Plans to license building trades in Victoria have slipped more than a decade behind schedule, exposing deep divisions over cost, skills and who ultimately pays for construction failures.

Victoria’s long promised plan to license building trades and curb widespread construction defects has been pushed so far down the agenda it may not be implemented until 2034, more than a decade after it was first scheduled to begin. Internal government briefings obtained by the Opposition reveal the delay could extend up to 14 years, leaving Victoria as the only jurisdiction without registration or licensing requirements for individual trade subcontractors.

That reset has carried consequences. Labour shortages, rising costs and a wave of insolvencies have reshaped the industry in the intervening years, with the collapse of Porter Davis in 2023 bringing consumer protections into sharp focus. The failure intensified scrutiny of how defects are detected, prevented and prosecuted, particularly when much of the work on domestic sites is carried out by trades that remain largely unregulated.

Under current settings, only plumbers and electricians must be licensed. Head contractors are registered in some circumstances and remain accountable to regulators and clients, but the subcontractors and employees responsible for much of the physical build face no equivalent requirement. The proposed reform would shift that balance, mandating registration for subcontractors and licensing for individual workers.

Legislation enabling the change passed Parliament in 2018 and again in 2021, yet momentum stalled. A public consultation page hosted on Engage Victoria disappeared last year, adding to frustration across the sector.

Minutes from a December 2024 meeting of the Building Industry Consultative Council show departmental officials warned the transition to the new regulator would further delay progress. According to the minutes, departmental representative Megan Peacock told the group the delay could stretch between three and 10 years, placing completion of the regulatory impact statement as late as December 2034.

Council members recorded their concern, calling for the immediate release of the statement and faster movement towards licensing carpentry trades. They argued government had a rare opportunity to deliver reform with bipartisan support from employers and unions, pointing to plumbing and electrical licensing as evidence that regulation can lift standards and reduce defects.

Industry split as costs and standards collide

Support for reform remains uneven. Major industry bodies including the Property Council, Master Plumbers, Lendlease, Multiplex, WorkSafe and Development Victoria were present at the meeting, and the issue resurfaced again in March and July last year. Members agreed to write to Housing Minister Harriet Shing and establish a working group to keep pressure on the process.

Master Builders Victoria has since cautioned against rushing the framework, arguing the proposal now requires review and updating. While it supports registering builders, it opposes licensing individual workers, warning the move could drive up costs without guaranteeing improvements in workmanship.

Multiplex has taken a different stance, backing any scheme that strengthens skills and lifts build quality. Regional managing director Ross Snowball says a clear and consistent licensing framework would raise standards while making trades more attractive as long-term careers, providing professional recognition and greater certainty for workers and consumers alike.

Unions continue to argue licensing would formalise skills, improve safety and help attract apprentices by offering clearer career pathways. The Housing Industry Association has rejected the framework, describing it as union driven, while leaving open the possibility of licensing for specific trades where consumer risk is demonstrably high.

At a March 2025 meeting, Master Builders Victoria chief executive Michaela Lihou argued waterproofing should be prioritised, reflecting the prevalence of complaints linked to moisture ingress. The original proposal outlined a phased rollout beginning with carpentry and expanding to other trades over five years.

A 2020 options paper estimated Victorians lose about $1 billion each year to non-compliant building work, with poor workmanship the most common source of complaints. Victoria remains the only jurisdiction without registration or licensing requirements for individual trade subcontractors.

The government maintains it is pursuing reform in stages. A spokesman said licensing already exists for critical trades and would expand once other consumer protections, including a home warranty scheme and stronger defect rectification powers, are in place.

For now, a reform intended to rebuild confidence in residential construction remains caught between policy ambition and regulatory reality, with the cost of delay continuing to surface in defects, disputes and eroded trust.