Weathertight Homes Resolution Services Amendment Bill

I guess the first thing to say about the first clauses of the bill is that the most notable thing is that the commencement clause is retrospective and that the Act is deemed to have come into force on the day it was introduced—that is, 23 February 2015. The observation that you have to make at this point is that this bill is a fix of a fix, and it is a desperate kind of last-minute scramble to fix a couple of problems with this bill in the 4 months before the Act is set to expire. We have said we are supporting it. We have said that we agree with the intent of the bill—the original Act and this bill—but retrospective commencement is never a good thing. It always raises questions, I think, about the quality of the process. I think, also, that the fact it is happening so late in the piece, before the expiry of the Weathertight Homes Resolution Services Act, begs the question of why the Government has taken so long to progress this and why it is really being tidied up at the last minute.

Over the last hour or so, we have had some reflections on both sides of the Chamber on this issue, which has been, really, one of the dominating issues of political life in this country over the last 20 years. The Hon Clayton Cosgrove, who has taken part in this debate as the bill has gone through the House, has reminded the House on a number of occasions that the Hon Dr Nick Smith sat on these Opposition benches day after day and screamed at the Government of the day: “Why don’t you just write a cheque?”. But he learnt, as his colleagues did in Government as well, that the issue is not quite as simple as that. Although the Hon Maurice Williamson, as the then building and construction Minister, proudly trumpeted on the front pages of the newspapers that this billion-dollar package was going to solve the leaky homes problem—great largesse—what have we seen? Actually, it has been a veritable trickle of homeowners who have come forward to avail themselves of the benefits of the funding assistance package for weathertight homes.

I do not mean to trivialise that. It has provided those homeowners with a useful alternative to litigation, adjudication, and the expense and the uncertainty of going down that track. It has provided them with an alternative.

As of a year ago the official figures were that only 87 leaky homes had been fixed. The ministry said at the time that it had approved repair plans for another 364 homes, and I think there were 3,000 in the pipeline that had been approved as having qualified for assistance. But it is a far cry from Maurice Williamson’s billion-dollar package. I am not aware of the dollar figure that has been spent under the funding assistance package. Perhaps the Minister for Building and Housing could just say, because I am sure he has got that number at his fingertips, but I do not think it is very much. The lion’s share of the appropriation for this funding assistance package has long since been siphoned off for other activities.

In this debate I think there has been some reflection on the follies of deregulation, and there has been something of a cross-party consensus in recent years that we need to continue to fine-tune and develop the Building Act and try to find the right balance between protecting consumers and trying to raise the quality standards in the building and construction industry without imposing undue and unnecessary compliance burdens on the industry. That is an ongoing process, but it was disturbing to hear the Hon Paula Bennett—then Minister of Local Government—come to this House last year and declare that New Zealand had moved on and was over the leaky homes. Apparently, according to Paula Bennett, we have moved on and we are over the leaky homes crisis. Nothing could be further from the truth. And, as Ron Mark was saying, the whole problem of leaky homes is actually a much bigger problem of shoddy building, poor building, and systemic breakdown, and deregulation is part of that.

I trust the Minister is aware of what Auckland Council has described as an epidemic of shoddy building in Auckland at the moment and an industry that is very poorly equipped and that lacks the capability to scale up and meet the demand pressures in Auckland—as that Minister well knows because he wakes up in the middle of the night in a cold sweat worrying about the lack of actual houses. I do not mean consents, I do not mean subdivisions, and I do not mean consented sections; I mean actual houses that people can live in. That Minister knows more painfully than probably anybody in this Committee how ill-equipped the industry is in order to meet the furious demand pressures that we see in Auckland at the moment.

One of the consequences of the inability of the industry to scale up is the shoddy building that Auckland Council says is responsible for something like 30 to 40 percent of building consents being failed at the moment. It is because the industry lacks skilled personnel, and there is so much work on that you have got people who are under-qualified and who are not properly supervised to do the work that they are doing.

We are also seeing, as I think Ron Mark was alluding to, a lot of multi-title buildings that were built in the 1990s—blocks of apartments and flats—that are now coming horribly unstuck and a Unit Titles Act that is simply not fit for purpose, that simply cannot do the job, and that is exposing residents in those blocks of apartments to financial catastrophe because they are being hit with huge repair bills. Particularly, what we are seeing is older New Zealanders who sold up and invested whatever asset they had into a flat or an apartment being hit with massive repair bills. They are part of bodies corporate that have not had adequate long-term repair plans, or the repair plans have not been funded properly. They have got poor Government standards and people are being driven to bankruptcy, and it is a hideous situation.

I would hope, in the spirit of the funding assistance package, that the Minister and his Government would consider providing on a case by case basis appropriate assistance to people who find themselves through no fault of their own in situations that are an exact parallel to the leaky homes problem that this legislation is seeking to correct—the injustice that it is seeking to fix I would hope that the Minister would exercise a kind of case by case and compassionate approach to assisting people who find themselves in those situations. It is not just leaky homes; we have seen large numbers of apartment buildings that have been built in breach of fire standards, and, frankly, I am amazed, given the data that is coming out on this issue at the moment, that there has not been a catastrophe and loss of human life because some of these buildings were built with such appalling breaches of the fire standards.

So Paula Bennett is wrong—we have not moved on from the leaky homes catastrophe. Any move to self-certification of building work or, in fact, contracting out and privatising the consenting process, as has been raised by the Minister in the past, would be absolutely mad and would demonstrate that this Minister has not learnt the lessons of history. It is not just the Earthquake Commission repairs that have thrown up so many cases of shoddy building, but it is happening in Auckland right now, and the lesson that we have to draw from this is that we have to be ever-vigilant and we have got to ensure that there are decent regulations and protections. If the Minister hints that he is considering an insurance-backed proposal—and I think this is what he was suggesting—then we would welcome that.

I too would like to take a call on clauses 1 to 3, and, in particular, start my contribution this evening by considering the title of this bill, the Weathertight Homes Resolution Services Amendment Bill. I would like to acknowledge that we are putting in place a scheme that offers an alternative to litigation, and allows homeowners who have been caught in this leaky homes nightmare a way in which they can get just and fair resolution for repairing their homes without needing the redress of the courts. I think that that is something that is positive. I think that we have traversed throughout this evening the long history of how we got here. My colleague Phil Twyford, in the contribution that he has just concluded, has also talked about how the Government members and the Minister who was previously in the chair, Nick Smith, had in Opposition quite a different approach to how it is that this may be fixed.

I think that we have a very apt title for this legislation, but I think, quite clearly, there are other names that we could have given this bill. One of them would have been the “Why Regulation Matters Bill”. What we have is a Government that often derides regulation. It talks instead about the need to be pragmatic, to just get on and do things. But regulation does matter, and nowhere can we see that more than in the leaky homes saga and what happened when we did deregulate an industry and let it go on and do things. Phil Twyford has talked about the deficit of standards that is occurring in the Auckland housing market. I, in earlier contributions, have talked about the fact that this Government has put in place at this very moment a system in Christchurch where we allow builders to certify their own work. We do not have an independent certification of some of the repairs that are going on in the Canterbury Home Repair Programme. We need to learn those lessons.

And it is not just in the case of housing; it is in the case of so many things. This is a Government that is hell-bent on deregulating everything from employment to education and thinks that it is the answer. It dresses it up in all kinds of fancy words and says that it is making things easier, but actually what it is doing is cutting the very kinds of protections in a way that has led to this leaky homes saga. So I think the “Why Regulation Matters Bill” name is a very, very good alternative.

I would also like to talk about the commencement of this bill and when this comes into force, and to acknowledge that we are, yet again, doing validating legislation. We are needing to put into legislation things to fix up what has already happened, and that is not the purpose of this House. I do not think it is why any of us came in here. We came into this House to make a difference. We may differ on how it is we think we can make a difference to the future, but spending inordinate amounts of time validating what has already happened seems a bit like being shut in a bad episode of a bad sitcom—we are always having to deal with the past. We are better than that. Our legislation should be future-focused. It should be about what we can do to make New Zealand better, not about fixing up disasters of deregulation gone bad in the past—and that is what we are here spending the time of this Committee doing tonight.

Labour supports this legislation, but we do not want to be in this situation. And we urge members and Ministers opposite to learn the lessons of how we got here, why it is we are here, and what happens when we do not put in place adequate protections for people and do not use the law to actually protect people and, in this case, their property. It is not just a nuisance; it is there for a reason.

I asked the Minister in the chair, Nick Smith, earlier whether he would clarify to this Committee whether it was him or Minister Paula Bennett who was reported in the media as advocating for a freeing up of the industry again. I think the terminology in one of the reports was that the industry would self-regulate—that the industry would certify its own work. I said to the Minister then, and I say it again, is that not the reason why we are in this problem? The Minister answered and said that it was Labour that put a bill through here in 1989, but I want to refer the Minister to the words of the Hon Maurice Williamson, who in this House claimed responsibility and said that it was him and his Government that passed legislation deregulating the industry, which has subsequently led to the situation that we now have.

I want to say that I take on board what the Hon David Cunliffe said. Look, this is not about blaming. Let us just take responsibility for where we are. But I did ask the question earlier whether it was his intent or the intent of Minister Paula Bennett to again lead this industry to a situation of more deregulation. I would caution the Minister and say, look, is not that why we are in this situation? We have got this Weathertight Homes Resolution Services Amendment Bill, which is a mouthful, and most people will not know what this is about. It should have been the “Leaky Homes Solution Bill” because that is what we are trying to identify here: a solution to help those people whose homes were leaky as a result of shoddy building and of the use of untreated timber during the period of the 1990s. If my memory serves me right, that was, again, during the Jim Bolger period. I want to say that I do not understand why it has taken so long—why it has taken this long from when the bill was first introduced to this House. I am not sure whether the starting date is going to serve the interests of those people whose issues we are trying to deal with here tonight.

The greater issue here is that most people, as a result of the leaky homes syndrome, do not feel confident about the building industry. In fact, I think most people are asking their neighbours whether they know a builder whom they can trust and have confidence in before they embark on building work. This is what has happened as a result of a Government that was so set on a freer industry, or deregulating the industry, that it did not care what took place. And when it did not care what took place, it actually was saying it did not care what happened to ordinary Kiwis, and now we are having to foot the bill for the result of that. This is another example of how this Government attempts to pride itself as the master of our economy and promote the fact that deregulation is good.

Once upon a time this country was hailed worldwide for having a mixed economy, where business could operate within the regulations set by Government. Time and time again, we have had politicians, or members of Government, step forward and say that freeing up industry was good. But here you have an example where greater freedom for an industry actually meant that it was looking at cutting costs without any concern about the subsequent consequences of shoddy work and the use of untreated timber. That is why we are here.

We are told that there is a small number of people who are going to have their claims resolved through this particular bill—about 70 homes, I understand. But Grimshaw and Co. identified that there were 42,000 homes affected as a result of the leaky home syndrome, and it also said that that is about 80,000 New Zealanders. I do not know whether this bill addresses these 42,000 homes affected, but I am hopeful that if we are genuinely concerned and want to make sure that we resolve the issues raised by these people, we will then have this Government consider seriously the consequences of its actions before it embarks on another deregulation exercise that it believes is good for the economy, when all we have seen and all that these 80,000 New Zealanders have experienced is that deregulation has not, in fact, helped them out. Thank you for that opportunity.

The clock allows us a couple of minutes. May I make a concluding call in this title and commencement part of the debate. I think this has been a good summary of the issues. I think there is a consensus around the provisions in the bill that broaden the category of cases and elongate the process by which they can still qualify for assistance.

There has been extensive discussion about the lessons of history around this, and they are valid, and the responsibility is shared by all in this House, even though different things have occurred at different times. But I do want to pick up on a comment that my colleague Phil Twyford made—that some of those lessons we have to highlight. As my colleague Megan Woods has said, Minister Bennett commented that we had moved on, and we certainly want to demur from that. As Phil Twyford said, the current Minister for Building and Housing declared when he was in Opposition “Just write a cheque and give them the money.”, and we know that that does not work.

💬 Hon Dr Nick Smith: Never said that.

Well, words to that effect. That does not work. This is a much knottier problem. So we want to make sure that justice is done. Sadly, the number of homeowners who have been helped through this process is low relative to the total number of—

I am sorry to interrupt the honourable member, but it is time for me to report progress.

Progress to be reported presently.

House resumed.

The Chairperson reported the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill with amendment, progress on the Weathertight Homes Resolution Services Amendment Bill, and no progress on the Radiation Safety Bill.

Report adopted.

The House adjourned at 9.56 p.m.