Building Bill

The question now is that Part 4, clauses 243 to 316G, including debate on schedule 3, stand part.

This is the part where the heavy-handed regulation reaches out and grabs hold of everybody. The rubber hits the road in this part of the bill. It would have stopped former Prime Minister Norman Kirk from building his house. Under its provisions, Mr Kirk would have had to have a licensed building practitioner come along and tell him whether he knew how to lay the concrete blocks—whether he was up to standard. [Interruption] That is right. I know who would have worn the concrete blocks, and it would not have been the former Prime Minister. I know where he would have liked to stick his engine if that building practitioner had arrived to tell him what was what.

That is the sort of thing that one would never consider could come out of a party that believes in the blue-collar worker. For example, the member down there, Clayton Cosgrove, who is talking to the Minister at the moment, represents a seat that is a traditional Labour seat—the seat of a former Labour Prime Minister, another blue-collar worker. One would never believe that this kind of thing would come into this Parliament under a Labour Government. But here we are today with a bill that means that anybody, for example, that man with his ute and his dog and his radio, will now have to have a proper building practitioner come along and tell him whether the wall on the hay barn that he has built, that is over and above the criteria for what is allowed to be built without having to have a building practitioner, is in fact up to standard.

It is going to be very interesting to see where these building practitioners will come from in Waitomo, when they have to travel out to somewhere like Kinohaku to have a look at a construction that has taken place there. Of course, it will not be required on the school, because Government departments I presume, like they were under the old Act, will be exempt. But under this Act, anybody else who is building anything substantial out in Kinohaku, miles from anywhere, will now have to have a licensed building practitioner come out to certify that the work meets the standard according to some bureaucrat in Wellington—

💬 Clayton Cosgrove: Good.

SHANE ARDERN:—and the member over there, who comes from a former Prime Minister’s seat, nods his head and says it is good. Well, I think Clayton Cosgrove should go back and have a talk to Mike Moore about this because I do not think he would agree with him, nor would anyone else who votes Labour, unless, of course, it is the urban-based lawyers who will benefit from it.

This is the worst possible piece of bureaucratic, politically correct regulation that has ever come to this Parliament in the time that I have been here. It stymies the very essence of being a New Zealander—that is, to be able to go and do some repairs to one’s own house; to be able to buy and then to upgrade an old bungalow somewhere in Wellington as a young couple that has just got married. On their weekends they can do it up and get a bit of capital gain and get some benefit from it, so they can move on as they climb up the ladder to becoming a successful couple. This will say to such people that they cannot do that unless they are prepared to pay through the nose and find some building practitioner who will turn up and inspect their work on the weekend, because that is the only time they have available to spend time on site with that licensed building practitioner. On the weekend they will be paying triple time under the new employment law for him to turn up and do that. I have to say to the members opposite, particularly the Labour members, that I could not believe it when I saw this measure being introduced by a Labour Party.

This whole business came about as a result of a process that has taken place under this Government. In 2002, the Building Industry Authority released its weathertightness report and made 20 recommendations aimed at fixing what it described as a systemic problem, or a systemic failure in the building industry. I go through this bill and I look at how having a licensed building practitioner, as will be required under this part, will address that. I ask the Minister in the chair, John Tamihere, who I notice is suddenly paying attention, to take a call and explain to members how—

This is the key to the whole building and construction industry now—licensed building practitioners. This now brings this part of the building industry into line with everybody else involved in the building industry. People have to be licensed to be a plumber, a drainlayer, or an electrician. Every other person involved in building construction has had a licence, except the person who is putting up the main structure.

💬 Hon Richard Prebble: Who never has.

Who, as the member says, has never had to have a licence.

Let me just take the Committee through some of the processes over the years. In the past there has been no consistency in the building industry, and as we have had troughs and peaks in the economy we have seen that as the peaks arrive we have a great influx of people and there is a demand for additional builders and people involved in the building industry. Those people have not always had the necessary training, because they have entered at a time when there has been a desperate need for additional manpower. As we have reached a trough in the economy, those people have then stepped forward and undercut everybody else. Therefore, the experienced practitioners have fallen by the wayside and we have had an inconsistency that has gradually built up until the 1991 Act and the regulations that resulted from that Act. The issue has been left wide open for the problems that have been the catalyst for this bill—that is, the leaky homes.

Sadly, some of the knowledge of those people meant there were a few problems. The cutting of corners and costs, and the lack of detail in many of the designs and the drawings, meant that councils accepted them on the understanding that the builder knew to include those details. But if the builders had quoted on the plans without including those details, then there was no way that they were going to be out of pocket and include them. So we ended up with a lot of missing detail on those buildings.

Then there was the demise of the apprenticeship schemes.

💬 Clayton Cosgrove: Who did that?

Well, unfortunately it was National. National got rid of the apprenticeship schemes. Although the Labour Government has called its new scheme the Modern Apprenticeships scheme, it is nothing like the old apprenticeship schemes that were in existence 20 years ago. The new apprenticeship scheme is simply a rebranding of the New Zealand Qualifications Authority modular scheme and it does not have the practical side of the old apprenticeship schemes. Therefore, it will not produce the quality of person that we need to come through. The building industry desperately needs quality.

One point I would like to make sure that the chief executive has in mind when the licensed building practitioners are registered is that we do not make it too difficult for them to register. There are a lot of very qualified members of the industry who are reaching the end of their working lifespan for climbing ladders and heavy lifting. They are valuable and vital in the industry for training, and that is required to continue.

I want to touch on a couple of the things that Mr Ardern said on Part 4 and schedule 3. This debate is very interesting because there is such a large contrast. We have those members opposite, and I think this may include Mr Prebble, who say that market forces will fix this problem. We have heard a bit about Norm Kirk tonight and how he built his place in Kaiapoi.

I can also give an example from my patch to members opposite. It is the case of a woman who came to see me about a leaky home. A builder, a number of “subbies”, and other folk had built this place in Kaiapoi and it was a disaster for her. Market forces did not help her. She could not go and chase down the builder, the developer, or the “subbies”, many of whom had gone broke. She could not seek recompense and she did not have the wherewithal to have—[Interruption]. Of course, Mr Prebble would not give a rat’s about her, he would only give a rat’s about people in his position who could afford to chase those people down. My constituent could not do so. She did not have the wherewithal to chase those people down, and, even if she did, she was unlikely to get recompense from them. Mr Prebble may be a great proponent of market forces, but they did not help that person.

Sitting suspended from 6 p.m. to 7.30 p.m.

I shall pick up where I left off before the dinner break. We were speaking to Part 4, and schedule 3. It was raised by a number of members opposite, and I was referring to Mr Prebble, that market forces would somehow fix the great evils in the building industry. Members mentioned the great man Norman Kirk who built his house in the town of Kaiapoi, and I referred to a constituent of mine who had been done over by builders and who asked me what she could do. She had a leaky home, she said that the builders and “subbies” had done a shoddy job, and asked what would be her recourse. The truth was that she had no recourse. If she were Mr Mapp, he being one of the landed gentry with the means to pursue a builder, then maybe she would have some recourse. But this person did not have the means to pursue those responsible. I invite Mr Prebble, being the great constituency member, of course, that he is—

💬 Hon Richard Prebble: I was.

Was, past tense, and the people dealt to him. I say to members opposite to be honest about it, and I ask Mr Prebble what he has nailed recently. I do not think he has nailed a nail into a piece of wood recently. [Interruption] I will not make that comment.

Let us be honest about it and say that market forces will not fix the evils in the building industry. For the life of me I cannot understand why Mr Ardern is opposed to licensed certifiers checking work. In a couple of speeches on this bill some time ago I said that the greatest asset a Kiwi has is his or her house. In many cases Kiwis put their life-savings into a house, and in the case of Mr Mapp and Mr Prebble, they probably put in half a percent of their life-savings. This bill seeks to have a certified licensed practitioner check whether a building is up to grade, so one has a bit of insurance. Mr Connell talked about the Aussie insurance scheme. I tell him that in this country we do not insure for mediocrity. We know that Don Brash, Mr Power, Mr Key, and a few others are insured for mediocrity, but we on this side do not believe that we should insure for mediocrity.

This bill goes back to having registered trades people doing good, standardised work, not the sort of shonky scene the National Government presided over. When members, such as Mr Prebble, try to say that somehow market forces will fix the problem, that is probably true for some who have the means to pursue some of the sharks, but for the average Kiwi market forces will not do the job. My constituent looked around and asked what the State would do, or what someone would do, to protect her so that she could either pursue those people, or more important, ensure that this sort of shonky workmanship does not happen.

I note that the deputy leader of the National Party, in theory, is a trades person. He is a woodwork teacher from my college, St Bedes. I ask tonight what he has nailed recently. Has he recently hammered a nail into a piece of wood? I am sure that although that member has not taken a call he would probably agree with the Government and say that we need standards. To pay some tribute to him, he is a trades person. He has done his time in a few places and got his trade ticket. He would not want shonky individuals in his industry. I invite Mr Brownlee to take a call to express those views. I tell members opposite that this legislation is about securing the homes of average Kiwis—their castle—and as I said, I cannot understand why Mr Ardern would oppose building certifiers.

I rise to speak in support of the National Party. Is that not a surprise! Something the National Party said that I think has some merit—which Shane Ardern suggested before—was that we should be looking at having a home warranty scheme, and I agree—

💬 Brian Connell: That was me.

Congratulations to Mr Connell. I agree that we should, indeed, have a home warranty scheme for homes in New Zealand, and if we moved to have that, it would have considerable advantages. Certainly, it would take the pressure off the need to have joint and several liability. At the end of the day, the reason we have joint and several liability is that we do not want the homeowner to have to carry the can for people who, under a proportionate liability system, would escape from liability because their companies had been wound up, or because they had no resources, or whatever. So a home warranty scheme that enabled the insurance company to pick up the tab for anybody who did not otherwise cough up, would be a very good scheme to have.

The trouble with the Australian scheme is that it is for only 7 years. I would have a lot of concern if we had a home warranty scheme that was for only 7 years. After all, the structural integrity of a home is meant to be for 60 years. Even in the limited environment in New Zealand we have confined liability for a period of 10 years, which is pretty restrictive, given the full life of a building. Even now, we allow claims for a period up to only 10 years. To bring that period down to 7 years seems to me to be quite inadequate. If we were to have a home warranty scheme, I would want to see one that was at least 10 years in length, and a period of even 15 years would be far preferable.

How will we get to that situation? It seems to me that this bill assists us to get there, because we will not be able to have a good home warranty insurance scheme unless we can assure an insurance company that we are building quality buildings. If the insurance company had to pick up the risk for the man with the ute, the dog, and the radio, its premiums would skyrocket and the length of cover would be totally inadequate. Therefore, if we want decent insurance cover for homeowners at an affordable price—which means we will be talking about several thousand dollars—we will have to deliver quality buildings.

We will also have to deliver an effective enforcement regime, which means that territorial authorities have to be doing their job properly, that the central authority is doing its policing functions properly, and that builders who are in default can be taken to task, such as is provided for in this bill by the way of notices to fix.

In my view, then, this legislation is a prerequisite to getting a solid building regime, which in turn can be attractive to an insurance company and enable us to move towards a home warranty scheme. Certainly, with that home warranty scheme, we could then look at removing joint and several liability.

There are justifiable arguments amongst those who are caught by the joint and several liability scheme that we should have proportionate liability. Why should a territorial authority, who may be found to be only 10 percent liable, have to pick up 100 percent of the tab, because nobody else pays? Why should builders, architects, or other people involved in building work be in that situation? I think that a proportionate liability system is fairer, but it can work only if we do not leave the homeowner to pick up the tab at the end of the day. That means there has to be some sort of insurance scheme so that the system has insurance company backing and some compulsory insurance, and that means that a product must be delivered to an insurance company that will, in fact, insure that product.

When the select committee went to Australia and talked to the Australian Building Codes Board at a federal level, and at a state level in New South Wales, about that home warranty scheme, yes, it did look at if there was some merit in it. In some instances the scheme in New South Wales was an example, but the trouble is that it did not have the joint and several liability or the quality of building standards and the enforcement regime that our legislation will provide. So I am not surprised that Australia has very limited cover. We can do better than that.

In terms of the registration of building practitioners, I can tell members that I have talked to some of them and, by and large, they welcome the provisions of this bill. Those who are competent builders know that, effectively, the registration of building practitioners will be to their advantage, because they will not be undercut by shoddy tradespeople who offer a cheap price and then deliver shoddy workmanship. In order to achieve that registration of building practitioners, clearly what we need is training and competency.

I want to draw the Committee’s attention to the clauses in Part 4—this bill does not contain a Part 3 as the Labour member said.

💬 Brian Connell: Which Labour member was it?

The one who spoke earlier, and who had to have a break over dinner to remember what he was actually saying.

Clause 259 is the clause in relation to the register of licensed building practitioners. One has to go through an interesting process actually to get on this register. The whole process here, which the Government would argue, is that if consumer confidence is wanted, then consumers need to know who is actually licensed. They forget about the principle of caveat emptor—buyer beware—and if buildings are being built they go down the road to see who has done the best job, so they actually have first-hand knowledge. That is the best advertising there is—word of mouth. But, no—this bill is becoming so restrictive that there is going to be a register of who is capable of doing the work.

If members look at clause 262(1) they will see what information is to be on the register. I draw the attention of members to that clause: “The register must contain all of the following information, to the extent that the information is relevant, for each licensed building practitioner whose name is entered in the register: (a) full name: (b) any aliases:”—I like that one because I am sure that Labour members will be looking for aliases to be registered on the register, and—“(c) date of birth:”. That is really significant. People have to enter their date of birth to become registered. What an absolute nonsense that is!

If people want a building practitioner they will go to somebody who has experience in the field. They can look through the Yellow Pages and find master builders or certified builders, or talk to people who have had their houses built. They can do that; they do not have to go to a register to get the information.

Clause 262 lists half a page of things that have to be contained in the register. Paragraphs (d) to (h) state that people have to include their addresses, phone numbers, and email addresses. Everything has to be identified.

💬 Brian Connell: What is the point of those questions?

That is a good question. I will tell the Committee what will happen. Builders who are out there will not go through this nonsense; they will bypass it.

What a great article I have here from the National Business Review: “Government puts another nail into home improvements.” Members should look at the photo there. The article appeared in the National Business Review on 16 July and what a great article it was about how stupid this legislation is. The points I made in the article are exactly what will happen, because builders will bypass these stupid provisions.

Builders will go out and do the building work. They will not be shackled by this sort of nonsense, and the old way will go on. We will have those do-it-yourself people—Bob the Builders—who will do their own building. They will not even go for consents. That is what will happen, because this legislation has become so prescriptive, in having to register and in having all of those details, that people will say: “To hell with this. We know what we’re doing.”, or “I have been in the building industry for the last 20 years. I know how to build a building.” People will ask: “Why should I have to go through this rigmarole if I want to build my own extensions or additions to my own dwelling, farm building, or whatever it is going to be.”

We identified a real issue in earlier parts—that is, the compliance costs that will be associated with this legislation. The increased compliance costs that will be associated with the sort of nonsense we see in this part have been mentioned plenty of times.

I also want to draw the Committee’s attention to another important area where this Government has talked about how it wants to have consumer protection. In that respect, Part 4 ties back to clause 175.

I want to respond to a few points made by the honourable member opposite, who said that I was just relying on the free market and that this bill would help people. Also, Mr Catchpole remarked that because all the rest of the world has licensed building, so should we. First, in the case the member cited, he pointed out that builders had gone broke or had gone out of business. If they had gone broke, this bill would not have solved the problem—unless it is the Government’s intention that ratepayers will be the insurers of all new buildings. If that is what is intended, then that will be very, very expensive.

On the question of licence, New Zealand has been a country that has never licensed builders. I ask members to look around this nation and see how we have managed to build it without licensing. Now, suddenly, we are told we have to have it. I can give an example. I said I was in the building industry. When I was out of Parliament, or had been retired by the voters—

💬 Clayton Cosgrove: Rejected.

—or rejected; I like to think I was given a holiday. However, there I was in Vietnam and I noticed that the New Zealand Government intended to build an embassy there. It was going to get an Australian company to do it, and I thought: “That’s no good; we must have a New Zealand company build it.” I persuaded a New Zealand company to put in for the contract, and it won it. I rang the Ministry of Foreign Affairs and Trade and said that the contract was needed immediately. I was told that it was OK; that because the building was an embassy it would be under New Zealand law. I told the officials that they did not understand, because in Vietnam there are so many regulations—everything is licensed. The biggest problem would not be building the embassy; it would be the time it took to get the regulations through. However, I put in the application, and the Government—the Vietnamese Government—literally wanted to know my grandparents’ names. The application documents were almost as big as this bill. I was visited the next day and told there had been a terrible mistake. I asked the officials what it was, and they asked me where my company’s licence was. I told them that in New Zealand we do not have to be licensed. They said that that could not be so; that everybody is licensed. I said that we have a licence in Hong Kong and in Singapore, but we do not have one in New Zealand. In the end I told them we were members of the Master Builders Association, and I got the permit.

💬 Darren Hughes: Was that a fib?

No, it was absolutely true. In fact, I rang the Master Builders Association, saying that it had no idea how much it cost to make a call from Vietnam, and asked it to send me a copy of our licence immediately. It was sent by DHL Worldwide Express. Vietnam does not accept faxes. I would never dream of fibbing. I actually knew what the next question would be: “Where is the Master Builders Association licence?”. How would the member answer that question? I had a day to think about it, because I knew I would be asked. I said that the Master Builders Association was licensed, and I produced the certificate of incorporation, as well.

All I am saying is that that did not make our embassy building any better. Neither did it improve the building standards in Vietnam. People who think that licensing and bureaucracy result in better building are out to lunch. We have managed to build this whole nation by doing it the Kiwi way, and we now have a Government whose Ministers appear to be saying that they think there is too much political correctness but are now trying to tell the nation that 358 pages of extra bureaucracy will result in better lawmaking. I say to members opposite that that is nonsense. This is rubbish legislation. It will take us down the bureaucratic route—the route of the loony left that thinks that having more and more rules is the way to govern New Zealand. The truth is that it should always be a matter of buyer beware. People contracting with a builder have a responsibility to find out whether that person is a registered builder. At the moment—if the member thinks that registration is important—people can go to a master builder; but if a Kiwi decides that he or she wants to take a risk, why should we remove risk taking from our community?

💬 Hon Damien O'Connor: Who’s a master builder?

A member of the Master Builders Association. Has the Minister never heard of that association?

💬 Hon Damien O'Connor: Anyone can join.

No, that is not true, actually. Where is the Minister’s master builder’s certificate? He cannot produce it. I can produce mine. In fact, is there anyone in the Labour Government who is a member of the Master Builders Association? There is not one.

I would like to follow on from my earlier speech and pick up on the classes of licence for building practitioners. This is where a builder has to reach a certain standard before being able to take on a certain level of construction. Under the regulations, there is a series of levels. At the basic level are the licensed building practitioners who are not fully qualified. They can enter at that lower level, provided they meet the criteria. They are peer reviewed, and they are allowed to tackle only certain styles or types of houses. If they want to move up to the next level, then they have to prove their ability to take on multi-story buildings. They can prove that through the peer review system and the registration board. There is a mechanism whereby if they fail to live up to the standard expected at the different levels, they are disciplined by a disciplinary board, which can deregister them to a lower level. Ultimately, if they are completely beyond recovery, they have to prove their capability of taking on work.

I would just like to pick up on the do-it-yourself builder. Everybody has been talking about a former Prime Minister being able to build his own house. There are a lot of stories about that. Even today he would be able to build his own house, but he would require a licensed building practitioner to sign off the outer envelope of the building—

💬 Lindsay Tisch: He has to be supervised.

Yes, he has to be supervised, and anything to do with structural walls has to be signed off by a licensed building practitioner. Anybody else can participate in building a house, so the former Prime Minister could, and would be able to—[Interruption] No, probably this one cannot—although we cannot say that, because, as it was pointed out to me in the dinner break: “Hey, what about the red-blooded sheilas who can wield a hammer?”. There are plenty of these women, and there are very, very good ones. There was an excellent woman who helped on Women Build 2000 for the Habitat For Humanity project. She did a very good job, and is highly recognised in the industry.

So this measure is a clear indication that the licensed building practitioner regime is welcomed by the industry. It will sort out a lot of the inconsistencies. The only thing—and I think Richard Prebble touched on this—is that we in New Zealand First feel there is one feature of the licensed building practitioner regime that should have been taken further. That is in terms of dealing with phoenix companies, where a builder or developer forms a company purely for the development of a particular project, then winds it up without any assets. The assets are held in another company, which are then leased to the building company. Basically, there are no assets for the client to then claim on. New Zealand First believes that this bill should have gone that extra step with the licensing regime and taken that aspect further. There is still potential for it to happen, although the Minister and the chair of the Government Administration Committee assured us that the issue will be picked up in another Act within the commerce area. We look forward to that. Believe me, we will be watching for it very, very closely. In the meantime the licensed building practitioner measure in this bill is very welcome in the industry. It is important so that the industry can progress and can regain the public’s confidence.

I am very pleased with the enthusiasm with which this call has been greeted by members of the Government, because they are now going to learn something about the deficiencies of this regime. We have been hearing from the member for Waimakariri, who seems to be extraordinarily proud that he represents hard-working Kiwis who struggle to own a home. Well, that is actually a good aspiration. We are all proud to do that. The real test, however, is: does the legislation help them? The answer here is no.

One point I have to remind Mr Cosgrove of is this. Did the Government make a serious effort until pushed, and pushed hard, by the Opposition to deal with the leaky homes crisis? The answer is no, and that member knows it. In fact, the whole process of the adjudication tribunal had to be established as a result of drafting work that I and my colleagues had done. Members should remember what the initial response of Government was. It said that a special dispute resolution procedure was not necessary. It was only when it was faced with continual and relentless pressure from this side of the House, and by distressed homeowners up and down the country, that it felt compelled to act. So let us not hear anything from the Government about claiming credit. It acted only under pressure.

The fundamental fault of the leaky homes crisis was not the lack of registration. That was not the problem. The problem was essentially building techniques, primarily, and poor supervision by the Building Industry Authority in relation to the development of the codes. If those codes had been well designed, there would not have been a problem. Let us, after all, look at reality. This country, for 100 years—well, more, in fact—has worked perfectly well without requiring a bureaucratically cumbersome approach to the registration of all builders. What we have had instead is an inspection regime. If that is conducted well and there are clear and transparent building codes, there is no problem. There is certainly an issue about skills, and that can be rectified. The Government’s solution of requiring registration of all building practitioners is flawed.

One of the issues is this. The speaker for United Future claimed that it will be unnecessary to inspect most work because one has to have, first, work governed by a building consent, and, second, structural integrity. Of course, the two issues are kind of synonymous. That is the reality. All work, subject to a building consent, will also have structural integrity issues with it. So in reality every piece of work now done pursuant to a building consent is going to require close supervision—not just inspection, but close supervision by a registered building practitioner. Now, if the regime had been a stronger inspection regime, that would have been a different story. I imagine that on this side of the Committee we would have supported that. We wanted a strengthened Building Industry Authority. We wanted the local authorities to be doing their work more rigorously. We wanted better building codes and better approved systems of construction. If those things had been done, there would be no problem and we would not be requiring this excessively bureaucratic approach that the Government has now imposed upon the entire industry.

I heard Mr Prebble say that many parts of the industry will be happy. But that is in part because it excludes new entrants. It is anti-competitive. One of the things we have always treasured in this country is the ability of people to get ahead—get into their own businesses, work under inspection regimes, and basically make progress. This bill will act against that. I have seen Minister after Minister in the chair fail to defend small businesses and people getting ahead—the very people that the Government purports to represent. When the rubber hits the road it completely fails those people.

I listened to Clayton Cosgrove’s contribution earlier, and I have to say that there are occasions when 5 minutes is a long time for a member to be on his feet, and that was one of them. It was clear that the member did not have a clue what he was talking about. He obviously has not been a member of the Government Administration Committee. [Interruption] No, it reminded me of Peter Sellers when I heard it—it was quite clever, but the content simply was not there.

I turn my attention to what the New Zealand First member said. He told us that the 386 clauses in this bill are not enough and that there would be more if New Zealand First had its way.

I also refer to what Mr Smith had to say. When I took an earlier call, I talked about the builders warranty insurance. He picked up on that concept, and I congratulate him on having the initiative to do so and to start looking at it. His concern was that it was for only 7 years. Well, the whole point of having the builders warranty insurance is to provide certainty to people who buy houses on spec that those houses were built to a standard that will stand the test of time. It is to ensure that quality building practices are in place and that shonky builders do not have a market in which to ply their wares. That is why I say that the builders warranty insurance would be a very suitable alternative. Certainly, it would be an alternative to the 358 pages of bureaucratic nonsense that we have in front of us.

Some of the powers that the chief executive has under Part 4 are almost more than those of the Building Industry Authority. One would have to say that the chief executive probably replaces the authority. I know that Dr Mapp was a critic of the Building Industry Authority, but when he was criticising and bringing down that shonky regime, I do not think he expected that this type of legislation would replace it.

The other thing that concerns me about this legislation is simply that although it is really a response to leaky homes, nowhere in it has that issue been addressed. Nowhere in the 358 pages I have gone through, clause by clause, page by page, have I found any mention of that issue at all. Rather than concentrating on shonky design, the legislation puts in place an inspection regime. The leaky homes issue was not about treated timber, or lack thereof, it was about poor building design. This bill is a very poor way of addressing that issue—a very poor way, indeed.

This bill will take from the New Zealand landscape that icon of the do-it-yourself builder—the New Zealand handyman. I would have thought that people like the New Zealand First member who spoke previously would stand up and fight for those types of people. But, no, he told us that he was comfortable with what is being suggested, and that somewhere between $6,000 and $7,000—it might be a small cost to him; I would love to see his bank balance—is just a small cost that New Zealanders will be prepared to pay, with absolutely no guarantee that they will get a better building as a consequence. All it is, is a compliance cost, and when he talks with his boss this evening, which I hope he does, I hope he wears a very thick coat, because he will get tanned something awful. Essentially, he stood up in the Chamber this evening and argued for a compliance regime that will stop the average Kiwi from being able to afford his or her own home. Even Clayton Cosgrove is nodding in affirmation. He knows I am right. He knows this will put people in Waimakariri who want a home 10 years further behind, and that their dream will just be that—a dream.

Poor old Norman Kirk must be turning in his grave. He was a guy who had that Kiwi spirit. He was prepared to get out and build a home. But under this regime, no, he would not be able to do that—and the irony is it is a Labour Government that is doing it.

First of all, I want to respond to Mr Connell. Yes, he did have a good idea before, but I am afraid he just lost it in that diatribe. He suggested that this bill had nothing to do with leaky homes, and that is simply an unbelievable statement. His suggestion that this bill is only about inspection is also pretty ludicrous. If Mr Connell reads Part 4, “Regulation of building practitioners”, he will see that the building practitioners who are to be registered are not just builders, they are also designers. Right from the very beginning, the design of buildings will be regulated. Designers will also have to be licensed building practitioners. He will also see that products need to have certification.

One of the key problems, and, to my mind, probably the primary problem in terms of the weathertightness of homes, was the question of the interface between monolithic cladding systems and frameworks, such as windows and doors. It was the interface between those products that was creating the problem. I took steps in the Government Administration Committee, and was adamant—and I am now satisfied—that the bill provides that when the product certification is done, it is not to be just a certification of products, saying: “This monolithic system is OK.”, but is also to be a look at the way the system interfaces with other systems, such as windows and doors, and with systems that are not monolithic cladding. That is where our attention needs to be. From my own personal experience as a lawyer, I know of situations where builders were not using flashings. Instead, they were putting silicon in the joints.

As a lawyer I have acted for builders and for people buying houses. I have also worked with clerks of works, and I picked up a lot of information about that. The registration of building practitioners is a fundamental part of the measure, and it covers the whole spectrum of things.

However, I want to make some comments by way of caution. It is my concern in terms of United Future’s position that when it comes to the regulations, which are still open slather here, the Government needs to ensure certain things. Part of my concern about this bill is that a lot is left to regulations and to the chief executive, and, when it comes to licensing of building practitioners and the qualifications for that, we have to keep some key things in mind.

The first is that there is currently a shortage of tradespeople. People are finding it hard to get good quality tradespeople; in fact, they are finding it hard to get any sort of tradespeople. The bill does provide—and National criticises this, although I cannot understand why—that this part of the regime will come into force only on 30 November 2009. That then gives us 5 years in which to bring about a licensing regime and to try to facilitate as many people as possible into the industry of the standard that is required in order to get registration as building practitioners. It is important that that happens, but it is also important that people who are senior building practitioners and who may not have the qualifications, but who, nevertheless, produce good quality work, have been in the trade for years, and are very competent, are not left out of this. If the Government came up with something saying that in order to be a licensed building practitioner, one has to have passed a certain tertiary course, it would lock out some people whom the industry cannot afford to lose.

So when the Government looks at that, it is important for it to consider whether there may need to be some grandparenting provisions for people who have done some old apprenticeship schemes or who can otherwise show their competency in terms of their building skills. That is absolutely critical. It is also critical that the Government moves with pace in terms of increasing apprenticeships and the number of people going into the trades.

I know from talking with educational authorities, and also with industry players, that the whole area of trades has been lost in our schooling system. I went to look at the business of an award-winning engineer, who told me that he had approached a college and asked to talk to the metalwork teacher. The woman he spoke to asked him what a metalwork teacher was. She had no idea. In fact, that college had no classes in that area. It is therefore very hard to get good students coming out of college who know anything about engineering, and what the tertiary institutions are producing is inadequate. So a lot of effort has to go into that.

For this bill to be effective, and if we are to meet the time line of 30 November 2009, it is absolutely imperative that we move rapidly to increase our stock of building practitioners and tradespeople who have the competency to meet the requirements under this bill. I would really encourage that.

I move, That the question be now put.

I have some new material, Madam Chairperson, that we have not covered. I say in response to Murray Smith, who has just resumed his seat, that that is what happens when we apply an academic answer to a practical problem. That is what happens; that is the result. What we get is 358 pages of legislation. It is a classic example of what happens when people apply an academic response to a practical problem. Let me just say to the Hon Richard Prebble, who talked about trying to build an embassy in Vietnam, that I went to Vietnam on a Speaker’s tour about 3 or 4 years ago.

💬 Hon Richard Prebble: Is it still there?

Well, it is a great building and it is still standing. Do members know what I found out, through an interpreter, when I was there? I found out that the Prime Minister had been there about 3 or 4 months before us. Now I know where the genesis for this bill came from. I wondered what she was doing in Vietnam. People said she had been tramping. She had certainly been tramping around the Government departments up there, having a look at how to fix up the leaky housing problem in New Zealand. I can tell members that there are a few leaky houses in Vietnam. There certainly were some fairly dodgy-looking construction sites when I was there.

But let us come back to the problem we face in New Zealand as a result of the leaky house inquiry. What the DIY’ers had to say when they came to the Government Administration Committee was that the bill was an overreaction to the leaky house problem. That is the first point they made. They acknowledged that there were some faults in the 1991 Act—and we accepted that that was so—and they said that most industry players had little appreciation or understanding of the existing Act, which is over 100 pages long. In other words, they were implying that the existing Act is too bureaucratic, and that no practical person was ever going to sit down and study 100 pages of bureaucratic nonsense. They said people had no understanding of the current Act after 12 years of it being in existence, and without significant expenditure and resourcing it was unlikely the industry would have any greater appreciation of the proposed legislation, which was to be at least double the size of the current Act. Well, the DIY’ers were wrong, of course, about that. They underestimated what the Prime Minister would bring back from her trip to Vietnam, which was that doubling the size of the legislation was not enough. So we now have 358 pages—over three times the size of the original Act—of regulations and compliance costs.

The DIY’ers said at the select committee that the compliance costs of this legislation may drive some businesses to cease trading. Nobody in the Committee tonight—or at any other time—has been able to come up with any evidence to say that that is not so. In fact, most people have acknowledged that there will be additional costs. The industry itself, through its submission on behalf of the do-it-yourselfers, said that the cost would drive some people out of business. We know that there is a shortage of competent builders in this country at the moment, and we can argue about why that may be so. We can talk about the training provided in the past. We can talk about careers advisors going around schools and telling everybody to be a rocket scientist, instead of a builder. But the bottom line is that we do have a shortage of builders in this country. So perhaps a Government member could take a call on that issue.

I know that the Minister in the chair, the Hon John Tamihere, has a lot of knowledge on this matter. Perhaps he could take a call and tell us how dumping the new regime that is in Part 4, and all the extra compliance costs, on the industry will help to address the shortage of builders in this country. How will it help to train young people? How will it allow the older, experienced builders who are semi-retired to carry on operating, while training a young apprentice at their side? We all know in New Zealand that the best way to learn is by doing. There are some people who will never be rocket scientists. Despite what the Prime Minister might have found out when she was in Vietnam, some people never will be rocket scientists—that is the reality. Some of her own caucus never will. That is for sure! But they may become builders; they may look for a career in the building industry once they leave Parliament at the next election. But they will not be able to get in, because the Government they are members of and this Minister have regulated in such a way that they will never get a chance to get across the hurdle.

One of the underlying causes of leaky buildings is poor design. It was interesting to hear Mr Smith talk about that. But where in this bill does it address those who are involved in architecture and draw up plans, which builders then put into practice, that result in poor design?

I move, That the question be now put.

I would like to follow on from a couple of points I was making earlier, to do with the licensing of building practitioners and the register. One of the issues I mentioned was to do with phoenix companies. A very good point was made in the Independent on 21 July. One of its articles stated that the bill fails to curb shonky property developers. It pointed out that this bill does not deal with that issue, and New Zealand First agrees with that. John Scarry also indicated that one way to solve the problem—and it is quite a simple one, to do with the licensing of building practitioners—is to license not just individuals and not just individual developers but the companies. If we license the companies we have the key to stopping the phoenix companies from appearing, because if they do not come up to the standards they will lose their licence, and they cannot just form a new company and expect it to be licensed overnight. They would have to prove to the industry that they are a worthwhile company and a worthwhile business. So that is one simple means of solving the problem of the phoenix companies. But this bill, sadly, did not take that extra step and license the companies, including development companies and building companies. That would have solved a lot of the problems.

Others have talked about the fly-by-nighters. This bill stops the fly-by-nighters—

💬 Brian Connell: How?

It is simple: someone cannot just get a licence to build one particular structure. So someone cannot just walk in and say he or she wants to develop a project.

💬 Brian Connell: So the home builder is gone.

No, the home builder is not gone; the home builder is quite able to continue. It is just the fly-by-nighters, who come into the industry to build a structure and then disappear, who will be affected. They are like the phoenix companies, but if they are licensed, then they cannot just disappear. If they want to continue to practise, they have to keep up their standards. Otherwise, they will lose their licences.

💬 Brian Connell: How are you going to police it?

Well, there is a simple way to police it. If we have the register—which some members were complaining about—it will show that a member is able to take on the structures that he or she is licensed to build.

The other part of the issue is the extra cost, which other members have been complaining about. They have been saying it is just an extra compliance cost, but it is not. It is an insurance policy to make sure that the public gets a builder who is capable of doing the job, and doing it properly—so that people are not stuck with a house that is substandard and is likely to end up as a leaky home. The leaky homes problem came about because people were taking short cuts, purely because they were trying to trim costs for developers. The developers screwed down the prices and the costs, and therefore this measure is an insurance policy.

Other members have mentioned the shortage of builders, and the need to keep semi-retired builders—the ones who are reaching the end of their working lives—involved. Shane Ardern mentioned those semi-retired builders having a young person beside them as an apprentice. That does not happen these days, and it will not happen as long as the Government has an apprenticeship scheme that is without that practical side, and that does not encourage older workers and businesses to take on apprentices. We have to have the support mechanisms and incentives in order for businesses to take on apprentices. Otherwise, they will not take them on, we will continue to have a reduction in the workforce, and, as the older builders get to the end of their working lives, we will not have the younger people coming through to replace them.

I move, That the question be now put.

The next piece that I will dwell on regarding the licensed building practitioners is the process of what a licensed building practitioner has to do. The example I will give relates to a builder but, as we know from the bill, any professional in the industry can become a licensed building practitioner. In fact, when we move to debate the Architects Bill sometime in the future, we will see it states that people involved in building who are registered, licensed, or otherwise recognised under other legislation will be treated as licensed building practitioners. So the licensing will cover a range of other occupations apart from builders. In order to show how stupid the process is, I will give the following example.

This is the process: I get a builder to build a house for me. The builder, after getting consent from a territorial local authority, builds the house. When it is finished, the licensed building practitioner certifies it is built in line with the building code, and the local authority issues a code of compliance. But let us suppose that in the first winter after it has been built, the house leaks. I call up the local authority and say that I have a problem, as my house is leaking. But the council says that it will defend itself, and that the issue lies with the builder. It is the builder who built the house, but it is the council that issued the code of compliance. If the builder in this example does not have insurance, who carries the can? It is the local authority that carries the can. That comes back to the point that I made earlier on: the onus is on the ratepayers, because it is the local authority that will carry the liability.

So how does the process of registration that a licensed building practitioner must go through—providing a name, an alias, and a date of birth—actually help the building industry? It does not. There is no consumer protection whatsoever with regard to these licensed building practitioners. The best means of getting a competent tradesperson is through word of mouth. It is still best to go and look at a building and ask the owner who built it, what it is like, and whether it has stood the test of time. I mentioned before the principle of caveat emptor—buyer beware. That is the sort of approach that we should be adopting, instead of what is involved here—very prescriptive legislation that is an overkill and, at the end of the day, does not give the consumer the protection that the Government expects it will give.

I will draw that point back to Part 1A. Under that part licensed building practitioners have to certify some restricted building work, but there is a very important out clause where they can skip any liability at all. Clause 175(4) states that when a licensed building practitioner gives a certificate under subsection (1)—and the bill identifies what subsection (1) states—that does not in itself “create any liability in relation to any matter to which the certificate relates”. That is absolute nonsense. The owner of a building is lulled into a false sense of security, and the certificate creates absolutely no obligation in relation to the value of the building. Licensed building practitioners will be able to opt out, and that will be a major concern. It will not help the industry one little bit, and it does not meet the requirements that the Government has been pushing about consumer protection.

If we look at the home builder—and these are points that have come up earlier—we see the home builder has to have someone to supervise his or her work. That is a new requirement. They do not have to be inspected; they have to be supervised. What does the word “supervision” mean? There have been plenty of examples given. In my second reading speech I spoke about the process one has to go through to supervise work. The extra hours associated with supervising the construction of a small dwelling of 120 square metres—a very small home—on a flat section will cost about $6,500—$10,000 in compliance costs.

I move, That the question be now put.