Legislation (Incorporation by Reference) Bill

National, as members will be aware, opposed the Building Act. We did so because, as we said at the time, it was very prescriptive legislation. We said that there were issues in it that were over the top. Although we acknowledged that there were deficiencies in the Building Act 1991, we also made it very clear that the cumbersome approach that was to be adopted would put huge compliance costs on how the industry worked. We also said that because of the change from inspecting properties to supervising properties, we would see huge costs associated with any building, but mainly with the building of residential homes.

It is interesting that at that time we acknowledged there would be ongoing problems with this legislation, and here we are, 12 days after the Act came into effect—it came into effect on 1 April, April Fool’s Day—making significant changes to legislation that one would have thought, it having had the scrutiny of the committee at the time, and submissions having been received on it, the Government would get right. Supplementary Order Paper 361, which has been tabled, really says that the Government got it wrong, stuffed up, and is bringing it back under urgency to fix it up. Well, that is completely unacceptable. This is an $18 billion industry. The Government needed to spend the time, hear the submissions, and take into account all the points that were articulated at the select committee. National was well represented on that committee with Shane Ardern and myself. We said that the bill would not work.

Now the Government is abusing the process, dealing with this legislation under urgency. I want to know why this Supplementary Order Paper will not be referred to the select committee, if it is so important. If it is so important that we should be debating it under urgency in order to fix up a mess that National members identified last year would be created, then we believe that it is incumbent on the Government to say to the industry and everybody involved in it: “Let’s look at it again. Let’s get it right. Let’s hear submissions.” That is our position, and it is the reason why we will not be supporting this legislation’s progress.

Clause 3C on Supplementary Order Paper 361 is concerned with dams, and section 14(2) in it states: “If a building includes a dam,—(a) the regional authority is responsible for performing functions under this Act relating to the dam; and (b) the building consent authority and territorial authority are responsible for performing functions under this Act relating to the parts of the building that are not a dam.” When is a dam not a dam? When it is in a damned bill like this, I guess! We visited a dam on the Waitaki River. What was in place there—the emergency procedures, and the monitoring of construction and of safety aspects of the dam—required expertise that far outweighed anything that any regional council or local territorial authority would have. Those councils do not have the expertise, but the people working on that dam do. Their stringent safety precautions, the functions and policies they have in place, would far outweigh any expertise that any regional council would have. So one would have to question why that sort of provision is included in the Supplementary Order Paper. National members are very clear in our minds that these things were tidied up at the time.

Clause 3L on the same Supplementary Order Paper repeals and replaces section 116B of the principal Act. This is the point that my colleague Dr Nick Smith has been talking about specifically. Subsection (1) makes it an offence to use a building “for a use for which the building is not safe or not sanitary;”, or if it has “inadequate means of escape from fire.” Subsection (3) creates a penalty: “A person who commits an offence under this section is liable to a fine not exceeding $100,000 and, in the case of a continuing offence, to a further fine not exceeding $10,000 for every day or part of a day during which the offence has continued.” Who has the sort of money in their pockets to be able to pay the exorbitant fines that this bill envisages? The select committee heard from the Far North District Council that a lot of the houses in its region do not meet codes of compliance. The figure escapes me, but there are thousands of properties that should not be occupied because they do not meet codes of compliance. Will we pull the plug on those property owners? Will we say that they should not be living in their houses because they do not meet a code of compliance?

Those houses probably do not even have consents. That is the issue, as we said earlier on in this debate. There will be a move from do-it-yourself operators not to go through the stringent provisions that the current Act allows, and they will bypass the system. In fact, there is an article in the National Business Review—

💬 Darren Hughes: A fine paper.

It has a very fine member’s photo in it, as well. This issue is dated 16 July 2004. The point I made in this article is that the Government was putting another nail in home improvement. That is what it says, and that is exactly the sort of issue—

💬 Darren Hughes: Good publicity.

While the member carries on, he should know that this is a serious issue. I suggest he takes a call to crystallise and articulate the Government’s position, because at the moment this legislation is a sham. It is a complete and utter waste of time. The point is that if the Government had got the legislation right in the first place, we would not be back here now under urgency trying to sort out the issue. It is so important, in National’s view, that the legislation should be back before the select committee, to let the people who will be affected by the legislation have a say.

I have another article, entitled “The Building Bill”. It also has photos of members. The point was made in it very clearly that as New Zealanders we pride ourselves on our practical ability to do our own thing. We have that mentality. We can knock down a wall, tile a bathroom, strip a door, build a deck—no worries. But this legislation means that those provisions will be taken away. This Supplementary Order Paper goes over the top in trying to correct some mistakes that have been made.

As Dr Smith has said, the provisions in the Act in its current form are not being carried through. Clause 3T substitutes section 363 of the principal Act with several new sections. This matter has been talked about in previous debates. The new section 363 is about “Protecting safety of members of public using premises open to public or intended for public use”. Dr Smith has said that if the law as it is written were being carried out, we should not be using the Beehive because of the construction work that is going on at this time. So there is abuse of the system, and that makes a mockery of the Act, which we spent time on. National members articulated those issues at the time. Now a bill has come in under urgency, 12 days after the principal Act was enacted, to try to correct these issues.

Well, our position is very clear. We are opposing this bill. If Government members think the issue is so important that we need to look at it more closely, why is there not a separate bill? Why do we not have a Building Amendment Bill to tidy it up? This bill is the Legislation (Incorporation by Reference) Bill. It is a means to slip through the back door a Supplementary Order Paper to tidy up the mess of the Building Act, and that should not be happening. If these issues are so important, why is there not an amendment to the Building Act, which was passed last year?

If we take it further than that, we see the disarray that this Government is in. Over the last 5 years seven ministers have been responsible for the building industry.

💬 Hon Ken Shirley: Seven?

That is right; seven ministers have been responsible for the building industry. Where is the continuity? Where is the focus when there are different people in charge who do not understand the industry, who have no idea what it is about, and who have never been at the coalface?

This legislation has got the building industry up in arms; it is very concerned about it. I was speaking to members of the industry last night, because I had some concerns about the speed with which this legislation came in. They have already spotted errors and problems, and so have we. I ask the Committee to consider new clause 3P, inserted by Supplementary Order Paper 361, which amends section 241 of the Building Act. There are numbers missing. Obviously it was rushed in so quickly that it is all out of order. There are things in the wrong place and there are numbers missing. Even new clause 5A, amending section 438 of the Act, has a number in the wrong place and a number missing. I quickly went through the Supplementary Order Paper and found that paragraphs have been missed out. New clause 3M has paragraphs (a), (b), (c), (d), (e), and (i) in new section 165(1). What happened to paragraphs (f) and (g)? Obviously something has been taken out, but nobody went through and checked it. The problem is that this legislation is being rushed through so quickly that errors are appearing again.

New Zealand First believes that this legislation is needed, but that we must get it right. The bill had to come before us because there were errors in the Act. The problems have carried on, and all of a sudden we are rushing the Supplementary Order Paper through, in urgency, in order to correct errors, including some major ones under section 363 of the Act, that have created all sorts of problems in the industry. This Supplementary Order Paper will solve some of them, but it will not solve them all. In fact, it will create more problems, because there will be confusion over the order of things. There are provisions missing and out of place. I ask the Minister in the chair, Pete Hodgson, why we did not put the Supplementary Order Paper before a select committee. If it had gone before a select committee, those issues would have been picked up by the members of the select committee and by the industry. They would have had a chance to take a closer look at the final product.

This document, in its final form, has not been put out to the industry. Yes, a discussion document went out, but a final draft document has not been out to the industry so that it could have a close look at it. People in the industry will spot holes in this legislation in all sorts of directions, and I am afraid that they have already spotted some. The industry has already expressed some concerns to me, and I would like to raise them later on. However, at this point in time I ask why the bill was not put out to a select committee. The select committee process is one where problems can be discovered and sorted out. Let us face it, we had to introduce this legislation to correct section 409 in the Act, because that section created a problem with regard to copyright. Now we are rushing another piece of legislation through the House, a Supplementary Order Paper, because there are so many errors in the Act. It is silly to put this legislation through in such urgency. The Supplementary Order Paper is quite an extensive document. It has a lot of implications, and if we do not get it right that will create many more problems.

I turn to new clause 3R, inserted by Supplementary Order Paper 361, which repeals sections 273(1)(b), 274(a)(ii), and 402(1)(t)(ii) of the principal Act. The question I have about this provision is to do with the register of building consent authorities. How on earth does the chief executive keep track of those authorities when a territorial authority has passed on its information, or transferred its functions, duties, or powers, to another territorial authority? He or she will have no idea about that until such time as errors start to appear and something starts to break down. I ask why the register of those territorial authority functions is not being kept by the chief executive. The chief executive does not have that record, so he or she will not know whom to go to when he or she has a problem. The chief executive will have to go chasing around and asking people left, right, and centre in order to find out who has that information and who has been responsible for the duties that were passed on or transferred by the other territorial authority.

To give members an example of how ridiculous the explanation of that measure is, I tell them that it refers to doing away with the registers of all consent authorities. That includes any private consent authorities, although I do not think there are very many of those left, because the Act makes it virtually impossible for private certifiers to be in existence. The whole thing was so rushed that the Government did not realise it had put in a provision that would do away with the registers for all the building consent authorities. That is just one example of the errors in this legislation. I am sorry to come down so hard on the officials who were put under pressure to come up with this legislation at such short notice. But let us face it, the first phase of the Act came into existence on 30 November 2004. Another very large segment of it came into existence on 31 March this year. From those dates a lot of these errors were known about; a lot of these things were discovered right in the very first stage. Why did it take so long for them to be actioned? It was simply because the Government was hoping the problems would not happen.

I am afraid the biggest example of that is in sections 362 and 363 of the Act, where, if territorial authorities—and I can give examples from Wellington and Auckland—were to follow the literal interpretation of the Act, we would have had to evacuate this building. The territorial authorities have been put in a very awkward situation. They could have set a precedent by ignoring the situation and saying that they would not take any action because everything was OK. But that would set a precedent, and everybody would expect to have the same treatment. That is why the Government suddenly thought it had better get into action and do something about the situation, and by rushing this legislation through it has put the officials under enormous pressure. They have come up with a lot of very good amendments, but there are still some errors in it.

New Zealand First says that the Supplementary Order Paper should be put to a select committee so that it can be sorted out in a proper fashion, with all the issues brought up and discussed with the industry. The building industry really wants the issues to be sorted out. It wants to have certainty in the industry, and it wants to make sure that everything is correct. When I see the number of errors that have occurred in this legislation already, I am afraid that we will just be back in this Chamber again in the not too distant future, to debate more of these issues and try to correct the errors we are about to inflict on the industry yet again. New Zealand First is not supportive of the process regarding this bill, because of its rushed nature—pushing the legislation through in urgency—and because of the errors that are occurring. I will take another call later on to discuss some of the other issues that have been raised by the industry already.

I have a lot of sympathy for the last two speakers, and I think that Brent Catchpole has probably enunciated the dilemma that exists with regard to these amendments fairly well. The difference between New Zealand First and United Future is that we have accepted that the changes that need to be made to the Building Act ought to come into force as quickly as possible. Given that the substantive part of the Act came into force on 31 March, there is a degree of urgency in correcting the problems that have been diagnosed, so that the industry knows where it stands and the ambiguities and confusions in the Act are dealt with. That means, unfortunately, that this bill needs to be rushed through in urgency and that it will not get the due consideration a select committee would give it. Quite simply, the time delay in getting the legislation to a select committee in order for it to consider the bill thoroughly, get submissions in and hear them, and then pass it, would only exacerbate the problems. From United Future’s point of view, we have had some opportunity to look at this legislation over the last few days. We have made suggestions that have been adopted, because changes needed to be made in order to improve the legislation and to correct further ambiguities or errors in it. I am grateful for the Government’s willingness to listen to that.

There is a maxim that rushed legislation is bad legislation. I think we suffer when we rush things through and then find that we have to revisit them later on, because we have not got them right or have made errors. I draw the Committee’s attention to an amendment that I have placed on the Table. It demonstrates the problems there have been in terms of rushing the legislation in. It relates to new section 116B, inserted by clause 3L of Supplementary Order Paper 361, regarding the use of a building or the giving of permission to use a building that is not safe or sanitary, or that has inadequate means of escape from fire. That is a new offence. It has arisen because of situations whereby landlords have allowed people to use buildings for, say, residential occupation, when the buildings were not in a condition to be used for that purpose. There was a recent example of that when a fire nearly resulted in the loss of life. It is important that there be a criminal sanction against people who allow buildings to be used for residential use, in particular, when they do not have sufficient means of escape from fire or are not safe and sanitary. That is what new section 116B is intended to provide.

However, my concern, on looking at the wording of the provision—it states that no person may use a building or permit another person to use a building—is that the courts could well interpret “permit” in a fairly loose way. Even the fact that a building has been used could be enough for the courts to say that a person had permitted it to be used. The fact that a landlord may not have known what a building was being used for, or may not have known it was being misused—for example, if there were squatters in it—could leave the landlord liable. I was particularly fearful that a court could take that broad sort of approach on the basis that every other offence in the Act is a strict liability offence. Those offences are clearly cut and dried—one either has a building permit or has not, either has a code of compliance certificate or has not, and so on. Those matters are very much in the hands of the landlord. But there could be a situation whereby a landlord, with no knowledge of the misuse of a building and no intention to misuse it, had squatters. If there was a fire and loss of life, it seems to me that the heavy penalties a building owner would face under the provision are such that there ought to be an element of what is called mens rea in legal language—some mental knowledge or awareness of what was happening.

I have an amendment on the Table that would change the words: “(a) use a building, or permit another person to use a building,” to “… knowingly permit …”, just to make it quite clear, if somebody were charged with that offence, that effectively that element of knowledge would be necessary. I discussed that with the Government yesterday morning when we were signing this legislation off. The Government had agreed to put that provision in, but it had not quite made it to the drafting stage. I am pleased that the Government will support that change in order to make the situation quite clear. That is an example, again, of something that we may well have had to readdress in the future after a luckless landlord had been caught because of the strict interpretation that had been provided.

One concern that I raised with officials is yet to be attended to. Because it has not been attended to, I am giving some warning of a concern that could arise through a difference between sections 49 and 53 of the Act. The intention of those provisions is for a building levy not to be paid until after a building consent has been granted, but to be paid before the building consent is issued. The difficulty is that section 53 has been amended to clarify that the levy is payable once the consent has been granted. However, section 49 has not been changed. Section 49(2) states that a building consent authority is not required to grant a building consent until it receives the levy. That means a local authority could say that it wants the money upfront and will then grant the consent, which is not what is intended—certainly not what is intended by section 53. We still have a little bit of an ambiguity there. We will have to wait and see whether, in practice, that turns out to be a real issue in terms of the way that local authorities deal with it. It may well be that they take the two sections together and recognise that they should grant consent before they collect the levy. In fact, that would seem to me to be practical. Local authorities do not really want to collect money at the same time that applications go in and then be faced with the situation of having to refund it again if the application is not granted, or of having to collect more money or to refund part of it if the application is changed so that the amount of levy to be paid alters. It seems to me that it is probably more practical from their point of view to grant consent before collecting the levy. That is another example of the teething problems we get with complex legislation like this.

It is a pity, given that the Act was passed 8 months ago, that some of the issues were not picked up early enough to allow them to go through a select committee process, in order for us to look at them more thoroughly and get views on them before the Act was implemented. Some of the issues in section 363, inserted by clause 3T of the bill, that have been referred to seemed to arise only once the Act started to come into force. It is, I suppose, a fact of life in New Zealand that very often legislation is put in place, but it is only once the rubber hits the road and we get to a position whereby somebody has to implement it—that is, the date it comes into force—that suddenly people realise there are some holes in terms of the way it should be implemented and, in particular, some ambiguity. People find out about that only at the time of implementation. Maybe that is really part of the justification for the Government’s urgency on this legislation. Effectively, some of these issues have only recently come to light. That is not something I am overly privy to, but I can imagine that that is a problem. Mr Catchpole, as well as me, has alluded to that as being a possible explanation for the urgency on this legislation.

There are some other provisions in this legislation. Most of the provisions, as I have previously said, are really matters of technical change and clarification. For example, the issue of cable cars was one whereby, under the provisions of the Act as it stood, if a single resident had a cable car, he or she had to get a compliance schedule. That was intended to be a compliance schedule for the cable car, but the way the provision was written meant a resident with a cable car would have then had to get a compliance schedule for everything in his or her house, when other residents did not have to get compliance schedules. There has been a clarification of that requirement, in that a single resident who has a cable car will have to get a compliance schedule only in regard to the cable car. That, of course, is what was intended. Those sorts of minor changes have been necessary to avoid hardship—in that case, to single residential owners—so that people would not be faced with the draconian problems that would arise through the unintended consequences of provisions in the Act.

I note also that there has been a change to the carrying out of restricted work, to make it clear that it is quite in order for somebody who is not a licensed building practitioner to carry out restricted work, as long as that work is supervised. The Act made it an offence for someone to carry out restricted work without being licensed, and it was not made clear that the supervision of restricted work by a person who is a licensed building practitioner is OK. That matter has been clarified in new clause 3G, and as well there is clarification of an issue regarding design work in new clause 3A. There was a need to clarify that not all design work will need a building permit. Somebody picked up on an ambiguity, whether real or imaginary, by suggesting that anybody who carried out any design work first had to get a building permit. Some design work will come within the definition, but that will be done by Order in Council. That is another important change.

I would like to thank the United Future member Murray Smith for his very helpful contribution in the last 10 minutes, and also acknowledge the very helpful contributions that United Future has made in the process of dealing with some mistakes that were made in this bill. We have seen a lot of crocodile tears cried over the need to change legislation. It has been curious to hear members—in particular, Nick Smith and Ken Shirley yesterday—carrying on and saying what a muck-up this bill has been. Of course, there were some mistakes, but I remind members that the Resource Management Act, passed by National in the early 1990s, has been changed 13 times. The Companies Act, also passed by National, has been changed numerous times. It happens with complex legislation that is being put into practice. It has to be adjusted to the realities of how things work.

This legislation to be amended, passed not so long ago, has over 450 clauses and has a lot of practical effect on the building industry. In fact, there were only two significant problems. The first is the copyright issue, in section 410, which United Future has been extremely helpful in working through—and New Zealand First for that matter. The second is safety in a public building where construction is taking place in part of it, in section 363. There has been a lot of legal debate about whether there was even really a problem there, but I accept that greater guidance needed to be given. We had some silly comments made by Nick Smith saying that Parliament needed to be closed down because the Beehive was having renovations. Curiously, the Wellington City Council, the territorial authority that makes that decision, said immediately that no such consideration was ever going to be given, that there was no problem. But, of course, Nick Smith has continued to put out press releases claiming all sorts of nonsense about it.

I want to comment on a few things that Murray Smith raised. He said he felt there was a contradiction between clauses 49 and 53. We have had legal advice from the department and there does not seem to be a problem, but we will talk through that issue with the member. We do not think there is a problem. He has put forward an amendment to new clause 3L to insert the word “knowingly”. That gives greater clarity for landlords, as the member explained in his presentation. I thank him for that contribution and we will certainly agree to that.

We are here fixing up a bit of practical legislation. I am pleased we are able to do that. As I said, there are only two significant problems, and one of them we do not even think is a problem, but we will just make sure that everyone is clear about that. We have an opportunity to go through a complex, large piece of legislation and fix up all those little things that inevitably happen when one is drawing up a big document—such as grammatical errors; numbering problems, which Dr Nick Smith spent an extraordinary amount of time talking about yesterday; and all those practical little things that happen inevitably in big drafting issues. We have that chance today. We are taking advantage of it. I am pleased and believe we will have better legislation at the end of this process.

I think the Committee and the country should be deeply alarmed by the comments we have just heard from the Minister. He is trying to sweep this major problem, this very complex legislation, under the carpet by saying that this is just about little wee things, such as numerical problems and grammatical errors. I tell the Minister that that is why legislation should go to a select committee. That is why this Parliament, before it rushes in to pass laws, calls for public submissions to hear what people out in the community with experience, such as he has not got, might think about it. But no, he is captured by his officials. He rushes to the Parliament with this legislation, under urgency, and rams it through. All he is doing is putting a sticking-plaster on a weeping sore, because the situation is this: this Building Act was passed some 8 months ago; part of it became operative on 30 November last year; another significant part became operative on 31 March this year. That is just 13 days ago! Yet here we have another amending piece of legislation 13 days later.

But here is the real catch: a Supplementary Order Paper has been cobbled together and it is 10 times the size of the amending bill, but none of it is going to a select committee. That is arrogantly bypassing the proper processes of passing legislation. This Minister knows it. It is a disgrace, and he tries to sweep it under the carpet, as error after error is exposed here in the Committee. He has entered into a sort of back-scratching exercise, a mutual admiration society; with the doormat party United Future.

I shall comment on the speech made by Murray Smith from United Future, prior to the Minister’s speech. He was proudly claiming credit—it was sort of the great achievement of United Future, yet he shot himself down with his own words. I do not know whether any members have picked up off the table his amendment in hastily scrawled handwriting. Here he is in the Committee talking about legislation that is not going to a select committee, making further amendments to legislation that he is proudly claiming he has had all this great input into. In other words, he is acknowledging he has not got it right, and it is legislation on the hoof.

It is a very bad process and we are seeing far too much of that practice under this Government. It is panic legislation. It is a knee-jerk reaction, and the building laws of this country are far too important to be fiddling with and changing on the hoof in the way this is being done.

This Government has made an absolute mess of the building laws. On the one hand it has totally removed the longstanding tradition of the Kiwi do-it-yourselfer, who is totally driven out of the industry, and Government members might well say that the building industry supports that. Well, of course they do! Has the Government not heard of restrictive trade practice? All employment groups love banning the do-it-yourselfer, because then they get more work. Instead we have this great layer of registration upon registration. I know a lot of Kiwis who are quite competent in this work. I actually built my first house. I lived in it before it was completed. There were no problems. It is still standing, does not leak, and that was over 30 years ago.

💬 Brent Catchpole: A good tent!

A very good house it was, I might add. That is the point. That has all ended now. No one can do any work within the structural envelope of the building. It is a nonsense. For the Minister to try to sweep under the carpet the fiasco we had in the clause that clearly stated—he might try to argue that it was ambiguous, but it was very clear—that someone cannot occupy any part of a public building that is subject to works, whether or not they are maintenance, restorative, or whatever, is a nonsense. It was very clear, and the Minister tries to say: “No, no, the city council was prepared to go along with that.” Well, I say: “Shame on the city council!” That is the problem with so many of our laws. We are not properly enforcing the many laws that we have passed, and at the same time we try to bring in layers and layers of more restrictive and prescriptive laws. This is bad legislation, and I urge the Parliament not to pass it.

I move, That the question be now put.

I raise a point of order, Mr Chairperson. I seek clarification on the vote on Part 1. Can you please tell me what the vote on that part was?

The CHAIRPERSON (H V Ross Robertson): Part 1 as amended was agreed to on the voices.

I seek leave of the Committee to put that vote again, because National wants to record a vote against.

The CHAIRPERSON (H V Ross Robertson): Leave has been sought. Is there any objection to that course of action? There is none. The Clerk will conduct a party vote on Part 1 as amended.

I raise a point of order, Mr Chairperson. If National just wants to change its vote, the other parties do not need to vote again, do they?

The CHAIRPERSON (H V Ross Robertson): My understanding is that Part 1 as amended was agreed to on the voices and therefore that we need to conduct a full vote.

Part 1 Amendments to Building Act 2004 (recommitted)

I need to clarify a vote, because the Clerk at the Table is not sure whether the vote was heard correctly. It is the vote on the Minister’s amendment to Part 3. I ask the Green Party to be so good as to repeat their votes on Part 3.

We are for the Minister’s amendment and opposed to the part.

, on behalf of the Minister of Commerce: I move, That the Committee divide the bill into the Building Amendment Bill (No 3), the Commerce Amendment Bill (No 4), the Copyright Amendment Bill, and the Health Amendment Bill, pursuant to Supplementary Order Paper 355.