Smith Nick: Residential Tenancies Amendment Bill — In CommitteeText is incorporated into the Bound VolumeSmith Nick: Residential Tenancies Amendment Bill — In Committee[Sitting date: 24 May 2016. Volume:714;Page:11128. Text is incorporated into the Bound Volume.]Hon Dr NICK SMITH (Minister for Building and Housing): I want to rise to the challenge of the points that were made by both Denis O’Rourke and Su’a William Sio who has just spoken. Firstly he says the Residential Tenancies Amendment Bill is about cheap insulation. No it is not. Let me be very clear: the bill and the regulations require that all insulation to be installed is to the 2008 standard—absolutely. He asks the question as to whether cost should be a factor in the policy making. Of course it should because all costs that we impose through regulation of this sort are ultimately passed on to the tenant and we have to be confident that the benefit is more than the cost. So here is my challenge for Mr O’Rourke and Mr Su’a William Sio and it is this—Hon Members: Sio.Hon Dr NICK SMITH: —Sio—when it came to the earthquake-prone buildings legislation this Parliament did not require that every single building be upgraded to today’s standard. Were we as a Parliament saying that lives do not matter? No we were saying quite logically that there needs to be an upgrade of older buildings but that it is not realistic that every older building meets the same standard today.I challenge the member on this point: the current new regulations require every home in New Zealand to have double glazing. Why do we not put in this bill that every house has to retrospectively get double glazing? If you want to follow the logic that you have advanced which is that every building has to be to the same standard that is what you would do. The reason we do not do that is not because we do not care about children or about home warmth; it is because we are economically rational. If we required every home to meet today’s standard and to be double glazed—if you believe what you say you would actually put in this bill that every home has to be double glazed because that is the current standard. But we do not because the cost that that would impose would exceed the benefit.Here is the bit that I do not think is understood: the 1978 standard provides for an 83 percent reduction in heat loss. The 2001 standard—they are the facts; they are the technical statistics the R rating. In respect of the 2001 standard that takes it to 87 percent and the simple logic is this: insulating the 180000 homes that are not insulated at all of which you are getting no reduction in heat loss is where the massive gains are to be made. Members opposite are completely underestimating the challenge for the insulation industry to do 60000 homes per year over the next 3 years which in my advice is going to stretch that industry to its absolute limits. That is my view: the cost-benefit analysis is overwhelming in saying that the benefits come from those houses that are uninsulated. Furthermore this bill requires that where the insulation from 1978 is not in fit and proper condition it does need to be upgraded and when it is upgraded it is upgraded to the 2008 standard. That is logical that is consistent that is the right thing for New Zealand families and it is the right thing for New Zealand homes.