Warning - Builder trying to rip off

I have encountered difficulties with the builder at Port Macquarie and I would be grateful if anyone could provide me advice on how to proceed.

After the DA was granted the builder?s construction manager noted that the land could be subject to flooding. They informed the council and the council recommended that the floor level should be raised by 300mm above the new weir.

After 1 month, the builder sent me a quote of $20500 (+ builder?s margin of 20%) for the variations. This is more than 5% of the builder?s initial quote.
I feel that it is unreasonable due to below reasons.

This issue was raised by a representative of the builder as quoted in his email. This was an omission done by the builder at the time of giving the initial quote in the building contract, indicating incompetence of the builder at the time of giving the initial quote. From a legal perspective, is this a variation and should it be the owner?s responsibility?
Also the council stormwater engineer had recommended the following steps to be taken by the builder;

? Ensure that the proposed driveway crossing complies with Council?s standard profile ASD208 (including freeboard above top of kerb).
? Provide freeboard to habitable floor levels above the top of the swale (300mm)
I feel that their price is excessive to carry out the above council instructions.

All these changes were made after granting of the DA approval by the council. Does this have any implications? The builder is blaming the council stating that the council stormwater engineer should have noted this prior to DA approval.

I would appreciate any advise as I feel the builder is trying to rip me off.