen as central to bringing that figure down.
For builders, this could involve new standards on roofing systems, cladding, and drainage, or stronger incentives to incorporate resilience into design.
4. Building Confidence and Defects
The submission highlights unfinished business from the 2018 Building Confidence Report, calling for faster rectification of serious defects and surge projects to address backlogs.
The message is blunt: defects left unresolved not only put communities at risk but could also limit insurability. Builders who fail to address quality concerns may face escalating liability issues.
5. Combustible Cladding Rectification
Queensland has lagged behind NSW and Victoria in funding combustible cladding programs. ICA says similar schemes must be rolled out statewide, or the state risks repeating crises that have already shaken confidence in multi-residential construction elsewhere.
6. Recognising Interstate Trades
As climate disasters grow in scale, ICA says Queensland must ensure a responsive workforce by automatically recognising interstate trades qualifications. After a cyclone or flood, labour mobility can be the difference between families waiting weeks or months to return to their homes.
Why Builders Should Care
The ICA’s proposals aren’t abstract policy, they hit directly at how builders design, plan, and deliver projects in Queensland.
- Costs & Margins: Insurance levies inflate costs across the chain, from subcontractor cover to project insurance. Removing stamp duty could ease some of the financial drag.
- Land Pipeline: Tighter planning restrictions could reshape where new estates emerge, forcing builders to adjust sales pipelines but also creating confidence in land less exposed to risk.
- Design & Standards: Stronger resilience requirements mean builders must adapt specifications, potentially raising short-term costs but reducing future warranty and defect risks.
- Reputation: The industry’s credibility depends on quality. Failing to rectify defects or ignoring cladding issues leaves builders exposed to both regulators and insurers.
- Workforce Flexibility: Recognition of interstate trades could help builders scale up quickly after disasters, where local trades are stretched thin.
For an industry already under strain from labour shortages, insolvencies, and regulatory changes, these shifts could reshape the playing field over the next decade.
The Bigger Picture: Productivity vs. Protection
The Queensland Productivity Commission is tasked with finding ways to improve efficiency in construction, a sector that accounts for more than 10 per cent of the state’s economy. But the ICA argues that productivity gains can’t come at the expense of resilience.
“Unlocking land in high-risk zones and cutting corners on resilience just locks in future costs,” Hall warned. “True productivity means homes that last, withstand disasters, and don’t leave families or communities stranded.”
This framing flips the traditional builder-government tension on its head. Historically, the push has been for faster approvals and lower upfront costs. The ICA is challenging Queensland to think in terms of lifecycle cost, where prevention saves billions compared to recovery.
What Happens Next?
The Commission’s final report is due later this year, with the State Government expected to consider its recommendations in the lead-up to the 2026 state election.
For builders, the outcomes could mean:
- New planning rules restricting developments in vulnerable areas.
- Updated NCC (National Construction Code) requirements with a resilience lens.
- State-backed funding for cladding rectification.
- Removal or at least reduction of insurance stamp duty.
- Faster interstate labour mobilisation after disasters.
Whether all six ICA recommendations are adopted remains to be seen. But the direction of travel is clear: resilience is no longer optional.
TGB Take
At The Good Builder, we’ve seen the risks play out first-hand, flood-hit communities, projects stalled by defects, and builders squeezed by insurance pressures.
The ICA’s submission is a reminder that resilience isn’t just a government talking point, it’s a frontline issue for every builder signing a contract in Queensland.
The challenge now is balance: keeping homes affordable while ensuring they can withstand what’s ahead. The builders who lean into resilience, quality, and smarter land choices will be the ones who thrive in Queensland’s next chapter.
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