As a component of the regulatory structure controlling building construction and land development in Australia, the system of building regulation was reformed during a period of significant restructuring of the Australian economy. The microeconomic reforms aimed to find efficiencies in government and industry sectors, and with respect to the latter, facilitate the development of competitive trade structures across national and global markets. The research provides a critical narrative account of the development and outcomes of the microeconomic reform of building regulation between 1990 and 2003. The microeconomic reform process is examined in the context of the vastly differing approaches of two Australian states, Victoria and New South Wales, with respect to the national reform agenda which was initiated and led by the Commonwealth government in response to the increasing globalization of the national economy. An understanding of what happened and why and how t he states differed with respect to the national reform agenda enabled the outcomes of the reforms to be examined for their impact upon government, industry and the community. The regulation of building construction is a constitutional responsibility of the state governments and has traditionally been controlled by local government. However, control is increasingly being centralized at the national level, in response to international pressures to adopt performance-based regulations, standards and governance systems that accord to neoliberal ideology. This has resulted in a reduction of state and local government involvement in certain building control functions with a commensurate increased role for the private sector; an increase in the complexity and quantity of regulatory instruments; a reduction in government accountability for the standard of building construction; the development of structures to facilitate competitive intranational and international trade in construction-related goods and services and a reduction in the quality and standard of buildings. The principal benefits of the reforms have accrued to industry and to government and the least benefits have accrued to the community/consumer.