Paring back the Building Code: What the Senate Productivity Committee’s Interim Report means for certifiers, engineers, architects and insurers

The Senate Select Committee on Productivity (Committee) released its landmark Interim Report on Housing and Productivity (Interim Report) during August 2026, recommending sweeping reforms to the National Construction Code (NCC) — with potentially significant implications for construction professionals and insurers.

Publication of the Interim Report

The Interim Report is the culmination of 236 submissions and several public hearings held during April and July 2026. It makes 19 recommendations — including four recommendations directed at overhauling the NCC — signalling a shift in how Australia intends regulating the design and construction of buildings in future.

The NCC currently prescribes the minimum required level for the safety, health, amenity, accessibility and sustainability of certain buildings. However, the Interim Report notes that the NCC is criticised for not being fit for purpose, varies at the state versus territory level, unnecessarily increases building and compliance costs, and hampers Australia's ability to deliver over one million new homes before June 2029, as targeted under the 2022 National Housing Accord — in circumstances where the number of homes completed per hour worked is reported to have fallen by 53%.

Mandatory technical requirements and additional adaptive optional modules

The Interim Report recognises that housing affordability cannot be fixed without fixing productivity, and that productivity cannot be fixed without fixing regulation. This recognition may have prompted the Committee to recommend reducing the NCC's mandatory technical requirements to 80-90 pages (down from approximately 2,200 pages currently contained in the NCC) to resemble the size of the original 1988 NCC and follow New Zealand's 83-page building code model. The Interim Report also recommends introducing:

1. the "Basic Australian Standard" — a mandatory code containing minimum safety and performance requirements including (i) structural integrity and stability; (ii) fire safety; (iii) weatherproofing and internal wet area moisture barriers; and (iv) lighting, sanitation and safe water, and health-related building standards; and
2. additional adaptive optional modules — including (i) accessibility (graduated liveable housing) standards; (ii) extended energy efficiency (tiered operational efficiency ratings); and (iii) a new pattern book containing federally pre-approved housing designs and modular/prefabricated building templates, giving effect to modern methods of construction (MMC) to fast-track municipal planning approvals.

Mixed reactions to the Interim Report

Unsurprisingly, the recommendations contained in the Interim Report have garnered mixed responses:

• Housing and building groups (like the Housing Industry Association) have welcomed measures to minimise bureaucracy and potentially ease escalating construction costs, recognising that housing supply and affordability are critical productivity challenges.
• Certain environmental organisations and the Energy Efficiency Council (EEC) have cautioned that reducing the NCC's mandatory technical requirements and making minimum energy efficiency standards optional may increase household energy bills and compromise safety, long-term energy performance, and national consistency if states diverge on optional rules.
• Some industry commentators have noted that while they support simplifying the NCC, improving national consistency and embracing MMC, cheaper buildings do not automatically result in more affordable homes if costs are shifted to higher energy bills, future retrofits or accessibility modifications.
• The Australian Institute of Building Surveyors cautioned against paring back the NCC, warning that any redefinition of minimum standards should not undermine safety, amenity or consistency, or Australia’s ability to build efficiently at scale.
• The Green Building Council Australia supports developing a national pattern book and embracing MMC to reduce design and approval costs while helping accelerate housing delivery.

Implications for construction professionals and insurers

If adopted, the amendments proposed to the NCC in the Interim Report carry potentially significant implications for certifiers, engineers, architects and insurers operating in the construction sector.

Certifiers

Building certifiers and Nationwide House Energy Rating Scheme (NatHERS) assessors arguably face the most direct operational impacts.

• Simplified compliance pathways. The proposed shift from prescriptive deemed-to-satisfy provisions currently contained in the NCC towards performance-based compliance (which may entail greater flexibility in how compliance outcomes are achieved) could fundamentally change the certifier's assessment task by broadening discretion while also increasing professional judgment risk.
• National voluntary certification scheme. The Australian Building Codes Board is working to facilitate the commencement of a national voluntary certification scheme for prefabricated construction manufacturers by mid-2028, aiming to provide greater certainty and eliminating the current requirement for modular projects to be approved building-by-building and recertified state-by-state — creating a new class of certification work.
• NatHERS assessor costs. Streamlining energy efficiency requirements under the graduated framework could affect fee structures and reduce demand for the services of NatHERS assessors.
• Jurisdictional consistency. Certifiers operating across multiple states and territories may benefit from the recommended move toward national consistency in the interpretation and application of the NCC.

Engineers

The Interim Report carries significant implications for consulting and structural engineers engaged in residential and commercial construction, including:

• Reduced scope of mandatory compliance work. Scaling the NCC down to the mandatory Basic Australian Standard core may reduce the volume of compliance-related engineering documentation required per project, particularly where the graduated framework envisages that accessibility, energy efficiency and MMC standards will become optional or tiered modules as opposed to mandatory provisions.
• Pattern books and pre-approved designs. Recommendation 14 — which proposes a national pattern book containing pre-approved standard housing designs and MMC with open-source construction templates, including unbraced ground slabs, timber framing grids and surface-mounted wet nodes — may facilitate legal compliance without the need to pay for custom engineering signatures, however standardised design elements may reduce demand for bespoke engineering input on routine projects.
• Inconsistent jurisdictional application. National harmonisation of NCC implementation across states and territories could reduce the duplicative engineering effort currently required to adapt designs across jurisdictional boundaries.
• MMC. Engineers certifying MMC systems should note the recommendation for clearer performance pathways, faster inclusion of proven innovations in standards, and stronger alignment between the NCC and Australian Standards.

Architects

Architects are likely to be impacted by the tension the Interim Report creates between design aspiration and housing affordability:

• A refocused NCC. The proposed NCC amendments narrow the regulatory parameters within which architects must design. As such, architects and their clients may enjoy greater design flexibility if requirements relating to sustainability, accessibility and energy efficiency — currently mandatory across all projects — become graduated optional modules.
• Pattern books as a constraint on bespoke design. While intended to accelerate housing delivery, the national pattern book model is likely to impact the architect's role in certain projects. Pre-approved designs assessed as complying with the NCC may bypass the conventional design-and-approval pathway, reducing the need for architectural engagement on qualifying projects.
• Opportunities in MMC and innovation. Conversely, the Committee's endorsement of MMC and prefabrication potentially creates new opportunities for architects designing within manufacturing-led delivery models.

Insurers

The Report has direct and indirect implications for insurers operating in the construction and professional indemnity markets:

• Modular construction insurance gaps. Existing state-based insurance schemes typically do not extend to modular construction. As such, consumers are consequently exposed to significant financial risk if a manufacturer becomes insolvent during the construction phase — highlighting both a market opportunity and an emerging risk for the insurance sector.
• Professional indemnity implications. The shift toward performance-based compliance, broader discretion for certifiers, and the introduction of pattern books and MMC pathways will require recalibration of professional indemnity risk profiles. The move away from prescriptive compliance may increase the exercise of professional judgment — with consequential implications for claims exposure.
• Prolonged projects and insurance costs. While approval delays and extended project timelines may result in higher insurance, tax, contribution and financing costs, accelerated approval processes could also reduce the duration-related insurance burden on developers and builders.
• Redundancy fund regulation. Recommendation 17 proposes extending the Australian Prudential Regulation Authority's prudential oversight to building and construction redundancy funds, signalling a broader regulatory tightening that insurers and fund operators are advised to monitor.

Key takeaways

If adopted, the recommendations contained in the Interim Report will have potentially far-reaching implications for Australia's construction industry. However, condensing the NCC or introducing graduated optional modules will not reduce expectations on construction industry players to comply fully with their legal obligations — the key to success will lie in construction professionals and insurers being fully equipped to understand and apply the revised NCC once published.

The Committee is scheduled to release its final report by 31 March 2027. Construction professionals and insurers are advised to stay informed of proposed changes to the NCC to minimise potential adverse impacts to their business and ensure that they remain compliant with the changing legislative landscape.

If you would like to discuss how these proposed reforms may affect your projects or your business, please reach out to our team.