Twyford Phil: Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill — First Reading 
Twyford Phil: Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill — First Reading 
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PHIL TWYFORD (Labour) 
: 
 I am happy to take a call in the first reading debate on the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. 
I acknowledge the work of the Minister in this area the Hon Maurice Williamson. Our country has been grappling with this huge problem for a number of years now. In saying that Labour will support this bill’s referral to a select committee we recognise that the Minister has worked hard and that this bill represents a genuine effort over a number of months to try to come up with a package that will seriously address the scale and complexity of the problem and attempt to provide relief for homeowners who have been afflicted by the leaky homes problem. 
We support this bill being referred to a select committee. We look forward to teasing out some of the questions and the issues on this bill because there are many. I will use the time we have today to raise just some of those questions about the structure of this package. 
The key thing about this bill is that it provides an indemnity to the Crown in the case of homes or buildings that will benefit from this financial assistance package. That is the first thing. The second thing is that it gives the Minister the power to provide a guarantee for commercial loans that are obtained to cover the 50 percent of the cost of repairs that are left over once the Crown and the council have both made their 25 percent contributions. 
That is the first thing I will query. We see in the regulatory impact statement that the Department of Building and Housing advised quite strongly against the Crown being indemnified. It said there was no reason why Department of Building and Housing assessors who scope a repair job should not be required to stand behind their work. I know that quite a few people in the industry feel the same way. The Department of Building and Housing said that the Crown’s liability would be very limited—there would not be a huge liability—and there was no reason the Crown should be indemnified. I am interested to hear from Government members in this debate why Cabinet and the Minister have gone against that advice and insisted on indemnifying the Crown. 
The next question is one that the Minister raised. It is the provision in the bill that seeks to prevent so-called double-dipping. People who benefit from this package may then sue other third parties like builders designers and architects. The provision seeks to prevent those people from trying to enjoin the council in that legal action. This bill specifically takes away that right. The regulatory impact statement says that it may be a breach of the New Zealand Bill of Rights Act to take away the longstanding legal right of joint or concurrent tortfeasors to seek a contribution. I wonder whether that is something else the select committee should consider—that this provision is unjustified and unnecessary. 
The third question I raise is about the 25 percent council contribution. Much of the language we have heard in the discussion of this package by the Minister suggests that if one signs up to the package one gets the 25 percent contribution from the council. That is what has been conveyed. But in the wording as I understand it the bill gives the council the right to opt in and make that contribution. The council is not required to opt in; it will simply allow the council to consider as it does now on a case by case basis what it wants to contribute. If it chooses to opt in to the Government scheme the bill clearly says 25 percent. But councils will not be required under the bill to pony up with that 25 percent. I think that is a very significant difference from the way it has been presented publicly. It will give councils the opportunity to consider each case on a case by case basis but a council will hold the whip hand when it comes to negotiations. It would be good to hear a response to that question from the Minister or from his colleagues. 
We think that clarity is needed in situations where a repair job goes pear-shaped. Given that the bill indemnifies Department of Building and Housing assessors what will happen if a homeowner goes into a repair project borrows half the money and gets half from the council and the Government but then finds halfway through the job that the assessor has got it wrong and a significant value in extra repairs is needed? What happens if they get halfway into a job and they find that some more structural work needs to be done? I have not heard anything from the Minister yet and nothing in the bill or the commentary gives any reassurance in that area. 
Hon Maurice Williamson 
: Quite a bit of this will get sorted at select committee. 
PHIL TWYFORD 
: Sure. Another concern is that the bill does not require remediation work to restore homes to the performance or durability requirements of the building code. It is quite possible in the framework we see in the bill that councils will insist for example on targeted repairs which may be unsatisfactory in terms of compliance with the building code. I would like to see the select committee take up that concern. 
It is not clear to me how this bill will affect multi-dwelling buildings which are particularly in Auckland a very big chunk of the leaky buildings problem. It seems to me that if an apartment complex was going to benefit from this package the body corporate would basically have to get 100 percent of the— 
Hon Maurice Williamson 
: No because the Unit Titles Act kicks in next year and it allows 75 percent. 
PHIL TWYFORD 
: OK. I appreciate the Minister’s explanation but it still leaves the question of whether a significant number of multi-dwelling units will not be able to be helped by the bill because they will not be able to reach the requisite 75 percent. Particularly with multi-dwelling units at the bottom end of the market people there will have very little equity in their buildings. They may not be able to afford the 50 percent. That is another question about this package. I do not mean to be pernickety because we genuinely acknowledge the effort and the ambition that has gone into the bill but a lot of people will not benefit from this bill. Many many people will simply not be able to afford to take on the 50 percent loan to meet the rest of the costs. 
Another concern is that the bill does not differentiate between genuine owners of leaky homes and greedy speculators who may be going around now snapping up buildings that are not weathertight buying them at knock-down prices. They are eligible under the bill for what would be a massive taxpayer subsidy to repair the buildings which they could then flick on at market value. I question whether the limited taxpayer resources available to solve this incredibly important problem should be delivered in that kind of way to speculators who could make a killing under this bill. I hope we will get the chance to discuss that concern as well. 
Doubt remains about the role of the banks in all this. I know the Minister has made reassuring noises but we saw in the  
New Zealand Herald  
this morning the Bankers’ Association saying that the banks had not yet agreed to participate. I would like to hear from the Government members now and not wait to hear in the select committee precisely what kind of guarantee the Minister proposes for those loans. If people find themselves in a default situation will that contract be allowed to fall over? Will they be allowed to default? Will the banks step in? What kind of premium is the Government intending to pay on behalf of the taxpayer to support commercial banks with those guarantees?