Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill

I move, That the Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill be now read a first time. I nominate the Environment Committee to consider the bill.

This bill amends the Building Act 2004. In doing so, it will lift the efficiency and quality of building work and provide fairer outcomes if things go wrong. The bill has two parts. The first part amends the Building Act 2004; the second part makes consequential amendments to other legislation. The changes made under the first part of the bill can be grouped into five categories: first, strengthening the existing product certification scheme known as CodeMark; second, creating a new scheme for modern methods of construction; third, better information for building products and methods; fourth, improved offences and penalties; and fifth, expanding the ways the building levy can be used. Collectively, the changes in this bill will support the building sector to shift to new, more effective ways of working, to help support productivity improvements, to lift efficiency and quality of building work, and to improve trust and confidence in the building regulatory system.

I want to first tell the House about the provisions in this bill that will strengthen the existing product certification system known as CodeMark. It is designed to provide assurance that building products sold in New Zealand comply with the building code. However, oversight of the scheme needs to be strengthened and brought into line with recommended best practice. CodeMark uptake is low, and the possible efficiency gains are not being realised.

To address these concerns, the bill will make the following changes to the product certification scheme. First, there will be a new registration requirement for product certification bodies to ensure the quality of the product certification scheme. Building consent authorities—known as BCAs—at local councils and builders will know what they are using, the building code compliant products, in a way that will result in safe and durable building work. Second, product certificates may also be investigated and may be suspended or revoked if they no longer meet the product certification registration criteria. The Ministry of Business, Innovation and Employment (MBIE) will be able to investigate product certification bodies and suspend or revoke registrations where appropriate. And third, MBIE will now have the power to make rules for the product certification scheme; this will provide clarity to the scheme parties, ensure consistency, and align regulatory best practice.

I’d also like to introduce the new manufacturer certification scheme for modern methods of construction. The current provisions in the Building Act reflect traditional roles and processes; it is not fit for purpose on how non-traditional building methods, such as off-site construction, should be treated. This has led to inconsistency, to duplication of effort, and to uncertainty for the sector about the consenting processes that should be followed. This bill provides the enabling framework for a voluntary manufacturer certification scheme for modern methods of construction. It will allow Kiwis to make the most of the new methods of construction and support the building sector’s growth.

The changes proposed will enable faster consenting for off-site manufacturing work done by certified manufacturers at the factory, thereby saving building owners time and money, because consent will be done on site for products and, in some cases, for entire houses instead of by the BCAs at the local council. Based on the CodeMark product certification scheme, this enables registered manufacturers to be certified by MBIE to produce modular building components within a defined scope of practice. Such components will be deemed to comply with the building code. A manufacturer, as part of the modern methods of construction scheme, may be producing a single unit that is incorporated into a large building, like a bathroom unit, or they may produce a whole tiny home ready to be placed on foundations on site, or even a whole standard-sized house.

This new deemed-to-comply pathway for modular components will integrate into the existing consenting system. BCAs will not look at any modular components that have already been deemed certified, except for how they will interact with other elements such as site work, foundations, and connections to services. The amendments create the high-level regime in primary legislation and empower regulations and scheme rules to flesh out the operational detail. Of course, we need to ensure liability is attributed to the right parties. Certified manufacturers will be liable for the performance of their own modular components. BCA liability will be limited to the aspects of the building that they are required to inspect by building inspectors.

The bill specifies faster building consent time frames, and robust checks and balances must be complied with to provide assurance to homeowners, building users, and BCAs. These include 10 working days for processing building consents for buildings comprising 100 percent modern methods of construction components, down from 20 working days; manufacturer and certification eligibility criteria; audit regimes; potential suspension of registration and certification; and the setting of the scheme rules by MBIE. Using these modern methods of construction has the potential to increase production efficiency, reduce waste, create safer working conditions, and reduce construction time frames.

High-quality building products are central to safer and durable buildings, which will support the building and construction sector to make good decisions about the use of building products. Subsequent regulations will be able to clearly set out what building product information is required and clarify the responsibilities of manufacturers, suppliers, and builders in respect of building products and methods. These changes will ensure that those who manufacture, supply, or use building products have access to information to support good decision-making. They can also be held accountable for any breaches of their responsibility in relation to building products and methods and their use. Consistent information will also make it easier for people to compare and choose building products and be reassured that they’re making the right decision on which product to use. The bill empowers the chief executive of MBIE to require information to be provided, where necessary, for the purposes of determining whether to issue a warning or a ban. This information may also be shared with other regulatory agencies, when appropriate, to ensure public safety.

To support these changes, the bill also improves the offences and penalties available when people breach these requirements. New offences have been created to support compliance with product certification requirements, the modern methods of construction scheme, and building product and method information requirements. Many of the current maximum financial penalties set out in the Act have not been adjusted since its enactment in 2004, and in order to improve compliance and deter poor or illegal behaviour, the bill amends maximum penalties upon conviction to better reflect the seriousness of the offence. The bill also extends the time frame to investigate potential offences, from six months to 12 months, to better support regulators in dealing with complex investigations into potential offences.

Finally, this bill expands the use of the building levy to fund a broader range of functions and activities relating to the building and construction sector. These broader functions and activities will include actions that relate to monitoring, overseeing, or improving the performance of the building sector; improving connectivity and collaboration; and support building sector transformation. This change may allow the levy to be invested in transformational initiatives such as the Construction Sector Accord. Collectively, these changes will address longstanding problems with the Building Act, and it will also provide the support that is needed to allow the sector to shift to new, more effective ways of working. It will also help with the transformation of the construction sector. I commend this bill to the House.

Thank you, Madam Speaker. It’s a privilege to be taking a call on this. This is an exciting time for me, I have just been appointed the building and construction spokesperson for the National Party, so I’m delighted to be able to stand and be talking on this bill. I’d like to thank Todd Muller, our new leader, for the opportunity to represent our party in this important area.

Before I get into the bill, though, actually, I do just want to take a moment to acknowledge all of the hard workers involved in the building and construction sector—all those business owners, all the stakeholders, especially given the last couple of months, it has not been easy. I appreciate there have been some very challenging times through that period, and I just really want to acknowledge that and thank them for the hard work they have done, for the challenges they’ve been able to work through, and, indeed, for the work and the role they all play as we try to rebuild the economy and recover from the impact of COVID-19. The building and construction sector will play a vital role in that, and it’s important that we get the policy settings right, as well.

Now, this bill coming before us today is a nice step in addressing some of those issues. There’s a bit more to be done, but it’s a good first step. Just before I delve into that, though, I am excited to have this opportunity. Whilst I don’t profess to be a qualified builder or have a long history in that industry, I did spend a couple of years—well, it’s a few years back now, but I ran my own little building and fencing business based in the Waikato and did a number of projects, so I do know which end of a hammer to hold and can pour a bit of concrete, although it has been a while since I laid a slab of concrete. But that aside, I do understand some of the challenges, but I’m very much looking forward to engaging with the sector, with those that are in it on a daily basis, understand those challenges at the coalface, but, actually, the key industry stakeholders, as well, from a broader policy and regulatory perspective, too.

💬 Simeon Brown: Cementing yourself in.

Cementing myself in, thank you very much, Mr Brown, that’s a very good building anecdote that I will continue forward in this role.

Now, this particular bill is looking to make a number of changes that we’ve heard from the Minister. One of the key ones for me is around the manufacturer certification and registration scheme for the modular components. Now, this is an area that we’ve seen massive progress in over the last few years as the method of construction, the products being used in those processes, have changed dramatically, and that is for the better. It enables us to be able to build more efficiently, to deliver a wider variety of products to the end-users, and to do that in a manner that has varied but is more efficient than it might have been previously.

However, the settings need to change to allow for that. So that’s where it’s important that having this scheme will reduce the consenting time. That is one of the big challenges when we look at the time taken to go through the whole consenting process at the moment: it is simply too long. It needs to be better, and this, I believe, will address that. So I commend the Minister for bringing it to the House in that form. It’s an important step that I think will be very much appreciated by industry.

What you often see is these modular components, they may be built in an area that’s not the final location, it may not even be in the same territorial authority, it may not even be in the same country. They can come in from overseas, there’s a whole range of different facets to it. So to be able to have a standard process where the consenting authority that has to provide the final sign-off is able to do so with confidence that an appropriate scheme has been adhered to, and those products turning up in part-form or as a whole house, whatever it may be, have met already a set of key criteria—and having robust rules around those criteria is a really important part. Being able to streamline that consenting process, removing a number of those inspections, whether it’s the pre-clad inspection, the post-clad inspection, pre-lining inspection, taking out some of those aspects will certainly improve efficiency. So that is fantastic to see coming in.

Likewise, with the information on products, giving greater confidence to those building consent authorities to be able to provide that consent based on a core standard, strengthen their product certification scheme, CodeMark, it’ll be great to see more use of that, and I think this will provide a bit of extra confidence in that space.

There are a couple of concerns I do have. I’m always a little wary when there is talk about widening the scope of use of a levy to provide greater capacity. I accept there does need to be an element of that, but that’s something I do want to scrutinise more closely as we go through the select committee process on this bill as well.

The other one for me was around the entry access. We’ve actually seen in a number of areas—and I don’t want to be scaremongering about it, but we saw with the National Animal Identification Tracing legislation, in the agricultural space, enabling warrantless searches of property. We’ve seen it just recently with the public health response bill to COVID-19 enabling warrantless entry, or the police to enter premises if they suspect people are breaching rules. So we’ve seen, from this Government, several areas where they’re giving the ability for entry that may be a little more than is actually needed. That also happens in this place, the Ministry of Business, Innovation and Employment are given significantly increased powers to enter any building if there is concern around the manner in which a product has been used or the validity, the quality, of that product. So that’s something that I do want to scrutinise a bit more closely as well, and I look forward to hearing from submitters about that, whether they share any concerns or whether there are any other particular issues around that part of it, because it is important that we maintain rights. But, at the same time, we need to ensure that clear scrutiny can be undertaken on the products that are being used to ensure adherence to the systems and to give confidence to those end-users.

Also, increasing the penalties there—I think that’s a fair measure to look at giving more confidence, I guess, again. Of course, being able to impose penalties or having a longer period to file a charge, these things will come after the fact. So if you’re getting to a point where that’s in play, you know, you’ve already got a problem with the product. But of course, hopefully it acts as a bit of a deterrent to tighten up any issues where people might have been looking to potentially cut corners in that space. So from that perspective, it’s good; there are some good aspects there.

I mentioned at the start, actually, that I was excited to take a call on this as the building and construction spokesperson. I’m the first National MP to be able to take a call on a building amendment bill in this term of Parliament. This is the first bill that has come up from the Minister this term. So we’ve had 2½ years, and this is what we’ve got. There are some good elements to it, which are as I’ve outlined, but, actually, there are some broader issues in the industry. Members over there, they can comment all they like, but if they go and talk to people within the construction sector—builders, suppliers, manufacturers; any stakeholder within that industry—they will get a raft of issues bombarded at them that need to be addressed. This picks up on some of those, but, actually, it shouldn’t have taken 2½ years to get to the point where we’re just seeing the first bill coming in—

💬 Hon Scott Simpson: Nearly three years.

Nearly three years, Mr Simpson points out.

So it’s good, there’s more to be done, and one of the key areas for me is around the building code. We’ve got to see some improvements made there, and I look forward to, hopefully, seeing something from the Minister in time about that and also in the liability space. When we look at the consenting and the inspections process, there are a number of elements there where liability, I think, is one of the fundamental issues. Everyone is concerned about being responsible for an issue, and so they might err on the side of caution, and we potentially end up with over-engineered additional costs coming into the process—and all of these things flow through to the end-user: the house owner. That person has to pick up the extra cost for council decisions on what level of strengthening needs to be made. But, actually, those territorial authorities, as well, can often be the backstop. So we need to look at that liability issue, and I really look forward to engaging more with industry, outside of this particular piece of legislation, to get their thoughts on that aspect as well.

Now, I would just like to finish on a positive note in terms of commending the Minister on her recent announcements just in the last week, I think it was Friday, outlining the move to take away the need for consent for small buildings—so a car port, or a water-tank stand, or water bladders, you know, a number of different projects, smaller than 30 square metres type projects—farm buildings, for example. That is great. That will streamline it, that’ll reduce the number of consents. Fantastic. The issue was, though, by making that announcement, everyone who was looking to do one of those projects suddenly went, “I’ll put the brakes on that; I won’t do it until that rule comes into play.” And, therefore, all those businesses, the builders, the suppliers now have lost that cash-flow stream, which they were desperately looking for post-COVID. So I hope that will be put in place soon, and I look forward to covering this more over the next weeks.

Thank you, Madam Speaker. It’s certainly a pleasure to be talking on this bill by the hard-working building and construction Minister, Jenny Salesa. Can I say, when I heard the comment that nothing’s happened for 2½ years, this is a Government that inherited an absolutely disgraceful mess in the construction sector—do I need to add in housing and a whole lot of other sectors? This Minister has sorted it out. She’s brought a dream piece of legislation into this House.

Because that’s how it’s been described by DIY enthusiasts, who have said, “Good stuff” to the coalition Government for scrapping those building rules and things for low-risk building projects. There have been no complaints. The 470 submissions that were brought forward were all positive, and even the Construction Industry Council said it had the right balance between risk and allowing people to get on with it—that’s a phrase that I hear from that side of the House. That’s what we’re doing on this side of the House.

This is a fantastic piece of work, with more to come. Can I say to the previous speaker: do some research into the history, because it’s not looking good. But, on this side, it’s looking pretty good to me. I commend this bill to the House.

Well, thank you, Madam Speaker. I’m yet to be convinced that it’s a pleasure to be speaking in the first reading of this Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill, because it’s a classic sort of fix it—

💬 DEPUTY SPEAKER: I’m sorry to interrupt the member—

I was just getting going!

💬 DEPUTY SPEAKER: —ha!—but the time has come for me to suspend the House for the dinner break.

Sitting suspended from 6 p.m. to 7 p.m.

Thank you, Mr Speaker. Before the dinner break, I was just launching into a presentation on this Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill first reading, and I was saying that, just by its very title, this is a bill that people listening at home and watching will be able to tell is pretty dry, but it appears on the surface to be a good, tradesman-like - type bill because it does, I think, quite good work. We’ll have an opportunity to explore and tease that out at select committee.

The Minister introducing it indicated that the bill’s to go to the Environment Committee. The Environment Committee hasn’t had much work to do recently, so I guess we will have an opportunity to finally do something. We’re 2½ years, nearly three years, into the administration of this Government and my colleague Tim van de Molen, when he was speaking, highlighted the point that this is the first bill that the Minister for Building and Construction has brought to the House in that entire time. That shows, I think, the New Zealand public about the lack of delivery that has occurred over this period of time. It’s been slow, and, when it does arrive, it’s rushed and sometimes rattled, but there are aspects of this bill that are, I think, worthy of consideration.

One of the challenges for people wanting to build homes and construct additions or build commercial buildings, and what have you, is that they have to rely utterly on the integrity of the builders, of the advisers, of the architects, and of the product suppliers. It’s fair to say that there have been, over the years, a number of occasions where the veracity and suitability of some of the building materials, some of the componentry, and, indeed, some of the workmanship has been very questionable. We all know the histrionics that have surrounded the disaster that has been wet and leaky buildings and is still ongoing for many people working their way through those sorts of issues even today. So this is a bill that seeks to make a whole lot of, on the face of it, relatively small changes, but cumulatively and seen as a whole package, they’re actually, I think, quite important.

One of the aspects that I think is worthy of consideration and mention in this first reading debate is that the Building Act 2004 actually doesn’t provide any clear definition of what a “building product” or a “building method” is and what role that a product or method should play in the construction of a dwelling, of an office, of a commercial building, or something like that. These are fundamental questions. So back in 2004, I’ve got no idea why the legislators of that time decided not to give definition to what was a “building product” or a “building method”, and, therefore, there’s been this very large degree of wriggle-room space that has enabled somewhat dubious suppliers of product that has been less than adequate and suitable for purpose to supply that, to have it built into the construction of the building that’s being built, and then the Gib board and the paint and panelling goes on. And then it’s not until some years later that, actually, the fault occurs because the faulty product is out of sight, out of mind, everything looks lovely on the surface, and it’s not until sometime later that the real damage becomes obvious, and then the costs start to mount up for the property and building owner. So I’m keen to find out at select committee what it is and how it is that the Minister and her officials are going to try and define “building products” and “building method”, but I think that’s an important part of it.

The bill also seeks to establish a voluntary certification scheme. I quite like voluntary schemes, because what it means is it’s a sector that is self-policing, self-administering in terms of making sure that the cowboys, if there are cowboys in their industry, in their sector—those people are, effectively, judged by their peers and, hopefully, run out of the sector, because it’s the relatively few who often spoil it for the vast majority of particularly very competent and careful craftsmen, tradesmen, and people like that who actually do very good work in most cases.

Another aspect of the bill relates to an updating of the penalties and fines that are appropriate in terms of penalties where an offence has occurred. Now, the current level of offences and fines in the legislation has not been updated at all since the principle bill was first passed back in 2004. Interestingly enough, in some other statutory work that the Environment Committee is doing currently, there is a clause where, actually, the penalty regime needs to be not based on a dollar value, because there are inherent problems with a dollar value simply becoming out of step and out of relativity with appropriate levels of punitive fining when bad stuff does happen and when there is a need for a deterrent value in a penalty.

So the primary fault that I have with this bill on first reading is that so much of it seems to be predicated and closely aligned to the Government’s intention to reform the Resource Management Act (RMA) to allow for some fast tracking and cutting of red tape. Now, the problem I have with that is that here we are 14 or 15 weeks out from a general election, and it’s only now, under urgency, under extreme circumstances like we are meeting tonight and discussing this bill tonight that the Government has finally—after 2½, nearly three years—got its act together to bring this piece of legislation to the House. We still haven’t seen the shape and form of the fast-tracking RMA amendment legislation that Minister Parker has promised to bring to the House. We understand from scuttlebutt around this precinct that, in fact, there are issues relating to the coalition’s relationships between their parties that are preventing that bill coming to the House.

💬 Chris Bishop: I’ve heard that.

You’ve heard that too, have you, Mr Bishop? Well, certainly it’s a common source of conversation and speculation around this precinct at the moment—is that part of the reason that the Government can’t propose and advance its RMA reform packages—

💬 SPEAKER: Order! Order! Back to the bill.

Back to the bill. Well, the bill is predicated almost entirely on advancing the Government’s RMA reform agenda, so I’ll be looking forward to seeing how that goes at select committee.

I’ll be looking forward to analysing the various moving parts of this bill, and there are many of them. We will be supporting this bill through to first reading. We will be looking forward to adequate and full scrutiny, and we’ll be looking forward to hearing the submissions from, I’m sure, what will be a wide range of interested stakeholders who will want to have their say and speak from a point of view that is expert and knowledgable from the construction and building sector. So we will be supporting this bill and I’m sure that the Environment Committee, as I said, who have not had an awful lot of work to do during this Government’s term, will finally have an opportunity to get its teeth into some serious work, and it seems that the Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill is just the bill for the Environment Committee to get its teeth into.

Before I call the Hon Ron Mark, I’d just like to invite the Hon Mr Simpson to shift one place to the right. I’m sure the member needs not much invitation to shift to the right!

Thank you, Mr Speaker. Look, I rise to take a short call to express New Zealand First’s intention, of course, to support this bill and to also congratulate the Hon Jenny Salesa for bring this sterling piece of work to the House.

I need to rebut a couple of the comments that have been made in that last contribution, and that’s coming from Scott Simpson, who did chair the Environment Committee last term, which I served on. He did a very good job of it. But I do find it a little churlish, some of the comments—you know, taking 2½ to three years for Minister Salesa to bring this legislation to the House—and then, in the next breath bemoaning the fact that the legislation hasn’t been amended since it was introduced in 2004. Well, there were nine years in which Mr Simpson’s Government and the National Party had to pass this legislation.

💬 Matt King: Ron Mark, you opposed it.

We’re talking about, Mr King, the Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill, actually; we’re not talking about the Resource Management Act. We’ll get to that in good time. But it is a little silly, actually, to be criticising the Minister, who’s taken time to consult with over 400 people, time to consult with the industry. New Zealand First has had solid input into this legislation.

I have to say that I look at aspects of this bill and the work that’s been done and the legislation that Minister Salesa’s brought to the House and it does take me back to the days in local government as the Mayor of Carterton, when we were watching bemused as—

💬 Chris Bishop: Oh, the glory days!

Glory days in Carterton—always glory days in Carterton, Mr Bishop. But there was often a lot of criticism of councils for taking so long to get consents through, and there was the debacle in Christchurch, where they actually had their certification powers removed and other people put in. Carterton, under the stewardship of Milan Hautler and Suzanne Zabell, Bruce, and Robbie, would turn around consents in four days—four days. And we would turn up to local government conferences and listen to the problems and wonder why it was that in metropolitan New Zealand the problem was so bad.

Now, this bill highlights some of those areas where there have been challenges for certain councils. One of the areas that stands out, and I’m so pleased that Minister Salesa is addressing this, is the issues around building materials and the hoopla and the rigmarole that people go through when requests for information about building products and methodologies are put upon them, not realising, of course, if the council staff, the certifying staff, continue to request this extra information, that poses huge delays at times. And if that consent goes to the bottom of the pile, it might then take weeks to resurface again before it’s actually even addressed. Looking at the notes from Minister Salesa’s work, you know, some of those delays have been an average of 21 working days. I know of a case where a builder was stalled on his building through the intervention of a lobby group who decided to advocate that the building was actually a heritage building, when it wasn’t. But their actions caused that project to be stalled. It cost that builder $31,000 before he could actually get construction going again.

Anything that reduces red tape, anything that enables us to build houses faster, anything that assures the people of New Zealand that building standards will not be lowered, that, in actual fact, we’re going to be tighter on building materials and tighter on certification of products—we’ve had countless examples in New Zealand over the last 15, 20 years of shonky products coming into this country and being installed in buildings only to have to be ripped out later on. We’re talking about water reticulation pipes. I know there was that issue about panels that were meant to be fireproof that actually turned out not to be. There’s no shortage of examples of where people have gotten away.

And thank you, the Hon Scott Simpson, for pointing out that the penalties for breaches are going to be stiffened up here in this legislation. The stiffening up on the back of the loosening up around some of the regulation and some of the consenting requirements, to me, is very sensible. This is the carrot and stick. This is the Government saying we’re going to make things easier for you. We’re going to reduce red tape. We’re going to make sure that people can progress the construction of their buildings in a safe manner. We’re going to remove duplication. There’s a company down in the Waimakariri—Matt Doocey will know it—Fraemohs Homes, who build prefabricated homes and have shipped them all over the world, actually. When I lived down in Rangiora, I used to visit there quite frequently and look at the work they did. Sterling work, great work, fantastic homes, fantastic houses. But the certification, the consenting process, required these buildings to be consented in the factory and then again, when they were erected, to have another consent when they were erected on the section by the owner of the property who’d bought the building. Minister Salesa, very sensibly, has identified that as an area that’s just duplication and unnecessary, so that’s changing.

I’m not going to rotary hoe the same paddock over and over, other than to say that if the Opposition feels that it’s taken too long to get this bill to the House; that it’s generally good and it’s smart and it’s good for business and it removes red tape and it’s good for the public of New Zealand who are wanting to build their homes; if it’s going to accelerate the building and construction of homes when we know there’s a shortage and that needs to be addressed—if they think that, then I guess they’ll move it through select committee pretty quickly and we’ll have it back in the House so we can pass it before the election—don’t you think?

Thank you very much, Mr Speaker. This is an important bill, and I hear the comments of my colleagues that it’s regrettable—a little bit sad—that it hasn’t happened sooner, but it’s a very important bill.

I want to start by just setting the bill in the context of the Government’s wider work programme, and I want to congratulate the Minister Phil Twyford for the good job that he is doing, in some respects, when it comes to the issues of urban planning reform and heading in the right direction when it comes to our housing market. He’s had a tough time of it in the last couple of days in the House, but, actually, he has the right idea. The implementation is problematic, the delivery is not quite there, and we all know the problems with KiwiBuild and light rail. But, actually, I believe the Minister understands what we need to do to make housing more affordable in New Zealand, and there are four components: urban planning reform, and stopping what he calls urban containment—we support that; Resource Management Act reform—we support that, and we wait with bated breath, like everyone else, the Government’s changes; he is advancing legislation that’s before the committee I’m the deputy chair of, actually, which is the Infrastructure Funding and Financing Bill and its connections to transport links, which I have the privilege of the being the spokesperson of; and, of course, making it easier to build and making it easier to get consents for building; and, of course, looking at productivity improvements and efficiency gains that we can make in the building sector, and that’s what this bill is all about.

Actually, there’s a fair degree of consensus across the two major parties in Parliament about this work programme to make housing more affordable in New Zealand, and, actually, a lot of the stuff that the Government is doing, we would argue, should be happening quicker and more effectively, but a lot of that work was started under the previous Government. Indeed, the genesis for this bill started under the previous Government as well.

I want to point out three particular things in the bill that—one of them is a good thing, and two of them I’ve got a couple of concerns about. The first is the creation of a specialist framework for modular components, and the language used in the explanatory note is “MMC”, and I suspect the members of the Environment Committee that are going to be considering this piece of legislation are going to get pretty familiar with that term. But “MMC” refers to modern methods of construction, which is buildings that use automation technology and assembly line methodology to efficiently produce building products. That is, I believe, something that we need to do much more of in New Zealand. We need to be much more interested, and developers and builders need to show a lot more interest in prefabrication and off-site manufacturing.

The simple reality in New Zealand is that we love the bespoke house. Everyone’s got the house that’s a little bit different from the person down the road and the neighbour next door—and, of course, that’s fine. But the reality of that is it does raise cost, and that cost has to be paid for. So if we can move to a system where there’s at least greater use of automation, greater use of prefabrication, off-site manufacturing, slightly away from the bespoke model, then I think that will be a good thing. So we’re going to have a specialist framework that will be created through the bill, and I think the committee will want to invigilate and investigate exactly how that’s going to work, pretty carefully.

Second point I want to look at is about the building levy. So the building levy provides funding for the performance by the Ministry of Business, Innovation and Employment’s (MBIE) chief executive of functions under the Act. What this bill does is amend the scope of the levy so the chief executive can use it for wider purposes. Again, I think the committee is going to want to have a good look at that. The thing about levies is you have to closely tailor them to what they’re being raised for, and ultimately levies have to be paid by someone and you have to make sure that the levy that’s being raised is closely connected to what it’s being spent on. And I for one would be a little bit worried about a wider power for the chief executive to spend it on things that would be extraneous or separate to what the building levy is collected for, and so I think the committee’s going to want to have a good look at that.

I do just pause here to note that the regulatory impact statement for this bill has been prepared under significant time constraints and, actually, it notes that “This has not allowed [time] for engagement with stakeholders [and] refinement”—I’m quoting—“of the proposals that were part of the public consultation.” I think that is regrettable, because this has been a work stream, to use a bureaucratic phrase, part of the work programme for some months now; in fact, some years of this time in Government. I do just point out that I think the committee that is going to investigate this bill is going to want to get into the nitty-gritty of the proposals, because I do note that some of the proposals in this bill have not been part of the refinement for public consultation, and I think that is regrettable.

Finally, can I make a point around public notification. There is an amendment to the public notification requirements to publish in newspapers various matters that relate to the powers exercised by the chief executive, and that may well be a pragmatic change. Moving into the digital age, you can publish things online—of course you can; of course, that’s far easier for departments—but I’ve got to say, having trawled through the MBIE website trying to get to the bottom of where all the Provincial Growth Fund money has gone, in a past role that I am now no longer in, that MBIE website is pretty big and it is pretty confusing to get your head around. Websites, particularly Government department websites, tend to grow and they never get smaller—particularly for a department like MBIE, which has a multiplicity of functions and very diverse across different parts of the economy.

I do worry that if you remove the public notification requirements away from newspapers there will be a diminution in the information actually available to the people who need to see it. The thing about a newspaper is that despite the challenges that newspapers are facing, particularly in the community newspaper area, they are still widely published and, I believe, still widely read. I think the committee’s going to want to just have a look at that and see whether or not that is a useful change to make, and I’ll be very interested, actually, in the feedback from the building sector on that. If it turns out that, actually, the building sector quite likes the idea of still being able to open the paper and see the exercise of the powers by the chief executive, the notices that are published—if it turns out that the sector actually quite likes that, I for one would not want to move to a system where we move online just for the sake of it. I think we’ve just got to be a bit careful about that. So that’s in the bill and I’m sure the committee will have a look at it.

I’ll just end where I started, by saying that this is an important bill. It’s a shame it has taken so long, but I think it will be looked at and addressed in good faith by National members on the committee. They’ll do a good job, and we look forward to its return to the House, presumably sometime after the next election, and, if we’re fortunate enough to be back, then we’ll be looking to advance it. Thank you, Mr Speaker.

Thank you, Mr Speaker. So we really need a strong, efficient, quality building and construction sector in Aotearoa right now. We certainly need to be building good quality, healthy homes for people, as well as supporting our local New Zealand - based trade training, and our materials, and make sure that we’ve got a fit for purpose framework, given the huge, massive building work that we’re going to have to do as a nation. And so this, the Building (Building Products and Methods, Modular Components, and Other Matters) Amendment Bill is part of the huge work—and I too join with my colleagues in congratulating, ka pai, the Hon Jenny Salesa in going out there and getting the thoughts and the wisdom and the insights of the industry, of people who this legislation is really relevant to, and getting a clear mandate, clear support for tightening up the frameworks around our building products and methods and components.

So my understanding is that this is going to explicitly regulate building products and methods. And the problem we had was that we went through a bit of a boom, and I actually believe it was National who was in power through this massive construction boom and left so many gaps. So we had a shortage of building materials; we didn’t plan for that. There was a shortage, and that shortage actually invited and allowed a vacuum for an influx—a flood—of shoddy materials, basically, and particularly from other countries. There was non-compliant steel dumping and investigations into non-compliant steel dumping, and, actually, what that did is it ended up causing problems where some of those—I think “cowboys” is what other people have been using—less compliant players in the sector would go ahead and use these non-compliant materials, build whole things, put on a whole roof, and then an investigation and councils would find out that this was not compliant. It did not match up to our codes. And then they would have to go back. There would be infringements and a whole waste of time and work, and a whole lot of stress and worry for the people who were waiting for these buildings to be made. So we’re trying to fix up that very problem that has been happening in the sector for quite some time.

We actually had—well, it is still happening—but when that was happening at that construction boom period, we actually had the plumbers, the electricians, the gasfitters, the glass installers, the window installers, and also both the importers bringing stuff in and the local producers all saying how much of a massive worry and frustration this is for our sector, for our country, for the people who need us to be building, and for the employment and trade and training of the sector as well. I was looking around for the Hon Jenny Salesa. She’s not here, I believe, but I don’t think we can underplay exactly how much incredible work this is that she has done—that she is working not just with the sector but with a range of players and pulling this together. So it’s going to fix that gap in our framework building regulation, this bill. We’re going to have a bit more consistency, because, up till here, we have got individual councils that are left with trying to make this framework work. And so you’ve got different rules around the country, variable standards, and duplication, which many have spoken about.

We’re also, in this bill, wanting to set up a framework for certification in modular building, and in my travels in the building sector and housing provision sector, gosh, I am excited about where we could actually get to in terms of off-site manufacturing construction. I believe we’re way down in terms of an overall percentage of how we build, including housing. I think we’re way down, some years ago—gosh, grabbing out of the air, but somewhere down near 10 percent. But we should be getting up above 80, up above 90 in the longer term for off-site manufacturing. And off-site manufacturing—so this bill is going to look at the certification where we can allow for the off-site inspection but also continue with the on-site inspection of OSC and also off-site manufacturing and construction. But, also, that is about the potential for having that trade and training and employment in our regions and rural areas. I’ve spoken to many groups who are really keen to set up that follow-through programme right from the get go. Up in Kaikohe, up in Hokianga, where I come from, the potential for—we’ve got so many incredibly skilled builders, construction workers, architects, including people from Māori and Pacific communities, who want to run and drive those projects in our regions to be able to provide some trade training, some local-based trades training, and employment, and get the off-site manufacturing done in those areas that sorely need it. And this bill is wanting to provide that certification and further framework to help us get to that goal and to help these companies with their accreditation that needs to happen.

And the third change is about the Ministry of Business, Innovation and Employment (MBIE) requiring information about building products and methods and allowing MBIE to be able to drive their regulatory functions more effectively. And I’ve talked already about—I mean, it was even, like, for little things such as your little taps, in terms of construction materials, right through to whole roofing construction materials. So, shoddy materials all the way through, and so, allowing MBIE to carry out those functions more effectively.

I’m particularly interested in, and hearing at the select committee stage about, one of the final changes, which is reducing the building levy, because it is said that this is currently generating more revenue than needed to fulfil the functions that it was set out and set up to fund in the first place. So I’m looking forward to further scrutiny on this through the select committee stage. But it is good that the Hon Jenny Salesa went to so much work and trouble to get the support, to get the broad support for this, but we can always hear and tweak things even further. And I think that’s exactly how we should be setting up this regulation. So this has our support. Thank you, Mr Speaker.

This bill is one small and overdue but welcome step towards addressing one of the great challenges New Zealand has—and that is that we have a lack of housing supply, not enough to keep up with demand, and that is, of course, driving problems across our communities as people are unable to fulfil their aspiration of homeownership, face increasing problems with housing affordability, and where we see across the board the impacts that has for families and communities.

So this bill is a good thing, because what it tries to do is address that issue that, right now, houses can’t be built fast enough and the consenting process is slow and costly. The intent of the bill is to lift the efficiency and quality of building work and that is, of course, fundamental. We need to ensure that we’re not adding excess costs to the building of new houses, because that will only end up making houses more expensive for those who wish to buy them, and it’s appropriate that our legal and regulatory system be evolved to keep up with modern techniques, modern frameworks, and modern ways of building. And this bill does that—or, at least, in its intent attempts to do so.

So on this side of the House, we say yes to a high-performing building sector, and we acknowledge that there have been systematic problems holding the building and construction industry in New Zealand back. We particularly agree with the need for better information on products and the need for improved certification schemes, and we also acknowledge that we are now living in a time where modern construction techniques have evolved considerably. Ours is the time of modular and prefabricated construction and design, and we on this side of the House are optimistic about the way that those new techniques could reduce costs for the sector, for builders and those constructing new houses, but also, ultimately, reduce costs for those wishing to buy them. But, of course, if people are going to be confident about taking up those new techniques, we need to make sure that the regulatory system, the certification system, and the information about those products is up to scratch. And this bill provides a framework in which that will be more possible.

So, overall, it’s my understanding that the builders and developers who deal with these issues on a daily basis think that this bill moves things forward and is positive. And so on that basis, I think it is it is probably well put. But I think the select committee process here will be particularly important because, as we in this House know, wherever we are seeking to create new regulations, new certification schemes, the potential to tie people up in more red tape and create regulations that constrain rather than encourage innovation is always there. So I will encourage those who are builders, those who are involved in development, to have their say on this bill. And I do so, very conscious that the nature of the building and construction sector in New Zealand is largely small and medium sized businesses. We have a model in New Zealand where tradies and builders often own their own businesses and subcontract other workers to come and help them with projects and in turn are subcontracted by others.

I do want to flag a concern that is something the select committee may want to think about, which is that if you’re in the building and construction sector, and you’re a small or medium sized enterprise, you may not be reserving a lot of time in your diary for submitting to a select committee. So I would challenge the House and those on the committee to think about how we hear from the voices of those really at the hammer face: really, the builders who are going to be most affected by this regulatory framework.

I also just want to flag up that this is a bill that looks at the levies currently able to be applied to the sector and it expands what those levies can be used for. Now, at face value, National doesn’t oppose this, but we are wary that when you say to a Government department in the future, “You’ve got more scope to use the levy for what you want.”, Government departments can sometimes take that ball and race a little bit too far with it. So we will be examining the bill carefully and hearing from those in the construction industry about whether they think the loosening of those levy requirements is appropriate and proportionate.

Finally, it must be said that this bill, while it is a worthy step in reducing the red tape processes of consenting and evolving our regulatory framework, it is but a very small step. And it is a shame that 2½ years into the term of a Government who promised that they would solve New Zealand’s housing woes and build 100,000 new houses, this is the most substantive thing that’s been offered up, because, fundamentally, and it seems to be increasingly agreed across the House, while these changes will take us some of the way, until we repeal and replace the Resource Management Act, the builders who will be complying with this bill will still be subject to unnecessary delays and cost.

So, on balance, National isn’t going to oppose this for opposition’s sake. We acknowledge that its intent is good. It’s trying to make building work more efficient and of higher quality. It’s trying to build confidence in modern construction techniques and to ensure that there is better information available on products. It’s a modernising bill. It’s a potential step forward. But we urge very careful examination by the select committee in the further stages, we urge those in the building and construction sector to have their say and tell us how it will impact them, and we further urge that far more substantive steps are needed if we are truly to address the problems with the cost of building in New Zealand and the lack of housing supply. Thank you, Mr Speaker.

The question is that the motion be agreed to. Those of that opinion will say Aye—[Interruption]

💬 Matt King: We had a split call with Labour.

Well—

💬 Matt King: They didn’t stand up, so—

If no else takes a call—well, I’ve put the motion, Mr King.

💬 Matt King: I was waiting for Labour; they didn’t, so I stood up.

Should we take leave for Mr King to have a speech and then I’ll put the motion? Is there any objection to that? Right, there is objection—there is objection. OK.

Bill read a first time.

Bill referred to the Environment Committee.