Hon ANNE TOLLEY (Minister of Education) Link to this
I move, That the Building Amendment Bill (No 3) be now read a first time. At the appropriate time I intend to move that the Building Amendment Bill (No 3) be considered by the Local Government and Environment Committee and that the committee present its final report to the House on or before 30 June 2011.
The Building Act 2004 is the primary legislation that governs the building and construction sector in New Zealand. The building and construction sector is vital to our economy, but productivity is low. The sector is finding the current economic environment tough. There has been a rise in construction activity this year, but it is a patchy recovery.
The current system is not broken, but it is not creating the right incentives to improve productivity. It is more costly than necessary and less efficient than it could be. Change is needed. When I say that, I am not talking about just the Government changing the law; I am talking about culture change in the building and construction sector so that everyone takes pride in their work and stands behind it. There are many good people doing good work in the sector, but the behaviour of some has dented confidence, and that behaviour has to change.
I am also talking about homeowners and others who commission building work changing their approach. Often their decision making is based purely on price. That approach needs to change to take into account factors that contribute to long-term value as well as immediate cost. None of this change will happen overnight, and we need to manage the change carefully so we do not lose the gains we have made since enacting the Building Act in 2004.
This Government is committed to regulatory reform designed to unleash enterprise. The Building Amendment Bill (No 3) is the result of a comprehensive review of the Building Act 2004 carried out in 2009-10. I acknowledge the important role played by the sector reference group in the review. Many sector leaders in the building and construction sector put time and effort into making submissions and contributing to meetings and working groups. They are the best source of information about the sector, and their input was very valuable.
A year ago, when we started the review, the aim was to reduce the cost and complexity of the consenting process. The Government received over 380 submissions in response to the review. The main message of the submissions was the vital importance of getting the balance right between reducing compliance costs and providing adequate insurance that building work is up to scratch. The package of amendments in the Building Amendment Bill (No 3) seeks to achieve that balance.
The Government has no interest in deregulating at the cost of the health, safety, or financial security of New Zealanders. Quality of building work must come first—that is the fundamental purpose of the Building Act 2004. The Government’s goal is a more efficient and productive sector that stands behind the quality of its work; a sector with the necessary skills and capability to build it right first time and that takes prides in its work; a sector that delivers good-quality, affordable homes and buildings and contributes to a prosperous economy; a well-informed sector that shares information and quickly identifies and corrects problems; and a sector where everyone involved in building work knows what they are accountable for and what they rely on others for. The Governments wants consumers in the sector to make informed decisions and to understand the risks and consequences of their decisions. I am pleased to report there is widespread support for the direction of the proposed changes.
I will now outline the key changes contained in the Building Amendment Bill (No 3). They cover three broad areas: clearer accountability, more efficient regulation, and improving skills and knowledge. These areas are all interrelated. We cannot make regulation more efficient without first getting accountability clear, and both depend on people having the necessary skills and knowledge. The Building Act 2004 will be amended to make it clearer that the buck stops with the people doing the work. Builders and designers must make sure their work will meet building code requirements; building owners must make sure they get the necessary approvals and are accountable for any decisions they make, such as substituting specified products; and building consent authorities are accountable for checking that plans will meet building code requirements and inspecting to make sure plans are followed.
The bill will also change the current building consent process to allow for risk-based consenting. This change will reduce compliance costs by doing away with unnecessary checking and inspection. It will also provide incentives for builders and designers to ensure they have the necessary skills to build it right first time.
A new risk-based consent system will allow owners to apply for different types of building consents based on the risk of the work to be done, rather than the current one-size-fits-all standard. Low-risk or simple residential work done by a licensed building practitioner does not need a lot of checking or inspection by the building consent authority. The building consents for this type of work will have limited checks and inspections by the building consent authority. For more complex residential work where the risks are higher, the current building consent process will remain in place, with detailed checks and inspections by the building consent authority. For commercial building work, the new building consent will take current best practice and apply it across the sector. This will allow for third-party review and quality assurance processes to take the place of building consent authority checks and inspections.
The risk-based consent system will work only when we have confidence in the quality of building work being done. The Government has identified a number of pre-conditions that will tell us whether we are on the right track. These conditions include having a sound base of competent licensed building practitioners who know how to comply with the code. We will activate the new types of risk-based building consents only when these pre-conditions are met.
In February this year the Minister announced measures to streamline and simplify the licensed building practitioner scheme. A robust licensing scheme with a critical mass of licensed builders means consumers can have confidence that their homes will be built right first time. The Government will cut compliance costs for building practitioners without compromising standards. The bill will amend the Act to be explicit about the standard of behaviour expected from people working in the sector. This is the culture change I mentioned earlier. Good standards of behaviour will help restore confidence in the sector. A code of ethics will now form part of the licensed building practitioner scheme, and licensed building practitioners will be able to be disciplined for breaches of the code or other behaviour that brings the scheme into disrepute.
The final key change included in the bill is an owner-builder exemption from the restricted building work regime in the Act. We are a nation of do-it-yourselfers, and the Government thinks it is unfair to stop Kiwis wielding a hammer on the weekend, which could happen under the restricted building work regime. But we still want to protect consumers from past shoddy work on their prime asset. The do-it-yourselfers will be exempt from the restricted building work regime. This means they will not have to employ licensed building practitioners to supervise or carry out restricted building work, but their work must still meet the requirements of the building code, and like professional builders they will still be accountable for the work that they do.
Further, we need to prevent unlicensed builders from flying under the radar and passing themselves off as do-it-yourselfers. The bill therefore includes provisions preventing do-it-yourselfers from working on more than one home within any 3-year period. It also requires any assistance given to the do-it-yourselfer by friends or family to be unpaid. The Government believes that these are fair and reasonable steps to prevent bad houses being built by unlicensed builders.
This bill will see more work built right first time, increase confidence in the sector, reinforce incentives for the sector to upskill, and reduce compliance costs by increasing efficiency.
PHIL TWYFORD (Labour) Link to this
I move that all the words after “Committee” be deleted. I acknowledge the work of the Hon Maurice Williamson in bringing the Building Amendment Bill (No 3) to the House. Labour will be supporting this bill going to the Local Government and Environment Committee. We see this bill as a modest and positive contribution to the ongoing process of reform of regulation in the building sector.
I also acknowledge the work of the honourable and modest Shane Jones, who started much of this work when he was the Minister for Building and Construction. He set up a number of task forces and began a whole process of consultation and discussion with the industry, which has led to many of the reform proposals that are contained in this bill. Shane Jones, in his earlier contribution on the weathertight homes legislation, was quite right to point out that if he were to join colleagues on the Government side of this House, the average quality of contribution on that side would rise and the average quality of contribution on this side would diminish.
I have to say that it was a great relief to finally hear a 10-minute contribution from the Minister who opened this debate. It makes a refreshing change from the rather desultory contributions we have heard from Government members this evening.
We support this bill. We think it is a modest step forward in the ongoing process of reform in the building and construction industry. However, it lacks ambition. I want to go on and say exactly why we support it and what is good about it, and raise some questions about the bill. Let us look at the context of what is happening in the building and construction industry. It is a hugely important part of our economy. It accounts for about 5 percent of our GDP, and something like 70,000 New Zealanders are employed in the sector, yet this is an industry that is in crisis. The building consent figures that came out last week show that construction activity in the residential sector has fallen through the floor. We have appallingly low levels of productivity in the building and construction industry. We are killing people on building sites at two to three times the rate of Australia. This is an industry that is in desperate need of assistance. Although the measures contained in this bill are positive and worthwhile in general, they are woefully lacking in ambition.
The question I have for Government members is why we are not seeing some kind of plan to rescue the building and construction industry in order to address the deep-seated productivity problems in the industry and the entrenched health and safety problems in this industry. Currently, in the economic crisis besetting the building and construction industry, we are seeing the departure of large numbers of skilled tradespeople at the moment who are going off to Australia. We are seeing apprentices being laid off at the moment because this Government does not have a plan not only for the wider economy but also in particular for this vital industry that we are talking about tonight.
The historical context is that in 1991 the National Government of the time deregulated the building sector, and, as we know, the response was a disaster for New Zealand. It was a disaster for homeowners and we are still feeling the effects of it. When the fifth Labour Government came in, we set out to address the problem. We saw in the Building Act 2004 a genuine attempt to restore a decent building regulation regime. We recognise that in hindsight that legislation is too prescriptive and too heavily focused on compliance. The result was that the industry generally stopped building leaky homes, but the heavy compliance regime slowed down the whole industry and added costs that were ultimately passed on to homeowners. So it is appropriate at this time that the reform process will swing the pendulum back towards the centre and give us a more thoughtful and light-handed approach that will be better for the industry and better for the consumer.
We are supporting this bill in general and we look forward to a good debate in the select committee, but we want to raise some questions at this point. One of them asks why the Government has opted for the much more light-handed approach of requiring home warranties to be made available to homeowners. The builder is required to have a home warranty scheme in their back pocket to offer it to homeowners at the point of purchase. A much more comprehensive approach would be to make home warranties mandatory and to back that up with a fidelity fund. I think that is the option that most people in the industry recognise would solve the problem.
It is heavy-handed and there would be some risk involved in such a big intervention, but I think that is an interesting debate. I would like to hear why the Government has gone for a much more insubstantial and light-handed approach that will arguably have less of a chance of solving the problem and providing real consumer protection. I am not convinced that this will provide the level of protection that is needed. Arguably, mandatory home warranties backed up by a fidelity fund that could invest in productivity, certification, and health and safety could potentially offer a much more thoroughgoing solution to the deep-seated problems of lack of productivity and poor consumer protection that we see in the industry today.
I think there are other issues. Reflected in the bill is an attempt to better balance the spread of accountability and responsibility across the different players in the industry, and that is a worthy attempt to reform the problem in the industry, which is that accountability has not been aligned with levels of responsibility, and that is what we need. If we want to drive behaviour change in the industry, accountability has to be aligned with responsibility. I want to give members an example of this. In the bill, new section 14D, inserted by clause 10, places on designers and architects the responsibility for ensuring that the plans and specifications that they deliver to the client, if followed correctly, will result in building work that is compliant with the building code. At the same time, clause 24 lets councils off the responsibility of carrying out inspections and issuing a code of compliance. This is a major change to the regulatory regime that has not been discussed publicly by the Government. It puts a huge amount of responsibility and liability on to designers and architects, and I wonder whether that is a sensible apportionment of accountability and whether the unforeseen consequences of that might undermine the objectives of this bill.
We have talked about home warranties. One of the other major pieces of the reform process that has been discussed is risk-based consenting, which the Minister outlined in her opening speech. We support that. The attempt is good and it will mean that we will see a much lighter and differentiated approach to consenting. It will mean that, for instance, certain things will be able to be done that will not even require a building certificate any more. They are things like car ports, porches, verandas, simple houses, and free-standing barns. I know that the leader of the Labour Party, the Hon Phil Goff, will be extremely relieved. He was most upset at being whacked with a huge building consent charge by his local council when he built a barn on his property, so that is one New Zealander who will be happy to see that change.
The bill also makes some further improvements to the licensed builder practitioner scheme, which is worthwhile. It prescribes a code of consent.
CHRIS AUCHINVOLE (National—West Coast - Tasman) Link to this
In following on from Phil Twyford, I say that it is a pleasure to hear a series of cathartic speeches from the other side of the House. Obviously he has fully considered the Building Amendment Bill (No 3), and I concur with his view that we can all look forward to good debate at the select committee. I think that is where the debate will occur.
I take pride and pleasure in being part of the John Key - led Government, which introduces purposeful and practical legislation, and has done since it took office. This particular bill is both practical and purposeful, and I commend it to the House.
MOANA MACKEY (Labour) Link to this
It is enormously disappointing that Government members do not feel that they should earn their $140,000 salaries by making a proper speech—
I say to Mr Auchinvole that he did not. The Minister of Education made a 10-minute speech, which is very good. Although I suspect that had the Minister for Building and Construction, the Hon Maurice Williamson, made that speech, he would have truncated it, but that is a bit hard to do when it is not one’s particular area and one reads the speech that the officials have very kindly written out for the Minister. But I suggest that we might have expected a little bit more from Mr Auchinvole, the chair of the Local Government and Environment Committee. The point of urgency is that Parliament sits for longer than it normally would. Urgency does not absolve members of their responsibility to debate legislation in the House, to show that they have taken the time to consider it, and to ask the kinds of questions that the public have been asking about it. That is not what urgency is. Urgency does not mean that we do in 10 seconds a job that should take 10 minutes. It is not our fault that the House is in urgency. It is not our fault that the management of the House has been such a shambles this year that the Leader of the House is in a panic and we will be sitting until midnight on Saturday.
Labour members will be supporting the referral of the Building Amendment Bill (No 3) to the Local Government and Environment Committee. The juxtaposition of the previous bill with this bill is very timely. I think we are all very aware that any changes made to the Building Act 2004 need to be seen in the context of the previous legislation—
—the leaky building solution—which is repairing a lot of the damage caused by the Building Act 1991. The 1991 legislation deregulated the sector to the point where consumers found themselves with very few protections under the law. Aaron Gilmore has been a builder, an architect, and a developer. In fact, I think he wrote the 1991 legislation, so I look forward to his contribution.
Jacinda ArdernOh, his brother did. His brother did it. This is a new kind of variation on a theme. Right before Christmas—what a gift! I thank Mr Gilmore.
But the juxtaposition of these two bills should not be lost on members of the House, because we need to be very careful when we amend the Building Act that we do not create the same problems that the previous National Government did in the 1990s, which have seen billion-dollar legislation having to go through the House to assist homeowners whose houses are absolutely uninhabitable and who have lost their life-savings, which were invested in those properties, because of shonky work and shonky materials. Legislation passed by that Government allowed that to happen under the guise of the free market. It was so opposed to any kind of regulation that it thought all regulation must be bad.
I suspect that is why, when Labour fixed the situation in 2004, we made the legislation very tough. The extent of the leaky homes crisis was just becoming evident to all the people of New Zealand. The public were crying out for more controls and people who were in the process of having homes built wanted to know that they would not fall into the same trap, and we responded with legislation that was very tough and provided enormous protection. We know that the Hon Shane Jones, who was the Minister, thought that perhaps the pendulum had swung too far. In hindsight, we know that the reaction, although understandable and appropriate at the time—
—had caused its own problems. I say to Mr Auchinvole that when Labour was in Government it acknowledged that and set in place a process to amend the Building Act again to remove unnecessary blockages in the system, and to try to make the process easier and to lower the cost of building houses in New Zealand. So we will be supporting this legislation, because we see it as another step in the process of trying to streamline the Building Act where we can. As my colleague Phil Twyford has said, it is very modest legislation. This bill will not have a huge impact, but none the less we believe that it is a positive step in the right—
Well, I look at the issue of housing affordability. Is Mr Auchinvole saying that this bill will have an enormous impact on it?
He is. OK. Well, I wonder whether I should listen to Mr Auchinvole or to the Registered Master Builders Federation president, Warwick Quinn, who welcomed the changes—like we do—but said that he does not think building costs will fall at all as a result of this legislation. Should I believe Mr Auchinvole or should I believe the president of the Registered Master Builders Federation?
Well, Mr Auchinvole thinks I should believe Mr Auchinvole; that is one of the few things he is consistent on and I congratulate him on that. But I think I will go with the guy who actually does this for a living and knows what he is talking about, with the greatest of respect.
And I do not mean Aaron Gilmore. I hope my whanaunga Hekia Parata, now that she is in a position to mentor younger members, will take Mr Gilmore under her wing and teach him those great Ngāti Porou qualities of humility, modesty, and wisdom. These great gifts can be bestowed upon Aaron Gilmore by one of our Ngāti Porou whanaunga, of whom we are very proud. I congratulate Hekia Parata on her promotion—it is well deserved. Now I have forgotten where I was up to.
Housing affordability is a major issue. This bill was one part of the housing affordability plan that National campaigned on. It said that the first way that it would address housing affordability was through tax cuts. Well, those tax cuts went to the wealthy. They went to people who could already afford houses, so that was a big fail.
The Budget increased rent for tenants, and the cost of living has gone up across the board, all of which make housing affordability even further away from being addressed. The second part was the Government’s Gateway Housing Assistance scheme. Well, that turned out to be a real fizzer, because not only did that great, bold policy deliver only 40 houses—40 houses across the entire country in its first year, when Labour while in Government had identified 1,500 sites in Auckland alone—but, apparently, it just does not work. The sector tells me that it does not work, but there will be more to come on that later.
Now we have the amendment of the Building Act. We in Labour absolutely agree that if we can put in changes that protect consumers and that mean they will not be at risk from shonky buildings, then that is great, and it would be great if we can address housing affordability through those measures, as well. But as the Registered Master Builders Federation president, Warwick Quinn, has said, this bill will not do that. If the aim of this bill is to reduce the cost of housing, well, that will not happen. So I do not think members opposite should claim, as Mr Auchinvole did, that this bill will be a panacea for housing affordability, when clearly it will not be.
I endorse what my colleague Phil Twyford has said about the building sector. This sector is in crisis. When we look at what is happening at the moment, we see that two things are happening concurrently. There is an incredible housing shortage in New Zealand—not enough residential housing is being built—and we have a building sector that is screaming out for work. The building sector has seen the number of consents drop through the floor to unprecedented levels. The work just is not there. People are losing their jobs and building companies are going out of business. On the other hand, we are facing an enormous housing crisis in New Zealand.
One would think that a responsible Government that had a plan for the economy—a plan to keep people in work and to address the lack of residential housing being built—would take advantage of this situation. Remember, Labour built 8,000 State houses to replace the 13,000 that the previous National Government had sold, and we did that during one of the biggest housing booms in New Zealand, when it was difficult to get hold of a builder, so imagine what we could do in a time when builders are screaming out for work. We could really dent the shortfall in housing that New Zealand is facing at the moment. But this Government has not done that.
In fact, what has it done? It has slashed the budget for housing this year by more than 80 percent. It slashed it. It has completely taken itself out of that situation. [Interruption] I am not sure what is noisier: Anne Tolley’s jacket or her interjections. But she can read the Budget and see that the Housing New Zealand Corporation has been told that any new houses will have to come out of savings in baseline spending. Is that what we should be doing at a time when we have a housing shortage and a building sector in crisis? We are not training building apprentices and we are not doing the skills training that we should be having at this time. Apprentices are being laid off. They could be going back to polytech to do more work on their qualifications, rather than their being let go and the years of training that have already been put into them going to waste. This Government has no plan—no plan for building. That is the important other half of this legislation.
Labour members support any moves that make it easier for the sector to work while also offering protection to consumers. This is modest legislation, and it follows on from the work that Shane Jones was doing. But there has to be a plan for the building sector; otherwise, all the good intentions in this kind of legislation do not mean anything.
KEVIN HAGUE (Green) Link to this
I begin where the previous speaker, Moana Mackey, left off. I support the comments that both she and her colleague Phil Twyford made about the broader context of housing and the New Zealand building industry in which the Building Amendment Bill (No 3) is being advanced.
A recent Government task force report entitled Home and Housed: A Vision for Social Housing in New Zealand found that there is a shortage of 70,000 homes in New Zealand, and that 8,500 to 20,00 New Zealand households have extreme housing issues. That is extraordinary. The Government’s solution has been to make vague comments about working with the community sector more, and that is simply not enough; we need action and we need it now.
The Government has cut money for upgrading and acquiring State houses from $120 million to $18 million in this year’s Budget. It is actively going backwards on supporting vulnerable Kiwis who have the right, we would say, to be guaranteed a roof over their heads. This cut is occurring at a time when over 10,000 families are on the State housing waiting list.
The Green Party has suggested some solutions that would address those needs for housing and also address the plight of the building industry. Our Mind the Gap package and our Green New Deal package have proposed a comprehensive State house building programme to increase the stock of State houses by 6,000 homes over 3 years. It would create 28,000 jobs. We also proposed that a further $200 million should be spent in community housing to build a further 500 homes over that period.
That is the broader context. I also make a comment that builds on something that Chris Auchinvole said. He thought that the debate on this bill would happen at the Local Government and Environment Committee. I think it is evident that that is the only place that it can happen. Even though this is a complex and technical bill, I am sure we would have all benefited from Government members taking some time to explain their proposals more, and I think the New Zealand public has a democratic expectation for the Government to do that in a first reading. The first reading debate is not about satisfying the needs of only the Government itself; it is actually about satisfying the needs of the New Zealand public to know more about the bill being proposed so that they are in a better position to make informed comments and submissions as part of the select committee process. I think it is unfortunate that Government members have chosen to take cursory calls on this bill, because it robs the public and important stakeholders of the opportunity to know more about the bill, and, therefore, to make the best submissions they possibly can as part of the select committee process.
The bill’s aims of making builders more accountable and simplifying the building process seem superficially good on the one hand, but on the other hand they sound like code for more deregulation and a higher risk of the kind of debacle that we heard about earlier this evening in this House: the catastrophe of the leaky homes disaster, which has befallen so many New Zealand households. Once again, it is one of those issues where there is debate between regulation and deregulation and striking the correct balance.
It is worth repeating the conclusion of the Hunn report about leaky homes, which in 2002 found that the deregulation of the building industry undertaken by the National Government in the 1990s represented a major systemic breakdown across the whole industry. That cannot be allowed to happen again. We cannot compromise environmental, safety, and quality standards in order to fast track building developments and satisfy National’s obsession with free-market economics. In the long run, that approach will lead to problems such as the leaky homes debacle, the repercussions of which we are still dealing with today.
We realise that the building industry and the systems we have around the industry are not perfect, and we certainly welcome some of the provisions in the bill. There is room for improvement and we agree with objectives such as holding people to account for their work. Indeed, part of the problem with the leaky buildings fiasco was the loss of the accountability chain and accountability mechanisms. It is important to remember that all of that fiasco happened in the context of deregulation.
I raise another problem that we hope this bill will address—that is, the problem faced by people who want to build different or eco-friendly buildings. Very often councils seem ill-equipped to deal with those kinds of applications, and they fall back on the tried and true systems that they know. That is anathema to the kind of innovation that we need in order to overhaul the style of New Zealand buildings and to address some of the challenges that we face in this century. On the whole, the 2004 reforms to the building code have been an improvement, but there is still a way to go.
With all that said, the Green Party has an open mind and is keen to hear the submissions from the public and from stakeholders on how the Building Act can be improved. We are also keen to hear from experts about how we can safeguard the environmental, safety, and quality standards of the building industry, and to see whether there is scope to make the processes easier to comply with. It is fair to say that we are sceptical about National’s record on building regulation and, more particularly, deregulation, but we want to hear the arguments. With that said, we will support this bill at the first reading.
Hon HEATHER ROY (ACT) Link to this
I rise to speak to the first reading of the Building Amendment Act (No 3) on behalf of the ACT Party. I have to say that the previous speaker, Kevin Hague, seemed to be struggling to fill his 10 minutes. It seems, in summary, that this is not such a bad bill, but he had to say something negative because it is Government legislation. We think that this is a very good bill. It will make a number of changes to the Building Act to improve its productivity, efficiency, and accountability, which should always be strived for.
The amendments will exempt a broader range of low-risk building work from consenting requirements, which will free things up significantly in the building sector, and that is well needed at the moment. It will also require building contractors to disclose more information to enable building consumers to make better-informed decisions. That too is very important.
I do not think the criticism about leaky homes was valid. I think this Government is taking leaky homes very seriously.
Hon Judith CollinsYes, the previous Labour Government did not do a great deal. I sat on one of the select committees that heard one of the bills. In fact, if Labour members had been listening to the debate on the prior bill, they would have heard that the Minister involved is fully engaged with this matter and has taken on the cause very passionately. Few could actually criticise his approach or what it is that he was trying to achieve.
In fact, I did sit through his speech, and it was an excellent speech.
The ACT Party is fully supporting this bill. We look forward to it going to the Local Government and Environment Committee, where, of course, it will receive proper examination in a great deal of detail by the committee members.
RAHUI KATENE (Māori Party—Te Tai Tonga) Link to this
I am pleased to speak on behalf of the Māori Party about the Building Amendment Bill (No 3). I find it very interesting that the general policy statement for this bill in part says: “Change is needed to provide incentives for building professionals and tradespeople to take responsibility for the quality of their work and to stand behind it.” It is really sad that in this time we need to pass legislation to make sure that people stand behind the quality of their work and take responsibility for it.
I remember that back in the late 1980s our family bought our first new home. It was built on iwi land by Māori affairs trainees. It was not what one would call a flash home. It cost us $80,000 in those days, and we had to take out a mortgage with an interest rate of about 18 percent. At one stage it rose to about 24 percent interest, so it was very expensive. The first storm we had after we moved in lifted part of the roof. I walked into one room and water was pouring down the wall. We had to get the insurance people to come in and check it all out and get the builders back to re-roof the building, and this was only just after it had been built and we had first moved in. This was long before the leaky buildings scandal.
About 10 years later, in the late 1990s, we moved into our next new home, which was a lot more up-market. In fact, it was built by a registered master builder who stood behind his work. He did fantastic work. When we first moved in he lived just down the road from us and he used to make lots of excuses to pop in and check out his workmanship. He would look around to make sure that it was holding up, and we felt very comfortable with that because we knew that he cared about the quality of his workmanship, about the quality of the building, and about the people who were living in his buildings.
That was very good. He did not need a Building Act or anything like that to force him to do it. But we realise that times have changed and there are cowboys out there still. We realise that some people will act only when the heavy arm of the law is resting upon their shoulders. So although it is regrettable, we support this bill being referred to a select committee.
NICKY WAGNER (National) Link to this
The Building Amendment Bill (No 3) is focused on improving efficiency and effectiveness in the building industry and on raising overall performance and productivity. It is designed to allow builders to build better-quality buildings in a more cost-effective manner by ensuring clearer accountability for building practitioners, building consent authorities, and consumers. It will make sure that work complies with the building code. It includes a code of ethics for licensed building practitioners, in order to encourage professional behaviour. It also allows DIY work under controlled conditions. I commend this bill to the House.
DAVID SHEARER (Labour—Mt Albert) Link to this
It is a pleasure to take a call on the Building Amendment Bill (No 3), and I will be taking a full 10-minute call, unlike National members opposite, who specialise in—
I can tell Nikki Kaye that National members have, on average, spoken for 26 seconds. That speaks to why we are here at the moment, which is because of National’s mismanagement of the House and the collision of all of this legislation at the end of the year. I remind the House that 2 weeks ago the Leader of the House said that we would not need to go into urgency before the end of the year, but here we are sitting under urgency until the weekend. I do not mind doing that, but I think that a democratic principle is involved here, which is that there should be good debate on important legislation. This bill is one of those important bills, but the New Zealand Security Intelligence Service Amendment Bill was probably the most significant and even it did not get more than a 3½ second call from National members.
This legislation has a long history dating back to 1991, with the deregulation of the building industry and the building codes. The idea was that somehow the market could regulate standards and ensure that buildings could be built more flexibly, more cheaply, and more efficiently, but ultimately it was at a huge cost to New Zealand. We have just been told that it was at a cost of $11 billion, but actually PricewaterhouseCoopers puts it at closer to $23 billion, which is about the cost of the health and education budgets for a year put together.
In 2004 the Labour Government brought in the Building Act, which tried to tighten up considerably the regulations in relation to buildings and building construction. I think that it was perhaps too heavy and too prescriptive and that this bill provides, in a sense, a rewriting of the situation back to where the law should lie. Nevertheless the leaky building situation is still with us, and I think the key point about this legislation is that the accountabilities are set and the expertise required by builders and councils is explicitly set so that there is real protection for homeowners and everybody else in New Zealand. In relation to leaky buildings, it is the rest of New Zealand that is paying for the array of faults that happened right throughout the industry.
This bill moves to a more balanced building consent system. It looks at low-risk building work, such as a low deck, a basic shed, or something that any Kiwi would build, and it enables that work to be done without consent, which is a very welcome provision. I think we can be well and truly over-regulated; applying for consent to build a shed and having to wait for 2 months to get that consent from the council at huge cost is unnecessary. Low-risk building work such as a simple one-storey house would go through a quicker, simpler consent process with fewer council inspections required, and rather than having to rely on the council, it would rely on the skills of a licensed builder. Consents for high-risk, more complex houses will go through the current kind of system that we have. Those are all sensible changes to the Building Act and will make a difference in terms of efficiency and the ability to get things done much more quickly.
This legislation also provides for a rebalancing of responsibility back towards professionals and tradespeople, which is important. However, I think it highlights the fact that the deregulation in 1991 brought about a major problem with the smaller number of builders who were trained, who came through a proper apprenticeship scheme, and were able to take on large building programmes. There were very weak skills in that area, which contributed to the problems we have seen today.
This legislation also includes better tools for consumers to hold professionals to account. It includes mandatory written contracts and deals with how disputes will be solved, how money will be paid, and how finances will be backed up.
This legislation is good but it is pretty modest. I do not think the bill goes as far as many people would like it to go. We should consider the comments made by John Gray, the President of the Home Owners and Buyers Association. He may even be watching the debate tonight and seeing the short calls that National members are taking on this bill and the cynical way in which they are treating the passage of legislation through the House. He accused the Government of a weak Building Act review and said that the changes had stopped short of a national building warranty scheme, or a fidelity fund, which he wanted as a backstop for homeowners, which my colleague Phil Twyford talked about before. Mr Gray said: “The building industry needs to give itself an enema,”. It is spoken like a true builder: to the point and saying that basically this bill is not as good as it could be. He continued: “The focus on potential liability is a sad indictment on an industry that … is still failing to focus on quality outcomes and to give consumers the level of protection they deserve …”. They certainly do deserve that protection, as we have seen in relation to the previous legislation on leaky homes, because families have been bankrupted and people have suffered huge financial burdens.
The building industry is extraordinarily important in New Zealand. It is worth, from memory, about 5 percent of GDP. An enormous amount of people work in the industry. Yet right at the moment, as Moana Mackey pointed out earlier in her speech, building consents are at an all-time low. In Auckland the number of building consents being approved now is about half the number of consents being approved a year and a half ago. Although the demand for housing is still there, building is not happening, and we will have a major shortage of housing in particular in Auckland in the coming years unless we are able to do something about it.
I will come to a couple of points that are more particular to this bill. Phil Twyford mentioned the fidelity fund. It has been brought in in Queensland. It is a more heavy-handed approach, I agree, but it does set up a fund that can be used to not only backstop any liabilities that could happen but also contribute to innovation and the building safety codes that we do not have at the moment. A fidelity fund offers the scope to be able to do that.
The bill lacks provision for materials, and I believe it should be looked into at the select committee. A lot of the leaky building debacle happened as a result of new materials that were untested or not tested sufficiently. The materials leaked or rotted, and owners ultimately paid the price. This bill does not sufficiently protect consumers from faulty products of manufacturers or retailers, and I think that needs to be addressed.
Finally, I hope that this bill brings about the culture change that needs to happen in our building environment. I do not think it will do that; it is too light and too modest, and it does not go far enough. But the ultimate test and the ultimate challenge is to bring about a much more professional building practice in New Zealand. That is what we all should be aiming for with this bill. Thank you.
NIKKI KAYE (National—Auckland Central) Link to this
This bill is about cutting red tape, reducing compliance, and reducing bureaucracy, and it is about affordable housing. One of the reasons I came to Parliament was because I got to see members opposite in their true colours. I will never forget being a researcher when members opposite said that it was a New Zealand Herald beat-up to say that we have leaky homes in New Zealand. I was very sad for the many families who suffered under the previous Labour Government. It did nothing—absolutely nothing—on the rotting homes crisis. So I am very proud of our Ministers that we have given certainty to so many of those families. As a constituency MP it has been heartbreaking to see the many families who spent years under the previous Labour Government—firstly when it denied there was a situation and, secondly, when it did nothing. So I am very proud to be part of this National Government, which has developed policy around weathertightness and leaky homes.
This bill is about Kiwi DIY. This bill is about saying that it will not cost an arm and a leg to do up one’s own place. I am very proud to be supporting this bill, which is not only about reducing compliance costs and red tape and providing greater affordable housing but about recognising the historic injustices, some of which were caused by the previous Labour Government, and about the average Kiwi person, who does not want to pay thousands of dollars just to do up their home. So I am very pleased to support this bill, because life is not a beach for some of those people. Some of those people have suffered significantly. I am very pleased to support this legislation.
Hon SHANE JONES (Labour) Link to this
Kia ora anō tātou, Mr Speaker. Just to bring the previous speaker Nikki Kaye up to speed, the bill she was referring to has already been dealt with. That bill pertained to the leaky homes problem. I can assure the member that everyone who spoke from her side of the House had less to say than she did.
A number of people have suggested that the Building Act ought to be put into the furnace.
Aaron GilmoreOh, hold on, that was Aaron Gilmore. He used the words “funereal pyre”. What he was actually referring to is the struggle that he and Paul Quinn will have to get hold of the lifebuoy as they are thrown off the sinking ship of Te Roopū Nāhinara. Paul Quinn will say: “I need to get it because I have protected us from prisoners, who now are unable to vote.” Aaron Gilmore will say: “I need to get it because I am the cleverest financial analyst who has ever come to Parliament.” But that is kei te pai, because Sammy Wong and his hovercraft will save both of them.
I raise a point of order, Mr Speaker. I am mildly offended that Paul Quinn is being treated in such a poor way, given that he is not in this House right now.
The ASSISTANT SPEAKER (Eric Roy) Link to this
Well, the member has actually breached a Standing Order ruling by referring to the absence of people from the House. I feel that we should just get on with the debate.
This legislation is about reforming the Building Act. I am not entirely sure whether it will relate to sow crates, but I can see a Minister over there who has ruined the agricultural portfolio, worsened the liability of the Crown, and incurred an inordinate debt as he sought to offend the members of an important religious community in New Zealand, who just want to go about their lives and eat kosher meat. He has introduced some foolish regulations. But I will come back to that another time. The man is a walking liability. He has probably endangered the larger meat trade, but the terms “head” and “meat” tend to come together when one looks at him.
This bill is an improvement in terms of what took place and what a number of us on our side of the House—too late in the piece, I might say—endeavoured to arrest. That is why a number of us have spoken enthusiastically about it tonight, and why 10 minutes, at the very least, is required to elaborate as to what the bill actually means, given that no one on that side of the House has either read it or—
I tell Mr Gilmore to keep all his energy for the lifebuoy. Well, in his case, I had better say the safety belt.
However, I come back to the bill. There will be four new categories of building permits. A lot of building activity in New Zealand should not require a permit of any sort, and I sought to do that in the period of time that I was Minister. Some very modest, insubstantial building activities ought to be able to be carried out without a permit, provided that the person is a credible and qualified tradesman. Why on earth should ratepayers be blighted with the costs of having to deal with permits and consents for building activities that are of a modest nature? That is why the schedule that was passed 2 years ago allowed certain building activities to be exempted. I must say that this bill continues slightly in that vein. It focuses the attention of decision makers on where risk really lies. Councils ought to be concerned about those projects where the risk is of a very substantial and significant nature.
Councils will not be issuing certificates of compliance; they will be issuing completion certificates. That will reflect the fact that when a person makes an application, the process has been completed. Owners have a responsibility not only to use common sense but to act as investors and owners of property and find tradesmen who are qualified and reliable. This bill brings a suitable level of responsibility on to the applicant and on to the person who actually owns the property. Then it sheets home the responsibility to those such as the designers. Those fools who brought cheek by jowl Mediterranean-style housing into New Zealand have got off largely scot-free and have concluded that they are no longer liable and are no longer responsible. But this bill provides for the liability that they should face to be borne by them, and requires them to ensure that the advice they give is consistent with the requirements of the building code.
The building code was originally a permissive experience, but it got far too liberal and problems emerged during the period of time prior to the Helen Clark Government. Our response, as my colleagues have said, was a very heavy-handed response, and we all agree that this bill should go to the Local Government and Environment Committee because the pendulum most certainly needs to swing back to a place where people are not overwhelmed by too much red tape and are not paying absurdly high levels of fees to the council when the problem that needs to be managed is of a very simple nature.
An important part of this lies at the heart of the average Kiwi citizen’s experience of owning their own property—that is, the owner-builder exemption. Earlier this was a matter of some debate. How does one allow for the average Kiwi do-it-yourself Carter Holt Harvey - ITM friend, who keeps those businesses in regular cash flow by wanting to improve and actually enrich the value of their properties? This bill will allow that to happen. However, where activity requires a high level of skill because one may impair the integrity of the building, there will be an obligation on the owners of the property to ensure that the people doing that work include a suitably qualified person. Without a doubt that will not pertain to Skyline garages and garden-variety straightforward—I will not say ticky-tack—modest dwellings. I do believe that under this bill those things can happen with a great deal of speed.
The difficulty underlying all of these changes is that the building industry is on its knees. The building industry is losing talent and qualified people to Australia. The building industry is not able to raise the necessary levels of capital, because the buying market has lost confidence. In addition to that, although population changes are taking place and the number of people requiring new dwellings and new residences is geometrically increasing, the difficulty is that the supply side is constrained—indeed, in some cases it is static. That is the deeper problem. Recently, representatives from the building industry said to Prime Minister Key that unless he was capable of bringing forward an intervention there would be no building industry left. The big end of town got taken care of; the Fletchers etc. have been given a lifeline through the role they are playing in the reconstruction of Canterbury. But the essence of the building industry is the person with a four-wheel drive, two or three, largely, blokes, a dog on the back, and some simple tools. That is the garden variety, everyday Kiwi enterprise in the building industry. We are losing them because there is a fear or a complete unwillingness on the Government side of the House in terms of economic policy to inject capital and confidence into this sector. Somehow members opposite imagine that the hidden hand of Adam Smith is going to rise and cause economic activity to enjoy a greater elevation. That is not going to happen. More apprentices are going to be turned away, there are going to be more difficulties, and we are going to watch a greater drift of our young people to Australia.
The challenge is for—[Interruption] I say to Mr Carter that he has created enough liability for the Crown. He has enraged the most frightening Aucklander, Michael Stiassny. We know that Mr Carter now requires a handholding experience by Crown Law to avoid any further liability being incurred as a consequence of his delinquency on the part of the Crown. Michael Stiassny is coming for him, make no doubt about that, as a consequence of his enraging and alienating that valuable part of the religious community of Auckland otherwise known as the Jewish community.
JO GOODHEW (National—Rangitata) Link to this
As this debate on the Building Amendment Bill (No 3) draws to a close I want to reiterate simply this: the building and construction sector is vital for New Zealand’s economic performance and prosperity. This bill is yet another tool in National’s determination to make sure that economic prosperity comes from this Government’s term in office—so different, so very, very different from the previous 9 years of inaction. Therefore, I commend this bill to the House.
Hon DAVID CARTER (Minister of Agriculture) Link to this
I move, That the Local Government and Environment Committee consider the Building Amendment Bill (No 3), and that the committee report finally to the House on or before 30 June 2011.