Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill

Hon MAURICE WILLIAMSON (Minister for Building and Construction) Link to this

I move, That the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill be now read a third time. I have to say this is a very, very exciting day for me as Minister for Building and Construction to be doing the third reading of this legislation, because it is the culmination of a huge amount of work by officials and teams of people working with local bodies, banks, and a whole lot of others to get to, finally, a package that could be agreed on and that would allow people to get out of the traps they had been caught in, having found themselves in a leaky home and unable to do anything about it. I will traverse some of the history of how the leaky homes syndrome came about as I give this speech, but today I will pay tribute to some of the people who were involved. I say to David McLellan and to Adrian Regnault, and to a number of other people in the Department of Building and Housing, a very big thank you for the long, hard work—difficult work, at times—of getting to a resolution.

Just quickly, I will go through some history, because I often hear the history of this thing misquoted. First of all, I often hear people say it was the National Government that put the Building Amendment Bill through in 1991. Well, it would be worthwhile getting on record that that bill was introduced to this Parliament by the Hon Margaret Austin, a Labour Minister in the Labour Government of 1990, and it passed through every one of its phases until the election of 1990 was completed, and then the National Government, with the total support of Labour, finished the third reading. I will make it clear that National was supportive of the legislation, but it was not the National Government that put up that bill and moved to deregulate the industry.

The second big myth—and I must say I actually believed this myth myself—was that it was politicians who had moved to allow untreated timber in the mid-1990s, which is one of the key ingredients of the problem. But, actually, no politician was involved in the decision to go to untreated timber. It was a decision made by a subcommittee of Standards New Zealand. The proposal was put up by a number of the timber companies saying they did not need to keep treating timber. Interestingly, if members were interested in reading the document, they would find that the whole debate at the time was about borer. It is really interesting that no one raised the question about rotting timber if it got wet. The question was whether we needed to keep treating timber because borer no longer really existed in New Zealand. The standards committee decided that untreated timber would become acceptable under the Building Act and the building code, and not a single politician was involved in the decision. What speaks quite loudly that it was not the Government, or Ministers of any flavour, that was involved is that every time someone has tried to join the Crown in litigation, and blame the Crown for this dreadful, dreadful fiasco, the courts have thrown it out and said there was no responsibility on the part of the Crown.

I want to make this clear to everybody in the House, because this is something I have looked at for a long time: there is no one thing to blame here. This was a systemic failure across the entire industry. This was designers, this was builders, this was materials, this was construction methods, this was consenting, this was inspections, this was homeowners not doing relevant maintenance—this was a systemic failure. Monolithic cladding was used with no cavities in the building design, and, actually, non-treated timber was a recipe for a disaster.

Well, when we came to Government in 2008 we came in at the same time as the global financial crisis. I have to say it was a really difficult ask to go to the Minister of Finance, who was struggling, based on what was going on right around the world, with an economy the worst we have seen, and say to him: “I’ve got a new expenditure item that’s bigger than just about anything you’ve ever seen on your books.” I have to say that the Hon Bill English sat down, looked at it, and said “Wow”, and worked through it. The Prime Minister got involved, and finally this Government decided that something had to be done, unlike the previous Labour Government, which had for 9 years said this was not its problem and it was not going to offer up a solution. And they are the facts: Helen Clark said she thought it was media beat-up—I have the quotes. We decided something had to be done, and we began a process of trying to negotiate. The local authorities wanted a settlement of one-third, one-third, and one-third; the superannuitants wanted to have no money borrowed and have it all paid for by the Government. Over time we gradually got to the package we have today.

The package sees the Crown paying 25 percent of the cost of the work required. The local authority, if there was one involved—and in some cases there was no local authority involved—will pay a 25 percent share. Then there is an underlying loan, which we call a loss-sharing arrangement with the banks—between the banks and the Government—which will be made to the homeowner to pay for the repairs. This is money that will be paid on receipt of work done, and that is vitally important. We will not hand out large chunks of money to people who own a leaky home who could then take the money and run, and sell the leaky home on to someone else so that the problem has not been fixed at all. This money will be paid on the actual receipt of the work done to fix the leaky homes.

I have to say I found Mr Twyford’s view on this a little bit puzzling. When Labour, for 9 years, said it was not the Government’s right to be involved, and would not be, Mr Twyford then chose to attack me last week for saying the package does not include apartments. You know, Labour would not have included anybody, even those in single dwellings, yet somehow he said that the National Government’s package would not include apartments. Well, he was wrong. This package does allow apartment owners to make an application for financial assistance. The only difference between those in apartments and a single dwelling is that apartment owners have to get the agreement of their bodies corporate. But that is the same for apartment owners even if they want to do just a general renovation. If owners want to paint an apartment block, or put new tiles throughout the common areas, they have to get their body corporate’s agreement. We changed the Unit Titles Act and made it that owners did not have to get 100 percent approval for changes, because one of the worst aspects of unit titles in recent times was that in a 100-unit apartment block, just one absentee landlord who was a stand-out from a collective decision and said he or she was not signing was all that was needed to stop the other 99 owners from making progress. So last June we passed the Unit Titles Act, which means that a 75 percent majority is enough. I make it clear today to anybody out there listening that if they are in an apartment block, the block is entitled to make an application, but it has to be agreed across the block. That is quite sensible. It would be nuts if units 3, 17, and 29 were fixed and made not leaky any more, but all the other units that joined on to them and had common walls were not fixed. Everybody has to be signed up, and if such apartment dwellers do sign up they have just as much right to apply for the package—25 percent from the Crown and 25 percent from the local authority—as anybody else.

The presenter the other night on the television programme called A Rotten Shame said: “I don’t know whether Maurice Williamson has ever looked into the eyes of a leaky home owner.” Well, does he ever know how to get something wrong! I have spent the last 2½ years looking into the eyes of hundreds, if not thousands, of people with leaky homes, and I know that that is one of the most ghastly blights on the landscape of this nation. Someone could not help but feel for people who, through no fault of their own—they have done nothing wrong—have ended up with their biggest asset in life rotting before their eyes and have no way out of it. People cannot have any compassion in them if they say “Well, it’s not for us to be involved. We’ve been found by the courts not to have a responsibility here.” So the Crown is stumping up, with a billion dollars. It will probably be more than that, because 75 percent of these homes are in Auckland—with 4 percent in Christchurch, 4 percent in Tauranga and 9 percent in Wellington; I think those are the numbers—so it is mainly an Auckland-type problem. But it could be as much as a $22 billion issue, based on what PricewaterhouseCoopers has said.

I am proud of a Government, a Prime Minister, and a Minister of Finance who, even in the toughest times economically, have said that we cannot just let these people sit in a rotten home that is going nowhere. This package offers an absolute option. It is voluntary; it is not mandatory, and nobody has to accept this package, although I bet there will be a lot who do. If some people want to pursue the legal aspects, and go through the litigation path, they still can; it has not been closed off to them. But let me just tell them that I have seen so many cases of litigation when, even if the claimants win, they lose, because their legal bills can often be more than the settlement they got. So I advise people to look at this carefully. I believe that this option that people can take from the Government is very fair and balanced. It is a very proud day for me to be in this House, speaking on the financial assistance package for weathertight homes.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) Link to this

I will take a brief call on this Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. Labour members on the Local Government and Environment Committee participated in the select committee process, heard submissions, and raised a number of questions throughout the passage of the bill. Although we support the bill progressing, we acknowledge that a number of issues have been left still unresolved. Let me comment on the huge challenge of responding to the work required by many of these homes that will need repairs. I have to say at the outset that we remain concerned that the Government is not doing enough to invest in the trade sector, so that we will have enough people to do the work required in the building industry. Labour members have continued to promote greater investment in apprenticeships and trades training. We know there will be significant pressures in both Auckland and Christchurch, and we remain concerned that the Government is not taking a comprehensive approach to ensure that in the construction industry, and certainly in the building sector, we have enough skilled people to meet the growing demand in the years to come.

I will come back to the bill. As I said earlier in my opening remarks, there are a number of issues we want to highlight, because several types of affected homeowners will be excluded by this package. It does not provide any solution, for example, for owners who are not found eligible under the legislation, owners whose homes are more than 10 years old, owners who have already commenced their repairs, owners whose homes were signed off by private certifiers instead of councils—those owners will not be eligible for the 25 percent council contribution—and owners who are unable to raise the remaining sum. That will include many who simply cannot afford to borrow their 50 percent contribution. In the current economic climate that is a significant burden and pressure on a wide number of families. Those people are also the ones who are often most vulnerable and disadvantaged in having the leaky homes problem.

That said, I know that the Minister specifically made comments on the issue of no Crown guarantee for bodies corporate, and he offered a response in that area. Some of the concerns we raised at the select committee, and continue to hold, include the fact that apartment owners are unlikely to benefit from the package because bodies corporate are not able to borrow the repair funds and levy owners for loan repayments. That is largely because banks will not lend to bodies corporate, as they are unable to give mortgages on common properties. Although some of the owners will have funds available and will be prepared to front up with those funds, at the start of the project many owners may not be able to extend their mortgages. I understand from colleagues that there was a fair bit of discussion about that, and it remains, again, a key concern.

Another concern is that the bill does not require remediation work to restore homes to performance and durability compliance with the building code. For example, councils that will have a say in setting the scope of the remediation might insist on targeted repairs that remediate the worst problems but do not necessarily bring the building up to code compliance. There are many buildings with severe weathertightness issues where the best option may be to bowl the building over and sell the land or rebuild, and this package offers nothing to owners who are in that particular situation.

We also think that speculators could take advantage of this legislation. It does not differentiate between owners of leaky homes who need help and speculators who are buying up leaky homes at very low prices. It is feared that a speculator who buys a property in the knowledge that it is a leaky home is eligible for assistance under this package. Is that fair? We have concerns about that, and think not. I understand that the Minister for Building and Construction, in previous remarks, has said that he is not fussed who fixes the homes—whether it is the homeowner or the speculator. I am looking at him, to either confirm or deny that.

Dr CAM CALDER (National) Link to this

It is my pleasure to rise to speak on the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. I am amazed to hear comment from the Opposition about a skills deficit. For 2 years National has been in Government and we take responsibility for the great advances we have made over that time. But if there is a skills deficit, which is what we are hearing from the Opposition, one can assume only that it grew in the 9 years of the last Government. In fact, Labour did little or nothing to address that appalling blight on the lives of thousands of New Zealanders.

I am very appreciative of the Minister for Building and Construction outlining how the systemic failure in respect of leaky homes developed—and it was a systemic failure. It is interesting to hear that at no stage did a judge sheet home responsibility to a Crown entity. That in itself is very interesting. Designers, builders, consenting authorities, material failures, the monolithic cladding that we have heard about, and owners not taking care of routine maintenance—all of these factors contributed to this problem, which is blighting the lives of tens of thousands of hard-working New Zealanders.

The Government has put together this financial assistance package to address the problem. We believe it is a fair solution. It spreads the costs as evenly as possible, at 25 percent to Government, 25 percent to the local authority, and 50 percent to the homeowner. The package has strong support from local authorities. Nobody has to take up this option, but it is an option that is available to owners to get their properties fixed swiftly, after far too long.

We have heard that the estimated cost to the Government is possibly in excess of $1 billion, but we believe it is money well spent on a problem that thousands of New Zealanders have had to endure for far too long. This Government is about getting results and addressing something that is equivalent to a natural disaster in this country. This package will deliver thousands of New Zealanders from a debilitating, uncertain blight on their lives. I commend the bill to the House.

DARIEN FENTON (Labour) Link to this

I come late to this debate but it is a pleasure to take a call in the third reading of the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. I will make a contribution in respect of the conclusion of the work that has been done by the Minister for Building and Construction and the Local Government and Environment Committee. Labour supports the bill, and we support the Government’s efforts to find a resolution to what has been a very sorry tale, and a long tale, for a long, long, time. It is a systemic failure, as the Minister said, and a disaster in the building industry and in many people’s lives.

The leaky home crisis, which emerged in the 1990s, is an ongoing construction and legal crisis in New Zealand, in which many thousands of newly constructed houses and apartment buildings built in the 1990s and early 2000s suffered from severe weathertightness problems. The total cost of the leaky home crisis is estimated at around $11.5 billion, with a reported estimate of between 22,000 and 89,000 homes affected, and only a minority of around 3,500 repaired to date.

Behind those eye-watering statistics are many ruined lives. I believe the Minister when he says he has had to look people in the eye. He described the other day in the Committee stage the difficult meetings he had had to attend, where people were crying. We have all met those people; we have all had them come into our offices. People have lost their homes and their livelihoods because of this crisis, and, sadly, as we have expressed throughout the debate, many will not be covered by this scheme.

Buying or building a house is part of the Kiwi dream. I can only imagine the joy of moving into a new home that people have built from scratch or taken over, soon turning into despair as the leaks appear, the building rots, the house starts to stink, and damaging fungi begins to creep through the house and damage the family’s health. Imagine what it is like not knowing where to turn or whom to hold responsible, especially when the builder or numerous contractors or subcontractors have disappeared, when the council takes no responsibility, or when liquidations occur.

We have a slightly less political view of what happened—well, I certainly do. I will not talk about who was responsible, but there is no doubt that this crisis began in the early 1990s, when the system of construction changed dramatically. It was the building code 1991 that re-regulated construction by setting performance criteria to be achieved, rather than prescribing the precise manner in which buildings were to be constructed. For instance, builders were told only that the structure must last 50 years, the cladding must last 15 years, and the walls and roofs must be impermeable to water.

Other factors that led to leaky home problems involved many developers, builders, and architects, who knowingly or carelessly constructed buildings with numerous faults and shortcuts. These changes coincided with our passion for new architectural design based on the Mediterranean-style flat roof. Perhaps too many people had been visiting Italy during that time; that design is traditionally for a dry climate. I can understand the attraction to those kinds of buildings; I find them very attractive and appealing as well, although now I am very suspicious of them. They have low-angle, mono-pitch roofs and no eaves.

Numerous local authorities failed in their inspection duties, and we have heard the stories of those failures. Local authorities now share significant financial responsibilities along with the builders, who in many cases have simply disappeared or removed themselves from liability, and the owners. Court cases generally assign around one-third of the financial responsibility to local authorities.

In 1998 the New Zealand standard for timber treatment was changed—and I am not saying any politicians were involved, I say to the Minister—to allow untreated timber to be used for wall framing. As that timber gets wet, it starts to rot. Due to increased insulation being used over that time, any moisture that came into contact with the timber was slower to evaporate. Additionally, some house designers used the opportunities to cut back water-protecting features such as eaves.

Another related problem was the collapse of the apprenticeship system, and the operation of some unqualified builders. Cowboys entered the market—[Interruption] I raise a point of order, Mr Speaker. I am speaking to the bill. I am rehearsing the history of this issue, as indeed the Minister did.

SUE KEDGLEY (Green) Link to this

I noticed a subheading in today’s New Zealand Herald that stated: “Allowing the mining industry to self-regulate was an unfathomable mistake,” and I think exactly the same thing could be said for the leaky homes fiasco. Allowing the building industry to effectively self-regulate has turned out to be an unfathomable mistake and one that has created, as many have pointed out, the biggest man-made disaster in our history.

The Minister for Building and Construction said in his speech that there was not any one cause of this fiasco. Actually, there is one underlying, fundamental cause: the passage in 1991 of the Building Act, which deregulated the building industry and was passed unanimously by Labour and National in this House. That legislation wiped out most of the previous protections in relation to building new homes and dwellings. It allowed builders to enter and exit the building industry without any real liability, any accountability, or any costs, it removed requirements in relation to skill levels and training, it loosened council inspection procedures, it allowed private sector building certifiers to compete with local council inspectors for work and issuing building consents, and, of course, it deregulated standards, which allowed Standards New Zealand to allow the use of untreated timber and monolithic cladding.

Under the new era of deregulation that was ushered through Parliament by both National and Labour, who were wildly enthusiastic about deregulation and what it would do for the building industry, effectively anyone could develop or build a home. They could build a house then wander off to the Gold Coast in Australia, as so many did. We got a whole lot of cowboy developers who did not give a damn about anything except trying to cut costs, building as cheaply as possible, and getting as much profit as they possibly could, with no responsibility. And, of course, we got a whole lot of builders who were not trained as builders. So it is a saga of greed, as well as of deregulation.

Basically, as I said, everyone who was in the House in 1991 has argued that they were swept up by the ideology of deregulation at the time. I looked back at some of the arguments in this House at the time. Apparently the new Building Act would reduce building costs, increase competition in the building sector, save money, and boost the building industry. Instead of these wonderful promises that both sides of the House assured us would happen, it has actually undermined confidence in the entire building sector. It has resulted in families all over New Zealand living in mouldy, damp, unhealthy, and rotten homes. The Minister himself acknowledged that the dreadful mould that many are exposed to, Stachybotrys, can actually kill people, and probably is killing people even as we speak. It has resulted in endless misery and a $22 billion bill for taxpayers, all because Parliament decided to deregulate the building industry and leave it to the marketplace.

Let us be quite clear: if there is an underlying reason for this, it is because Parliament created the problem by passing flawed legislation that deregulated the entire industry. Therefore, by that standard, it is Parliament’s responsibility to resolve it. We should be held accountable, not the innocent homeowners who are stuck in cold, rotting, damp, and insanitary homes. They did not create the problem, although their lives have been blighted and in many cases ruined because they made a fateful decision to buy a home in good faith that is now leaking like a sieve. They are the innocent parties in this, and we should remember that. This problem was created—

NICKY WAGNER (National) Link to this

I am very pleased to support the third reading of the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. This bill has been a long time coming. The leaky homes problem emerged in the mid-1990s and continued until about 2005. It was at that time that the Labour Government refused to acknowledge the enormity and the severity of the problem, and it also refused any Government compensation. In fact, the Labour Prime Minister called it a media beat-up. The Labour Government’s solution was to establish the Weathertight Homes Resolution Service, which set up a process that was so time-consuming and so expensive that the costs of determining liability were often substantially more than the costs of repairs. Millions of dollars were spent on disputes rather than on fixing anything. The estimated number of leaky homes in New Zealand could be up to 42,000, and the cost of repairing those homes is enormous. To get that into perspective, the cost of leaky homes could prove to be more than the cost of the Christchurch earthquakes.

When National came into Government in 2008 we made a commitment to dealing with this issue and to delivering a pragmatic, cost-effective solution that would mean funding would be spent on repairs rather than on lawyers and disputes. New Zealanders need to be able to repair and restore their homes, and this bill provides a method of funding that will allow homeowners and families to get on with their lives. The Hon Maurice Williamson has worked long and hard to piece together this economic package. It means that, generally speaking, local government has agreed to pay 25 percent, central government will contribute 25 percent, and householders will pay 50 percent, but the Government will guarantee homeowner loans so that obtaining finance will not be a problem.

The Government’s financial package is expected to cost over a billion dollars over 5 years, but we believe that it will be money well spent. Leaky homes have caused misery to thousands of families, and many have had to live with this problem for years. Today is a new beginning, and this bill will give relief to thousands of victims of leaky homes. It might not be the perfect answer and it might not fit everybody, but at least now everyone who has a leaky home has a solution and they can choose to take it. Thank you.

Dr RAJEN PRASAD (Labour) Link to this

It is a pleasure to take a call on the third reading of the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. I agree that the Minister for Building and Construction has every reason to express satisfaction, because he happens to be the Minister who has heard from everybody who has been suffering through this issue, and he is the one who has brought a solution to this Parliament. The solution has currency and has been developed into this bill, which has nearly gone through all its stages. So, yes, it is a time to acknowledge that that advocacy has been successful, and everybody in this House has been a part of that.

However, it is not a time for recrimination of the type we have just heard. I was intimately involved in the development of this issue right throughout the period—through my own family and through many of my friends—and I know that solutions were being designed as people became more familiar with the problem. The Weathertight Homes Resolution Service was a solution that was probably best practice at the time in the view of those who had experience. To say that the last Government did nothing is looking for recrimination for no good reason, and I think one must push back on that. Public opinion was at a particular place, and the science was at a particular place, and we have now understood more about it. So I thank Minister Williamson for acknowledging that, and I acknowledge his contribution to this issue.

I will talk about the specific provisions in the bill, and what I am about to say leads into that, but also it is time to reflect on the kind of failure that occurred and resulted in this problem. Minister Williamson has described it as multiple failures, truly systemic. Yes, it was so, but also it was a failure of the private sector in many, many ways. The private sector was allowed to run amok in the development industry devoid of the standards one expects in order for good buildings to be built. When the issue of building standards was brought together with the issue of untreated timber and things like that, we realised that the issue we needed to address was that of unethical practice. Designs were faulty—and no good architect would say they were good designs—but they were cheap, which is why they were adopted. There was no reason for the building materials to be abused in the way that they were. I was incredulous to see the workmanship that created this problem—and I know something about building, having built houses myself. The normal guarantees that would be given were not there, and, indeed, the assurances one gets in terms of inspection were not there. Those who inspected those buildings were from the private sector, many of them contracted by local authorities.

So here we are. This is a massive bail-out of a failure of the private sector, and I want to acknowledge that. We trusted the sector to fix the problem, and it did not. There are so many examples. I have seen top plates of curved buildings being made out of particle board, plastered over, railings drilled through them, and simply sealed up. They became leaky buildings. That was a failure of design. If those buildings had been made with the same materials, but with good workmanship, good design, and good inspection, then this failure would not have happened, but it did. The Minister is right that leaky buildings are as a result of systemic failure.

The damage that leaky buildings did to many individuals and families is incredible. I entirely believe the Minister when he says that he has looked into the eyes of people from affected families and he has seen the enormous damage that has been done. I have looked into the eyes of my own children and I have seen the enormous damage that has been done to them. Luckily they had a parent who could sign a cheque to fix it up. The provisions of this bill do not take that damage away, and we ought to acknowledge that. I know of some elderly people who sold the last pieces of their property and bought an apartment that would enable them to manage their expenses, but it became leaky. They had nowhere to go. They are still there, and this bill does not assist them. The bill is a good attempt to address the problem, but it still leaves enormous problems unaddressed. I do not say that as a criticism of the Minister. I appreciate that there are limitations, but it is a problem for this Parliament and for this Government.

There is something difficult about understanding that one qualifies to make a claim only if one’s building is 10 years old. People whose buildings are 10 years and 1 month old do not qualify, yet they are in exactly the same situation as the person whose building is 9 years and 11 months old. It is exactly the same situation. The personal hurt, the impossibility of fixing it, and the assistance from elsewhere are exactly the same, yet the family whose building is more than 10 years old will not be assisted. There are many families in that area. I say to Mr Williamson that the problem has not gone away for a sizable part of our population. What is to happen to those people? Who will stand alongside them? I still think that solutions need to be developed for this group. Perhaps $23,550 is a generous offer for those who qualify and it could have been stretched a little bit further, but I am sure the designers and the Local Government and Environment Committee looked at that. However, it does create a problem, and the provisions of this bill do not address it.

There are others who do not qualify. I have talked only about those whose buildings are more than 10 years old. But there are those who have already commenced repairs and those whose buildings were approved by private certifiers. That is pretty hard, because a private certifier was contracted to do a professional job. They did not do that, and simply because of that fact, the family, the individual, or the elderly couple in retirement now do not qualify for this assistance. So there is something unfair about these solutions, as well.

The bill is like the proverbial curate’s egg: it is good in parts. It is good as far as it goes, and it is still a credit to the designers who have brought it this far. But it leaves a problem unanswered, and that problem at some point will have to be answered by the Government or local authorities.

I want to make one or two other points. I was very happy during the Committee stage to get the Minister’s assurance about the assessment process. When a building is assessed and an agreement is reached as to how much will be paid, the building is opened up. When it is opened up, as sure as night follows day, that assessment has been found to be inaccurate. I have been really worried, because I have seen with my own eyes the damage that has been done. The Minister assures me—and it is on the record of Parliament if lawyers ever need to go back to this—that owners who have received inaccurate assessments can go back to the assessor to have the building reassessed after the cladding has been taken off, and another arrangement can been made about how much money is made available. I thank the Minister for clarifying that, as I was quite concerned that it would be a problem.

I still believe—and I disagree with the Minister on this point—that there is something inherently unfair about this bill, and it is in relation to those who have purchased leaky buildings at bargain basement prices, at sizable discounts. The people who originally owned the building have missed out. They have got out of it and somebody else has purchased it. Most of those purchasers are not young, private couples; they are developers and speculators. They now have the ability to receive State funding for up to half the cost of repair, and they can then harvest the capital gains that this would give them—and those gains would be enormous. I would rather that that money was utilised for the kinds of cases I have talked about—for those people who have no other means of fixing up this problem. The Minister has not been convincing on this point, but it is a problem and I hope that, at least, priority will be given to those who are genuine homeowners, who still own and live in their homes. Thank you.

CHRIS AUCHINVOLE (National—West Coast - Tasman) Link to this

I am very conscious of previous speaker Dr Prasad’s family involvement, which he expressed during the second reading of the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. Far be it from me, in any way at all, to try to dilute the reality of that situation for anybody who has been involved, but I would like to reassure the member on some of the points raised by him. Although I appreciate that not everybody can be at a select committee, I think he would have been comforted by the degree of thoroughness that the Local Government and Environment Committee process ensured was given to these things. I mean that quite sincerely, because the stories that came before us were oftentimes heart-rending.

I will address two of the points the member made, and I am sorry that the member’s representatives on the committee did not explain this when they were explaining the bill to his caucus. The 10-year feature is because prior to 2004 things were done to start to stop the leaky home syndrome. The Building Act 2004 made sure that the leaky homes problem would not arise again. Building techniques were developed, supplies became better, and the accreditation of building consent authorities was concentrated. So the select committee was assured that it is reasonable to expect that claims coming forward now would have occurred well within the 10-year period. It was on that basis that we accepted that there has to be some sort of defined point.

The other thing is that there is a no-blame basis for this legislation—a little like ACC. It is not designed to comfort—and I do not make the remark flippantly—homeowners or initial owners of leaky homes; it is designed to address the problem. In this case the building is the feature, not the owner. It is the building that has to be corrected. From that point of view, there is a no-blame basis. I understand that there has been very good sign up from local government and territorial authorities—not because it is cheap or an easy way out but simply because it gives certainty. This is where I think the Minister for Building and Construction’s bill and his work have been so praiseworthy in terms of getting this put right. It does not do anyone a favour, but it certainly gets the work done.

Just to address one of the points that was raised about past practice, I must say that I concur with the previous speaker from the other side of the House that now is not the time to be allocating blame. Indeed, this bill does not. Nothing about it allocates blame. But it is a case of bye-bye to the cowboys. The Minister, who is not known for his love of intense regulation—he has not been previously known for it—has reintroduced regulation and has reregulated builders and, shortly, the licensed building practitioner scheme will come into effect in March next year. [Interruption] Yes, this Minister did it—mandatory H1.3 timber treatment is required. This Minister has reregulated.

I know we have done a lot of work on the building amendment bills Nos 1, 2, and 3, and I think No. 4 is coming up shortly. A lot of work has been done and it is most reassuring. All in all, this is a most worthwhile bill. I am very proud to be involved in its processing. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki) Link to this

Tēnā koe, Mr Assistant Speaker Robertson. Kia ora tātou katoa i tēnei ahiahi i a tātou e wānanga nei i tēnei o ngā pire Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill . He wā poto noa iho ki a au engari i a au e tū nei, ka hoki ngā māhara ki ngā mate nei kua pā mai ki a au ki roto i a Te Arawa. Ko tērā o ngā pāpā, a Theo Tait, tae rā anō ki te mokopuna a Te Ariki Mōrehu e takoto mai rā ki runga i tōna marae. Kore tae te aukati te āhuatanga ō-mate kua tae mai ki runga i a au o Te Arawa ka mutu, te motu. E kui mā, e tama mā, e koro mā, e hine mā i te pō, moe mai, moe mai rā.

Ka huri atu rā ki tēnei o ngā kaupapa kōrero i tēnei rā. Kai te tautoko te Pāti Māori i tēnei huarahi ki te manaaki, ki te tautoko i te hunga kua rongo nei i te ngau o ngā whare tuturu nei. I te ōrite tō mātou tū mō te Weathertight Homes Resolution Services Bill,arā, mō te mātāmua tonu o tēnei ture i te tau 2006, me ētahi atu o ngā ture mai i taua wā. Kei te tautoko mātou i te whakaaro kia noho te Kāwanatanga hei tuarā ki ngā whare pūtea, kia whakamāmā i te āhuatanga ki runga i aua whare pūtea kia rere pai te moni, te pūtea rānei ki ngā whānau, ki te whakatikatika i ngā whare. He huarahi pai tēnei i tōna tuturutanga ki te whakatau i ngā kerēme hei whakatika i tēnei take, arā, ngā whare tūturu, ngā whare pirau nei.

He pai tonu ēnei āhuatanga katoa engari, i a tātau e kōrero nei mō ngā whare tuturu, ngā whare pirau nei, me whai anō hoki tātou ki te kōrero mō te whānuitanga o tēnei mea o te ora o roto i te whare. Ki a au nei, he hononga tonu i waenganui i te hauora o te āhuatanga o te whare, o te ora o te tangata. Kai reira tērā whanaungatanga i waenganui i ngā mea e toru e kōrerohia ake nei. Ki taku mōhio, kei Counties Manukau, kei te Tonga o Tāmaki, kei Tāmaki tonu, kei Te Tai Tokerau, kei Te Awakairangi ētahi kaupapa i raro i te maru nei o te Healthy Housing,arā, ko te whakakotahitanga o ngā take hauora ki ngā take ā-whare. Nei au e pātai nei, he aha te take kāre i te pērā i roto i tōku ake rohe pōti o Te Waiariki i te mea, kai reira tonu, kai te wā kāinga ngā whare tuturu, ngā whare pirau, ngā whare makariri, ngā whare mākū, ngā whare pūwhāwhā nei. Mēnā ka pērā te āhua, arā noa atu ngā painga ki te hauora o te tangata. Nō reira, ko te tūmanako i a tātou e kōrero nei mō te pire nei,tērā pea ka whai wāhi tātou ki te whakatau i te whakaaro, āe, ka pai te whare, ka ora anō hoki te tangata.

Kai te tautoko te Pāti Māori i te āwhina ā-pūtea mō ngā whare tūturu engari, me titiro anō ki te āwhina ā-pūtea i ngā whānau ki te ārai i te makariri, ki te whakapaipai ake i te hanga o ngā whare, ki te whakanui pea i ngā rūma o te whare kia kore te whānau e noho kōpā, kia taea ai e rātou te whakatikatika ngā pirau me ērā atu momo raruraru o ngā whare. Me pēnei tātou ka tika. Ki te āta titiro tātou ki te māuiui ā-rūmātiki nei, ka mōhio mai tātou, arā nō tōna hononga ki te āhuatanga o ngā whare. Kua kaha ngau mai taua māuiui ki a ngāi Māori me ngā whanaunga o Te Moana-nui-a-Kiwa. Ka pā mamae tērā mate, tērā māuiui ki te tangata nā te kino o ngā whare, nā te kōpā o te noho o ngā whānau, nō reira, arā noa atu ngā painga ka puta i tēnei kaupapa o te Healthy Housing project.E kī ana te kōrero “He aha te mea nui o te ao? He tangata, he tangata”. Mēnā e pono ana tērā āhuatanga ki a tātou me whai atu i tēnei huarahi ki tōna mutunga mai. Koinei au e whakaara ake nei i tēnei o ngā whakaaro.

Nā, kia hoki mai ki te pire nei me ōna toronga. Kei te tautoko te Pāti Māori i te Housing Innovation Fund,kai te tautoko anō hoki i te Warm Up New Zealand: Heat Smart home insulation programme,hei mea whakamahana i te motu. Arā nō ōna painga. Nō reira, mēnā ka pērā, kai te tautoko mātou i tēnei pire i tōna mutunga mai. Ā, kia ora tātou.

[Thank you, Mr Assistant Speaker Robertson. Greetings to us all this afternoon as we debate this bill, the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. I have only a brief call, but as I stand here my thoughts go to specific deaths affecting me in the Te Arawa region: those of the fatherly figure Theo Tait and of Te Ariki Mōrehu’s grandchild, who is lying in state on his marae. Circumstances relating to the deaths can never be avoided for me, Te Arawa, and, indeed, the nation. Oh elderly womenfolk, young sons, elderly menfolk, young daughters in the void, rest there, rest there.

I turn now to address this bill today. The Māori Party supports this way of taking care of and embracing the people affected by these leaky homes. Our stance on this one is similar to that on its predecessor, the Weathertight Homes Resolution Services Bill passed into law in 2006, and on other legislation since then. We support the proposal that the Government act as a guarantor to financial institutions to ease the pressure on these money institutions, so that money becomes accessible to families to repair houses. In its simplest form this is a good way to resolve the claims that will fix this issue relating to these leaky and decayed homes.

All these situations are well and good, but while we are talking about these leaky and decayed homes we should be talking broadly about healthy housing. To me, there is a connection between the healthy state of the house and the person’s health. There is an association between the three things being discussed here. I understand there are Healthy Housing projects operating in Counties Manukau, South Auckland, Auckland itself, Northland, and the Hutt Valley under the mantle of Healthy Housing, in regard to an association between health and housing matters. Here I am asking why those projects are not operating in my electorate of Waiariki, because the situation exists back home there as well. There are leaky homes, decayed homes, cold homes, damp homes, and dilapidated ones present. If that is the case, there is much benefit to be gained in terms of a person’s health. Hopefully, as we talk about this bill, we will find time to consider the thought that yes, if the house is fine, the person is healthy as well.

The Māori Party supports a financial assistance package for leaky homes, but we must find a similar package for families to block out the cold, to make improvements to houses, to increase the size of living spaces so the family is not cramped, and to carry out repairs to decayed areas and other basic problems of houses. We have to do this; that is for sure. If we examine the disease of rheumatic fever, we will then understand its connection to housing conditions. That illness has impacted greatly on Māori people and their Pacific Island relatives. It is linked to poorer housing conditions and overcrowding. There are enormous benefits in the Healthy Housing project. The aphorism states “What is the greatest thing in the world? It is mankind, it is mankind”. That is why I bring it up here.

In coming back to this bill and its connections, I say the Māori Party supports the Housing Innovation Fund and the Warm Up New Zealand: Heat Smart home insulation programme as a means of giving warmth to the nation. It has many benefits. In order that this legislation is implemented, we will support this bill right to its conclusion. Greetings to us. ]

Hon RICK BARKER (Labour) Link to this

Thank you very much for the recognition, Mr Assistant Speaker Robertson, and for the opportunity to make a contribution to this debate on the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. First, I reiterate what my colleagues have already said: Labour supports this bill. I congratulate the Minister for Building and Construction on steering this bill through the House. Like a large number of bills that have gone through this House it offers good points but it is not perfect. That is not surprising; I have not seen anything yet crafted that can be considered by all parties to be perfect. But let us look at the world not through a glass half empty; let us look at the world through a glass half full. I pick up on the points made by my colleague Rajen Prasad and I re-echo them: there are many, many people in New Zealand who are incredibly distressed at the state of their buildings. They are incredibly distressed that they have been let down by, as they see it, the authorities, the builders, and the architects. There has been an enormous amount of blame game played. We heard some of it this afternoon in the House. The Green Party member Sue Kedgley pointed the finger at all and sundry, other than the Greens, as to who was responsible. Well, the Greens can of course do that, but some people have to take some responsibility and get things done. This bill gives some certainty as to the way forward, but there is still a lot of uncertainty.

The first point I will raise in the third reading is the size of the problem. As I understand it there is $11 billion worth of houses involved—$11 billion is a large figure. It is an enormous figure. When we put that figure beside the cost of the reconstruction of Christchurch, we are, effectively, doing the job of rebuilding Christchurch twice over. This is a huge amount of money, it involves a huge number of homes, and it represents in many ways a loss—because if it is a cost, it is a loss. We are looking at a loss of $11 billion in Christchurch, a loss of $11 billion in leaky homes, and a loss of multiple hundreds of millions of dollars in finance companies that have gone broke. New Zealand has suffered a significant hit in a short period of time with leaky homes, Christchurch, and the financial crisis, but we have to dig ourselves out of the hole. This bill represents, in part, a way forward.

As my colleagues have said, there are some issues around, for example, who is eligible for the assistance package. There will always be issues at the margin. The member Chris Auchinvole explained why the 10-year limit was there. I have to say to the member that the moment we draw a line, some people are in and some people are out. That means that some people will be out and they will feel aggrieved.

LOUISE UPSTON (National—Taupō) Link to this

I am pleased to stand in support of this third reading of the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. This is a bill that will give some people some certainty, and these are very vulnerable people. I am sure that every one of us in the House will have faced one or many more of them over the years. It is very important that the Government steps up with an assistance package that helps people not only rebuild their homes but, more important, rebuild their lives. This bill is another example of the Government getting on and getting the job done. That is what people want; they want some certainty.

Others speakers in the House today have referred to leaky homes as a disaster, and it is fair to say that the issue is a disaster of significant proportions. In the fullness of time this may end up to be larger or smaller than the Canterbury earthquake, but it is a disaster none the less. I am pleased that the speaker before me, Rick Barker, chose to take an optimistic view in terms of apportioning blame. It is one looking forward to the future and looking at this financial assistance package as a good solution, where the Government shares responsibility for the cost with local government—the Government being responsible for 25 percent of the cost and local government for 25 percent of the cost. That is a fair and equitable solution in terms of how we are able to go forward and to make sure that people are able to rebuild their homes.

I want to touch, just for a moment, on the human cost of this. Often in this debate we have talked about the financial cost and whether it is $1 billion or $11 billion, but more important for me is the human cost, which we are unable to measure entirely, ever. That is why, in terms of the contribution of this bill, it provides people, whether an individual or a family, with the certainty to get on, to move forwards, and to rebuild. Yes, there is a time frame, and other speakers before me have talked about the fact that the drawing of a line will have an impact on some people, but in the hearing of the Local Government and Environment Committee, it was clear, given the submissions that came in, there was general support for the bill. People accepted that this bill was a fair and equitable solution to a fairly devastating issue.

It was really good to see the strong support from local authorities. As the Minister for Building and Construction said, we have also had the signalling of support and agreement by the banks. They are an important part of this puzzle, so that people who wish to borrow to complete their repairs and maintenance are able to do that. Getting the banks on board was an important part of the solution and I know that the Minister has done an enormous amount of work to make sure that this is a package they could buy into. So I congratulate the Minister on doing that.

I say in closing that each one of us has heard the stories of the agony for homeowners and of how much litigation and legal wrangling has gone on for them in trying to solve this problem of leaky homes, so it is really great to see that this bill is focused on fixing and rebuilding homes, rather than lengthy litigation and legal wrangling. That is why I am proud to support this bill.