Regulatory Systems (Building and Housing) Amendment Bill

We look forward to a full and vigorous debate on the Regulatory Systems (Building and Housing) Amendment Bill. It is good to see Minister Mitchell in the chair, and I am sure he is ready to take lots of questions, because there are a lot of questions to be asked about this bill. It might seem a relatively innocuous bill, going by the title, but there are many aspects of this bill that are worth teasing out.

Just for the benefit of people listening, the bill is an omnibus bill. It is one of a package of three, and we are dealing first with the building and housing amendment bill. The purpose of this bill, the first of the three amendment bills, is basically to clarify and update a number of provisions in the law—in this case, the Building Act. It is designed to give effect to the purpose of the Act and its provisions, to eliminate gaps and errors, duplication, inconsistencies, and so on, and to do a little bit of kind of updating and fine-tuning. The other objective that is listed in the bill’s explanatory note is about removing unnecessary compliance costs and the costs of doing business. As people who have been observing this legislation for some time now will know, that has actually been a critical factor underlying successive reviews of the Building Act.

I want to talk about some of the items in Part 1 of the bill. There are not a huge number of provisions in Part 1, but I think there are some points that are worth touching on in Part 1 in relation to some of the points that were raised by submitters. Let us have a look at clause 4 of the bill, which amends section 12 of the Building Act to cross-reference a specific clause in schedule 1. This is just a sort of a minor clarification, you would have to say, but a submitter by the name of Iain, who was quite prolific in making submissions to the Local Government and Environment Committee on this—

💬 Hon Member: Oh dear!

I do not think it was Iain Lees-Galloway—

💬 Iain Lees-Galloway: No, he spells his “Iain” right, though.

But “Iain” is spelt the same way. He asked why, in section 12(2)(c), schedule 1 is being replaced with clause 2 of schedule 1. The officials explained that, basically, section 12 describes the role of building consent authorities and local councils, and it is basically just fixing an incorrect cross-reference. So this is one of a number of fairly minor cross-references.

Iain also asked the select committee—in fact, he suggested that the current wording in clause 2 of schedule 1 be changed from “is likely” to “must” comply, but the officials said that that actually would have been outside policy. It would have amounted to a substantive change to the clause, and they rejected that.

Section 96(1)(d) of the Act also gets a bit of attention in Part 1 of the bill—clause 5. It specifies a certain circumstance when a territorial building consent authority may issue a certificate of acceptance for residential building work that has already been done. The reason that that section is being repealed by this part is that it applies to applications for a certificate of acceptance that were made prior to 31 March 2010, and any applications like that were generally required to be granted or refused in 20 working days. So that is pretty simple, and I do not think anybody would object to that.

Another question that was raised in the committee about this part was how this is likely to affect homeowners, and that is a pretty good question. I think it is fair to say that homeowners are the people who have borne the brunt of all of the kinds of inadequacies in our regulatory system for residential building, and I think any electorate MP will have had people coming to their office who have been on the wrong end of a building job or a renovation that has gone wrong. This part—it is fair, I think to ask that question about—[Bell rung] Mr Chairman.

The CHAIRPERSON (Hon Trevor Mallard): The member has started very well, but let us see whether he can keep going.

I take that as a great vote of confidence, Mr Chairman. So the question is how does the repeal of this section actually affect homeowners, and the officials’ response to that at the committee was that it is unlikely to have any impact on homeowners for the reasons that were outlined in relation to clause 5. In the unlikely event that any unresolved applications are still in the system, there is an out clause, and homeowners can apply to the Ministry of Business, Innovation and Employment for a determination. So there was no change recommended on that particular discussion point.

There are a few more points. It was proposed by a submitter that the current wording in clause 2 of schedule 1, in the Act, should be changed, from “is likely” to “must” comply. Again, the officials recommended to the committee that, actually, that change not be made, because it would introduce an element of compulsion that was not anticipated by the policy.

Interestingly, Transpower had a couple of things to say about Part 1, and came along to the committee. It proposed putting a new requirement into either the Building Act or the building code for building consent applications to state whether or not a particular part of the code applies to the building work concerned, and the committee rejected that as basically being out of scope. It would have required a whole new round of analysis and consultation, and that was rejected, along with another kind of parallel issue relating to elements of the building code.

So those are just some opening remarks on Part 1. There is a whole lot that can be said about this bill, and everybody in the House knows that about the state of the building and construction industry, and the constant, ongoing need to improve the regulatory framework to put consumers in a much stronger position. These are all vital matters, and we are going to be asking questions in the course of this debate on a whole range of issues about, really, whether or not the changes in this bill will make a significant difference to the Government’s ability to deliver better outcomes for consumers.

The CHAIRPERSON (Hon Trevor Mallard): No you won’t—no you won’t.

I mean to say, Mr Chairman, that—in closing—there are a whole lot of things in the building and construction area that need to be done. Mandatory warranties for homeowners are something that should be right up on the Minister’s agenda and there are some things in this bill that—

The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member now and say that this is a very narrow bill. It has been accepted at the second reading, and although the member spent about 4 minutes of his first speech talking very much about the details of the bill, he has since then strayed away, and what is not in the bill is certainly not appropriate discussion for the Committee of the whole House.

Thank you.

As my colleague Phil Twyford said, there were a number of submissions made by a person by the name of Iain—no relation—although, he does spell it with the Scottish version, which is good to see. One recommendation that that submitter made—which Phil Twyford touched on very briefly—that I would like to look into a little bit more deeply is clause 4, which proposes an amendment to section 12. The proposed amendment is to change the wording to clause 2 of schedule 1 of the Building Act. So clause 4 would “In section 12(2)(c), replace ‘Schedule 1’ with ‘clause 2 of Schedule 1’.” of the Building Act.

This recommendation to change from “is likely to comply” to “must comply”, as the official said, amounted to a substantive change in policy. I would appreciate it, actually, if the Minister in the chair, Mark Mitchell, could tell us why this is a substantial change of policy, because what clause 2 of schedule 1 of the Building Act refers to is “Territorial and regional authority discretionary exemptions”. It says that “Any building work in respect of which the territorial authority or regional authority considers that a building consent is not necessary for the purposes of this Act because the authority considers that—(a) the completed building work is likely to comply with the building code;”.

The submitter recommended amending clause 4 of the Regulatory Systems (Building and Housing) Amendment Bill to ensure that that clause 2(a) of schedule 1 goes from “is likely to comply” with the Building Act to “must comply” with the Building Act. I would be interested to know from the Minister, or from any member who was on the Local Government and Environment Committee, why it is deemed satisfactory that building work for which a consent is not deemed necessary must only be “likely to comply” with the Building Act, rather than being “required to comply” with the Building Act, and whatever criteria is used to determine whether or not the worker is likely to comply with the Building Act, just how much of a shift is that to require it—sorry, I have been saying “the Building Act”—to comply with the building code.

Just how much of a shift, how much of a policy change, is it to go from being likely to comply with the building code to being required to comply with the building code? It seems to me, as someone who was not on the select committee, that if a territorial or regional authority is able to waive the requirement for a building consent, then that authority must be extremely satisfied that the work that is going unconsented, or that does not require a consent, is going to comply with the building code.

In the event that it is found that the work does not comply with the building code, what then is the recourse for someone who wishes to challenge that? What is the measure by which we can determine whether or not it was likely to comply with the building code in the first place? Surely it is much cleaner if the work is required to comply with the building code, as was suggested by that submitter at the select committee.

In addition, clause 2(b) of schedule 1 allows that “if the completed building work does not comply with the building code, it is unlikely to endanger people or any building, whether on the same land or on other property.” So we have got a situation where it is possible for a building to be unconsented, despite the fact that it does not comply with the building code, so long as it does not endanger people. Well, again, how do you determine whether or not a building is going to endanger people, or another building, whether it is on the same land or other property? And, again, just how much of a policy shift would it have been had the committee accepted the recommendation by the submitter to go from using the words “is likely to comply” to “must comply”? So I would appreciate the Minister’s answers on those questions.

I am going to call the Hon David Parker but, before I do so, I do want to reiterate the warning that I made earlier on the question of relevance and to make it very clear that things that are not in the bill in the Committee stage cannot be relevant. The last member gave us 4½ minutes on something that was not in the bill, and if a closure had been moved I would have been tempted to accept it.

I want to talk to clause 5(2) in Part 1, which amends section 96 of the Building Act 2004 by repealing subsection (1)(d). I have the Building Act in front of me and I want to ask the Minister in the chair, Nick Smith, to clarify why it is that we are repealing section 96(1)(d).

Section 96 of the Building Act, which this bill repeals subsection (1)(d) of, deals with the situations where a territorial authority can grant, on application, a certificate of acceptance for building work already done. This is not the situation where someone has applied for and got a building permit and is then seeking a compliance certificate for the work that has been done in compliance with that building permit; this is dealing with situations where building work has already been done, but it probably has not gone through proper consenting processes. Section 96(1)(a) describes where this normally happens. It says: “A territorial authority may, on application, issue a certificate of acceptance for building work already done—(a) if—(i) the work was done by the owner or any predecessor in title of the owner; and (ii) a building consent was required for the work but not obtained;”—so that is pretty clear; you can see why that is necessary there. Then it has an “or” and it has some other examples in paragraphs (b) and (c), which are not being dealt with here.

Then in section 96(1)(d), the provision that is being repealed, it currently says that: “A territorial authority may, on application, issue a certificate of acceptance for building work already done—(d) if—(i) the work affects premises to which section 362A applies;”—and I am not going to go into that—“(ii) a building consent for the work was obtained before 31 March 2005; and (iii) the territorial authority is unable or refuses to issue a code compliance certificate for the work; and (iv) the application for the certificate of acceptance was made before 31 March 2010.” Presumably that arm of section 96(1)(d) was of relevance and actually dealt with problems that some people had that would not be able to be cured but for section 96(1)(d). I want to know why, if it was useful back then, we can be assured that it is no longer needed now.

I am going to give you an example of how long these things kick in. When I am in Auckland—surprising though it might seem to people—I look out the back window and it looks like I am looking at the Southern Alps. There is a huge shroud in white of a sort of three- or four-storey, peaked building, one street across on Sackville Street, called Summerfield Villas. Summerfield Villas were built many moons ago by Mainzeal construction. They have been repaired three times. They are currently being repaired for the third time and this shroud has been over them for about a year whilst many hundreds of thousands—I suspect millions—of dollars has been spent on the refurbishment of those premises. Those premises were built long before I was on the scene up there. I suspect they were built more than 10 years ago.

We know that Mainzeal construction is no longer, so you cannot force Mainzeal construction to fix these things up and meet the Building Act requirements in respect of those Summerfield Villas on the corner, because it no longer exists. It has been put into liquidation. There was some controversy, under Dame Jenny Shipley, as to whether it was trading at a loss. But it just shows how long it is that these things can be problematic for the owners of those buildings—the unfortunate owners of these leaky buildings—mainly in Auckland.

I want to have an assurance that this deletion now of section 96(1)(d) is not going to deprive owners of a route to get a certificate of acceptance for building work that has already been done. Presumably that paragraph (d), which I have read out, was necessary in respect of people who had this work done and applied for this work before 2010. But I suspect there are plenty of people out there who are still waiting for decisions from the council that relate back to 2010.

We know that some of the applications that people have made in the likes of Christchurch to resolve insurance claims from more than 6 years ago have not been resolved. I would not be surprised if there are people who have been waiting for more than 6 years to resolve their problems relating to buildings or problems relating to an overdue certificate of acceptance for building work that has already been done, even though that work was that old.

In the Committee stage of the Regulatory Systems (Building and Housing) Amendment Bill, which is one of the three bills that we are discussing in the Committee of the whole House this afternoon—the commentary on the bill says that it “specifically aims to improve effectiveness and efficiency in the areas of building and housing.” Certainly, Part 1 of this bill is very short and, essentially, addresses some technical changes—some very technical amendments.

If you turn to the departmental report on this, though, with regard to the submissions on this part of the bill—and I think my colleague Phil Twyford referred to some submissions by an individual called Iain—there were also two specific submissions from Transpower. I have a question for the Minister in the chair specifically on this, and I hope that he will be able to answer it. Both of Transpower’s submissions were reasonably similar. It requested that this part of the bill have an insertion of a new requirement, into either the Building Act or the building code, for building consent applicants to state whether or not NZECP 34 applies to the building work concerned. It also asked for a new requirement, again in either the Building Act or the building code, requiring building consent applicants who have provided a certification that the building meets the requirements of NZECP 34 to provide certification by a suitably qualified person that the completed building does comply with that particular NZECP 34. Officials disagreed on both counts. They said it was not within the scope of the bill.

What is NZECP 34? It is the New Zealand Electrical Code of Practice for electrical safe distances, which sounds like a pretty important document. [Interruption] Because I looked it up, Mr Twyford. It covers safety issues, in so far as they relate to safe distances to overhead electric lines, telecommunication lines, lines equipment and fittings, and personnel working on or near to such lines equipment. The code sets out the minimum requirements. I am not going to go through all of the minimum requirements—

💬 Hon Michael Woodhouse: Thank goodness!

Well—

💬 Hon Member: Maybe she will.

Perhaps I will, then, Mr Woodhouse, because actually—and I hope that members in the Committee, particularly the Minister in the chair, will take this quite seriously. My question is: why was this not taken seriously? Why is it out of scope? If this code, NZECP 34, is out of scope, then where does it apply if it is not in the Building Act or in this particular piece of legislation? It sets out the minimum requirements for excavation or construction near overhead electric line supports, limits for construction near conductors, limits for the installation of conductors near existing buildings and similar structures—I could go on.

The question is: why is it out of scope? Does it apply in the Building Act or elsewhere in legislation where we know that there has to be some kind of certification by building consent applicants—that they are actually getting a suitably qualified person so that new buildings are complying with electrical work and the work that needs to be done around them? That is while they get their building consents, and then once the work has actually been completed.

I think this is quite critical. I know this is a brief part—this part of the bill—but I think it is a pretty critical question. Is this something that has been left out? Has it been left out for a reason? What further analysis and consultation with stakeholders is required, as the officials said? Is that further consultation and analysis actually being done, or has it been done?

I move, That the question be now put.

I think, unfortunately, there have probably been a couple of relevant speeches since. Would anyone else like a call?

Tēnā koe, Mr Chair. I heard your cautionary point, because this Part 1 is a very short part, of seven clauses, of the Regulatory Systems (Building and Housing) Amendment Bill. My question is the same as that of my colleague Clare Curran, but I would just like to bring to the Committee’s attention the Ministry of Business, Innovation and Employment’s own purpose for the regulatory systems bills. Basically, it says that the purpose of these regulatory systems bills is to “(a) maintain and improve the effectiveness and efficiency of the regulatory systems” and “(b) can include policy changes that involve continuous improvement to, repairs and maintenance of, regulatory systems, but not significant policy changes”.

I too wanted to raise the issue of Transpower, and I hear your cautionary note that things that are out of scope are not to be discussed. But when I read these purposes, which have been designed by the Ministry of Business, Innovation and Employment, then I too would argue that Transpower’s submission around high wires actually meets this test, in terms of what my colleague Clare Curran has indicated, through her diligent work on New Zealand Electrical Code of Practice 34. I do not want to repeat what has been said, but when I read the ministry’s purposes for these regulatory systems, it clearly, for me, says that the submission from Transpower—which is one of our largest, if not the largest, utility companies—to the Local Government and Environment Committee meets the standard. But, again, perhaps the Minister can enlighten the Committee as to why the officials felt that it did not meet that test. Thank you.

Part 1 agreed to.

Part 2 Unit Titles Act 2010