Building Bill

I rise to talk on the title of the Building Bill, because I believe it is totally wrong and totally misleading. In fact, a much more suitable title for this bill would be what the Rt Hon Helen Clark found when she was tramping down the Ho Chi Minh Trail. That would much better describe the over-the-top regulation that is in this bill. This revelation came about earlier tonight when we found out that the Prime Minister herself had been to Vietnam to have a look at what they do there with regard to building regulation and qualification. That is where it came from, because we cannot find anybody in the Labour Party who will admit to having been the genesis of this brilliant piece of bureaucratic nonsense. So that is the only conclusion I can come to.

Let us just go back a bit and find out, as we debate the title, how this whole process started. It started as the result of the National Opposition putting a huge amount of pressure on the Government to go through an inquiry as to the problem that was starting to develop, and resulting in leaky buildings. The problem was starting to develop in a very small percentage of buildings, which were mostly in Auckland.

What did that inquiry find? It found that there was a systemic failure within the building industry. It was not due to one particular thing, but the inquiry pointed to a use of monolithic cladding, to a failure in terms of training and qualified builders, and to a major problem in how supervision was taking place. At the end of the day—

💬 Simon Power: And the problem with design.

Yes—and to a problem with design; architects were particularly mentioned. But when we return to the bill, we find that under the title there is absolutely no solution to those problems.

I ask members opposite: when Bob the Builder is driving down the road in his ute with the dog and the radio, and with this piece of doorstop sitting on the seat underneath the dog, how will that stop the problem of leaky homes? I look forward to a member on the other side taking a call to explain that to the Committee tonight, because I am sure that anybody who is listening will be very interested in how, under the title, that will happen.

I have here before me a list of things that were suggested as recommendations by the do-it-yourself people out there in the building industry. They said that the Government should consider overhauling the current warrant-of-fitness regime. They also said that the Building Industry Authority should be empowered as a self-governing body to make sure that those who slipped through the cracks—and remember they comprise only 1 percent or less of those who built homes in New Zealand during this period—should be brought into line so that people had some redress.

They also said that we should remove all references that are misleading or difficult to follow. What do they mean by that? They mean terms or references such as “may”—which should be replaced with “shall”—and “it is unclear in the terms of the code of compliance what it means to be responsible.” They said that some of that stuff should be cleared up, and that it should be written in plain English, not in the kind of English we get in Parliament that needs half a dozen lawyers.

The lawyers have debated this bill tonight and not one of them can agree on what each clause stands for or states. I have noticed some wide-ranging views in the Committee amongst the lawyers. It is quite interesting for somebody who does not have a law degree to listen to the debate that has come from the lawyers.

💬 Simon Power: Depends on who’s paying the bill!

Of course—it depends on who is paying the piper. That is probably how it works; it depends on what side of the fence one happens to be sitting on at the time. But it seems to me, as somebody who does not have a law degree, that there is a reasonable amount of ambiguity amongst the lawyers here about what various clauses in this bill stand for.

Further, the bill will take 5 years to come into force. I know there have been other Acts of Parliament that have been slow finding their way through, but surely the title of the bill should be the “Very Slow-Release Solution Bill” or the “Will take 5 years to be enacted and still not fix the problem Bill”.

This is like the house that Jack built. That is what we have been going through in this Committee stage—the bill is an absolute nonsense. It will add considerable costs where there need not be costs. The genesis of this bill was the leaky homes issue. It actually goes back further than that. There was an industry group that got together in 1998 and said the current Building Act 1991 needed to have some changes made to it. Industry players got together and started to work through improvements that needed to be made. A change of Government a year later in 1999 meant that all the good work that was done at that time was shut down. It was not even considered. The point I make here is that at that time it was said that the process to review the 1991 Act would have taken at least 4 years. As a consequence of the weathertightness problem and the leaky homes we have legislation on which the industry has not been widely consulted.

💬 Dianne Yates: Absolute rubbish.

That member chairs the select committee, and we would not have had that sort of nonsense if the industry players had been involved. The only time they had any input into this was when they made submissions to the committee.

If a bill was drafted, one would have thought that the whole industry—everyone—would have been involved, and of course the players were not involved in that. It is an overkill. It will increase the regulatory burden that all players in the industry will be faced with, and at the end of the day it will not do what the bill is supposed to do, and that is to give consumer protection.

We know there are issues with the present Act. We have acknowledged that. We know there are issues with leaky homes. But in no way does this bill prevent the problem, and that is why the bill is not titled the right way. The “Building Bill” should actually be “The House That Jack Built Bill”. If we were to look at the whole question of the benefits and the costs associated with this, there was a cost-benefit analysis report that said that for a 150 square metre house the costs could increase about 2.9 percent. I think that is on the light side. In fact, the figures we have used in previous debates, and also in National’s minority review, suggest that the costs are going to increase by about 12 to 15 percent.

The economic impact of this bill will lead to significant increases in labour costs. There is already a short supply in some trades, especially those skilled trades such as bricklayers. They are actually naming their price at the moment. It is a very competitive field to be in, and they are doing extremely well. If we look at comparative prices between homes in Australia and in New Zealand, to build a home in Auckland it is $2,300 per square metre; in Adelaide it is $1,170 per square metre. To build a smaller home, a 120 square metre home, will take 4 months. The actual costs are not $6,500 that we have talked about before, because I did a rerun of the figures. It will take 85 hours of supervision time, and that is what the bill says. The bill does not say “inspect” it says “supervise”. That is what it now says. One has to supervise everything, not inspect, so it will be 5 hours per week over a 4-month period—85 hours in total, which will be closer to about $10,000 just to meet the new requirements of the bill.

We have the Minister for Small Business, John Tamihere, who is sitting there, and he has not taken any notice of what this is going to do. I ask the Minister whether this is going to enhance protection, give customer safety, or give a sense of security.

💬 Hon John Tamihere: Yes.

The Minister says that it is. Well, we will find out very quickly will we not, when people are having to pay these huge costs. There will be absolutely no guarantee that there will be anything in it for them. We will see a lot of people building new homes for the first time being disadvantaged by this. What will that lead to? It will lead, in my view, to illegal construction. People will go through the back-door. They will say: “I’m not going to go through this process. I’m actually going to go and do those renovations to my own home. I’m not going to get a consent. I’m not going to have a licensed building practitioner come around. I’m going to do it myself.”

I move, That the question be now put.

As we all know, this bill was the result of an inquiry into the weathertightness of homes and the leaky homes problem that we had. It was recommended that there be some changes, and this bill is the result. I would just like to pick up on a point made by one of the previous National speakers who claimed that it was National that brought about the inquiry into the weathertightness of homes. I find that laughable, because New Zealand First could also make exactly those same claims. We did exactly the same amount of work on that problem. However, we are not going to make the same claim as National. We could do, but the real claim to the weathertight homes inquiry into the leaky homes was, in actual fact, the direct actions, and the direct result, of Prendos and the O’Sullivan brothers. They had a huge hand in that. For years they lobbied the Building Industry Authority, the industry, and also the Minister. It was not John Tamihere, the Minister who is in the chair now, it was the Minister of Internal Affairs who refused to acknowledge—

💬 Brian Connell: Who was that?

It was George Hawkins. He refused to acknowledge that there was a growing problem. The other thing was that he was being very poorly advised by the head of the Building Industry Authority, Dr Porteous. He failed to acknowledge or take any action. He had all the evidence put in front of him, time and time again. Even when the information from the Hunn report was put in front of the head of the Building Industry Authority, he failed to do anything. He refused to acknowledge that there was anything happening. Even the Barrett report from Canada was put in front of him to show what was happening. He failed to acknowledge and follow up on it. It was Prendos and the O’Sullivan brothers who eventually went to the media and published the problem.

Before any action was done, one can go back 2 years to find those media releases and media claims that were being published, but everybody was ignoring them. That was the real catalyst, and the real ones who were behind bringing the weathertight homes inquiry into the leaky homes problem. It had been happening for years and nobody else would acknowledge it. But Prendos did not give up, and I give credit for that. That company did a lot of work in eventually forcing the inquiry, and finally we end up with a rewrite of the Building Bill, which is what we have here today. This will go a long way to avoiding a similar situation, provided everybody acknowledges that the Building Bill is important, and that they also had a part to play in the weathertight homes problems.

I move, That the question be now put.

I rise to speak to the title of the bill, which I think is misnamed; this is not a Building Bill but it will be a bureaucratic nightmare of a bill. It is worth drawing to the attention of the Committee that Government members have not got up to defend the bill and have not set out what the bill is supposed to do. The bill was originally as a result of the so-called leaky buildings weathertightness syndrome, but I notice that the Minister now says that it is on behalf of battlers—the idea being that battlers are somehow helped by bureaucrats who will put up the cost of housing. That could account for the fact that under this Government the affordability of housing for people in the Auckland area—the members’ own constituencies—has deteriorated considerably. The Minister has not actually denied that the bill will worsen that problem. Some figures have been given as to what it will be. I tend to be on the pessimistic side, because I think bureaucracy is like an acorn: one ends up not only with an oak tree but eventually a forest, although one must have been cut down in order to print the bill.

I do ask the Government where it found the figures for the fines that are provided for in the bill. There is a fine of $200,000 just for not having a certificate, a piece of paper. It does not say that the building is a bad building. As Mr Shane Ardern pointed out, this is an example of taking a problem and then saying that there has to be a law. Well, what we actually know about the leaky building syndrome is that it was caused by two different things: firstly, fundamentally the introduction of new materials, and people not knowing how to use them; and, secondly, regulations.

When we insisted, thanks to our Green friends here, on buildings being energy efficient, they were sealed. People have been referring to old buildings being weatherproof. That is nonsense. The truth is that most buildings in New Zealand have leaked, but the water has flowed right the way through and out the other side. It is thanks to the Green Party that they had to be energy efficient, so they were sealed. The water came in, then had nowhere to go, and it rotted the buildings. It is part of the problems that the Greens have given us. But this is the second part—and I notice they are consistent and are voting for it—

💬 Shane Ardern: The rot set in the moment they came into Parliament.

No, there was a bit of rot here before that; they have just made it worse—sort of sped it up. But I say to the Committee that this is bad lawmaking. It will not help battlers. It will not help the construction industry. Well, actually it will help those who are in it. Those who, like me, are established, will do well out of this bill, because it will cut competition. It will make it harder for people to start building businesses and become bigger, because this compliance cost, as dozens of studies have shown, will fall disproportionately on companies according to their size. For large companies, compliance costs are small in relation to their overall business. They have the ability to employ people full time, working just to meet the council’s requirements. But for small builders—and most residential buildings in New Zealand are built by small builders—this will be a very, very heavy compliance.

Of course, if one runs into a council such as the Waitakere City Council—with my friend who wants to prosecute me over my swimming pool—one will get hit with a $200,000 fine, and there are very, very few builders who could survive a fine of that magnitude. A Government that passes such a police-State measure, and then says that it is in the interests of the country, deserves to be thrown out. So does the United Future party. What is the point of having an MMP Parliament if parties like United Future and New Zealand First compete to see whether they can say “Yes” before the Government can? That is all we have seen tonight. We have not seen any proper scrutiny from those parties. They are a complete waste of space.

This bill should be called the “Why Would You Build It Bill”. I do not think many people will want to build anything at all, because they will not be able to afford to. This bill establishes a chief executive body, a building accreditation body, a product certification accreditation body, a building advisory panel, a building practitioners board, a building practitioner registrar, and independent certifiers. Then, at the end of it all, comes the territorial local authority. That is all part of the product of this bill.

One of the matters I wanted to raise during the earlier debate, but I did not get a chance to, was the consultation requirements for making regulations. Again, this comes back to why one would do it. The regulations are made through Order in Council, and there is a bit of a reference to consulting. Clause 354(3)(a) states that the chief executive must “consult with the persons or organisations that appear to the chief executive to be representative of the interests of persons likely to be substantially affected by the making of the relevant Order in Council or regulations;”. However, subclause (5) states: “A failure to comply with this section does not affect the validity of any Order in Council or regulations made.” So on the one hand the chief executive can do that, but, on the other hand if he does not do it, well, hey, it does not really matter anyway.

I really feel sorry for local authorities in all this, because they will be caught in the middle. There will be people who are building houses who will not get their certificate of compliance. Effectively, they will not have a home to move into until they do.

That happens now, and does that mean that people will have to wait some time? And what happens if they actually move into their house without that certificate of compliance? Who bears that liability? Is it the builder or is it the homeowner? I would suggest that it looks to me a bit like it is the builder. So if I were getting a house built, and it all got finished and the council was waiting to deliver me a certificate of compliance, I would move into the jolly thing. I would not wait around for the council. But that means I would be making that builder liable for the fact that I had moved in. I would break a window and do it, because it would be my house, and the thing that is stuffing around is the council, not coming forward with a certificate of compliance.

So who gets caught in the middle of all this? The council! This is an absolute travesty that the Government is dumping on local authorities. They get to bear the brunt of most of this.

There is no certainty about business for any of the independent building certifiers in all of this. Territorial local authorities are bound into it. They have to do this—the Government has made it compulsory. They cannot get out of it, whether they want to or not. I guarantee that they probably do not want to, because they have to do a heck of a lot to actually comply with the provisions of this bill.

Then I look at the provisions concerning levies and I see that councils have been charged with the responsibility of collecting the levies. They wear the liability of paying the levies to the chief executive, or whichever other body is supposed to collect it. One of the registrar’s functions under clause 353, “Regulations: general” is that the registrar sets “(d) prescribing the fees or charges payable in respect of the performance of the Registrar’s functions”, and these include an application to be licensed. Is there a payment also for the issue of the licence? Is there also a payment for the renewal of the licence? So suddenly there are three payments—and I have barely started.

Then comes the levy. Well, there are different levies for different classes of licensed building practitioners. I guess that means there is a different levy for an architect who might be licensed as a building practitioner, and a different one for a builder who is licensed as a building practitioner. There is a different one for a lawyer, maybe, who is licensed as a building practitioner. These are the sorts of things that the Government is providing for in this bill. So there are different levies for different classes of licensed building practitioners, and, as we know, it has previously been revealed that a building practitioner can be anybody who wishes to so apply. The amount of levy can be set at any level, I guess, because that is what the registrar’s function is—to set the amount of the levy, and the method by which that levy will be calculated. So that method could be whatever method he or she determines is appropriate, and then there are all the other criteria and other requirements. On top of that when someone actually builds a house—

I move, That the question be now put.