Removal of aluminium cladding from Canberra's Centenary Hospital and other public buildings should come with an urgent national ban on the dangerous products, a Senate committee has warned.
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Flammable composite cladding - blamed for a catastrophic fire which killed more than 80 people inside London's Grenfell Tower - is present in tens of thousands of Australian buildings and makes up as much as 10 per cent of the cladding on the Centenary Hospital for Women and Children.
Parliament's Standing Committee on Economics called for an urgent national ban on the importation, sale and use of the dangerous polyethylene core aluminium composite panels, as well as for state and territory governments to establish a national licensing scheme for builders.
The committee, which has considered dangerous building products over three years and received more than 160 submissions, also called for beefed up penalties for breaches of the construction code and more funding for the Federal Safety Commissioner.
It said there had been extensive delays in the development and implementation of policies to address non-compliance and non-conformity in the building industry and long lag times in addressing a 2014 fire at Melbourne's Lacrosse residential tower.
Labor's spokesman on innovation, industry, science and research, Kim Carr, said the panels represented a fundamental failure of public safety akin to deadly asbestos.
He blamed decades of deregulation and privitisation and said use of the cheaper, imported combustible products saved builders just $3 per square metre.
"It's been more good luck than good management that no one has been burned to death. More than 80 people were killed in England and we could have a similar circumstance here," he said.
"We have the case of Canberra and while we don't know how many buildings there are in Canberra specifically, the question is why are there any at all?
"The Commonwealth government needs to take some leadership here. Nationally consistency is required."
Last month an independent assessment of the hospital found the panels represented a "credible fire risk", including where panels had been installed over emergency exits and evacuation areas.
The Grenfell tragedy has prompted audits around Australia and the world.
The fire is believed to have rapidly spread because of the exterior cladding, made of aluminum and polyethylene.
An audit of about 100 Commonwealth-owned buildings in Canberra is under way and the ACT government says the hospital is the only building identified so far by a desktop audit.
Territory schools are being reviewed as part of the probe.
Senator Carr said the committee had been told of clear breaches of the national building code, widespread certification fraud, product substitution and counterfeiting.
"I've never seen a set of submissions from such a wide range of people, particularly in an industry so diffuse as the building industry, with so uniform responses to what is a comprehensive failure of public accountability for safety," he said.
"We banned asbestos because we've realised how dangerous it is. There is not a safe use of this product for high rise buildings, it is against the building code, and yet it is on tens of thousands of buildings."
A final report from the committee is due in April 2018.