Building Bill

, on behalf of the Associate Minister of Commerce (Hon John Tamihere): I move, That the Building Bill be now read a third time. This bill is the culmination of a thorough review, and I pay tribute to the literally hundreds of stakeholders who have offered advice during its development.

The bill marks an important milestone in the development of an appropriate regulatory framework for the building industry that both the industry and consumers have been seeking. Like a well-designed building, the changes reflected in the bill are a complementary and integrated package. They are designed to work together to minimise risk of future regulatory failure. The Opposition claims that the bill is over-regulation. That ignores the impact that too little control has had on ordinary New Zealanders. I believe that the bill represents a position of balance. We want New Zealanders devising innovative solutions to building problems, but we also want buildings that do not fail.

The performance-based approach has been retained, but adapted to provide greater information on the outcomes sought, their measurement, and best practice on how to achieve them. There are changes to improve monitoring and enforcement of the building control system, and to ensure the competence of those who provide the services—the designers, the builders, and other critical sub-trades. The performance standards and the licensing regime are designed to ensure that people who use buildings can do so safely and without endangering their health; that buildings have attributes that improve the well-being of people who use them; that people can escape from buildings if the buildings are on fire; and that buildings are constructed and designed in ways that promote sustainable development.

This bill strengthens the building regulatory regime by providing the framework to ensure that inputs into buildings are high quality. The building code will be comprehensively reviewed within 3 years to make sure that it is clear enough about the standards we expect buildings to meet. The bill provides for the development of compliance documents that set out how the building code standards may be met, and for best-practice guidance documents to provide information to territorial authorities in recognition that they are co-regulators in respect of this legislation. It requires registration and audits of building consent authorities, and as part of this process they will need to be accredited that they can do the job and do it well.

The bill provides for the licensing of building practitioners for the first time, and sets the framework for the licensing system, but the detail of how it will work in practice will be set out in regulation, after consultation with the industry. On Monday the Associate Minister of Commerce, the Hon John Tamihere, released a discussion document on this subject.

The bill also provides greater consumer protection. It gives express recognition to the importance of standards of design and construction in achieving its objectives, increases the emphasis on durability and standards of maintenance, and provides for mandatory standard warrantees. Sustainable development will be promoted by the development of building standards in relation to energy efficiency, energy conservation, water efficiency, and water conservation.

In conclusion, this bill shows that the Government is concerned about ordinary New Zealanders, and I look forward to it being passed into law. I commend this bill to the House.

National has acknowledged through the first and second readings and the Committee stage of this bill that there are deficiencies in the Building Act 1991. We have acknowledged the leaky home problem, and the subsequent weathertightness report. But we cannot support a bill that introduces a very prescriptive regulatory regime. It is overkill and an overburdening of the industry with bureaucracy and administration. Although we believed there were faults in the 1991 Act, it was also our view that that legislation could have been amended to compensate for its deficiencies.

This legislation will add significant costs to all construction work, and compliance costs for residential buildings will increase the most. It will potentially affect economic growth, due to the significant increase in building compliance costs for both applicants and territorial local authorities with regard to accreditation. We will see widespread bypassing of the new requirements for do-it-yourself projects. The economic impact of this legislation will see significant increases in labour costs. The labour component of the cost of a typical dwelling is approximately 35 to 40 percent. That labour component will bear the brunt of the increased costs, as it responds more readily to supply and demand factors than the other components do. There is already a short supply of skilled tradespeople in the building industry—especially in bricklaying, where they are able to name their price. The provision that building works need to be supervised, rather than inspected, will prove to be a major cost factor in any building project. To supervise the construction of a small home that would take about 4 months to build has been estimated to take about 85 hours. It will cost approximately $10,000 just to meet the new requirements of this legislation.

Will this legislation enhance customer safety and protection? National’s view is that it will not. This legislation will lead to delays, it will fuel inflation, and it will most probably lead to illegal construction work, as people look to bypass it. The very considerable shortage of skilled personnel will impact on the number of licensed building practitioners available from 1 July 2009, when that part of the bill becomes law. Any person assuming liability for the overall supervision of building works as a principal licensed building practitioner will need to have wide knowledge and a high level of competency, as well as substantial professional indemnity insurance—that is, if he or she is able to obtain that insurance. Industry registration will have an immediate impact on the availability of skilled tradespeople, because many of them will simply not wish to formally upskill themselves in order to meet the requirements to become licensed, and will leave the industry. The training industry does not have the resources to meet the expected demand from those who will wish to upskill themselves to meet the new regulatory requirements that the bill provides for. That will be very noticeable in rural and remote areas, and will have an adverse economic and social effect on owner-builders and on farming communities.

The traditional Kiwi attitude towards building one’s own home, farm building, or backyard shed is compromised by the very prescriptive nature of this bill. In fact, clause 173 requires that all work be supervised—not just inspected, as the law states at the moment. That will add huge costs for those operators who are involved in building prefabricated buildings, barns, bridges, glasshouses , and hothouses. All those structures require a building consent, and their construction will need to be carried out or supervised by a licensed building practitioner. With the increased compliance costs, the viability of some of the businesses operating in that area could become suspect, and that will be a major concern.

We also have a concern about the future of private certifiers, who, along with territorial local authorities, will become building consent authorities. The issues pertaining to insurance have been widely canvassed and debated. In Australia—and I used examples of this in the Committee stage yesterday—private certifiers are used extensively. They are covered by proportionate liability, compared with the system in New Zealand where the liability is joint and several. There is a distinct feeling within the industry that the Government does not want to have private certifiers. Although private certifiers are accommodated in the bill—the amendment to clause 381 tabled yesterday on Supplementary Order Paper 241 in the name of the Hon John Tamihere provides for a period of some limited comfort; in fact, clause 381(1) enables them to work until 31 May 2006—they will not be able to continue in their work unless they have applied to become a building consent authority before then. In National’s view that is an escape clause for the Government, and it will be difficult for a private certifier to operate after that date.

The role of building consent authorities is important in the bill. It will be impossible for territorial local authorities to pick up all the work that is currently done by private certifiers and their own staff, because they will not have the qualified personnel needed to do that. Some observers have commented that private certifiers could become the employees of territorial local authorities. That is quite right; they could. But it is certainly my view that many will move off shore, where their experience and expertise will be valued.

We had another major concern regarding the bill. I put forward an amendment to add land subsidence and geothermal hazards to the definition of the term “natural hazard”. Supplementary Order Paper 241 did include subsidence, but the proposition that geothermal hazards should be included was defeated. The impact of that is that territorial local authorities will not be able to refuse to issue consents on the ground that the land could be subject to geothermal hazards—or hot spots in the ground. They will then not have the protection of non-liability, as found in clause 344 of the bill. Councils have been able to use section 36 of the current Act to manage risk, but under this bill the risk management provision is excluded when it comes to the matter of geothermal hazards. In the Taupō area, where geothermal hazards are a major factor, the liability that that council will face in the future could be quite extensive. It is my view that Parliament is exposing local government to future civil litigation—a minefield—and that that will have significant effects for both councils and their ratepayers.

We also argued that if fences to hold people out of swimming pools were included in the definition of a building, stopbanks should also be included. The devastation that we have seen in the lower North Island, and recently in the Eastern Bay of Plenty, would suggest that stopbanks are important in the protection of people, property, local communities, and infrastructure. But our reasoning was not accepted by the Government.

National has stated throughout this debate that there are problems with the existing law and the Act, and that those problems needed to be fixed. But to throw the Act out in its entirety and to substitute 385 pages of bureaucratic red tape will do nothing to ensure the safety and confidence of the people whom this legislation is designed to help. National does not support this bill.

I rise on behalf of New Zealand First to take a call in the third reading of this bill. New Zealand First supports this bill, and we support it because it is the result of an extensive inquiry. That inquiry was held into the weathertightness of homes—the leaky homes debacle that we saw a few years ago. We also support the extensive research into and rewrite of a number of parts of the old Act. Although New Zealand First believed that the old Act was adequate, we felt it did need a few adjustments, the most important of which concerned the licensing of building practitioners. However, with the catalyst for this bill being the inquiry into the weathertightness of homes, it was a case of this bill having to go through a whole process that followed on from that inquiry. That process was carried out extensively, particularly by the Government Administration Committee. Its chairperson, Dianne Yates, and the rest of the members of the committee did a very, very good job in putting the bill together.

New Zealand First believes that do-it-yourselfers are not affected in any way by this legislation. They do have to make sure that if they are working with the outer skin of a building or with any structural walls, they have somebody there to sign off that they have carried out the work correctly. That person has to be a licensed building practitioner. A do-it-yourselfer—or DIY’er—is allowed to do everything else, so the great Kiwi tradition of people being able to build their own homes has not been affected, at all. It is essential to remember that, because the structures that are put in place through this legislation ensure that do-it-yourselfers are not affected. People have to abide by certain rules, but they can still build their own homes.

People state that extra costs are a part of this bill. Yes, there are some extra costs—some extra compliance costs—but we think of them as an insurance policy. That policy insures that the building or house is put together correctly, with all the detail and all the facilities necessary for it to be an asset. Let us face it: people’s homes are the biggest assets they will ever own. Therefore, they want to be sure that those assets will not become devalued, which is what we have seen with leaking homes. Those buildings have been devalued. In fact, there are a lot of homes out there that people are having difficulty in selling. No insurance company will touch them, because there are huge problems with the way that the buildings were constructed and with the effectiveness of the repairs to them. So New Zealand First looks at the additional costs as an insurance policy—insurance that people have houses that will be ongoing assets for them.

The fact that code of compliance statements for buildings were outstanding with territorial local authorities was an area we were very concerned about. We discovered during the select committee inquiry that there were tens of thousands of code of compliance statements outstanding, and there had been no attempt to match them up with the building consents issued by building consent authorities. That in itself was a major problem, because many of the houses concerned were completed many years ago. I have evidence that some buildings were completed from 5 to 10 years ago, but they do not have a code of compliance statement. That was a remiss action on the territorial authorities’ part, because they failed to follow up on that and cross-check the records. This bill corrects that, and makes sure that they are responsible for checking to ensure that the correct paperwork has been completed.

The provision concerning licensed building practitioners is the biggest addition in this bill. It is the major part of the bill, and if anybody says that the old Act is being thrown out and that the 358-page bill now being brought in is a complete rewrite of the legislation, he or she is incorrect. It is not a complete rewrite, because large parts of the old Act have been just transferred straight into this bill, with the addition of the provisions concerning licensed building practitioners. New Zealand First agrees that the licensing of building practitioners is an important step towards trying to unify the whole process. In the past the process has had a lot of inconsistencies, as the economy has gone up and down. When the economy was on a high, a number of new entrants into the building industry came in without the full training and skills that were needed, and that was particularly true after the abolition of the old apprenticeship scheme. A lot of those people came in, and they began to undercut others when the economy started to dive again. That then forced the full tradespeople out of the industry, because they could no longer compete with them, and it left a huge gap in the industry. Licensing people at the levels of their competence, which will be done with peer review, will allow for more consistency within the whole building industry. The industry welcomes that, because it means it will have a better benchmark for deciding how the construction and building industries should develop.

We in New Zealand First are very mindful of the need for the chief executive, and particularly the licensing body, to be very careful with regard to the licensing regime, so as not to make it too difficult for some very skilled people who are reaching the end of their working lives. We do not want to see people with high skills walking away from the industry early, because they have a valuable part to play in training the young people who are coming into the industry. If we allow those people to fall by the wayside early, then we will lose their experience, which will not be passed on.

The Government crows about its Modern Apprenticeships scheme. Now, that is a misnomer, because although the Government promised that it would put the old apprenticeship scheme back in place, Modern Apprenticeships are not the old apprenticeship scheme. The Government has just taken the scheme that was in place under the New Zealand Qualifications Authority, rebadged it, and called it the Modern Apprenticeships scheme. It does not provide the mechanisms and support for small businesses and highly skilled tradespeople to take on an apprentice. There is not the incentive or the mechanism for them to take on apprentices, and to properly train the young people who are coming through. Therefore, we are not getting the new entrants coming into the scheme. As a result, the industry is very short of skilled tradesmen and tradeswomen—and there are a lot of very skilled tradeswomen within the building industry as well, so they should not be forgotten. But it is important that the chief executive keeps in mind the entry levels and requirements, in order to make sure that the skilled workforce is not forced out of the industry.

As the bill has progressed through the House, we have already seen an improvement within the industry. We have seen territorial authorities pick up on parts of the bill already. Many parts of the building code have already been rewritten as a result of the inquiry into leaky homes and the advancement of this bill. Therefore, the industry is starting to regain the confidence of the public, and I am pleased that it has taken into its mind the need to regain that confidence. We will see a much better economy resulting from that.

Finally, just to wrap up, one matter that New Zealand First would have liked to see included in this bill was a provision to prevent phoenix companies from popping up just to develop a particular project and then disappearing again, taking the assets with them.

The Green Party is extremely pleased to be supporting this bill. We are particularly pleased that so many of our amendments have been incorporated into it, such as adding sustainable development and health to the purpose clause, and adding issues of heritage, energy conservation and efficiency, the use of renewable energy, water conservation efficiency, the efficient use of material, waste reduction, and, of course, health, into the principles of this bill.

I notice that the National Party representative has suggested that this bill is overkill, but the truth is that it is responding to an extremely serious problem, which was investigated in the leaky buildings inquiry into poor building practices in New Zealand. It is not a small problem, but a huge one, as can be seen by the fact that the Weathertight Homes Resolution Service’s information line has received an extraordinary 7,623 calls since it was launched in September last year, and the service has received 2,273 applications since December last year. All of those thousands of applications came from people whose lives have, in many cases, almost been destroyed by the fact that they have bought homes that, in some cases, are worth virtually nothing. We heard from submitters who had literally lost all their life-savings, and others who were living in homes that are damp and wet, and who have serious health concerns.

This is not overkill. It addresses a very serious problem in New Zealand, and for the first time it offers real consumer protection. However, the Green Party still has real concerns about the energy efficiency standards in the building code, and we sincerely hope that the bill will result in higher, better standards of insulation and energy efficiency. Current insulation requirements under the building code are, frankly, minimal. They are simply minimum standards that need to be met, and hardly contribute to building warm, dry, healthier homes. In Europe, double glazing is the norm in most new houses, as is thick insulation. But double glazing is not even part of our code. Surely it is simple common sense that new houses with large amounts of glass, particularly in the colder areas of New Zealand, should be double-glazed. Surely it is just common sense that we would have higher standards of insulation in New Zealand, particularly in the colder parts, because properly insulated homes mean warmer houses, lower heating bills, and less sickness. They require much less heating and much less energy, and produce great energy savings, not just to the householder but also to the whole nation, so that instead of having to build dams to solve our energy shortages, all we need are simple things like properly insulated homes. We need incentives to encourage people to properly insulate their homes.

Less heating would also mean less smoke from wood fires and, consequently, less pollution, which would mean meeting our Kyoto obligations faster. At present we have smog reminiscent of Victorian London lying over some of our major cities on cold winter mornings—notably, Christchurch. Various regulations are being talked about, but there is no mention of proper, strengthened insulation and double glazing to help solve the problem. Properly insulated, energy-efficient homes mean savings in terms of costs to the health system, and fewer employee sick-days for businesses.

If it were all added up and a proper cost benefit done, it is pure common sense to require new home owners to build warm, energy-efficient, and well-insulated homes, especially when one realises that spending a little up front will result in huge savings every single year that a house exists. If a house lasts for 50 or 100 years, as it is supposed to—if it is not one of those leaky homes that may last only a few years—there will be huge energy savings. And, of course, it is so much more expensive to try to add insulation to an already built home than it is to build it in the first place.

It is quite astonishing that in New Zealand, half our houses are not properly insulated. A quarter of our homes have full insulation and a further quarter are partly insulated. That is despite the fact that research shows that people who live in well-insulated homes have much better health, and children who live in uninsulated homes are twice as likely to experience asthma and take days off school because of colds and the flu. That is why we are deeply disappointed that a simple, common-sense amendment that we put forward was rejected by the Committee—a requirement that if an existing home is undergoing a significant renovation, the energy efficiency standards of the building code should apply to the alterations of that house. When one reflects that half our homes are not properly insulated, one can see what a waste of energy, what poor health, and what problems that is creating. Surely it would be simple common sense to require that the energy efficiency standards apply to alterations. But, no, the Committee rejected that amendment. What stupidity! That will come back to haunt us. We will continue to waste energy and then, instead of considering simple things, we will go around trying to destroy our environment by building dams. What idiocy!

Another common-sense proposal we had was that territorial authorities should be given the power to be able to ensure, purely for reasons of resource conservation, that they could add requirements in their geographic areas for new homes having to meet certain additional standards. But the bill does not permit them to do that. It is simple common sense, as I said. In Christchurch they might be looking at greater insulation, or double glazing. In areas where there are water shortages, they might want to introduce mandatory water tanks. It is just simple common sense to give the local authorities the ability to require that, for resource conservation only. I am pleased to see the Labour member Steve Chadwick agreeing with me, and I therefore wonder why her party rejected our amendment, which would mean so much in terms of improving energy efficiency.

Finally, I want to say, talking about health, that we are absolutely delighted that there is finally a requirement that the new building department will have to assess the health effects of new building materials. It is not just astonishing but almost beyond comprehension that none of the thousands of building materials on the market in New Zealand—many of which are known to off-gas things such as formaldehyde, a known carcinogen, and which use known toxic substances—are assessed for their health effects, even though we spend 80 percent of our time indoors. We have just come up with a whole new national environmental standard for air quality, but we are completely silent on indoor air quality. We were warned by various submitters that indoor air quality will be a major health concern in New Zealand, and we are grateful that we will require, at least, under that provision that the health effects of building materials will have to be considered, even though it is arguably 100 years too late. But the problem is what will happen to all of those existing building materials that are already emitting toxic fumes, and in some cases are creating poisonous environments in our homes and in our buildings—another big issue that the Green Party wants to see addressed.

We strongly support the registration of builders, and we believe it is essential that we have builders who are properly registered. It is just bizarre that we have people building our homes who do not need to have any qualifications. We do have some concerns about whether owner-builders are being penalised by the provisions of this bill. They are not the ones who created the leaky building crisis—it was the developers. We also have concerns about the continuance of private building inspectors, but overall, despite our reservations, we think the bill offers much greater consumer protection and we are happy to support it.

I would like to spend a couple of minutes in rebuttal of the Green Party member who has just resumed her seat. I totally agree with her that housing is unquestionably an important part of health. New Zealanders do live in cold, damp houses because of our climatic conditions. We live in a cool, temperate climate zone and we are right at the edge of not justifying central heating, and our houses are cold. Most visitors to this country agree that our houses are cold, relative to other countries, but then we would be using an awful lot more energy if we had central heating. What we find in America and Europe is that they tend to overcool their houses in the hot summers and overheat them in the winter—fighting nature at every turn—whereas in New Zealand we tend to put on warm jerseys and sit around the fire. We are hardy characters and that is the Kiwi tradition.

There have been a lot of myths, and the speaker from the Green Party has just highlighted those myths. Firstly, in reference to the leaky home syndrome, she was calling for more insulation and energy efficiency. We have seen tremendous progress in energy efficiency in installation over the last 20 years in this country, but that is one of the biggest problems of our leaky home syndrome and the toxic algae and fungi that are in the wall cavities. It was when we started tightening up on the conditions of the vapour barrier that we had the condensation in the wood structures of our timber frames, and the rot. Those fungi and algae, which are naturally occurring, are much more toxic and damaging to health than we had realised.

Then we come on to the issue of treated timber. Members will remember that we used to treat our frames, but part of the problem has been exacerbated by the lack of treated frames. Who was it who ran a campaign against copper chrome arsenate? It was an outrageous campaign in Wellington playgrounds—spurious science. I will tell the members what they did, because the Forest Research Institute has done a lot of work on this, and there is quite a bit published. The person who made this claim—and a certain member of this House jumped on the bandwagon—actually took shavings from a playground that kids enjoyed, where there was nice tanalised timber. The analysis was that a kid would have to ingest 5 kilograms a day of these wood shavings down at the local playground. How many little kids sit down at the playground, in between swings and slides, and ingest 5 kilograms of copper chrome arsenate treated wood? It is absolute rubbish. In terms of infusion into the adjacent ground, there is no movement at all into the adjacent ground.

In fact, copper, chrome, and arsenic are not particularly toxic. They can be toxic in certain doses, but they are certainly not as harmful as not treating one’s wood and having the algae and the fungi that cause real disease in our homes. That is why we have to be very careful with issues like this.

In fact, it was not the copper chrome arsenate , which was the tanalised treatment of our wood frames, and it was not the boric. We used to boric treat our frames, but that was only for insect attack, not for algae and fungi. The algae and fungi were held at bay indirectly. To prevent the anti-sap stain, we used to put wood through the boric bath, to which pentachlorophenol and organochlorine were added for cosmetic reasons. It stopped the blue stain as the market did not like blue-stained wood. But it was that substance that actually prevented the mould and the algae on our timber-framed housing. Now that we have very staunch, tight, vapour-proof insulation, we are finding that air is condensing in the wood cavity with nowhere to go.

Our homes are also more weathertight. We have sealed our windows tighter. In the old houses that Shane Ardern and I grew up in, we used to have to stand on the carpet when the wind blew, to hold it down. That was the nature of New Zealand housing. However, insulation is now very tight. We have this monolithic cladding, some of which is not very good, and I think we will see a move away from that. The market is already rejecting it. New house buyers look very askance when they see monolithic cladding, and so they should. There are also design problems like internal balconies that become water traps and baths, and that water soaks down through the cavities.

But the answer is not more regulation and control. The ACT party fiercely opposes this bill. It is all about more compliance costs, more barriers to new entry, and greater costs and difficulty for young homeowners trying to get into their first home. It is not a good bill. We heard from the New Zealand First speaker in this debate a claim that this would not impinge on the home do-it-yourselfer—the Kiwi tradition of doing one’s own work. I have to tell that member that it certainly does as we now have this term “restricted building work”. I refer the member to clause 6 where it is very clear. It states: “restricted building work—(a) means building work that— (i) requires a building consent;”, and it goes on to state that it “includes, without limitation, work on—(i) the building envelope; and (ii) the structural support of a building”.

But it is actually worse than that. I have just picked up another point when reading this provision. Traditional Kiwis will not be able to paint their houses any more, particularly if it is a two-storey house, because most scaffolding is attached to the frame of the house. There are screw bolts that go in with a scaffolding frame, which many people will be familiar with, but the bill refers to “any plank, coupling, fastening, fitting, or device used in connection with the construction, erection, or use of scaffolding”. If people use scaffolding to paint their houses they will have to have one of these registered licensed people on station and charging an inordinate amount. This is an affront to the traditional Kiwi ethos and spirit, and I am deeply alarmed that so many parties in this House have been duped and seduced by what I regard as very draconian legislation.

The big construction companies welcome the bill. They say that it is good, but then they would. Who will benefit if entry is to be restricted? Those who are already in the tree hut always want to pull up the ladder so that no one else gets into the tree hut. That is exactly the situation we have with the big construction companies. They are rubbing their hands with glee. Fletcher Challenge has just announced a record profit—and good luck to that company—largely because of the home-building activity. This bill means that healthy competition will be further restricted, and monopolies will be enshrined, and that comes at a cost to the economy and to the individual.

There are all sorts of other provisions in this bill—fences actually become a building, and a swimming pool fence becomes a building. We will have bureaucrats and more bureaucrats. Let us think about it. We have always had local bodies with responsibility for inspecting buildings; some of them have done good jobs and some of them not so good. Surely, that is enough control and regulation. When we start to have certifiers over inspectors over administrators—and then who checks the inspector and who certifies the certifier—it sounds good on paper, and it might make people feel all warm and fuzzy inside and think they have done a good job in sorting it out, but in practice invariably all it means is more control, more restriction, and a less satisfactory outcome where the rubber meets the road. This is bad legislation, we will not support it, and we are very disappointed that other parties have chosen to support it.

I rise to shed some light rather than heat on the Building Bill. During the Committee stage we heard a lot of people speaking who obviously had not read the bill, or if they had, had not understood it, and the ACT party has continued that today.

Let me outline what this bill actually does and what the structure of the building industry will look like once this bill has passed. The first item is that there is a chief executive who will be responsible for the Department of Building and Housing that has just been created, and over whom the Government will have much clearer oversight than it does over the Building Industry Authority. The current regime of the Building Industry Authority has lacked oversight; it has been too detached from Government oversight, and that has been the thing that has caused us considerable problems. Part of the value of this bill is that it sets out clear principles that the chief executive is to follow, and that provide a holistic approach to the building regime in New Zealand. It provides quite a wide range of measures that are to be taken into account when the building code and the way in which our building system is to operate are being formulated. Those measures have been expanded, particularly by the Government Administration Committee, to contain things like heritage recognition and the need for energy efficiency, as well as to require innovation and cost factors to be taken into account. So there is far greater clarity outlined in the bill in terms of the role of the chief executive, and a better picture for everyone to look at in terms of the sort of building industry we are seeking to establish in New Zealand over the next 5 to 10 years and beyond.

The chief executive also has to undertake consultation, and there are very clear provisions in the bill requiring him or her to consult the building industry. They include the provision of an advisory group made up of people from various aspects of the industry who will provide ongoing advice to the chief executive in the role that he or she fulfils. That is in contrast to the Building Industry Authority, which was a little bit of a law unto itself. It was quite a small body that, clearly, did not consult, or, to the extent that it did consult, did not adequately consult or take sufficient notice of what it was being told. That was no more transparent than in the leaky homes scenario, where we found that the chief executive had been sitting on documents for 2 years that would have alterted him earlier to the problems that the leaky homes inquiry subsequently found out about. The problems we have had in that whole area could have been discovered a lot earlier.

Another thing that the bill sets up, having provided that framework in terms of chief executive oversight, is provision for materials and labour, and the methodology in terms of building, to be clearly examined and controlled. The certification of products and methods is a new idea that is contained in the bill. Hopefully, it will provide a better solution than the one we currently have whereby the only remedy is approved solutions. The way that that has worked is that very few people have applied for approved solutions, and that regime really has not been successful. Hopefully, the certification of products and methods, although a voluntary scheme, will be far more successful. Part of the important role of the chief executive, in conjunction with the Government, is to ensure that people—manufacturers in particular—are attracted towards getting certification of their products. They will receive approvals from territorial authorities more quickly, if the products and the methods they are pushing forward or selling have already been examined and shown to be compliant with the building code.

One of the things that United Future was particularly keen to see, in relation to the certification of products and methods, was that the authorities look not just purely at the method or the product but at the way it interfaced with other products and other parts of the building. That was the principal weakness that was found in the homes that were not weathertight; it was not so much the cladding system but where the cladding system interfaced with other areas. United Future succeeded in having clause 103(2) put into the bill. It provides: “A product certificate must state whether there are any matters that should be taken into account in the use or application of the building method or product, and if so, what those matters are.” That is intended to provide a broader basis of looking at the way that those methods are used and when it is appropriate to use them—something that was lacking up till now.

The powers of the chief executive are substantially increased over those that the Building Industry Authority has, particularly in the ability of the chief executive to move urgently where it is ascertained that there is an obvious default or problem. With the homes that were not weathertight, the powers were simply not there for the Building Industry Authority. The chief executive can issue warnings and bans; he or she can use those in extreme situations where they are needed.

The next thing that the bill provides that is a substantial improvement, and is part of this whole new regime, is the licensed building practitioner system. It provides for minimum standards of training and competence where at the moment we have none. We have a laissez-faire system where any person can build houses, as we have described in this House as we have debated this bill. But the bill does provide minimum standards.

There is an important factor that has already been alluded to by New Zealand First, and that is the concern that there is pressure in terms of our having sufficient tradespeople to fulfil that role. It is something I also alluded to in the Committee stage. It will be very important for the Government to ensure that we are able, in fact, to deliver the tradespeople that we need in society to do the work and meet the demand. That is why, of course, the licensed building practitioner regime is being delayed for 5 years—to give time for people to be upskilled and to meet the requirements. It is up to the Government now actually to put in place the mechanisms to enable us to reach that situation, but I think, as I said during the Committee stage, we will need to have some measure of grandparenting, whereby senior practitioners who have proved their competence in terms of their experience are not left out of the loop and are not lost to the industry.

That is in contrast to Mr Prebble’s speech yesterday, where he was talking about how he valued the fact that he had had a builder come to him and say: “Well, if you tell me you’ve got a permit, I can build you a house more cheaply than if you’ve actually got a permit.” He thought that was a really good idea—that people should be able to undermine the system, to provide services and get round the regulations. Well, I do not think it is a good idea. I think it is how the market works, and, obviously, it is the way that ACT would like to see it work, but it is not good for New Zealanders. Mr Prebble may be able to assess the difference between a high-standard builder and one that is not competent for the job; most New Zealanders cannot.

The licensed building practitioner regime will also cover both design and building, and give a number of classifications of people within those categories, to meet different standards of building and different levels of complexity. I think that is really welcome, as well.

We have talked at length about owner-builders and the restrictions on them. Contrary to what ACT has said, the restricted building work is confined to what is really essential. A lot of areas are not covered: decks; internal rearrangement of rooms that have non-bearing walls; and interior design matters. There are also the exemptions contained in schedule 1, which ACT seems to have overlooked; a number of areas of building work are exempt, including verandas, patios, and things of that nature, and other building work that a local authority believes is not likely to breach the provisions of the building code. So there are provisions that try to limit what a licensed building practitioner has to sign off, because we were very conscious in the Government Administration Committee of the need to provide for that.

The last things are the regulatory bodies, the public audit, and accountability. Increased powers are given to territorial authorities, whether they are working directly or through council-controlled organisations. There is a need for plans to be consistent with the building code but also with the Resource Management Act. And there will be inspections and code compliance certificates. That is a particular improvement in the bill, because we found during our examination that tens of thousands, if not hundreds of thousands, of code of compliance certificates are outstanding. This bill provides that all building work will be assessed 2 years after a building consent has been issued, and either a code of compliance certificate will be issued, or a notice to fix will be issued and enforcement proceedings undertaken.

Those are major improvements. National’s promises to do nothing, or to make changes without legislation, or to make some changes to the current procedure in a patch-up type of method, would be totally unsatisfactory. This bill provides a holistic approach. It covers the whole territory and provides us with a new framework that will stand us in good stead for the future.

I rise in the third reading to oppose the bill, which is what National members have done the whole way through, so it will come as no surprise to the House. There are a range of reasons for that, and there is a range of debate yet to be had on this bill.

Let us start with how the whole process began. The 1991 Building Bill, which was passed with the intention of reducing compliance costs, was found to be a bit deficient. There is no dispute on this side of the House about that; the National Party accepts it. Certainly, the building survey that was carried out in 1994 warned that there were some problems looming and something should be done. By 1998 the Building Industry Authority had investigated that, and had decided that, because of a range of reasons, there were some problems starting to develop. I think it said at that stage that there was a development of systemic failure for the reasons that the Hon Ken Shirley spoke of earlier, which included the change in the way that we built buildings and the desire to have them more airtight, watertight, and insulated, and able to be heated from inside, outside, and everywhere else. Simultaneously, we were going through a campaign, primarily run by the environmentalists, against the use of tanalised timber, for a whole lot of misguided reasons that have been well stated throughout this debate. So we moved to a situation of monolithic cladding, highly insulated construction, and untanalised Pinus radiata being used for the framing. All of that, along with bad design in trying to achieve modern architectural desires, led to the leaky house syndrome.

It was decided by the new Labour Government that an independent inquiry should be conducted. It was chaired by the then State Services Commissioner, Don Hunn. The Hunn inquiry overwhelmingly confirmed what the Building Industry Authority had been saying a year or two prior to that At that point, it was decided that a select committee should look into it. The select committee inquiry, of course, was primarily driven by the National Party outcry at the Government’s lack of response to this issue. It absolutely put pressure on the Government, through the media and in various other ways—in campaigns, and at meetings up and down the country. I know that my colleague Wayne Mapp was very active in that; so was Tony Ryall. That led to the select committee inquiry, which came back recommending some changes.

The select committee then set out to go through a submission process, which is quite normal; that is what happens with select committees. A number of people submitted. The summary of the submissions went along these lines: “Most industry players have little appreciation or understanding of the existing Act, which is over 100 pages and has been in place for 12 years. Without significant expenditure and resourcing, it is unlikely that the industry will have any greater appreciation of any proposed changes.” So it was saying that there was heavy-handed regulation. We have here a thick bill of 358 pages. I will digress a little by saying that when we have a practical problem like leaky buildings, and it is handed to a bunch of urban academics to solve—the kinds of people who could not tell a claw hammer from a Skilsaw, or rusticating from Hardiplank—then we end up with 358 pages of bureaucratic, socialist nonsense that will not fix the problem.

💬 Jill Pettis: Stop saying that.

There is no evidence that it will. That is the end result. I notice I have excited one or two members on the other side. I am pleased I digressed, because it has woken up one or two members over there.

What happened then was that the select committee listened to the submissions, and, overwhelmingly, the submitters who came in were people with a practical building background—there were a few lawyers, of course; we always tolerate a few lawyers in the process. They came through and said that what Mr Smith from United Future, the party that says it stands for common sense, is proposing will add a huge layer of cost to the industry, will make low-cost housing more unaffordable, and will make poor-quality houses more sustainable, because nobody will have the money to be able to fix them. They said it will run the do-it-yourselfers out of business, will put them completely out of business, because they will be required to have a certified licensed building practitioner standing there on a Sunday afternoon, with mum, dad, and the kids there, inspecting their work on upgrading the new family room.

I digress again. The house I grew up in was a traditional Taranaki sharemilker’s cottage. Every time another child was born, another room was added on to the house. That was how it worked in those days. This bill will absolutely stop that practice from happening. That house used to leak like a sieve. People would say that was good. It was as cold as hell. In fact, the old man used to say, and I need to say it again: “You opened the fridge door and the cold air rushed in.” That is the kind of house I grew up in. That house could still be built to that standard, under this bill. That is the irony. The things that that house had, like eaves, a corrugated iron roof, sash windows, and native untreated timber, are what is being proposed in this bill. We could have had a building certifier standing there, but the end result would have been the same. The house never fell down. The house was solid. It did not rot, except for the weatherboards on the outside, which had to be replaced from time to time. The house stood there for 100 years. People on the other side say that that could not be; well, it could be. That is the reality. That is exactly what could happen. [Interruption] Where are the standards in the bill? The Green member made a very valid point when she said that some of the issues around insulation—which of course is in the building code, not in the bill—are not actually mentioned.

Here is another interesting analogy. The old house I grew up in had water tanks. We had our own water supply from a tank on the roof. The tank occasionally would have in it the odd dead bird, a few dead possums, plenty of bird droppings from the roof, a few leaves—they all added body to the water. But listen to this: the house had a corrugated iron roof painted with lead paint, secured with lead-head nails, with lead flashing, and galvanised pipes to provide the water to the taps. It was perfectly safe and environmentally friendly—rainwater off the roof! It is a wonder we were not poisoned by the water we drank.

💬 Hon David Carter: It made you bald.

Absolutely! I know there were some side effects, as my colleague says, but the reality is that that house would pass the test today. That is what happens when a bunch of urban bureaucrats try to design something.

Let us have a look at some of the other bizarre things that have happened. Yes, we have given the chief executive more power, and I do not know that that is a bad thing. We will have to suck it and see on that one. We will not know until we test it. But here is the real acid test. How will a chief executive based in Wellington or Auckland have jurisdiction over what happens with house construction in Kinohaku? That is what I want to know. All that he will do is bind up all those people out there through the territorial authorities, which now will have to adhere to instruction from the chief executive and with so much red tape that our traditional Kiwi bloke out there, with a ute, and his dog, and his radio, will be out of business. When a Kinohaku family wants to build on to their house, they will have to get an Auckland-based carpentry firm or construction firm to go down there and build it. What will that do? It will add about $40,000 or $50,000 of costs to building houses in outlying, isolated rural areas where the territorial authorities will not have the horsepower or the expertise to provide the kind of red tape that the member is advocating. That is what will happen.

Of course, all the Auckland firms are rubbing their hands together. The Hon Richard Prebble touched on this point last night in the House. He mentioned the director of such a firm. Those people love this bill, because they know that the man with the ute, and the dog, and the radio is history. The typical Labour-voting Kiwi bloke is out of business, and they know that. He will not be able to put up with this regulation. He will not be able to get through it.

But that is not all. It gets worse. Not only will swimming pools need to be fenced but they will need to be caged. If people have a swimming pool next to a creek that runs down a mountain to the sea—that is how it normally happens—there may be no fences or gates around the creek but the swimming pool will have to have a cage round it.

We oppose this bill. It is nuts.

We know that a Government is in trouble when it refuses to take calls. I recently had the opportunity to reread the debate around the passage of the Resource Management Act, and I was particularly taken with the contribution made by a former colleague of yours, Mr Speaker—namely, Margaret Moir, who represented the West Coast. That was the last time the West Coast had reasonable representation. She predicted, in her speeches on that legislation, that it would cause huge hassles and huge compliance costs for New Zealand. Nothing could be truer than that.

💬 Hon Harry Duynhoven: She voted for the bill.

Certainly. Margaret Moir was a National member. She recognised that the Resource Management Bill, as advanced by Sir Geoffrey Palmer—and as a Labour member he should have been more wide awake—would impose huge costs. Now we have the Building Bill—

💬 Hon Harry Duynhoven: She voted for that bill.

If Harry Duynhoven wants to take a call, he is welcome to do so. If not, he should shut up and listen. I say to him that in a few years’ time we will find that this legislation is held in as much disrespect as many people hold the Resource Management Act. This bill will impose huge costs and huge complexity on the construction industry.

At a time when home affordability is at an all-time high, one would have thought the Labour Government would show some concern for the desperate prospective new homeowners in this country. At a time when interest rates, construction rates, and real estate prices are all rising, what is the Government’s response to that, in terms of helping people to buy their own home? It comes to this House and, with the support of New Zealand First, the Greens, and United Future, will pass this legislation, which will move home affordability away from those very people. This is happening at a time when 12,500 New Zealanders are waiting desperately for a State house. That number will further increase, because of this legislation.

I have listened to a large number of the speeches on this bill but I have to say that the speech made by Sue Kedgely from the Greens was one of the more intriguing and interesting contributions that I have ever heard in a discussion in this Parliament. She stood to say she was going to support the legislation, and then spent a full 10 minutes on decrying it, and correctly pointing out the many, many inadequacies in it. Then she concluded by saying that, as she had been told to do, she would vote for it. I do not often agree with the Greens but one of the comments that Sue Kedgley made was about the value of double glazing. I think she is absolutely right. Double glazing is of huge importance to this country; we are desperate for energy conservation. She spoke very well about the need for double glazing as a standard in the industry. At a time when this country is desperately short of energy, does this Building Bill deliver double glazing? It absolutely does not, I say to Sue Kedgely. It does nothing at all to deliver double glazing as a standard in New Zealand houses.

The other amazing contribution that we had came from the United Future member Murray Smith. During the Committee stage on Tuesday night when I was here in the Chamber, I asked the Minister in the chair, the Hon John Tamihere, whether he would help me by explaining what was meant by the term “restricted building work”. That definition is at the very crux of this bill because if something is a restricted building work, it then requires one of the newfangled licensed building practitioners to be involved in its construction. I put a simple question to the Minister, and asked him to help us with the definition of a restricted building work. At the end of my 5-minute questioning of Mr Tamihere he obviously did not have Helen Clark’s permission to speak, so he sat silently in the chair. But up jumped Mr Murray Smith. Now for the benefit of the people listening to this debate, I will explain that Mr Murray Smith is a member of Parliament. He is here with the United Future party, so we have not heard much from him and we will not in the future hear much from that man again. But he stood and said I should read the bill. He told me that the definition of “restricted building work” was in the bill.

So I went back up to my office and went through the papers that had arrived on my desk that day, and found that on Tuesday the Hon John Tamihere had released a discussion document Licensing of Building Practitioners: Discussing the Options. I looked at it and saw that on page 2 it states: “Purpose of this paper”, and, amongst other matters raised, it also states: “In particular, it wants your views on what work should be restricted to licensed practitioners and who, or what sorts of trades, should be licensed.” Although Mr Murray Smith has not been in Parliament for long and will not be here for much longer, I ask him what right he has to say that the definition is included in the legislation, when we then have the Minister in charge of the legislation putting out a discussion document that asks the industry to help the Government with the definition. That is what is happening, I tell that member. My question as to what a restricted building work is was a legitimate question that Mr Murray Smith and Mr Harry Duynhoven cannot answer. No member of the Labour Party can answer that question. Now the Government has put out a discussion document, asking the industry to help it to define that term.

💬 Steve Chadwick: The sector asked for a discussion document.

That is the very point I am making. I am pleased that member has finally woken up. It is a quarter to 6 and close to her bedtime. Now she is acknowledging that the legislation is so imperfect that it does not define that issue, and that Labour went back out to the industry and asked it for help. What a disastrous piece of legislation it is that we are to pass today.

The other point that became quite clear—and I thank Mr Ken Shirley for his contribution—is that some people in the construction industry support this legislation. If one talks to them, one learns they all have one thing in common: they are pretty large operators. The construction industry is very similar to the tourism industry, in that there are a few large operators and lots and lots of small operators. The large operators build perhaps more than 100 houses in a year, and they will find that they can comply with this legislation. But typically, the construction sector of New Zealand has a huge number of small operators, such as builders who work on their own or with one or two mates. They are the ones that will struggle with this legislation. What will happen then? The big operators will be advantaged, and they will squeeze out the small operators. It is no wonder some of the big operators support this legislation, because it will give them a huge competitive advantage.

I tell the Government that shortly after the next election this legislation will be one of the first pieces of legislation that is back before a National Government—because it will be a National Government that will tidy up this mess. It is all right for Murray Smith to scoff and laugh, because he will not be here in Parliament then to fix it. He can give his valedictory speech today; that is what we have just heard. He will not be back to fix the mess. This legislation will be one of the first pieces of legislation that a National Government—the next Government—will tidy up. All that has been done here is to impose 370 pages of legislation that will add approximately $6,000 to $10,000 of additional cost to the building of a house, but it has done what the Prime Minister wanted this legislation to do. Cynically, all that she wanted to do was to take the leaky home syndrome, which occurred in 2000 and was particularly embarrassing to the Government, off the headlines. She has succeeded in doing that, but no owner of a leaky home will get any satisfaction at all out of the bureaucratic nightmare of this legislation.

Mr Speaker.

The ASSISTANT SPEAKER (Hon Clem Simich): Is this a point of order?

No, I am taking a call.

💬 Jill Pettis: No, you are not.

I raise a point of order, Mr Assistant Speaker. The chief Government whip has just told a member who has stood in this House and called that he is not allowed to call. That is an outrage.

The ASSISTANT SPEAKER (Hon Clem Simich): No, it is not an outrage; I was going to tell him the same thing. Would the member please sit down.