Smith Nick: Building (Late Consent is a Free Consent) Amendment Bill — Second Reading 
Smith Nick: Building (Late Consent is a Free Consent) Amendment Bill — Second Reading 
[Volume:640;Page:10730] 
Hon Dr NICK SMITH (National—Nelson) 
: 
 It is with great disappointment that I inform the House that the Government has decided to reject the Building (Late Consent is a Free Consent) Amendment Bill which seeks to address a very real problem for thousands of New Zealanders and for an industry that is worth over $18 billion a year to the New Zealand economy. This bill attempts to address a subset— 
Darren Hughes 
: I raise a point of order Mr Speaker. The member is a member of long standing and we have delayed the second reading of the bill in order to enable him to be here tonight to move his bill but I notice that he is a couple of minutes into his speech and he still has not moved the motion that the bill be read a second time. 
Mr DEPUTY SPEAKER 
: He is not a couple of minutes into his speech and he was just coming to that part. 
Hon Dr NICK SMITH 
: So despite my disappointment I do wish to move  
That the Building (Late Consent is a Free Consent) Amendment Bill be now read a second time 
. I want to make the point to members opposite that the biggest issue on the minds of New Zealanders today is the huge dilemma presented by our economy. In our economy we have strong house-price inflation which is resulting in the Reserve Bank governor having to wind interest rates up. The consequence of that is a record high exchange rate which is destroying regions like my own that are dependent on exporters. 
One would think that a Government might want to do everything possible to try to constrain house-price inflation. In fact Government members sit back like Pontius Pilate saying that this is nothing to do with them that it is someone else’s problem. Well I have to say to members opposite that their refusal to amend the Resource Management Act with the effect that is having on the supply of homes—this is Economics 101 supply and demand—plus the bureaucratic costs that have been added with the Building Act 2004 are contributing to that problem and to New Zealand’s wider economic woes. There has been a dispute in the Local Government and Environment Committee about how big this problem is. The Registered Master Builders Federation told us that it now takes longer in New Zealand to get a consent to build a house than it actually takes to build it. That is disgraceful. That is absolutely killing off— 
Darren Hughes 
: Whereabouts? 
Hon Dr NICK SMITH 
: The member asks where. If we look in my own community of Nelson we see that the problem is significant. We heard submissions from every part of the country and if the member for Otaki actually bothered to speak to some practical people in his own electorate he would know it is a problem there too. I say to members opposite that even the Government accepts that this is a problem for at least 20 percent of building consents. Twenty percent of building consents means 16000 homes a year. I cannot believe that members opposite would want to ignore a problem of that size. 
I have some sympathy with the plight of councils. The reality is that this Government has imposed huge extra bureaucratic costs on them. The process by which building consent authorities are accredited is over the top. Where the Government has got its response to the leaky home problem out of order and wrong is that it has not bothered to strengthen commercial accountabilities to make sure that those who build shonky buildings are held responsible. The end result is that councils have ended up as the guarantee of last resort of our building industry. Because councils face liabilities of not hundreds of millions but billions of dollars they inevitably have become incredibly risk-averse and they in response to that are contributing to this problem. So I have some sympathy with councils and the reality is that the Government has made the problem so much worse for them. 
I will give a really practical illustration. I actually come from the construction industry as does my colleague Bob Clarkson. I will give the House a practical example of what the Government has done. Here in my hand I have a building consent for a $240000 very standard home in Nelson built by Jennian Homes—a good company. There are 35 pages of documentation here and the building consent fees in 2004 were $2700. I have a second building consent in my other hand. As a consequence of the Government’s Building Act not 30 pages but over 200 pages of documentation are required and the fees for the homeowner in this case were over $7600. I do not think members opposite have any idea of the bureaucratic paper-ridden system that they have introduced into the building industry or of the costs that is imposing on the average homeowner—costs that are contributing to the huge pressure on house prices that is doing so much damage to the New Zealand economy. 
So what would this bill do? This bill focuses quite specifically on the issue of the legislative requirement for building consents to be processed within 20 working days. Every other New Zealander has to obey the law—so too should those administering the law. Members opposite effectively say that when councils breach the law and go over the 20 working days there should be no penalty. The most interesting part of councils’ and the Government’s argument is that they say it is perfectly proper for councils to put a penalty on ratepayers when they do not pay their rates on time. That is what councils do. Why do councils do that? They all admitted that they do it because a penalty incentivises people to pay their rates on time. Well if it is good enough for the goose is it not good enough for the gander? If it is good enough for the council to put penalties on citizens when they are late what about when the council is late? 
That is where members on this side of the House make no bones about the fact that we are on the side of the average Kiwi not on the side of the bureaucrats. We are here to back those builders and homeowners who are trying to get ahead in life and are having a huge heap of paperwork and delays imposed on them. 
Let me go through each of the arguments the Government has put forward as to why it is opposing this bill to show how weak the Government is. The first thing it said is that if the council has to process the consent within 20 working days it will not be done properly. Well is that not interesting? We spoke with the Hamilton City Council. It has 100 percent compliance its fees are lower and it is on time. I note that Hamilton’s good mayor Bob Simcock a good former National member of Parliament has applied some common sense in his district and there is absolutely no evidence to show that his council is now doing anything less in terms of quality. Then how about this for an argument from Labour? It said that if there is a penalty the council will process the little consents and not the big ones. Well I have heard some daft arguments. Members should remember that the size of the fees is proportional to the scale so the size would make no difference to the financial incentives for the council to do the work on time. And then the weakest of the arguments that have been provided by the Government in rejecting this bill is that it is unfair because the councils are having difficulties attracting the skills. Well I have to say that if I do not pay my tax on time to this good Government and I say: “Look I’ve had trouble getting hold of an accountant.” does the Government say: “Oh we’ll let you off your tax.”? Of course not! If I do not meet my regulatory requirements as a building owner and get an engineer on time to provide my annual building certification will the Government let me off the hook because there is a shortage of building certifiers? Not on your life! So I simply tell members opposite that they apply one set of rules for bureaucrats and a different set of rules for average citizens. 
So I plead with this House is it not time we took a stand on behalf of the average citizen? Is it not time that we stopped talking about reducing paperwork and actually made some attempt to do it? Is it not time that we stopped talking about compliance costs and actually did something about them? Is it not time to give the homeowner a win? Is it not time that we made councils accountable? And is it not time we actually ensured that when councils break the law there is a penalty? 
The last point I say to members is this: National’s view is not that we believe there will be a cost to the ratepayer. Hamilton City has shown that with the right incentives building consents are done on time. As a result there is an increasing supply homeowners are getting a better deal and that is the right sort of way forward for us to provide fair laws for this country and for the building industry.