The Victorian government was told its home building insurance platform needed to be improved five months before construction company Porter Davis collapsed.
About 1700 homes across Victoria and Queensland were left in limbo when the company went into liquidation in March.
Some 560 families nearly lost their home deposits because Porter Davis did not file insurance for them while they waited for building to start.
A government working group cited issues with the home building insurance platform in October, freedom of information documents released on Monday state.
The working group, chaired by the treasury department and comprising industry and union groups, made 14 recommendations for short-term fixes in the ailing construction sector.
Among the measures was for government to improve the transparency and effectiveness of the Victorian Managed Insurance Authority’s home building insurance platform.
The working group also advised government to advocate for banks to be more flexible with builders’ finances and to increase public knowledge of insolvency practitioners.
Victorian minister Steve Dimopoulos said the government had implemented all of the short-term recommendations.
“We’re also looking further into what changes we can make to protect consumers in the future,” he told reporters on Monday.
But opposition finance spokeswoman Jess Wilson said the government had failed to act, leaving hundreds of families in the lurch.
“If the Andrews government had progressed these measures last year, many of the ongoing issues in this sector may have been mitigated,” she said.
The Victorian government in April announced a $15 million scheme to pay back Porter Davis customers who put down a deposit but never had insurance filed.
But some customers say they’re missing out on support because they only signed a tender agreement rather than a full contract before the company collapsed.
Mr Dimopoulos said the government was working on assistance for those Porter Davis families.
“We’re investigating individual circumstances,” he said.