The interim report is unusually precise about what state variations cost. It is much less precise about what would stop them.

Treasury has put a page count on something the industry usually describes in adjectives. State and territory variations contribute approximately 600 extra pages to NCC 2022.

That figure sits in the interim report of the NCC Modernisation Project, released on 30 April. It is the same project as the review of the Code we covered at consultation stage, now far enough along to have reform directions attached to it. There are five. The second is the one that would change what a builder builds.

The five are: simplify access and use, recommit to a national market, tougher cost benefit analysis and decision making, enable innovation and new products, and reduce the cost of demonstrating compliance. Four of those are about how the Code is written and applied. The second is about whether there is one Code at all.

It is titled “Recommit to a national market”. The verb is doing a lot of work.

What a variation actually looks like

Variations are easy to discuss in the abstract and hard to picture. The report picks one example and it is a good one.

Heated water services in Volume Three of the Code are meant to do two things nationally: reduce scald risk and improve energy efficiency, through referenced Australian standards. What actually applies depends on where you are standing.

New South Wales largely replaces the Code requirements with its BASIX pathway, with its own scald control triggers and replacement exemptions. South Australia substitutes its own prescriptive provisions covering permitted heater types, minimum gas star ratings and solar or heat pump thresholds, and widens the scald triggers. Victoria adds replacement exemptions, extra requirements for thermostatic mixing valves, and ties parts of heater compliance back to state plumbing regulations. Tasmania and Queensland embed their own water heating and energy provisions.

Those are the examples the report chose, not the full list. One family of clauses, five jurisdictions doing it differently, same hot water unit. Multiply that across three volumes and 600 pages stops sounding abstract, which is the practical reality behind what the compliance split means across state lines.

What is a state variation to the National Construction Code?

The National Construction Code is written by the Australian Building Codes Board but has no legal force of its own. Each state and territory gives it effect through its own building legislation, and in doing so may add, remove or modify provisions. Those changes are published as jurisdictional appendices to the Code and are known as state variations. A variation can replace a national requirement with a state scheme, impose an additional requirement, or exempt work from a national provision. The Australian Building Codes Board itself records that any provision of the Code may be overridden by, or made subject to, state or territory legislation. Because adoption is a matter for each jurisdiction, both the content of the Code and the date it takes effect can differ across borders.

The number behind the argument is fourteen years old

The report’s evidence for national consistency being worth chasing comes from a 2012 study by the Centre for International Economics, prepared for the Australian Building Codes Board.

That work put the annual economic benefit of a single national technical code at around $300 million, spread at broadly similar levels across residential and commercial construction. It also found that only about half of the available benefit had been captured, with the rest held back by remaining variations and implementation constraints.

So the case being made is that roughly half the value of a reform delivered in the early 1990s is still sitting on the table. That is the prize. The report does not update the modelling.

Victoria is the case study, and it cuts both ways

The report holds up one jurisdiction as evidence the problem is solvable. On 30 March Victoria announced it would strip out a number of its variations, and the Victorian Appendix to NCC 2025 takes the count of variations and additional clauses from 115 down to 60, removing 29 pages, effective from 1 May.

That is a real reduction and it happened voluntarily. It also means that after a deliberate consolidation effort, one state still carries 60 variations to a national code.

One family of clauses, five jurisdictions doing it differently, same hot water unit. Multiply that across three volumes and 600 pages stops sounding abstract.

The gap between the diagnosis and the lever

Each reform direction in the report is split into immediate actions and issues requiring further exploration. Reading which side things fall on is more informative than reading the direction itself.

Under direction two, the immediate actions are that states and territories recommit to reduce variations and uphold nationally agreed timeframes, and that jurisdictions improve data sharing.

The data sharing action is more interesting than it sounds. The report describes creating feedback loops across jurisdictions on the use of performance solutions, on complaints, on evidence of defects and on emerging risks. At present a regulator in one state has no systematic visibility of which performance solutions are being relied on elsewhere, or which are failing. That is a gap in the evidence base underneath the whole system, and closing it does not require anyone to surrender a variation.

Filed under further exploration are the mechanisms. Limits on variations. Stronger national legal or governance models. Agreed criteria for handling variations that genuinely cannot be avoided, such as those driven by geography or climate. Greater transparency about why a variation arose in the first place and whether its impact is proportionate.

The diagnosis is specific and the enforcement question is open. Which is consistent with the constitutional position, because the Code has no force of its own and where licensing and compliance obligations sit is a matter for each state. A recommitment is the strongest immediate action available to a Commonwealth project that cannot legislate the outcome.

One reform has already been delivered, and it did not come through Building Ministers. The 2026 to 2027 Budget committed $42.7 million over four years in grants to Standards Australia for free read only access to standards referenced in Commonwealth, state and territory legislation, including those called up by the Code, which was among the loudest complaints in the consultation.

Why the timing is odd

One line in the report is easy to miss. A new Intergovernmental Agreement is described as being in final jurisdictional review and sign off, and the report notes the opportunity to consider future governance arrangements within it, including how harmonisation would be maintained in the timing and implementation of the Code.

That agreement is the vehicle. It is the document where any binding constraint on variations, or any commitment to common adoption dates, would have to live. It is being finalised now, while adoption dates that still differ by jurisdiction remain the live evidence of the problem it would address.

The final report goes to Building Ministers in late 2026. On the technical side there is runway, because in October 2025 Building Ministers agreed to pause further residential changes following NCC 2025, other than essential quality and safety measures, until the end of the National Housing Accord period in mid 2029. We covered that decision when residential changes were formally paused.

The governance decision is the nearer one, and it is the one that determines whether the other four reform directions land in one market or eight. Nationally consistent pathways for new products, which is direction four, only mean anything if the pathways are actually national, and that matters directly to the methods and materials moving across the industry right now.

THE GOOD BUILDER TAKE

The useful thing in this report is not the reform list. It is that a Commonwealth department has finally measured the variations problem instead of describing it. Six hundred pages, a $300 million a year benefit with about half of it never collected, and a worked example showing five different hot water regimes under one national clause. That is a proper diagnosis. What sits next to it is a request that states recommit, with every actual mechanism parked under further exploration, because the Commonwealth does not regulate building and cannot do more than ask. Victoria has shown a jurisdiction will cut variations when it decides to, and has 60 left after doing it. The document worth watching is not the final report in late 2026. It is the Intergovernmental Agreement being signed off right now, because that is where a recommitment either acquires teeth or stays a recommitment.

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Source: National Construction Code Modernisation Project Interim Report, The Treasury, 30 April 2026, including the evidence snapshot “Towards a single national code” and the case studies on Victorian variations and heated water services.

Last updated 2 September 2026. This article will be reviewed when the final report is provided to Building Ministers and when the new Intergovernmental Agreement is executed.

General information only. This article reports on a Commonwealth policy process and is not legal or compliance advice. National Construction Code requirements and adoption dates differ between states and territories and change over time. The Good Builder recommends confirming current obligations with the relevant state or territory regulator before acting on anything set out here.

Author: TGB Editorial