Young Jonathan: Building Amendment Bill (No 2) — First Reading 
Young Jonathan: Building Amendment Bill (No 2) — First Reading 
[Volume:652;Page:1789] 
JONATHAN YOUNG (National—New Plymouth) 
: 
 Speaking as a person who has built three of his own homes I am pretty glad I built them prior to 2004 by the sounds of things. I did not really build them; I was the project manager. I did build one wall which had to be rebuilt so perhaps my skills are in project management rather than with a hammer and nail. 
The building industry is a very important part of the New Zealand economy. Housing is a basic necessity and a human right and affordable housing has become an increasing concern for all New Zealanders and members on both sides of the House. In March 2008 the then Prime Minister’s office released a report into house prices. It claimed that in real terms house prices had increased by 80 percent since 2002. That is more than the increase in the 40-year period between 1962 and 2002. The cost of land has also doubled since 2001. We identified tremendous concern in our country particularly for young people trying to get into their first home. The Building Amendment Bill (No 2) is very advantageous to the hope that we will see the price of housing come down with measures taken to reduce compliance costs and regulation costs but without reducing the quality of the homes that builders in New Zealand construct. 
House prices have fallen since those statistics were produced but the historical house price to household income ratio of close to three and a half times annual earnings has changed considerably. Affordability requires household disposable income to increase by 80 percent or house prices to fall by over 40 percent. This bill will begin to address that alarming increase we have seen. 
Although there are a number of drivers to this increase in unaffordability one notable driver is the increase in regulation costs and compliance costs. Last year National members pointed out—and some members have stated so here this afternoon—that the Building Act was estimated to have loaded up to $20000 on to the cost of building a new home. When we came to building our first home if another $20000 had been added we would not have had a home. Not only would we not have had a home but I am sure that the builder and subcontractors—plumbers and electricians—would have been without the benefit of that employment. 
So we see as we begin to address some of these costs that not only are we making the issue of housing affordability important so that it is within the grasp of young people and families in particular but also there is the opportunity for more work to flow to subcontractors. At a time such as this when we are facing a global recession that is affecting the construction industry in particular there are people out there in our communities right now who are perhaps on their last job or wondering whether in a week’s time they will find more work. We will not get this bill through in time for that to be resolved but it will address that issue and housing affordability and increase work opportunities in time to come. 
Not only does this increased cost act as a huge roadblock to people but removing it will make it far easier for people who are in the subcontracting industry to find work. The National-led Government sees streamlining as important because it will free up our economy and promote growth particularly at this point in time. As part of our first 100 days in Government we introduced a bill to streamline and simplify the Resource Management Act to improve the processing of resource consents and cut compliance costs. The reform of the Building Act has the same intention as our work on the Resource Management Act. It is part of this Government’s ongoing commitment to cut red tape. 
One instrument with which to streamline the building industry is to employ multiple-use consenting which we have heard about this afternoon. It will help drive improvements in housing costs and affordability by removing barriers to achieving potential economies of scale. Another change this bill seeks to bring about is reducing the statutory time frame for processing a building consent application from 20 working days to 10 working days where the application includes a national multiple-use approval. That makes great sense and enables expeditious timing to take place in building projects. 
These proposals follow consultation with the industry and local government. As a member of the Local Government and Environment Committee I look forward to working in that group to progress the bill to the next stage. 
The bill introduces another two changes. The first is to differentiate between major and minor variations to consented building work. Let me tell members as someone who has designed houses and built them that plenty of variations come along. Halfway through the project one sees a cost saving or halfway through the project one thinks of a better idea. Kiwis have ingenuity and want to make things better if they can without having to load up extra costs for a good idea or to save in the overall expense or put a better design element somewhere in the house. That is a good move and will offer the flexibility that people involved in construction and building enjoy. It will allow for creativity and changes to come without making it overtly or unnecessarily expensive. 
The second change involves project information memoranda which we have heard about. They include great information for somebody who wants to go forward in a project but many builders and developers know everything they need to know about a particular property. A project information memorandum is a compulsory requirement in the consenting process but as we have heard only 5 percent of people seek that memorandum before the consent process takes place. Obviously they get the memorandum at the same time as the building consent in order to comply but the other 95 percent of people find it unnecessary. It adds cost. There is a range of fees all the way up to $1189 for particular projects. It just adds cost that many people feel is unnecessary. It also adds time. 
The project information memorandum is still available and it is a very interesting and perhaps positive report for people to seek if they are not sure. But many people are sure and we feel that in making them voluntary rather than compulsory it will be very good in keeping down compliance costs. It is a great service that councils can offer. For example a project information memorandum will show whether there could potentially be erosion on the property falling debris subsidence or slippage or silt build-up because the land is susceptible to flooding or in fact whether flooding could happen on the property. All that information is very useful and councils feel that giving this information is pre-warning people so that later on they are able to proceed with full knowledge. 
Hon Maurice Williamson 
: It would have been good if that had been around in Noah’s time. 
JONATHAN YOUNG 
: That is right. However a project information memorandum adds expenses—professional fees to advisers territorial authority fees and the cost of delays in starting the building. All of those can cost money. Even though there is a fee regime from a territorial authority there can be very high expenses in terms of professional fees to support that project information memorandum. This bill does not do away with that cost but makes it voluntary whether someone seeks a memorandum. 
This bill will streamline many aspects of the building industry and in that regard I believe that it is very well supported in the House. It is part of National’s commitment to reducing red tape in order to get this country growing again. I thoroughly support this bill. Thank you Mr Speaker.