Victoria wants the federal government to contribute to a $600 million fund to remove dangerous cladding from hundreds of buildings, including apartment blocks.
The fund will be overseen by a new body, Cladding Safety Victoria, with half the works to be paid for directly by the state Labor government.
Premier Daniel Andrews has written to PM Scott Morrison to ask the federal government to pitch in the other $300 million to fix the problem.
If it doesn’t, the state government plans to raise the money through building permit levies in the next five years.
Victoria’s cladding task force, set up after London’s deadly Grenfell Tower inferno, has inspected more than 2000 buildings across the state.
About 500 of those buildings are considered high-risk, and in need of rectification works.
Mr Andrews said community safety was at the heart of the cladding task force’s 35 recommendations, released on Tuesday.
“When it comes to dealing with the cladding challenge, community safety has got to come first,” he said.
“Our firefighters and other first responders … could well be called to fast-moving nasty, potentially deadly cladding fires, if we didn’t take the action that we are announcing here.”
The Victorian announcement came as one of Australia’s biggest building certifiers warned industry uncertainty – due to insurers walking away from high-risk projects – was putting the future of his company at risk.
John Massey – the certifier of Perth’s Optus Stadium – has written to Mr Morrison to say his company’s contracts will be in trouble because insurance companies are excluding dangerous materials such as cladding in coverage offered to private building certifiers.
“We will be required to close our business without our current insurance cover,” he wrote.
“Building surveying firms across Australia have closed their doors and many more will be forced to follow.
“Without a workable solution on the table very soon, I believe the building and construction industry throughout Australia will eventually collapse.”
Some states are excluding cladding from insurance policies in the wake of skyrocketing premiums, while Australia’s five largest industry groups have demanded urgent action on “patchy and inconsistent” building rules.
The groups argue inconsistent approaches are fanning a crisis in the building supply chain.
“The insurers are taking on massive risk and are questioning whether or not they do that,” Master Builders Australia chief Denita Wawn said.
Ms Wawn also urged the states to ensure greater enforcement of regulations.
“As an industry association we can’t do that but those who regulate the industry can,” she said.
Labor has accused the federal government of failing to show leadership on the issue, but the responsible minister blames the states and territories for the mess.
Federal Industry Minister Karen Andrews will put pressure on her state and territory counterparts when she meets them in Sydney on Thursday.
She is offering to fund a task force to oversee the response to a recent report into building surveying.
Ms Andrews praised Victoria for announcing it will pay for combustible cladding to be removed from privately owned buildings, and said other states should consider similar solutions.
But the federal government won’t be offering to foot the bill.
“The commonwealth is not an ATM for the states,” she told ABC radio.
“This problem is of the states’ making and they need to step up and fix the problem and dig into their own pocket.”
The Victorian Greens welcomed Mr Andrews announcement.
“No Victorian should be living in danger because of flammable cladding on their home,” leader Samantha Ratnam said.
“The affected owners and residents have worked tirelessly to elevate their concerns and we hope this important first step will grant them much-needed relief.”