Why do Gold Coast Plumbers bury their mistakes?

Why do Gold Coast Plumbers bury their mistakes?

I recently had a client comment that Gold Coast Plumbers bury their mistakes far more than doctors bury their mistakes. It is a comment I cannot disagree with in any way. Increasingly we see underground plumbing work that is so non-compliant it’s confirming Gold Coast Plumbers bury their mistakes, knowingly and deliberately.

Whywait Plumbing do not accept that Gold Coast Plumbers bury their mistakes

Calling them mistakes is not being truthful because we all know it’s a deliberate act to cut costs. We all understand those plumbing companies that choose to undertake construction work are under enormous competitive pressure to reduce construction costs continually.

However, because of these plumbing companies buckling to pressure from project managers, builders and developers, they are in an ever downward spiral of negligently breaking the law. The reality is all of the parties involved in the lawbreaking know the chances of them getting caught are slim as the inspections by City of Gold Coast’s plumbing, and drainage inspectors are cursory at best.

Underground water pipes, house sewer drains and house stormwater drains are all buried underground. Unfortunately for property owners, it can take years before the problems become apparent and they investigate the issue. By this time the original construction job is out of warranty, and the QBCC will show little interest in any investigation of negligence.

Investigation and rectification of non-compliant installation of underground plumbing infrastructure fall onto the hapless property owner. Rectification bills can be enormous, and the likelihood is there is no insurance coverage or any desire by the council or state regulatory authorities to investigate.

I believe we have the best plumbing regulations and standards in the world. We used to have the best enforcement in the world to ensure our buildings met the high standards required. The enforcement of the Plumbing and Drainage Act of 2018 and the preceding laws have become so lax that most buildings constructed in the last twenty years have multiple underground plumbing defects. Disastrously for property owners, the majority of these defects are waiting to break down and cause havoc finally.

Gold Coast Plumbers bury their mistakes which causes water damage repaired by Whywait Plumbing

When these buried mistakes are covered by insurance and break down, causing water damage, every one of us bears a cost via ever-increasing property insurance premiums on all buildings. If enforcement had occurred at the construction stage, then this water damage would have never happened.

It is our experience as maintenance plumbers that builders and developers perceive they can reduce costs and increase profits by not complying with the Plumbing and Drainage act of 2018.

The legal obligations of complying with the Plumbing Code of Australia, which is Volume 3 of the National Construction Code, is not even a consideration.

I accept this lack of compliance has come about due to multiple factors and pressures. Nevertheless, this short-sighted attitude and systematic non-compliance with what is the law affects property owners with prodigious rectification costs. I believe that the project managers, builders, developers and plumbers involved in this ongoing fraud of property owners and insurance companies are well aware of what they are doing but blame it on:

  • Competitive pressures in the construction industry where the lowest price wins mentality rewards plumbers who take non-compliant short cuts to reduce costs to win jobs
  • All builders actively forcing cost-cutting on sub-contractors and suppliers
  • Time constraints on plumbers to complete the job and be paid
  • The reluctance of builders to inform clients that unforeseen issues have arisen which will increase the cost of construction
  • The failure of building certifiers and plumbing inspectors to defect non-compliant work and the turning of a blind eye to incorrectly graded trenches, lack of compaction and inappropriate backfilling of trenches
  • Continual lack of enforcement by the Queensland Government regulators

Every one of the above has in their view a justifiable excuse for what is occurring but all that is required is for the law to be obeyed. The Plumbing and Drainage Act of 2018 and the Plumbing and Drainage Regulation 2019 merely need to be enforced to stop Gold Coast Plumbers bury their mistakes attitude continuing.

By enforcing the law, everyone is a winner and will return us to the standards that previously existed where non-compliant work was defected without a second thought. Every plumber I discuss this with would be more than happy with this to occur as it would create a level playing field for the plumbing industry where efficiency was rewarded rather than non-compliant short cuts. It further protects property owners and the entire construction industry that is already under a cloud due to the cladding non-compliance in buildings throughout Australia.

Whywait Plumbing want to stop Gold Coast Plumbers bury their mistakes attitude continuing

As licensed plumbers, we are mindful that non-compliant plumbing is a public health risk. I reiterate most of the non-compliant work is knowingly and deliberate which is ultimately negligent behaviour. Sooner or later insurance companies and no-win no-pay lawyers will awaken to the fact that this non-compliance is negligence resulting in the plumbing industry as a whole is portrayed as cowboys with no integrity ripping off poor property owners.

This is a scenario where no one wins except the lawyers. As a critical industry plumbers cannot allow a perception that plumbers as a whole are unable to undertake legally compliant work. We certainly need no more regulation we just need the existing laws and regulations enforced to protect the community’s health as a whole.

The Myth Of The “Going Rate or Recommended Rate” For Plumbing Services

Unfortunately, the myth that there is the going rate for plumbers or recommended rate for plumbing services is one of those lovely urban myths that will never go away. Some consumers promote it as a method to avoid paying for plumbing services generally after the work has been completed.

Even more disturbing is the fact that it is also promoted by some plumbing contractors who are:

  • lacking in necessary business skills and cannot do basic accounting equations to work out the cost of running their business and provide quality service at a fair profit
  • engaged in payback against other plumbing contractors to undermine their competitors by claiming they are overcharging

Every plumbing business is not the same. Every plumbing business has different levels of cost structures, overhead costs and productivity levels that are required to set a selling price or a break-even price. It is illegal under the Competition and Consumer Act 2010 for business to collude in setting prices or for there to be any set or recommended rates by master plumbers associations.

For many one-person plumbing businesses when they start out, it is just far too complicated to put a budget together and calculate what the cost of doing business is. Reality is they need to do it so that they can ensure they are charging a rate for their services that covers the cost of running the business. Unfortunately what happens most of the time is these one-person plumbing businesses decide that they will charge the going rate for plumbers and be done with it.

So how do these one-person businesses find out what the going rate for plumbers is? Very simply, they ring around all their competitors, pretending to be a prospective customer and find out what they are charging for their services. As no professional plumber can give a price over the phone, they tend to only get prices from like-minded one-person businesses promoting a whole undercutting philosophy based on some mythical hourly rate which then becomes the mythical going rate.

To see how this whole myth of the going rate for plumbers becomes self-perpetuating, consider the following scenario, which is exactly what happens all the time. Consider the scenario where  Trevor decided to buy a van, get a new mobile phone and using his tools supplied to him by his former employer and open up “Trevors Plumbing Service.” Trevor knew his old employer, “Gold Coast Plumbing”, was charging $130 per hour but he knew that his former boss had lots of equipment and paid his employees above the award wages, so he decided to charge only $80 an hour.

A couple of weeks later Jason who does not like Trevor, hears that Trevor has opened up his plumbing business, and he figures he’s much smarter than Trevor plus he’s sure he’s faster and quicker at doing plumbing work than Trevor, so he decides to buy a ute too and open up “Speedy Plumbing.” Jason gets his girlfriend to phone Trevor pretending to be a customer to find out his charges. As Jason does not like Trevor, he figured he could knock him out of business by charging $20 less and getting all his business. So “Speedy Plumbing” is now in business charging $60 per hour.

Meanwhile, Stephen had opened up “Super Coastwide Plumbing” a year earlier and had just had a builder who supplied him with 90% of his work tell him that he was going to be using another plumber to do his work in future. This is despite the fact that Stephen was providing excellent service but at $100 per hour was way above the going rate for plumbers. Stephen panicked on hearing this and decided to call around his competitors to see what the going rate for plumbers was. Stephen discovered that it was ranging from $40 to $160 per hour.  Stephen decided that to keep his business going he need to match the going rate for plumbers and based on where most of his competitors were opted to drop his rate to $65 per hour to be under the rate charged by “Trevors Plumbing Service” who appeared to picking up lots of work.

Meanwhile, over at “Gold Coast Plumbing” the owners are having a meeting. “We aren’t making enough money to cover our costs!” They say. “Well, we can’t increase our rates because we’re already one of the highest in town — $70 higher than some after ringing around to find out the going rate for plumbers is.” The owners are frustrated because they’re gradually watching their business go down, a business that’s been in their family for three generations.

What happens next is textbook accurate and occurs over and over again in the plumbing industry causing unemployment, financial hardship and family breakups.

“Gold Coast Plumbing” starts cutting corners using cheaper materials, cancelling insurance cover, not replacing old equipment, not replacing old utes and vans, charging clients for hours that were not worked, using labourers and apprentices instead of qualified plumbers. Their plumbers become disillusioned and start looking for jobs elsewhere and this forces “Gold Coast Plumbing” to use more labourers and apprentices to undertake the work that requires licensed and experienced plumbers.

Over at “Speedy Plumbing” Jason is struggling to cope with all the work but cannot hire any licensed plumbers because he’s discovered he can’t afford to pay them plus buy more utes and equipment because his rates are too cheap and don’t cover the costs of running the business.

Trevor over at “Trevors Plumbing Service” is still working by himself, so does not need a lot of work to keep him busy plus the customers that hired him because he was the lowest price have left him and gone to “Speedy Plumbing”. Trevor is not concerned as he’s making more money than he did when he was an employee at ‘Gold Coast Plumbing” plus he’s his own boss and he doesn’t have to answer to anybody. Trevor has discovered that he’s got to cut corners to make sure he can pay the bills. He does not renew his QBCC licenses or take out public liability insurance. Trevor adopts a policy of never returning calls to customers that complain, guaranteed to keep him out of trouble from inferior quality materials and workmanship.

Meanwhile, Stephen at “Super Coastwide Plumbing” was struggling to pay bills since dropping his prices to the going rate for plumbers with the losers being his family. Stephen’s wife is forced to return to her old job, working to support “the business” until it gets back on its feet. Even worse cutting corners meant customers were not getting compliant plumbing work undertaken with failures being the norm. Finally, employees started getting reduced or no training with wages failing to be paid on time as there was never enough money.

Every successful plumbing business knows the starting point always is knowing what it costs to do business and setting rates that ensure they can make a profit for the long term which is specific to their circumstances and business model.

No one ever wins in setting up a business based on the going rate for plumbers or recommended rate because they are a myth. The only guarantee is that the business will close leaving employees, suppliers and customers all out of pocket and worse off for the experience in a myriad of ways.

Sadly I witness these scenarios repeating themselves over and over again on the Gold Coast. There are no winners when you don’t operate a business to make a profit after covering every single one of your costs.

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