Weathertight Homes Resolution Services (Remedies) Amendment Bill

The CHAIRPERSON (H V Ross Robertson) Link to this

Kia ora tātou. The House is in Committee for further consideration of the Weathertight Homes Resolution Services (Remedies) Amendment Bill. The bill has been recommitted for the purpose of considering the amendments set out on Supplementary Order Paper 133 in the name of the Hon Clayton Cosgrove and the amendment dividing the bill. When the Committee last considered the bill, it was debating the amendment set out on Supplementary Order Paper 133 to omit clause 3. Therefore, the question before this Committee is that clause 3 stand part.

PHIL HEATLEY (National—Whangarei) Link to this

Thank you, Mr Chairman; I will just wait for the clapping to die down. We are considering clause 3, “Principal Act amended”. It states: “This Act amends the Weathertight Homes Resolution Services Act 2006.” It is interesting to consider that we have canvassed the purposes of the Act in previous speeches.

The National Party was always supportive—and certainly we listened to the submissions to the Social Services Committee when the original bill was debated—of the view, in terms of general damages, that damages for relevant mental distress, for example, should be claimable through the dispute resolution process. We recognised that many of the people who are going through the leaky buildings crisis have families, and others are elderly people who do not have years ahead of them in which to save money and make payments to repair the destructive job that someone has done on their home. Those people underwent tremendous stress over a period of years, particularly while the Government tried to get the process right in terms of the resolution services, and they should have every right to pursue damages for relevant mental distress. We supported the submissions made along those lines many years ago.

It has taken until now, in this legislation—unfortunately, 5 years later—to recognise that mental distress is a relevant and legitimate claim. So why would the National Party not support that? We certainly supported it when submissions came to this Parliament several years ago, and, of course, we accept it now. The only regret we have is that it has taken 3, 4, or 5 years for the Labour Government to acknowledge that claims for mental distress should have been accepted in the first place. I can only think of the tears, the heartache, the pain, and the family stress that has occurred in the interim for those who have been through the process and who have been unable to claim for stress in relation to mental fatigue and distress. Of course, there is no option for those people to claim for that; that option is available only for those who enter the process now, going forward. So, yes, we support the legislation from the point of view of those claimants.

But in terms of clause 3, which states: “This Act amends the Weathertight Homes Resolution Services Act 2006.”, I say we should not be fooled into being unaware that the legislation we are debating this evening also makes changes to the Building Act. The Minister, in a last-minute bid, has decided to bring in, on Supplementary Order Paper 133, clauses that amend the Building Act. Those clauses have nothing to do with the principal Act, the Weathertight Homes Resolution Services Act. They are clauses on a Supplementary Order Paper to debate and force through Parliament changes to the Building Act. Those changes are all about the ability of local government to be registered as being able to issue building consents. Of course, local government has been issuing building consents for many decades now. The Minister suddenly decided that local government had not been doing that in a particularly good way, and now, for some reason, councils are required to be accredited by 30 November 2007 to issue building consents.

Supplementary Order Paper 133 shifts the accreditation date beyond November, because the Minister knows that the deadline for accreditation for councils currently in the Building Act cannot be met. It is absurd to think that councils, which on the whole have been issuing building consents in a good and responsible manner for many, many decades, will suddenly not be able to issue those consents, whether it be by the date currently in the Building Act or after that date.

The CHAIRPERSON (H V Ross Robertson) Link to this

Are you seeking the call, Dr Smith?

Hon Dr NICK SMITH (National—Nelson) Link to this

I seek the leave of the Committee to take a call. I am sure that members would be delighted to hear a contribution—

JOHN CARTER (National—Northland) Link to this

It is a great pity that my colleague Nick Smith has already taken his time, because, as always, his contributions are certainly well worth listening to. However, I will endeavour to reach his high standards.

I want to draw the Committee’s attention to an issue that is a worry right across this country, and it would pay for the members opposite to listen, because the Minister in the chair, Clayton Cosgrove, is doing the building industry, local government, and homeowners in New Zealand a grave disservice. It is an absolute disgrace that we are here today considering this bill, for two reasons. Firstly, this Minister knew many, many months ago that the deadline he gave to local government would not be achieved. Local government authorities told him that, the Building Officials Institute of New Zealand told him that, and members of Her Majesty’s loyal Opposition—including myself—advised the Minister of it. But this Minister would not listen. He carried on saying that he had set the deadline and that local government authorities would achieve it. Well, the sad fact is that local government authorities were never going to achieve it, and it was impossible to achieve it.

One of the reasons why local government authorities were not able to achieve the deadline is that this Minister and his department have been taking experienced people from local government and employing them in the Department of Building and Housing. I have already told the Committee—and it is worth repeating again—that the Department of Building and Housing has risen in staff numbers from the equivalent of 31½ people employed in 1999—I think the half might have been the Minister—to in excess of 300 people. Where would those people have come from? Obviously, they would have to have some experience in building, although with the stuff that is coming out of the Department of Building and Housing, one would hardly think so, quite honestly. Some of the rubbish that comes from that department is an absolute shame.

The point is that a lot of the people who are now employed in the Department of Building and Housing have come from local government authorities, which, of course, has left local government authorities short of staff. Local government cannot attract experienced people to be building inspectors and, as a consequence, people cannot achieve the goal of being authorised as building inspectors by the date set by the Minister. The Minister knew that. He must have known that, and it surprises me that he has not taken a call and at least once endeavoured to defend the fact that he now has to extend this deadline. But the Minister carries on arrogantly, saying: “Well, so what? It does not matter.” Well, actually, it does matter, because the Committee also needs to understand the negative impact this issue is having on homeowners in New Zealand.

The fact is that the Department of Building and Housing is out of control and it passes regulations day after day that are unnecessary, that are hugely costly, and that are causing stress and delay. In some cases it is so difficult to comply with the rules and regulations that the Department of Building and Housing is putting down that a number of builders are saying they will have to exit this industry. They cannot afford the delays, they cannot afford the costs of the delays, and they cannot afford the cost and the time it takes to fill out the paperwork that is required by the Helen Clark - led Labour Government and, as a consequence, by their local authorities.

What is even worse is that the building industry is telling me there is absolute confusion from district to district as to exactly what is meant by the rules and regulations being passed by the Department of Building and Housing. I wish I had time to gather the volume of rules and regulations that have been passed under this Minister’s ministership. Seriously, it would choke a horse, a whale, or any sort of large animal that we might like to try to get to digest it. In fact, it would actually—

DARREN HUGHES (Junior Whip—Labour) Link to this

I move, That the question be now put.

JOHN HAYES (National—Wairarapa) Link to this

Mr Chair, I will certainly do my best this evening to deliver your aspirations. The Minister in the chair, Clayton Cosgrove, who is promoting this legislation, had a mantra: “Do it once, do it right.” Let us go back to November 2002, when he was responsible for passing the key leaky home legislation. He did it in a great panic, and the task was done in 2 weeks. A mess of major proportions was made. Then we track forward to 2005, when there was another attempt to fix this mess. The Minister ignored submissions from the public, and he introduced legislation to fix the botch-up. He also had produced a new Building Act, and now he comes to this House in 2007 and says there is actually a further botch-up. This is a classic example of this Minister saying: “Do as we say, not as we do, in the Labour Party.”

I think it is totally offensive for this Labour administration to insult the House by inviting it to suspend or break its own rules. This law change will not come into effect for a further 3 months, on 28 November. I think it is absolutely extraordinary to usurp the House’s rules in this way. I invite the Minister to advise the Committee as to when he first learnt that the councils could not meet their deadline, because in a speech he gave a month ago he said there was no problem. If he had read Molesworth & Featherston this week, he would have been able to read the story of the Labour Party’s rising star who has just been torpedoed by his bureaucrats.

I would ask the Minister why house ownership has been reduced by 1 percent per annum under his stewardship. I would ask him why, under his stewardship, the cost of completing a house has risen by 20 percent per annum because of the Building Act, and why, of all the leaky home cases that have been brought to his attention over the last 5 years or more, only 15 percent have been resolved. I think it is time for the Minister to contemplate an alternative career outside his housing portfolio, because, clearly, he is making a total botch-up of the administration of that portfolio. I see this every day in my electorate in the Wairarapa, where building costs are escalating hugely.

DIANNE YATES (Labour) Link to this

I move, That the question be now put.

Hon CLAYTON COSGROVE (Minister for Building and Construction) Link to this

I move, That the Committee divide the bill into the Weathertight Homes Resolution Services (Remedies) Amendment Bill and the Building (Consent Authorities) Amendment Bill,

Hon Dr NICK SMITH (National—Nelson) Link to this

This motion from the Minister represents everything that is rotten about this Government. It is about incompetence, it is about abuse of process, and it is about bad outcomes for ordinary New Zealanders out there, in respect of both the Building Act and the Weathertight Homes Tribunal.

Let me first deal with the issue of incompetence. In 2002 the Government rushed through—in 2 weeks—the legislation to deal with weathertight homes. It got it wrong. In 2005 the Minister in the chair came along to the House—again in a rush, again breaching normal process—and said that the Government would fix the botch-up, but got it wrong. Submissions were made to the Social Services Committee that the bill did not provide for general damages, that it was unfair, and that we needed to make it explicit, but the Minister said that he knew best and that the bill did not need to include it. Now we have this amendment bill before the Committee, which is effectively about a botch-up that was fixed in 2005, but turned into a botch-up, and now we are trying to fix that botch-up—again, in a mad rush.

Then we have the splitting of this bill to be inserted into the parts of the Building Act. We see the same levels of incompetence in that area. That is, in 2004 the Government brought this big bureaucratic Building Act into Parliament, and in 2005 it said: “Oops! We’ve made some mistakes and we’ve got to fix it up.” Now, here, at the last moment, after the bill has gone through its Committee stage, the Minister introduces amendments that now require the splitting of the bill. National says that this is absolutely incompetent. What makes it almost laughable is that the Minister in the chair has given speech after speech to the building industry saying: “Do it once; do it right.”, and when it comes to the weathertight homes legislation and the Building Act, the track record is mistake after mistake after mistake. That would be all right, except there has been an awful price for New Zealanders to pay for these botch-ups.

Five years after this Government introduced the legislation to address leaky homes, only 15 percent of cases have been resolved. The Government has spent $85 million on the bureaucratic process to deal with leaky homes. That works out at $111,000 per case. But the tragedy is that the average payout on each of those homes has been $70,000. So I ask the Minister in the chair, who wants to split the bill, why we should agree to that. Why should we agree when there has been mistake after mistake after mistake?

Then we look at the core Building Act, which this legislation also amends. Have we obtained the objective of trying to generate good quality buildings at less cost? My colleague Bob Clarkson—“Bob the Builder”, we colloquially call him, because he knows a thing or two about building—has rightly exposed the fact that 5 years after the leaky homes legislation, the chief executive of the Department of Building and Housing can still not give this House an assurance that there are not more leaky homes being built. That is incompetent. But even worse is that if we look at the bureaucratic nightmare it now takes for any citizen to get a building consent, we see that it is an absolute disaster.

Members should look at yesterday’s Dominion Post, in which the Wellington City Council says that the amount of paperwork that is now required to build a standard New Zealand home has increased fivefold. I simply ask why members on this side of the Chamber would want to do that. The fascinating part is—and this is again where there is a double standard—that the Minister has said that he stands for reducing compliance costs. Then we have, in this crucial area of building, an increase of fivefold in the amount of paperwork that is required in the building industry, to the point that talented, good professionals are leaving New Zealand to go to Australia to avoid the bureaucracy that has been created.

The third point I have made about the motion to split the bill is that the legislation has caused bad outcomes for people. Every year that Labour has been in office we have seen a 1 percent reduction in homeownership—and, really, that is a telling sign of the failures of this Government.

PHIL HEATLEY (National—Whangarei) Link to this

I would like to carry on from where Nick Smith left off. He has made some very poignant points in his calls over the course of this debate, with none being so poignant, I guess, as when he pointed out the number of times that the Minister for Building and Construction has been into this debating chamber with legislation, saying he will fix the leaky homes crisis.

I was impressed that the Minister for Building and Construction ever got into this debating chamber to fix the leaky homes crisis, because—as colleagues will recall, and perhaps the Hon Dr Nick Smith will support me in this—the Prime Minister of New Zealand, Helen Clark, said there was not a leaky homes crisis, that the National Party was blowing it all out of proportion, and that only a handful of homes in Auckland were affected. Then the New Zealand Herald, through quite a campaign, was able to establish that a lot of homeowners across the country, and particularly in Auckland, were affected by the issues being addressed in the provisions in this legislation that we are discussing tonight.

So the Minister has come into this debating chamber not once, in 2002, not twice, in 2004, not three times, including when this legislation was first debated, but four times. We are here tonight discussing the fact that we now have to split the bill and discuss not only the Weathertight Homes Resolution Service legislation but also the Building Act. Four times we have been in this debating chamber since 2002 to discuss provisions related to the Building Act in order to see this leaky homes crisis fixed—a crisis that the Prime Minister originally denied was a crisis at all.

So does National support the ability to split the bill, and to discuss the amendments to both the Weathertight Homes Resolution Services (Remedies) Amendment Bill and the Building Act tonight? We say, quite simply, that the Minister has run roughshod over Parliament’s normal processes. Listeners may not be aware of this but normally when legislation is drafted there is wide consultation within an industry—in this case, within local government and councils—to see whether there is a need. Legislation is then worked on by officials and it is tabled in the House. There is a first reading.

The legislation is then sent to a select committee, where it is discussed amongst 12 members of Parliament from across parties. They consult the public, who come to Wellington, or perhaps the committee travels across the country to take submissions, and there is wide-ranging discussion with affected parties out in the public. That part of this legislation is not happening at all. This legislation is being rushed through this Parliament tonight, and on ensuing days. We think that is appalling.

Then, of course, normally legislation would come back to the House, have its second reading, the Committee stage, and the third reading, and hopefully we would see good legislation passed into law. Unfortunately, history speaks for itself with regard to this legislation.

The Building Act came in, in 2002. It was fixed again in 2004, fixed again after that, and now we see these amendments here before us again tonight. What confidence can this Committee and the public have that the Minister has got it right again this evening? He did not get it right on those other three occasions, and I think that is a lesson to this Minister and the Labour Government that we must follow good process. Only by following good process will we have good scrutiny of legislation, and ever have even a hope of getting it right.

This legislation affects leaky homeowners—thousands of them across the country—who are under tremendous financial burden and pressure. Many of them are at the latter end of their lives, they are affected by this legislation, and the Minister should get it right.

JOHN CARTER (National—Northland) Link to this

I have a couple of questions that I would like to ask my parliamentary colleagues. The first question is who among them thinks that if we pass this legislation, it is going to fix up everything, it is going to fix all the problems, and they are going to disappear. At the moment I cannot hear any members saying that they think that. Not even the Minister for Building and Construction will say that this legislation is going to solve the problems. The next question I have is who in this Parliament thinks that if we pass this legislation, there will not be any more leaky homes. Well, is that not strange! Not even the Minister is indicating that he thinks this legislation will solve the leaky homes problem. Who thinks that if we pass this legislation, we will end up with more leaky homes? A good number of my colleagues are indicating that they think that will be one of the outcomes. Yet the Minister does not even take an interest.

What this Parliament needs to know and what the country needs to know is that right now, in New Zealand, more leaky homes are being built than ever before. We already know that in this country 3,200 homes are registered as leaky homes. What people do not yet know, but what we are being told, is that leaky homes are being built in this country every day. The reason is that this Minister has been derelict in his duty to ensure that the materials that go into those homes are up to standard. We know that materials imported from Asia that are going to fail within 7 to 10 years are being put into homes in New Zealand. Copper piping and plastic piping will fail in 7 to 10 years. It will cause leaks, the moisture of course will go into the timber, which is not treated, and as a consequence we will end up with more leaky homes. This Minister knows that. This Minister has been charged with the responsibility of ensuring that it does not happen, and he will not even stand up and guarantee to the people of New Zealand that under his regime, under the regime that we are dealing with tonight—the two bills that we are splitting the original bill into—there will be security for the people of New Zealand. I say that the Minister should take a call on the Weathertight Homes Resolution Services (Remedies) Amendment Bill and the Building (Consent Authorities) Amendment Bill, which the original bill is being split into, and tell the people of New Zealand that he is going to improve things and make them better. But the Minister cannot do that.

That is the problem with this legislation. When we pass these two bills, we are going to end up with a bigger mess than ever. It has been recorded, and it needs to be recorded again, that in New Zealand now it is estimated that over 250,000 homes are not compliant. These 250,000 homes, which people are living in, do not have a compliance certificate. People cannot even sell these homes, because they do not have a compliance certificate. These 250,000 homes would take up an area the size of Wellington City. Here we are, debating legislation tonight that is meant to address that sort of problem, and this Minister will not even take a call to defend his own legislation.

That is the problem. We really are dealing with a run-down Government, a Government that knows it is failing. This is just another example of the failure of this Government. Here we are, considering legislation tonight that is just going to add to that failure. The challenge is going to be for the next Government—and we will take it on—to fix this. There are ways that it can be fixed; and it will be fixed. We will give certainty and security to the people of New Zealand and to new homeowners. They will not have to worry about a department of 300 people delivering laws and regulations that make the problem worse, not better. They will know there are local authorities out there that are competent and can provide the security they want. They will know there is a building industry that is robust and confident and has a future, because that is what we will deliver to New Zealand when we get the opportunity to start making decisions, instead of having to put up with the incompetence that this Minister is showing tonight.

One of the things one would expect is that at the very least the Minister would take a call, stand up, and defend his own legislation. But this Minister has sat in that chair tonight and has not taken a call. He has not bothered to defend the Government against any of the comments that we have made. He has not suggested that anything we are saying is wrong. He has just sat there, and carried on. It is a disgrace.

Hon Dr NICK SMITH (National—Nelson) Link to this

I have two questions for the Minister in terms of the motion to split the bill. The first is: why should we trust that he has got it right this time? We know that in 2002 the Government got it wrong, in a rush. We know that in 2005 the Government got it wrong, in a rush. We even know that with this core bill the Government got it wrong. We know that with the core Building Act in 2004 we got it wrong. We know that in 2005, when we attempted to amend the Building Act, we got it wrong. Yet the Minister is asking for an enormous amount of trust from this Parliament. He is asking us to pass these five pages of new law but without having a first reading and without it going to a select committee to receive the scrutiny of public submissions. If this was the very first time, we might give it the benefit of the doubt. We might say: “Yeah, well, we’ll go along with it.” But the Minister has to understand that when the House has gone along with it and agreed to amendments done in a rush five times, and when every one of those five times it has found that it has stuffed up, the House has to say today: “Minister, once bitten, twice shy. We’re not prepared to go along with it.” I will put money on it.

I bet there is not a single member of this House who has gone through these five pages of law line by line, checked back to the Building Act, checked back to the Weathertight Homes Resolution Services Act, and ensured we have it exactly right. I bet not one member of the House has been able to do that.

JOHN HAYES (National—Wairarapa) Link to this

This motion is an abuse of the Government’s power. The suspension of the Standing Orders is a draconian provision because it allows the Government to override the rules of this Parliament. I am absolutely—

JOHN CARTER (National—Northland) Link to this

I want to follow my colleagues John Hayes and Nick Smith, and pick up on a couple of the points that my colleague Nick Smith made. He made a very good address to the Committee on the fact that we are splitting this bill. He brought to the Committee’s attention the fact that he had recently been to the Building Officials Institute of New Zealand, where he had addressed them and been welcomed as a hero and a saviour. I can understand that, and this Minister needs to understand that it was not just because he is Nick that he was applauded and welcomed; it was because of his association with the National Party, as well as his being a very good member and individual himself. The Building Officials Institute of New Zealand is looking for someone to get it out of the muddle it is in. Nick Smith referred to that, and brought it to the attention of the Committee—as we should when we are debating this bill and the splitting thereof.

But there is another issue we need to discuss, which we have not mentioned enough tonight. We have talked about the problem of the compliance costs this legislation is putting on local government. We have talked about the worries and failures there are in local government and the fact that it cannot now meet the requirements that this Minister and his Department of Building and Housing are putting on it. But I want to talk about two other things—firstly, who is actually paying. The terrible cost that has been put on homeowners and the building industry in New Zealand is just not acceptable; it is seriously not acceptable. We are seeing price increases because of the incompetence of this Minister and his department. We have reached the stage now where the rules, regulations, and compliance costs that will be put in place as a consequence of passing this bill will mean extra increases in costs to the homeowner.

Compliance has become so difficult that it is nigh on impossible for a layperson now to fill out a building application form. That is what we are putting in place with the splitting of this bill, and that is why I bring it to the attention of the Committee. We need to understand, as we pass this bill and its two parts, that one of the things that will happen is that people will find they have to employ a person to fill out their building permits. Well, that is unbelievable. A building permit application is not actually a difficult thing, or it was not until this Minister and his department became in charge. Under the previous legislation it used to be that a person would fill out his or her name and address, put in the details of the house and a bit of the description of the property, etc., say who the builder was, describe what style of house it was, attach some plans, and away that person could go. We could actually do it for ourselves, pretty much.

Hon PETE HODGSON (Minister of Health) Link to this

I move, That the question be now put.