10. Hon Dr NICK SMITH (National—Nelson) Link to this
to the Minister for Building and Construction
What, if anything, is the Department of Building and Housing doing to improve housing affordability?
Hon CLAYTON COSGROVE (Minister for Building and Construction) Link to this
As I advised the member last week in answer to the same question, the Department of Building and Housing is working in partnership with a number of agencies in developing a range of housing affordability proposals, including the investigation of shared equity. This is part of the Government’s wider work programme on housing affordability. Specifically, the department has introduced changes to the building code, as I said last week, on energy efficiency, to save families in new homes between $760 and $1,800 per year on their energy bill. The department is also progressing a suite of reforms to transform the sector that include occupational licensing for building practitioners, a review of the building code, and the accreditation of building consent authorities.
Hon Dr Nick Smith Link to this
Does he agree with the analysis by the Registered Master Builders Federation of New Zealand that the single biggest cost difference between building a house in New Zealand and in Australia is the cost of consents, fees, and levies, and its analysis that these have risen 900 percent under his Government; if so, will he endorse John Key’s call for reform to get these costs down and make houses more affordable?
Hon CLAYTON COSGROVE Link to this
I am aware of the chief executive of the Registered Master Builders Federation, Mr Pieter Burghout, claiming that 30 percent of the increase in the cost of a basic house represents regulatory costs, plus 20 percent labour and material costs. The other 50 percent is the increase in land costs. I am advised that of the 30 percent I have quoted, 15 percent are local authority infrastructure levies and fees—for example, development levies that local authorities choose the quantum of to charge, not the Government—and 15 percent are other local authority charges, Resource Management Act and building consent charges, and costs of delays in variability in the consenting process. The auditing and consenting of local authorities we are undergoing now will alleviate this.
Gordon CopelandIs the Minister aware that the evidence submitted to the Commerce Committee by the Registered Master Builders Federation is that the time taken to obtain consents has quadrupled, and that the average construction time to build a new house has gone from 12 to 22 weeks since the new Building Act came into force—a prime example of bureaucratic overkill—and does he intend to do something about it?
Hon CLAYTON COSGROVE Link to this
In answer to the last point, we are. I am aware of delays in the building consent—
Hon CLAYTON COSGROVE Link to this
I tell the member to just breathe quietly. I am aware of delays in the building consent process. The way to address organisational failure in any entity is to go through and organisationally audit the entity to find out whether it has enough staff, whether it has enough resource, and whether its processes are adequate and efficient. That is what one does. One does not do what the member opposite wanted to do in the legislation he tried to put through this House, in which if a council did not meet the 20-day mark, the person who wanted the consent got the consent for free, and the ratepayer took on all the sunk costs. That bill, which that member proposed, was not endorsed by the National Party East Coast branch chairperson—I think her name was Seymour—who called it “daft”.
Hon Dr Nick Smith Link to this
How does the Minister reconcile the self-congratulatory statement by Lianne Dalziel yesterday in the House that the Government has led “the most effective review of red tape that this country has ever seen” with the statement by the Wellington City Council last week: “A typical house plan 4 years ago was three A3-sized plans and 30 supplementary pages. Now builders are required to file 12 A3-sized plans and up to 300 pages of supplementary documentation.”?
Hon CLAYTON COSGROVE Link to this
I remind the member that the 1991 building code, which his Government passed—the national building code—sets permissive performance standards for buildings. The code leaves it up to local consenting authorities—that is, local councils—to determine the actual rules and requirements for compliance with the code and the set of relevant charges attached to it. In essence, the code leaves it to the local authorities to set those rules. That is why this Government is in the process of reviewing the building code, in the first review since 1991. The second discussion document is out now, and I invite the member to submit on it as other learned entities are doing.
Is the Minister aware that according to the Registered Master Builders Federation, drafting and specification work for a new house has quadrupled since the Building Act came into force, and that builders are now drawing plans for the local authority rather than for the builder; and does he agree that in moving to regulation from deregulation we have swung the pendulum too far, thus putting the cost of new houses out of reach for many young New Zealand families?
Hon CLAYTON COSGROVE Link to this
For the member’s benefit I will quote again. I am advised that of the 30 percent Mr Burghout quoted before the committee, only 15 percent of those costs were local authority charges, Resource Management Act charges, and building consent fees and charges. If we move back, as John Key said he wanted us to do, in his speech to the New Zealand Contractors Federation of 20 August—where he effectively said he would deregulate the industry again, as the previous National Government did so that there were no rules, anybody could pick up a tool belt and call themselves a builder, and apprenticeships were done away with, which this Government has brought back—then I say to that member: be it on his own head, because that is how we got the leaky buildings scenario we are charged with fixing up now.
Hon Dr Nick Smith Link to this
What action did the Minister take in response to the letter from the Registered Master Builders Federation to him on 20 October last year that states: “About $30,000 of the cost of the average new home is attributable to unnecessary regulatory red tape”, and does his failure to address these issues after more than a year not show that this Government is part of the problem of home affordability and not part of the solution?
Hon CLAYTON COSGROVE Link to this
Like all dutiful Ministers on this side, I reply to letters. I say again to the member that these issues are why we are embarked on the first review of the building code since 1991. Under his Government in 1991 that member put in place a permissive performance set of standards for buildings that effectively said, for the benefit of the House: “You must build a house that does not blow over in the wind. How you achieve that, local councils, is up to you. You local councils set the rules, and we will set the performance standards.” That is why we are embarked on a review of the building code, and if the member would like, I am happy to send him a copy of the discussion documents so that he can put forward his view.
Gerry BrownleeI seek leave to table a document that will make an utter nonsense of the claims by Clayton Cosgrove, that document being the speech made by John Key.
Madam SPEAKERHon Dr Nick Smith Link to this
I seek leave of the House to table the speech made by the Hon George Hawkins saying that only Labour could claim credit for the—
Hon Dr Nick Smith Link to this
I seek leave to table the letter of the Registered Master Builders Federation to the Minister on 20 October last year, saying that unnecessary—