In the past few weeks, a list that already contained PBS Building Group, Rork Projects and Cubitt's Green Flats and Home Extensions got a lot longer, with Project Coordination placed into administration and Voyager Projects into liquidation. According to the Australian Securities and Investment Commission (ASIC), in 2022/23 alone there were 121 construction industry insolvency appointments in the ACT.

What contributes to a builder collapsing can be many things. From poor cashflow management and market conditions through to planning delays and excessive regulation.

When costs are driven up to a level higher than builders have quoted for on a job, the risk of that builder going bust climbs exponentially.

Market conditions are very tough at the moment with sales weak due to rising interest rates with an equivalent reduction in building and labour costs yet to materialise.

And complaints about how slow planning and building approvals and draconian government regulation drive up costs is certainly not a new phenomena in any jurisdiction around Australia.

However, are the ACT government and the ACT public service conscious of how their regulations (and how they implement them) impacts on people trying to run businesses?

Forms, waiting in line, long waits, delayed approvals, and a seeming lack of urgency and hustle in how these "customers" are served, impacts materially on their business.

It adds to holdings costs and adds to overheads. Is this materially contributing to the building company collapses we are seeing in the ACT?

An example of additional red tape impacting builders in the ACT is the Urban Forest Bill which came into effect on January 1 this year. This bill is design to protect urban tress and help the ACT government meets its target of 30 per cent tree canopy cover or equivalent by 2045.

As part of this bill, the height definition of a regulated tree dropped from 12 metres to 8 metres.

A regulated tree means that say you are doing a knock down rebuild of your house and the house is in the dripline of your neighbour's 8m tree you will now need a tree assessment.

This tree assessment then potentially triggers requiring a development approval (DA) not just a building approval (BA).

This DA requirement adds three months at least plus additional costs, not to mention the additional cost of the tree assessment from a professional arborist. (If you are interested, have a look at Part 2 Section 11 1 of the Urban Forest Act 2023 at the "straight forward" definition of a regulated tree).

Will the Tree Protection Unit in EPSDD go into existing/current builds that are underway and require them to get a tree assessment (and therefore potentially a DA) even when that building approval was granted before the Urban Forest Bill came into effect?

The well-intended Urban Forest Bill and other regulation like it has consequences on businesses like builders (as well as the livelihoods and jobs of the people that work in these businesses). Are these consequences considered sufficiently when new regulations are drafted?

Slowing the creation of new dwellings is one thing but contributing to making it hard to survive as a builder does not help get the houses on the ground we need to address the shortage of housing in the ACT. There is a fine line between appropriate regulation and excessive regulation.

And the tree bill is just one example. In the last 12 months alone, builders have had added to their regulatory load silica laws/regs and silica awareness training, liveable housing requirements, moving from six stars to seven-star energy ratings, new Territory Plan and DA assessment process, and that's before we get to the uncertainty around land release timing and the unwillingness of SLA to drop land prices in a weakening market and get blocks sold.

Many of these areas have very strong cases for regulation particularly silica and liveable housing requirements. But the government should be cognisant though of the accumulating impact of all this regulation on builders.

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It has been said that business survives and thrives in spite of government not because of it.

The abundance of Commonwealth government jobs and procurement in Canberra means the ACT government has less of an incentive to make the ACT a great place to do business. Businesses and business people should not be seen as bad guys - they are people who take significant economic risks and who employee many people.

Infamously (and allegedly) in the Legislative Assembly building decades ago a former government minister was heard to say "We tax them 'til they bleed but not 'til they die" Well sometimes with excessive taxation and regulation, businesses do die.