Plumbers, Gasfitters, and Drainlayers Amendment Bill

on behalf of the Minister for Building and Construction: I move, That the Plumbers, Gasfitters, and Drainlayers Amendment Bill be now read a third time. On behalf of the Minister for Building and Construction, I take another opportunity to thank all members of the House for their consideration of the bill. The Plumbers, Gasfitters, and Drainlayers Amendment Bill is validating legislation. It validates a disciplinary levy and an offences fee set by the Plumbers, Gasfitters and Drainlayers Board under the Plumbers, Gasfitters, and Drainlayers Act 2006.

The disciplinary levy and the offences fee were imposed on registered plumbers, gasfitters, and drainlayers to fund the board’s disciplinary and prosecutorial functions over registered plumbers, gasfitters, and drainlayers, and non-registered people carrying out sanitary plumbing, gasfitting, or drainlaying work, as intended by Parliament. However, there is a lack of clarity regarding the board’s ability to use these funds to investigate and prosecute non-registered people. Validation of the disciplinary levy addresses legacy issues, as it covers the disciplinary levies imposed by the board on registered plumbers, gasfitters, and drainlayers from 1 April 2007 to 11 January 2012. The bill also validates the offences fee imposed by the board from 12 January 2012. Overall, the validation of these fees and levies was the most practical and cost-effective option, because the money has been spent on investigations and prosecutions.

This bill provides an enduring solution to the technical funding difficulties currently faced by the board, by extending the board’s power to impose a disciplinary and prosecution levy on registered persons to fund the cost of prosecutions of those working illegally in the industry. This bill provides clarity and certainty to the board and the industry going forward. It ensures that the board will now continue to be appropriately funded to carry out all of its statutory functions, including the prosecution of non-registered people carrying out sanitary plumbing, gasfitting, or drainlaying work. This will allow the board to effectively do its job of protecting public health and safety. It will also allow the public to be confident that people undertaking plumbing, gasfitting, and drainlaying work are competent, registered, and regulated to carry out safe work. I commend this bill to the House.

What a surprise. I got last-minute notice from the Government that the Plumbers, Gasfitters, and Drainlayers Amendment Bill would be debated this afternoon. What a surprise. So, just like the manner in which this bill progressed, we got ambushed again. Nobody had any idea that this bill would be coming up in the House this afternoon. We had it at the last minute.

At the Committee stage, I congratulated the Campbell Live television show, “The politics of plumbing”, because that show picked up lots of important issues that we did not pick up. For instance, who are the cowboys? Because enabling the board to prosecute these so-called cowboys in the sector is one of the main reasons why the Minister has chosen to get the bill rushed through the House. Through that television show, we understood that lots of competent, quality, and experienced plumbers, drainlayers, and gasfitters choose to boycott the undemocratic process of the board and choose to boycott the fees imposed on them, and—to borrow the words of the Ombudsman—that is not only a kind of unjustified fee, but also a kind of a new form of tax imposed on those experienced plumbers, gasfitters, and drainlayers. Therefore, they have become the so-called cowboys. As I reinforced in my speech contributions during the Committee stage, nobody would be in a position to defend these so-called cowboys. But, again, as the television show picked up, lots of the quality and experienced tradespeople choose to boycott the board, and have, therefore, become the so-called cowboys.

I would also like to congratulate the officials on their hard work, because although this particular bill is not terribly complicated, it does involve lots of hard work, especially when the officials are placed in the unnecessary position of advising the select committee and advising the members.

But having said that, I would like to pick up two major points. They are very important points that I would like to touch upon. One is that, to the surprise of many of the members, one of the pieces of advice that appeared in the Ombudsman’s briefing—and that is on paragraph 4—reads: “The Ombudsman has upheld the complaint and recommended, among other things, legislation to validate the disciplinary levy imposed by the Board between 31 July 2010 and 11 January 2012 … The provisions of the PGD Amendment Bill form part of the Ministry’s response to the Ombudsman’s recommendations. The Ministry has been asked to respond to the Ombudsman by 29 March 2013.” It is all correct, but I have a major problem with the set phrase—the magic phrase—“among other things”. What are the other things in the magic, set phrase “among other things”?

If we turn to page 18 of the Ombudsman’s ruling, released early this year, we will find that—and I will read it out—there are basically two recommendations. The first one is: “To the Ministry of Business, Innovation and Employment and the Plumbers, Gasfitters and Drainlayers Board, that they together or separately make proposals to the Minister of Building and Construction concerning the desirability or otherwise of: a. legislation to validate the Plumbers, Gasfitters and Drainlayers Board (Fees) Notice 2010 as it relates to the disciplinary levy;”. That is correct. What was missing from the briefing is No. 2, which says: “To the Plumbers, Gasfitters and Drainlayers Board (regardless of the outcome of 1 above), that”—and I will it read out—“it enter into discussions of representatives of persons registered under the Plumbers, Gasfitters and Drainlayers Act 2006 to achieve a satisfactory arrangement with persons who have paid excess amount of levy under the Plumbers, Gasfitters and Drainlayers Board (Fees) Notice 2010 in respect of the disciplinary levy.”

So there are two sets of recommendations, and the two sets of recommendations come hand in hand. They are, namely, to bring legislation to validate the Plumbers, Gasfitters and Drainlayers Board (Fees) Notice 2010 and also—reading into the Ombudsman’s view on this matter on page 10 of the ruling—as a condition of validation, the board should engage with industry representatives, whereby the excess levies paid could in whole or in part be refunded over a period, or some credit could be given in respect of future fee or levy payments in compensation. But, unfortunately, that second set of the recommendations was missing, hidden, or buried in the set phrase “among other things”. This is unfortunate and unhelpful, because one of the main reasons why half of the sector took the complaint to Parliament’s Regulations Review Committee, the Office of the Ombudsman, etc., is unfairness.

What is in issue here—to borrow the Ombudsman’s words on page 7 of the ruling—“is an unlawful levy, a tax, that the Board was not authorised to impose.” Secondly, in relation to procedural fairness or unfairness, there was a failure to consult adequately before making the continuing professional development notices. Again I would like to refer to the Ombudsman’s recommendations released earlier this year. Page 13 of his opinion reads: “Consultation is often seen as a necessary element in ensuring the fairness of administrative decision-making by enabling those affected by proposed decisions to express their views before such decisions are taken. No doubt this is an important, perhaps the principal, reason for requiring consultation prior to decision-making.” Secondly: “… another important reason is to promote the effectiveness of any decision itself. By drawing on the knowledge and expertise of industry participants it can be expected that the decisions ultimately taken by the Board in regard to registration and licensing will be better, more grounded, decisions than those taken without the benefit of such input.”

Lack of fairness and lack of adequate consultation are two of the main reasons why the industry took complaints to the Office of the Ombudsmen and to other officers as well. It is, therefore, important to present the full picture, not only for the general public but also for National members of Parliament, who have voted for this bill and, I believe, will vote for this bill again. This is a bill seeking to validate retrospectively the unlawful imposition of an unlawful tax. Having understood all the issues, if those members still believe that they should support their Minister for Building and Construction by voting for this bill, I say good on them. At least they have the guts to be a political hooligan.

The second issue relates to another point I picked up from the briefing, and I believe it is one of the grounds for the Minister believing we should rush this bill through. On 12 May 2011 the chair of the Regulations Review Committee moved a motion in Parliament to disallow the clauses providing for the July 2010 fees notice relating to the disciplinary levy, with effect from 31 March 2012, the end of the board’s 2011-12 registration year. It goes on and on, and the last sentence is—

💬 Mr DEPUTY SPEAKER: Order! The member’s time has expired.

First of all I would like to reiterate that National will be voting for the Plumbers, Gasfitters, and Drainlayers Amendment Bill. I acknowledge the contribution made by Raymond Huo, who was on the Government Administration Committee for this business.

💬 Raymond Huo: I was.

Yes, you were there. I am acknowledging that you were there. I am acknowledging that to the House.

The primary objective of this bill is to legislate to ensure the protection of public safety, and, most important, for reassurance that when you call a plumber or a gasfitter to your property, you can expect a qualified, skilful, and professional job to be done. This bill tidies up the legislation around the funding of the Plumbers, Gasfitters and Drainlayers Board so that it can effectively do its job of protecting public safety.

The bill validates the board’s disciplinary levy, which funded the investigation and the prosecution of plumbers, gasfitters, and drainlayers. The bill tackles anomalies of the funding of this, and tidies up any irregularities around the funding of the Plumbers, Gasfitters and Drainlayers Board so it can effectively carry out its job of safeguarding the public, and impose the offences fee for the prosecution of people working illegally. The board is funded entirely from the fees and levies charged under this legislation. The funds are collected from only people who are registered under the Plumbers, Gasfitters, and Drainlayers Act. One such levy is the disciplinary levy, which is set out by the board to fund the cost of complaint and disciplinary actions against such people. There is also the offences fee, which the board collects in order to fund prosecution against non-registered persons working illegally in the industry.

The validity of the disciplinary levy and the offences fee has been the subject of complaint to the Regulations Review Committee and to the Office of the Ombudsmen. The board was established under the Plumbers, Gasfitters, and Drainlayers Act 1976, and it has continued to exist under the current Plumbers, Gasfitters, and Drainlayers Act 2006. The board is responsible for protecting the health and safety of people by regulating, and ensuring the competency of, the people carrying out sanitary plumbing, gasfitting, and drainlaying work. One function of the board is to prosecute those who are working illegally in the industry—non-registered persons performing work that only registered persons are allowed to do.

The Government is determined to bring about safety measures throughout the building sector and improve skills and capability within it—to “build it right first time”. As a result of the Regulations Review Committee’s recommendation that the House review the disciplinary levy imposed by the board from July 2010 to January 2012, the board changed its fee and levy structure, removing the part of the levy relating to non-registered persons, and in January 2012 it set an offence fee to fund prosecution instead. This would affect the safety and the well-being of New Zealanders and the professional reputation of the sector. It is clear that the Government’s intention was always that the board’s prosecution function would be funded by the industry, because all its statutory functions are funded through these fees and levies charged under the Plumbers, Gasfitters, and Drainlayers Act 2006. I commend this bill to the House.

Thank you very much, Mr Deputy Speaker, for what is probably my last contribution to this piece of legislation, the Plumbers, Gasfitters, and Drainlayers Amendment Bill. I regret that it is not going to be a happy contribution. My concern with this legislation has been for a long time that, firstly, it is retrospective, and nobody likes retrospective legislation. Secondly, it seems patently unfair to plumbers, gasfitters, and drainlayers, who have been socked with an illegal levy. For them there will be no repayment or compensation for that, by virtue of this bill passing its third reading. We are about to make legal an illegal levy imposed by the Plumbers, Gasfitters and Drainlayers Board, in order to provide pūtea—a basket of money—that can help prosecute people who should not be practising in any of those trades. The purpose of that is entirely fine. The method of it was illegal.

I have been constantly told by the Minister for Building and Construction and others that should we not pass this legislation, the Plumbers, Gasfitters and Drainlayers Board would be bankrupt. The extent of this moneys owing back to plumbers, gasfitters, and drainlayers, from whom it was taken illegally, is in the order of some $600,000. Labour was always keen to find a different way through for this, and we made that clear at the beginning. It was contained in Supplementary Order Paper 204—which my colleague Raymond Huo had put up—that there be an agreement, a way of compensating in part those tradesmen who had been disadvantaged in this way. They would not get everything back that they were owed, but they might get something, and that was the import of an amendment that my colleague put forward. It would have been a reasonable thing to do.

As it stands now, and as this bill is due to pass in the next few weeks, there is an injustice that is being done. People are being required to pay for something that was illegally taken from them. This disciplinary levy was collected illegally. As I say, the purpose of it might have been entirely valid, but it is not inconsistent with the history of the Plumbers, Gasfitters and Drainlayers Board to not have done things entirely properly.

There has been an inquiry into this board previously, under the Labour administration, and there was some change as a result. However, we have now seen this piece of behaviour come in and be discovered only latterly, and the remedy that the Government is jumping to is this one of retrospective legislation. I contend that there are other ways to have addressed it, that there could have been ways of arriving at a settlement that left the tradespeople not so disgruntled and the board not so out of pocket. But, quite frankly, having had those suggestions that the board will be bankrupted if this bill does not pass, I must say that I have not seen evidence to that effect. I do not understand why a board that receives annual fees for registration purposes and additional fees for licensing purposes can go bankrupt. If a member opposite is able to clarify that for me, I would be grateful to hear from them.

But it seems to me that threats of bankruptcy are exaggerated and are overhyped, and I am not persuaded that that is the case. The board has constant revenue streams derived from registration and licensing fees. What it is doing now is compelling tradespeople, by dint of its own overreaching of its ability in law, to flee the cost of licensing. So what we will have is registered plumbers, gasfitters, and drainlayers not being licensed on a regular basis—in other words, not having to prove that they have upgraded their qualifications and their skills on an annual basis. They will now become the prey of the Plumbers, Gasfitters and Drainlayers Board, which will now seek to punish them—

💬 Chris Auchinvole: What?

—by virtue of the very fee that it has extracted from them illegally. If that is difficult to understand, Mr Auchinvole, look at it this way: they have been required to pay a fee for disciplinary processes to get rid of the unlicensed cowboys in the industries, right?

💬 Chris Auchinvole: Partly, yes.

So now what we are seeing amongst tradespeople is that in order to avoid exorbitant fees, which have now accumulated to $600,000, they will not relicense. They will carry their registration, but out of protest at this fee they will not relicense, however much we choose to make it legal. That defeats the purpose that this fee was collected for, in my view. If we have unlicensed tradespeople who are now going to be hounded by the board because their lack of licence makes them unlawful, because they do not have the same qualifications and tickets that they ought to have to practise, then the Plumbers, Gasfitters and Drainlayers Board has only itself to blame.

I consider that the passing of this legislation will compound the injustice to plumbers, gasfitters, and drainlayers. That is a travesty. There are other ways around this, and the Minister should have set his mind to more imaginative solutions than simply this one of validation, which the Labour Party cannot support. This has been a longstanding problem. This is not the way to solve it.

Debate interrupted.

The House adjourned at 6 p.m.