Building (Late Consent is a Free Consent) Amendment Bill — Second Reading 
Building (Late Consent is a Free Consent) Amendment Bill — Second Reading 
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Building (Late Consent is a Free Consent) Amendment Bill 
Second Reading 
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. 
Hon CLAYTON COSGROVE (Minister for Building and Construction) 
: 
 I will unpack the lack of logic around this bill but despite all the hot air the member finished by saying two things. He said we should help out the average Kiwi. I will put that aside and get to that in a moment. But then he quoted the jewel in the crown of local authorities the case winner for him the Hamilton City Council which he says is doing this and he uses this as the only example in New Zealand that should win the argument logically in this Chamber for him. Well it is interesting. 
Let us read the reaction to his bill by a chap called Graeme Fleming the environmental services manager for Hamilton City Council the council that Dr Smith quite rightly cites as the be-all and end-all as one that is doing this—[ 
Interruption 
] Hang on taihoa. The  
New Zealand Herald 
 on 17 February 2007 quoted Graeme Fleming of Hamilton City Council as saying that Dr Smith had got it wrong that “It’s no use being a quick consent if it’s not a quality consent.” 
The second thing that Dr Smith rabbited on about was this: he said and I agree with him on this that we should think and do something for the average Kiwi ratepayer. I agree with that. We know that Dr Smith’s National Party policy is not to visit extensive rate increases on the ratepayer. That is what he said and he nods in agreement and I acknowledge that. I am glad to get him on the record. So what does this bill do? This bill says that if the person wanting the consent—the person wanting to build a house—rocks up to the council and the council does not meet the 20-day deadline then the costs of that consent are absorbed by the council and the person who wants to build the house gets the consent for free. That is what the bill says. But Dr Smith’s understanding of economics and cost accounting is so limited that he fails to acknowledge that the costs associated with that consent process do not vaporise into the ether but are then spread across every other general ratepayer who does not want a building consent. If he is so naive that he thinks that local authorities will not raise rates in order to absorb those costs then he is a lesser man than even I think he is. His understanding of what we should do to assist the average Kiwi ratepayer is sadly lacking. 
This bill is a simple political pamphlet. It is thin; one A3 page is all there is of it. That is the intense thought process that Dr Smith went through. That is the depth of his knowledge and research. The bill does not address the systemic organisational problem that one finds in every organisation. If an organisation has a doubling in its customer base and if it has a doubling in building consents then the organisation needs to address the organisational factors within. Does the organisation have enough building inspectors clerical people and consent people to get the consents out? Are there management systems in place to deal with them efficiently? Are there resources to back the consenting process? Nothing in this bill addresses that. And Dr Smith got the following wrong. The Labour Party has said that councils would be incentivised not to deal with the small consents but to deal with the large commercial and residential consents—the big ones—because that is where the high risks and the big dollars are if a council misses the 20-day mark on them. And mum and dad average Kiwi ratepayers whom Dr Smith purports to want to protect get done over. 
Dr Smith waxed eloquent last night and did the old parish political pump. He had a go at the leaky building stuff saying we need quality we need safety and we need benchmarks. I agree. Yet his bill tonight does not propose to address any of those issues. It does not address the issue of a council that has not met the 20-day mark but has addressed quality and safety issues. It says that if the 20-day mark is not met then that is it. That is what the bill says. It does not address quality. It does not address safety. It does not address the inherent failures we have had in some local authorities when building inspectors for instance have not done their job. That is what the bill does not address. 
The bill is a limp attempt at politics. I say this: members do not have to believe what I say about the bill; let us have a look at the reaction to it. I cite this wonderful piece of information called the  
East Coast Informer  
and what that newsletter called the bill. A woman called Pat Seymour a National Party member and chairwoman of the East Coast branch of the National Party called the bill “daft”. Now I am a young man—I know that people will not believe this—and I had to look up this word “daft” in the  
Collins English Dictionary 
 to see what it meant and this is what it says: “daft—foolish simple stupid” and the clanger for Dr Smith is that it says “insane”. It is an insane piece of legislation from a daft member. This is what a member of his own National Party said about him. I quote from Pat Seymour and I can do no better than that member of the National Party when she said: “From a local authority perspective this is a daft piece of potential legislation. The only one that will end up paying every time is the general ratepayer.” Pat Seymour a member of his party and a member of Anne Tolley’s electorate committee said that. She understands absolutely what will happen to the average Kiwi general ratepayer. 
She goes on to say: “All costs have to be budgeted for within a local authority. If a consent not provided within the described time frames is made a free consent to the applicant—then departments will simply budget a sum within the rate strike to allow for any such eventualities.” She said: “From my experience council officers make every effort to meet statutory time frames and there is usually a very good reason for consents being late.” Now they are the words from one Pat Seymour East Coast National Party electorate chair in January 2007. Do not judge me by what I say judge the member’s own party member who has worked out that this is a daft to quote her piece of legislation from a daft member. 
This is about politics. This bill does nothing to address the systemic failures that have occurred within local government. So the question is: what is the alternative and what should we do about it? Well the member is right. We have embarked upon an audit and accreditation process. What does that mean? That means we go in with International Accreditation New Zealand an internationally renowned accreditation procedure and ask: “Are your systems up to it? Are they efficient? Do you have the skills and knowledge? Do you have the people and are you adequately resourcing”— 
Mr DEPUTY SPEAKER 
: Do not bring the Speaker into it please. 
Hon CLAYTON COSGROVE 
: I am sorry. Are the councils adequately resourcing the consenting function? That is basic organisational theory. One does not go into an organisation saying: “Look you haven’t got enough people your systems are not good enough you haven’t got enough resourcing so if you don’t beat the mark we’ll chop ya.” One does not say that—or say: “Give it away free.” That is not how one solves a logical problem. But we know that there is inherently a basic lack of logic with this member. That is what one does. One goes and addresses the systemic failure. And of course councils are doing that. Some councils are finding it tough. Smaller ones are struggling to meet the 30 November deadline but they are working towards it. Palmerston North has met it. The Government has put 3 million bucks into a system to address the core issues. 
The crowning jewel for this member was Hamilton City Council. Well that has been torpedoed. His crowning jewel was his National Party policy. Well Pat Seymour has put the sword into him tonight slashed him open and slashed the policy open. What will the member say? Will he get up and say that Pat Seymour is wrong and his colleague Anne Tolley is wrong? Yes—he nodded his head. Let us have a look at what Len Clapham the Chief Executive of the Building Officials Institute said. He called the bill “idiotic”. Let us look at what the media has said about this great genius from the National Party. The Christchurch  
Press 
 states: “Nats’ own-goal”. The  
Southland Times 
 states: “Consent fee waiver plan nonsense” and “Consent bill very dangerous”. I have a quote from the  
Whangarei Leader 
—and I see that John Carter is here—“Building consent plan short-sighted”. These are quotations from the independent media. 
So on all counts Nick Smith has no credibility. He stood up and said National wants quality in the building industry yet this bill does not address that. He stood up and said National does not want costs visited on the general ratepayer. Well this bill does that. Pat Seymour the National Party member agrees and knows it and has put it on record. On every count this flimsy political pamphlet of a bill with about as much thought in it as he gives most of his work has been done over. I say to New Zealand that the Government is dealing with this. Local authorities are stepping up to the plate and we are going to deliver to consumers in the correct way in the proper way and in a way that works—not with political stupidity. This is a daft bill from a daft daft member. 
JOHN CARTER (National—Northland) 
: 
 It is with a great deal of pleasure that I get to follow the Minister Clayton Cosgrove. If ever there was a Minister who was right outside of his own ability we have just seen it. He is a guy who has imposed so much cost on to New Zealand on to local government and on to individuals that he is a disgrace. Of course he is part of the Labour Party and just being part of the Labour Party is a disgrace anyway. But let me tell members that this Minister is not just a disgrace but also an absolute failure. In the next few minutes that I have to speak I intend to explain why. The first thing is that when this Government took over in 1999 the Department of Building and Housing—or its equivalent—employed 31½ people. 
Tim Groser 
: 31½? 
JOHN CARTER 
: I think Clayton Cosgrove was probably the half but the department had employed 31½ equivalents. Does anyone want to have a little guess at how many people are employed there today? 
Hon Dr Nick Smith 
: 50? 
JOHN CARTER 
: No not 50. Give me a bit more. 
Chris Auchinvole 
: 80? 
JOHN CARTER 
: No. Would members believe it is over 300? Over 300 people are now employed in the Department of Building and Housing. It is a disgrace. How many percent has it gone up? Who can calculate that? Is it a zillion percent? In Northland terms it is a zillion percent. It is an absolute disgrace. But do members know what the outcome is of 300-plus people writing rules and regulations? It is that we now have departments in the Department of Building and Housing. One department has to write some rules the next department has to check them then the third one has to get them and see whether they are OK and when they are not it has to send them back because it has to be busy. So it goes on and on. But what is even worse—and this is why my colleague Nick Smith has brought this bill to the House and he deserves to be applauded for it—is that we are over-governed and we have more compliance than we absolutely need. The reason is that local government now has to try to match the Department of Building and Housing. The upshot is that the bureaucracy in local government has grown from 30000 in 1999 to over 40000 in 2007. It has gone up 25-plus percent. The building inspectorate of the Department of Building and Housing—and the Government knows this—has grown like crazy in the number of people it has to employ. The reason for that is the volumes of paper. With the volumes of paper the books and all the things those people have to understand they cannot keep up. 
Let me tell my colleagues what is even worse because it is another thing we need to understand. Do they know where the 300 people who are now employed in the Department of Building and Housing came from? They came from local government of course. So why can local government not get staff to deal with what the Department of Building and Housing has put out? It is because they are all employed in the Department of Building and Housing. So local government is left without staff who are capable of responding to issues and administering the rules that their previous colleagues are writing. 
Clayton Cosgrove is saying that we have got to get on top on this we have to get the compliance down and we have to make it easier. Let me tell members the next thing. When ordinary John Citizen goes into the council and says: “I would like to fill out a building permit please. Could you let me have the pieces of paper.” he comes out with a wheelbarrow full of reams and reams of paper. So John Citizen has a look around and says: “I don’t think I can do this.”; and the council says: “No we would advise you to go and get a lawyer. Go and get someone who is capable of filling out the building permit because you won’t be able to.” That is what Nick Smith is telling us. He is telling us that the compliance costs are just so hideous that he has brought in this bill. 
Clayton Cosgrove is responsible. He is the one who has seen this grow exponentially. He does not care about compliance costs. The Labour Government does not care. Let me tell members what I think is the best thing Clayton Cosgrove could do. The one thing we can say about Clayton Cosgrove as far as I know is that he is not a liar. As far as I know he does not lie. He would be better to take over David Benson-Pope’s place as the Minister for Social Development and Employment. 
But let us move on from there because there are several other things that are a real worry and it is why my colleague Nick Smith has brought in this bill. Nick Smith knows that we have a leaky home problem in this country and what he is worried about—and what we are worried about—is the fact that under Mr Cosgrove’s regime more leaky homes are being built. We have this department that employs 300 people who are meant to be making sure there are no more leaky homes. Members will be interested to know that right now the materials in current homes that are being built are faulty. Mr Cosgrove has a department that is meant to make sure that materials are certified. Over 600 sorts of materials go into houses. So far the Department of Building and Housing has managed to certify four. With a staff of 300 people it has managed to certify four materials that go into our homes. 
If we get copper pipes from Australia they are certified for 50 years. If we get them from England they are certified for 60 years. But people are importing them from Asia with no certification at all. Those pipes are being put into New Zealand homes. They have been tested and they might last 7 years at best. Right now they are being put into our New Zealand homes. They might last 7 years—it is a lottery. What will happen is that in 10 years’ time someone will flush the toilet and mum will get a shower in the kitchen. That will be the upshot and this Minister is responsible for this. That is why my good colleague Nick Smith has brought in this bill—to try to bring some focus on what is happening in the building industry in this country. 
That brings me on to my next point and it is why my good friend and colleague Nick Smith has brought in this bill. The worry in the building industry is that it will become so difficult to comply with the regulations that the Department of Building and Housing Clayton Cosgrove and the Labour Government have brought down that a number of people are thinking of exiting the industry. 
 They are seriously thinking of exiting the industry. It has got to the stage where they cannot make a living out of it. They are seriously worried about the fact that the compliance costs are so difficult they cannot get by. 
Let me finish on one other point and it is a serious one. It is this issue of certification that the Minister talked about at the end of his speech. He talked about the fact that we do not need Nick Smith’s bill because all the councils will soon be able to be certified and all the building inspectors will know what they are doing and therefore it will all be OK. The fact—and it is one of the reasons why my colleague brought in this bill—is that the Minister himself admitted that there are a number of councils that will not comply and be certified to be able to issue permits. 
Hon Members 
: How many? 
JOHN CARTER 
: There are at least a dozen. But there is more. We will have areas in New Zealand where people will apply to the council for a building permit and the council will say: “Sorry we aren’t able to issue a permit because we’re not certified. We haven’t got the qualifications.” The cost that is imposed on councils by Mr Cosgrove and his Department of Building and Housing is all part of this. It is estimated that the cost to ratepayers in this country to try to comply with what Mr Cosgrove is asking councils to do will be in excess of $8 million. In fact some councils are saying that it will be as much as $250000 a council and a number of them will not be able to pay it. 
Mr Cosgrove stands up and tries to denigrate my colleague Nick Smith for bringing in a bill to draw to the attention of Parliament and the country an issue that seriously is a problem. Local government admits it is the building industry admits it is the people of this country know it is—they know there is a problem. It seems the only people who do not know are Mr Cosgrove and the Labour Government. They think it is all OK. They think it is OK to have 300 bureaucrats writing rules and regulations that are causing more problems. Nick Smith does not think it is; neither does the National Party. That is why we support what Nick is trying to do. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 Normally the Local Government and Environment Committee works very well on legislation. It is any member’s right to bring legislation to this House in a genuine attempt to fix a problem but this bill simply does not do that. This bill is absolutely barmy. 
Nineteen of the 24 submitters to the select committee were not just opposed to this bill but vehemently opposed to it and I want to talk about the reason. Fundamentally there is no such thing as a free consent and the member opposite knows it. Somebody has to absorb those costs somewhere; somebody has to pay. The National Party wants to hold or reduce rates so it is a delicious irony that this bill’s approach—that if the council is late in processing a building consent it has to waive the fee—has the perverse incentive of loading on to every other ratepayer in the community the costs of those who apply for a building consent. What are councils going to do when they do not get the fees and they do not get the levies? How are councils going to address issues like research standards development and dispute resolution? Who will fund those activities which are needed now in a very complex building environment? 
But there is one other aspect that I find deeply disturbing because it is punitive. Of course the local authorities voted against this bill. Why? Because it is punitive and provides the wrong incentive for them to improve their performance. I think that the local councils have had a very clear message in the National Party’s local government bill. It is perform or penalise; those members say they will penalise and come down hard on the local authorities. That is why the local authorities rose up and were violently opposed to this bill. 
Jacqui Dean 
: Violent? Not violent. 
STEVE CHADWICK 
: They were very angry about it actually. The Wellington City Council said it did not want a punitive approach. It would rather work with the industry and work with the Department of Building and Housing to learn about the new building code to learn about the accreditation system and to learn about the regulatory environment that is fixing systemically the dreadfully deregulated approach in the 1990s that resulted in the Hunn inquiry and the leaky buildings inquiry. I was involved with both of those inquiries and they showed a totally fragmented deregulated and untrained environment. There was no trade training or apprenticeships at all during the 1990s. That is why we ended up with the systemic problems of leaky homes. The Wellington City Council did not want a punitive approach. It said it will fix it; it is not right yet—certainly not. 
There is plenty of scope currently a local government sector told us to reduce delays in the consenting process. One quite good aspect of this bill is that we started to look at what we can do to improve the current problems. But the size of the problem is not half as big as the member opposite is telling us. Twenty percent of building consents are not granted within 20 days. So this bill is a sledgehammer to crack a nut. But we certainly do need to improve the process. Every local authority said that. 
The local authorities also told us that 50 percent of the documentation they get before them is totally inadequate. They are blamed for the lack of documentation and rigour in applicant information that comes before them and they then have to waive the fee. It is quite daft. They asked why they have to carry the burden of a shortage of qualified building inspectors and a shortage of licensed building practitioners. Who got rid of trade training and apprenticeships in the 1990s? It was National. It is no wonder we are left with this mess. 
We heard some good submissions. The Property Council talked about the 19-day syndrome. Because of inadequate information from the applicant not the local council the council is going to stop the clock. It also said that a 20-day limit does not fit all situations. It was just a ridiculous time-limited boundary that did not take into account the complexity of the many building processes and the many building specifications that its members have to deal with. The Property Council wants incentives that are not perverse and do not induce silly behavioural responses. The councils will simply stop the clock and we know that. 
Some of the arguments we heard stated that delays in processing occur because of a multiplicity of factors. It is unfair to penalise the councils for that. The bill risks promoting speed in consent processes at the expense of quality so what will the councils do? They will cut quality. I know that Dr Smith does not want that. We were told that the councils will make a deliberate shift in policy to deal with the high-cost highly complex building consents first because they do not want to carry the risk of losing the fee for those. So the ordinary punters whom the Opposition says it likes to support will be way down the order in the consenting process. It simply will not work. 
We were also really concerned that the systemic failures that caused the leaky homes and that we are trying to address are simply not covered in this bill. It is absolutely silent on things that can be done to improve processes. It is simply a time-framing issue. The bill is silent on levies and it is silent on consent application fees. There is no mention at all as to who will fund the research the development of standards and the dispute resolution services. 
This bill is a failed approach to try to address a problem. The local authorities asked for some best-practice guidelines so that they can learn from one another. They all admitted that they needed to do better than this. They asked for some education on the building code. They asked us to go—as we did on the resource consent process—around council hearing committees and give education; to go and have some workshops twice a year with the building industry so that applicants and developers do know what the requirements are. [ 
Interruption 
] What a good idea! It has happened with resource consents and that certainly improved the performance of the consenting process under the Resource Management Act. 
This bill is fundamentally flawed. It was really quite tragic to have it in front of the select committee. Then the media response—not the select committee response—to this bill came out. The Queenstown Lakes District Council said it was nonsense and hoped it would not be passed and the Whangarei District Council said it was just an appallingly short-sighted bill. We cannot do a quick fix in a member’s bill to try to fix these systemic problems. 
I am very confident that the accreditation process which is putting some pressure on local authorities to meet the deadlines and the current review process are actually raising lots of issues for the Department of Building and Housing to go back and work on with local authorities. I know that developers and builders will come to grips with the building code in the new Building Act. As a result of that in 10 years’ time we will be looking back to see that we no longer have the dreadful depth of problems of leaky buildings in this country. It is a problem that we all need to fix. 
Hon BRIAN DONNELLY (NZ First) 
: 
 Although I agree with the previous speaker Steve Chadwick that the Building (Late Consent is a Free Consent) Amendment Bill is flawed legislation I must take issue with one set of comments that she made about apprenticeships and the fact that there was no vocational training in the 1990s. In fact the demise of apprenticeships actually occurred in the 1980s. Although it is true that National got rid of the Apprenticeship Act it replaced it with the Industry Training Act which referred to trainees. I tell members that in July 1996 there were 17000 trainees and in July 1998 just before the demise of the New Zealand First - National coalition there were 57000 trainees—the biggest percentage increase ever. Nick Smith will tell members that the delegation for vocational education at that time was held by a New Zealand First Minister. I could also say that when the Modern Apprenticeship Training Act was put in by the Labour Government there were in fact 47 pieces of legislation that referred to apprenticeships so they certainly were not completely got rid of at that time. 
New Zealand First recognises that there is a problem with regard to delays in the issuing of building consents and that there has been frustration on the part of some developers. Although New Zealand First members acknowledge that frustration the situation is not as monumental as has been made out in some of the rhetoric that has been used. As has been mentioned approximately 20 percent of consents are not issued within 20 days but there are certainly not deliberate delays by local councils. We need to look at what is causing those delays. 
There are two major problems. The first is that not all applications are completed adequately so councils have to go back— 
Hon Dr Nick Smith 
: Not true because they can stop the clock. 
Hon BRIAN DONNELLY 
: Yes they can stop the clock. I am well aware the clock is stopped in those particular cases but those applications are part of the problem. The second serious concern which is a major concern is the shortage of people with the capacity to carry out the duties of the job. The pool of qualified and experienced staff capable of carrying out that work is just not big enough to meet the demand from both the private and the public sectors. I think the mover of the bill would recognise that that is a genuine issue. 
Hon Dr Nick Smith 
: I acknowledge that but the Government has stolen them for the Department of Building and Housing. 
Hon BRIAN DONNELLY 
: That does not really matter because this legislation says that regardless of whether the Government has done that it is—through the councils—going to penalise ratepayers the citizens of New Zealand. That is where the cost is going to go unfortunately. 
Recruiting and retaining staff is becoming increasingly difficult for local authorities to the extent that the New Zealand Society of Local Government Managers earlier this year initiated a staff recruitment and retention project to overcome the shortage. I think this legislation is totally unfair. Whatever the cause of the shortage of skilled staff it is totally unfair then to come along with legislation that penalises councils because the shortage exists. 
Be that as it may the bill would lead to some—we believe—unacceptable perverse effects. As the Local Government and Environment Committee has pointed out expensive big developments would be given priority over small projects. Woe betide a householder who wanted to put in a small retaining wall with only a small consent cost or a deck with only a small consent cost because those applications would be shelved in favour of the big developments where there are big costs. That would cost the councils even more money and that would have to be handed on to the ratepayer. Moreover we believe that it opens a door for developers to put in proposals that are short on information and therefore to create delays themselves. It could lead—and this has been mentioned before—to unholy haste and shonky developments being approved. As has been said it is not good to have a quick consent if it is not a quality consent. We have to concur with that particular proposition. 
I will mention the worst outcome: the legislation would lead to increased rates for ratepayers. There is no doubt that when faced with a shortage of supply councils could do only two things. They could either cough up or not receive the money because there are delays to consents or they could put in huge salaries in order to attract staff. Whichever way is chosen there would be additional costs and additional rates. 
New Zealand First is the only party that has taken any constructive action over the issue of rising rates. National voted for Rodney Hide’s bill to freeze rates and now it is putting up legislation that will increase rates. How is that for a contradiction? New Zealand First will not support legislation that will drive up rates. As I say we put in place the rates inquiry. That was our initiative and we drove it forward. I do not have a clue what will come out of that inquiry because it has been completely independent and/or autonomous. However David Shand the chairman of the review inquiry has already come out and said that within the next 10 years rates will be unaffordable. This bill would impose additional costs upon the ratepayers and therefore we do not believe we can support it. 
Nick Smith has asked whether it is not time to take a stand on behalf of the ordinary citizen. Well by voting against this bill we believe that we are taking a further stand on behalf of the ordinary citizen to ensure no more drivers that will push up rates are put into the system. 
I have to mention Pat Seymour who has been referred to. She obviously has the confidence of the National Party because in the 1990s she was the chair of the Early Childhood Development Board. She was appointed to that very important position by none other than the National Government which obviously had confidence in her judgment about those things. It was Pat Seymour who said this bill is daft. 
I finally refer to the Whangarei District Council and I ask the member for Whangarei whether he can explain to that council why he will be supporting such short-sighted legislation. Thank you Mr Deputy Speaker. 
METIRIA TUREI (Green) 
: 
 I do not intend to take a long call on the Building (Late Consent is a Free Consent) Amendment Bill. I have say the speeches have been very entertaining given that the select committee process has been much more congenial than the debate tonight would suggest. 
 The Green Party voted in favour of sending this bill to a select committee because we thought some useful issues could be explored. That was the case and it was great to hear councils and people involved in the industry talk about the real issues. It became very clear that delays with building consents are serious and cost significant amounts of money to non-commercial developers developers of smaller projects and people doing small renovations. We are not talking about commercial developers of multimillion dollar projects. These people find it quite expensive if they do not have the time and resources to wait. 
In our view enough is being done to try to resolve the problem so we think Dr Smith’s bill is not necessary. In fact it is the wrong kind of tool to sort out this kind of problem. 
I understand that about 20 percent of building consents are delayed. There are a few primary reasons. Some applications are incomplete and often that is just a lack of information. Definitely there is a lack of qualified building consent processors and inspectors. I think that was the No. 1 reason given in the Local Government and Environment Committee. That is not the fault of councils. The question is whether councils should bear the cost for something that really is not their fault. There is also the difficulty faced by small councils in retaining qualified staff and in their disproportionate difficulty mismanaging the costs of building consents in their area. 
Changes were made to the Building Act in 2004 but they have not completely bedded in yet. I think we will see advantages coming out of those changes later on that will deal with these problems to some extent. It is certainly true that solutions are needed but ratepayers cannot take on the cost of the problem. 
I agree there is no such thing as a free consent. I completely agree with Steve Chadwick. It is rubbish to say there is. Somebody has to pay. The Green Party certainly does not agree that all ratepayers should have to pay because of late consents particularly where very large commercial developers benefit. They could probably afford it but lots of ratepayers simply cannot. 
Some solutions are in place such as the accreditation and registration of building consent authorities which are required under the 2004 legislation. That accreditation is required to be done by November 2007 so it is worthwhile waiting to see that process bed in. We should see some good progress from there. 
Some councils have systems and good models they could use. Some councils have a fast-track process where people pay more but that is useful only if the councils have enough numbers of staff who are sufficiently trained to do that work. But that system can be useful sometimes. It is always an advantage if better information is provided to applicants and they know how to complete an application so that there are no further delays when the council requires more information. 
On balance we do not see any need for this bill to progress any further. We do not think it is a sensible tool to deal with the problem but it did provide the opportunity for having a useful exploration of the issues. So we thank Dr Smith for bringing it to the House. Kia ora. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Kia ora tatou i tenei po. Katahi te pire nei. Ko tona tikanga me whakaae mai. Engari ara ano te “engari”. Ae ra hoki he raruraru kei reira na te takaroa o te wa ki te ata titiro ki nga tono hanga whare nei; “engari” ko te whakairi i te putea te rongoa? He tauira ano tenei o tera ture koura nei—ka hinga i konei waihotia mo nga ra 20 waiho ake ma te wa tera e whakatika. Mena he korero tau e pirangi nei e ai ki ta te Official Information Act tatari ake mo nga ra 20 katahi ka puta he maramatanga ki a koe. 
Koi nei pea te ahua i tera wiki mo Te Tari Hauora i a ratou whiriwhiri ana i nga huarahi hei whakatau i nga take o te hunga i haere ki Vietnam te hunga kani rakau te hunga noho mai ra i Paritutu. Ka mutu ko nga tangata kua rongo nei i te ngau o te paihana – taria te wa tirohia ano a nga ra 20.  
I tenei pire koi nei te porangi o taua tikanga ara o nga ra 20 mena ka whakamanahia tenei wahanga o te rangai kawanatanga a-rohe. E 20 ra i raro o te Building Act 2004 ki te ata wetewete i nga tono kia kitea mai ai mena ka eke te pai o nga whare ki tera e tika ana a kia tu kaha tonu mo nga tau. Ko te mate o nga Ture Koura nei he wa tona kaore he take o aua ture. Penei ki ta George Bernard Shaw i ki nei ko te ture matua e ki ana karekau he ture matua. 
Kei te mohio tonu matou mai i te mahi rangahau o Te Tari Hanga Whare i te Whiringa-a-rangi o te tau 2006 kare te tata o nga 20 o-rau o nga tono i whakaaetia i roto i tera ra 20. Ko te 1 o te 5 tono i mua o te kaunihera kaore i whiwhi whakaaetanga e tika ana mo ratou. 
He aha i penei ai? Ara noa atu nga tangata i tua atu o te kaihanga whare i tona kotahi te apiha kaunihera i tona kotahi. Ara ano hoki ko te hunga no ratou nga whare ko te tangata waihanga ko nga kaimahi i te tuatahi ka mutu i tua atu ko nga tangata whanau ranei ka noho i aua whare a te wa. 
Penei i ta John Scarry korero he tangata pukenga nei o Tamaki-makau-rau ki te komiti whaiti ko te hunga whai hua na te ahuatanga o tenei huarahi whakaaetanga ko te hunga ka whiwhi ka mahi ranei i roto i aua whare e korerohia ake nei otira me Aotearoa whanui. 
No reira me hoki ki taua korero ra. “Ae” engari “But”. Ara noa atu nga patai. Ko te mea nui hei mea wananga ma tenei Whare ko tenei. Ae ranei kaore ranei. Mena ka tangohia mai ko te utu te tikanga ka utua. He mea whakatau tenei i te raru ka whakapoto nei i te roa o te tatari ki nga whakaaetanga? 
Ara ano hoki etahi take. Mo nga ropu a-rohe e ata wetewete nei i nga whakaaetanga a whare ko tona tikanga kei a ratou nga pumanawa me te kaha nei ki te ata whiriwhiri whakatau ranei i nga tono. Ki ta te Ture a-Hanga Whare ko te tikanga he tikanga arotake ano wa ratou kia taea e ratou te whakamatautau i a ratou ano kia kore tatou e whakarite tikanga ka hoki mai ki te ngau i a tatou a te wa. Ko te putake o tenei pepa whakaaetanga a-whare he hiahia kia kore etahi mahi huna e noho pera ara e noho huna. Mena ka puritia te utu mo nga whakaaetanga i nga kaunihera tera pea ko tona mutunga mai ahakoa ehara tera i te hiahia he akiaki tonu i a ratou nga kaunihera kia tere oti nga tono mua mai o nga ra 20. Kei wareware i a tatou me ata haere kia kore ai e whakapau kaha mo te koretake noa iho. 
Ko te mate o te whai i nga here a-ture me te kore aro ake ki take ke ko te aronga ke o nga kaunihera me nga tangata kaipakihi kia oti wawe nei nga tono ma te wa tera e aki na ka wareware ko te huanga ki muri. Ko te mutunga mai o tera ko nga whare pakarukaru nei. Ko te aronga o tenei ture hou ko te taumata tiketike e taea ana. Ko tou titiro ki a koe ano he mea nui hei whakapakari ake i nga whakahaere me nga whakaritenga engari e hia ke nei nga take hei mea wananga whakatau mo nga awangawanga. Koi nei te korero i kaha tautokongia e nga kaitono.  
Na te ropu Hanga Whare o te rohe o Manawatu-Wanganui te korero tino marama ki a matou. Hei ta ratou he pohehe nui te ki na nga mahi ngoikore a-kaunihera anake i takaroa ai nga tono. Hei ta ratou ara noa atu nga uauatanga. Ko te ngako ki tenei take katoa kia tukua nga momo uauatanga here e whakaroa ana i nga tono.  
Na ki ta te Kaunihera a-Wahi ko te ingoa pai mo taua raru ko te “capacity constraints of councils”. Tera pea ko tetahi huarahi hei whainga ko te whakarahi ake i te hunga matatau ki te mahi hanga whare me te hunga tirotiro whare. Ki ta te Kaunihera a-Rohe o Franklin titiro ko te uauatanga nui ko te whakaaetanga ahakoa ko te ngoikore o te mahere he ngoikore no etahi ki te ata titiro ki nga mea pakupaku nei me te kore pepa hei tautoko i nga tono. Kei te kaha tautoko a John Scarry i tenei korero. Hei tana koi nei te take nui mo te takaroa ara he koretake no nga tono. 
Kaore matou o Te Torangapu Maori paku tohe ki tera whakaaro o Nahinara mo te raru otira ki tenei pire—engari ae ki te rongoa ke. Kei te marama tonu matou ki nga raru e haere tonu ana mo te tautukunga te ekenga me te kaha ka puta ki nga kaunihera ia wa ia wa. Kei te mohio ano hoki matou mena karekau he ropu whiriwhiringa whakarongo ki nga take Maori kare aua take e rongohia e arongia. Ka mutu kei te mohio matou mo te itiiti o te Maori e eke ana ki nga kawanatanga a-rohe. He awangawanga nui tera ki a matou. I te tau 2004 ko te nuinga o te hunga i potingia ki nga kaunihera he Pakeha ara e 94 o-rau engari he aha ta te Maori? E 4.3 o-rau noa iho. Na ara ano hoki ko te roanga ake o te whainga i tona kotahi ko nga momo uauatanga e hia ke nei pai mai kino mai. Ki te pohehe tatou ka taea e tatou te whakatika nga take katoa ma te moni i tona kotahi ma te patu i nga kaunihera ngoikore nei me te pupuri i nga moni ki ta tetahi he tirohanga whaiti he pohehe nui tera.  
E kore Te Pati Maori e tautoko i tenei pire engari kei te kaha tautoko matou i te hiahia ki te ata titiro ki te maia ki te matau me te tautukunga o nga ropu a-rohe ki te whakatutuki i nga mea e hiahiatia ana. 
Mena he painga o tenei huarahi koia tera ko te putanga o nga take penei i te noho tuturu mai me te matau o nga kaimahi he take tera e whakaaro nuitia ana e matou na te ahuatanga o te maia o te ao Maori. A me whai tikanga ano tatou kia aro pumau ki nga kawanatanga a-rohe ki nga huanga ki te noho a-tangata ki te tika me te pono. Ahakoa enei matapono katoa ko ta matau e tohe ana kia kaua he “ae/engari” i te taha. Kia ora tatou. 
[An interpretation in English was given to the House.] 
[ 
Greetings Mr Deputy Speaker and to all of us here this evening. What a bill! We could easily say “Yes” but this is a “But” situation. Yes there is a problem in the delays incurred in the processing of building consent applications but will financial incentives fix the problem? It is also another brilliant example of the golden rule—when all else fails apply 20 days and hope that the problem will sort itself out. If we are desperate for information the Official Information Act says just to wait for 20 working days and we will find out all we need to know. 
Last week the Ministry of Health resorted to the rule when puzzling over what to do with all those Viet Nam veterans sawmillers residents of Paritutu and in fact any person exposed to the risk of dioxin—call a review for 20 days. 
In this bill we see the folly of the 20-days rule applied to the local government sector—20 days under the Building Act 2004 to deal with consent applications to ensure that buildings will be built to a standard that will guarantee they are still standing in years to come. The problem with golden rules is that there is always some situation that makes them redundant. Or as George Bernard Shaw said the golden rule is that there are no golden rules. 
What we know now from the Department of Building and Housing survey undertaken in November 2006 is that approximately 20 percent of consents are not issued within these golden 20 days. One in five applications before the council is not receiving the approved consent it is entitled to. 
And why is this such a problem? There are a lot more people at stake here than an individual builder and a council officer. There are household owners architects contractors and developers in the first instance; and of course in the longer term the people who will inhabit the buildings for years to come. 
As John Scarry an Auckland structural engineer told the select committee the greatest beneficiaries of the building consent process are the people who will own and/or live and work in the building concerned and the public of New Zealand. 
So again we come back to the crunch “Yes/But” question. The issue for this House to determine is whether removing the requirement to pay fees will actually address the problem and reduce building delays. 
There are other factors. For the authorities that undertake building consent review the theory is that they have the capability and capacity to make the appropriate assessment. The Building Act requirements rely on these authorities being able to undergo the accreditation and audit processes with such efficiency that we do not set ourselves up to fail in the future. The purpose of the building consent process is to ensure that building faults are avoided. Withholding the fees that councils rely on from processing consents may of course have the u 
nintended effect of forcing councils to rush decisions through to meet the golden time frame of 20 days. One should remember: less haste less waste. 
The whole problem with meeting fixed timing rules at the expense of all else is that  
councils and developers would concentrate on getting consents issued on time as their sole driver—quality taking a back seat. And what this leads to is substandard buildings. The focus of the new Building Act is quality. Accreditation should help to improve systems and processes. And there are many other factors that may bring about the changes that I think all submitters agreed were needed. 
The Manawatu-Wanganui Regional Building Group summed up the argument for us. Its submission alleged that it was naive to assume that delays in processing building consents were due to the inefficiency of councils alone concluding that in reality the situation is much more complex. The key to this whole issue must therefore be in unpacking the complexity of the factors causing delay. 
The Property Council named the problem as the capacity constraints of councils. Part of the solution therefore may lie in addressing the gaps in numbers of qualified building consent processors and building inspectors. The Franklin District Council saw the problem as being the difficulty of verifying compliance because of poorly presented plans poor attention to design detail and a lack of supporting documentation. John Scarry also endorsed this alleging that the biggest single cause for delay is caused by the design documentation submitted for consent being seriously deficient. 
The Maori Party has no argument with National’s identification of the problem—well not with this bill anyway—but we most certainly have difficulty with the solution. We know there are ongoing issues with competency with compliance and with capability of councils. We know that in the local government sector unless there are specific consultative forums where Maori can raise our particular issues those issues generally do not get heard or addressed.  
And what we also know is that the low representation of Maori in local government is also extremely concerning. In 2004 the overwhelming majority of elected local government members were Pakeha—94 percent— while the proportion of Maori was a dismal 4.3 percent. And then there is the whole process of building consent itself with an  
increasing complexity of building consent applications some good some not so good. To think that all of these wide-ranging issues can be solved by one financial lever—punishing tardy councils by withholding fees—is as one submitter put it simplistic to an extreme. 
The Maori Party will not support this bill but we do support the urgent need for a review of the capability and capacity of local body organisations to do the tasks we expect of them. 
If this process has done anything it has brought issues to the surface around retention and expertise of the workforce—issues that we are acutely concerned about in the context of Maori capability. We need to ensure that local government is as committed to quality committed to representation and committed to justice. However for all these principles we insist that there be no “Yes but” about it. 
] 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I will take just a brief call on this second reading and I congratulate the sponsor of the Building (Late Consent is a Free Consent) Amendment Bill because he has tried to address a very serious issue. I know that a number of constituents who have come into my own office outside Parliament have reported some really concerning stories particularly around mistakes that had cost dearly in terms of time and wasted materials. So I appreciate what the member has intended to do with this bill. 
This bill has also highlighted something that probably concerns United Future even more than what is being attempted here. I have had some very interesting discussions with members of the master builders association and they have assured me that they believe compliance costs on homes could be reduced substantially as part of the efforts we need to be making to make housing more affordable. This issue needs to be considered seriously beyond this bill because if the kinds of figures that were quoted to me by the gentlemen from the master builders association are true then those figures are shockingly high. A sum of something like $30000 may be able to be recuperated while still maintaining robust regulations around housing practice and I think that is something that needs further exploration. 
United Future is unable to support this bill going any further. We commend the Local Government and Environment Committee for the work it has done. Obviously some very interesting content came out of the submissions which confirmed a little bit for us some of the reservations we had about this particular approach to solving the problem. I think the biggest concern for us is that people who put a real effort into making a very sound application would end up paying the price for that work and that those who had put in poor applications with insufficient information and without meeting all that was required and who then had delays as a result of the fact that they were required to put in more information could end up getting a free consent process. 
I am also concerned about the fact that this bill is a little bit like using a sledgehammer to crack a nut. Some other issues need to be considered around things like the combination of factors regarding the workforce and the serious need for workforce development. The sector could improve to the stage that a bill like this one could become a very viable option but in the current environment with the lack of experts who are able to complete that work in a timely way it would be a foolish step to take right now. 
 I do congratulate the member; I think his intention was extremely worthwhile. I think the discussion has been worth having and I for one am very very keen to go back and talk to people like the master builders in order to find out the specific detail on what we could be changing around building compliance so that we can start to see the costs of New Zealand homes tracking downwards as part of a multifaceted approach to making houses more affordable in New Zealand. I am sorry that we cannot support the next stage of the bill but we think there is more work that could be done. 
RODNEY HIDE (Leader—ACT) 
: 
 The ACT party rises to support the Building (Late Consent is a Free Consent) Amendment Bill and to congratulate Dr Nick Smith and the National Party on taking a serious issue and dealing with it. I will go through some of the arguments we have heard being made against this bill in order to show that they clearly cannot stand up. 
I have an interesting thing to share with members. Web cameras are a fantastic thing and I just got an email from someone on the other side of the world who is following this debate. It is quite something when one thinks about it because most people in this complex cannot be bothered but there we go. 
Chris Auchinvole 
: Most New Zealanders can’t. 
RODNEY HIDE 
: Most New Zealanders cannot be bothered to but if people in Europe want to then they can log in. 
Mark Blumsky 
: Why would they? 
RODNEY HIDE 
: I tell the member why they are logging in. They are figuring out whether this good bill will succeed because it will be part of the measure of whether they will bother to come back to New Zealand and build houses. 
I will go through what this bill does. It puts a financial penalty on a council if it fails to meet a deadline for handling a building consent. Do members seriously believe that when we pass a law requiring every person to get a building consent councils can just take as long as they want? Members surely cannot believe that surely not. There has to be a time limit. If we ask ourselves what we will do to enforce that time limit it is actually quite simple: we put a financial penalty on the council. 
Members opposite are bleating on about the costs to the ratepayers. Councils get whacked for costs regularly when they screw up. That is how it works. But this situation gets worse because with this Government in power we have seen the costs put on local government rise dramatically and I did not hear the poor ratepayers being consulted then. 
If we are serious about this I would not mind moving an amendment even at this late stage I say to Dr Smith. If we want to save ratepayers dosh then let us put the penalty on the councillors and the staff because they are the ones who are screwing up. Let us get the incentives right. I tell members that if 20 percent of deadlines are being missed now once we put the financial penalty on the councillors and their staff not one would be missed. So let us get that canard we heard against this bill out of the way. Of course there should be a penalty. My goodness what sort of penalties do taxpayers and ratepayers have to put up with when they get it wrong? And they are the ones who are paying for these councils! 
The second thing is that we cannot have a situation where a council can just take forever. We heard the complaint that if councils rush it through then they might screw it up. Actually my experience of life is that when people do things properly they do them briskly and well. It is when they have forever to do things that they actually go wrong. We see with the leaky homes issue that this Government was ticking boxes left right and centre. It was taking forever and not doing any proper checking. But we all know ourselves in our own lives that when we have a time line we work towards it and that is what we should have with our councils. If they cannot do it properly in 20 days then there is something seriously wrong with the councils. I am astonished to hear that 20 percent are not meeting their deadlines. It is disgusting. 
Hon Dr Nick Smith 
: Master builders say it is 50 percent. 
RODNEY HIDE 
: Dr Nick Smith has said that it is up to 50 percent. Members can just imagine the cost and the heartache that is going on with householders and in the building industry as a consequence. 
I would ask Mr Donnelly along with the Green Party the Maori Party and the Labour Party whether we do not care seriously about that and whether we are interested in having a Government that works. Are we interested in putting some stakes in the ground and saying that this should be done in 20 days and just to show we are serious saying we have a penalty if it is not done? Or do we operate in a country that says that any old thing will do when it comes to Government and to local government—but woe betide the homeowners who do not tick all the boxes fill out all the forms and jump through all the hoops that councils and the Government put on them? 
I say that if it is good enough for ratepayers to be penalised when they are late and for ratepayers to have to have time lines then the same discipline should apply to local government in every instance. I commend Dr Nick Smith for this bill. I have to say that I am very disappointed in the parties that have backed up lazy and incompetent bureaucracy at a cost to all of us in defeating this bill. 
MARK BLUMSKY (National) 
: 
 I rise to stand and support my colleague’s Building (Late Consent is a Free Consent) Amendment Bill here in the House. I have to say that I have been in Parliament now for about 18-odd months and the select committee process has been one I have enjoyed. I feel it is in that process that one actually gets to see some real people and some real issues that are confronting New Zealand. 
The Local Government and Environment Committee is a good select committee. We have had some good bills come before us and I think we have made a positive impact on those bills. We have worked hard and I think with the right attitude. That is why Steve Chadwick must not let Clayton Cosgrove anywhere near our select committee. His performance today and the way he spoke to members of this House and the way he turned what I thought was a positive discussion into a personal attack on my colleague who sponsored this bill was sad. If he has that influence on our select committee which works well together then I think that will be a bad day I say to Steve for the business we do. 
Dr Nick Smith has done a huge favour; he has brought an issue out of the closet and put it on the front page in a way that it was not. He has done New Zealanders a favour and he has done builders a favour. We have to fully understand that late consents are an issue. I never understood that. I am not a builder. I look at a hammer and go looking for the instruction manual on how to use it. So it is not an area of interest to me at all. But it came through in the submission process and in the select committee process that it is an issue to one heck of a lot of people—not just builders but many hundreds of thousands of householders and homeowners. 
So I say to Nick Smith that I believe that a real difference has already been made by the fact that his bill has gone through the parliamentary process. He has woken up local government big time. He has woken up many councils that were just drifting along with this issue. I tell members now that the councils got scared. They got very nervous that this bill was real and that it would really create a wake-up call within their local authorities. 
The submission process did actually bring some pretty good feedback through and I know the committee chair Steve Chadwick brought some of the comments to the table. I thought I would also take the opportunity to bring some of the other submissions to the table because I feel that they add value to the debate as well. I have just chosen a couple. One of them is from a gentleman by the name of Colin Hill the former president of the august organisation Architectural Designers New Zealand. In his submission he slammed local authorities for the huge backlog of lodged consent applications that are just not being processed within the statutory period. His organisation represents architectural designers throughout New Zealand. As he says we can speak to any architectural designer builder or group housing company and they will tell us of numerous cases of building projects that have been postponed or put off indefinitely because of the unacceptably high level of costly delays by local bodies in the processing of consents. We are looking to be productive country a country that is encouraging growth and this sort of commentary would have to be of serious concern. Colin Hill is obviously very supportive of the bill that Nick Smith brings to the House. 
The other interesting submission came from the New Zealand Business Council for Sustainable Development in a media release. It surveyed 418 interested parties and 63 percent of those supported the bill. I have to say that if we look just at those who are business proprietors or self-employed or business managers we see that that number goes up to 77 percent. The survey revealed that 23 percent of those who applied for a consent in the past year rated their council’s performance as good but 28 percent rated it as poor. Of the 400-odd surveyed 28 percent said that this member’s bill would improve council efficiency 21 percent said it would give them more certainty and allow them to plan and 20 percent said it would force councils to comply and take accountability. I have to say that if we add those numbers up we get something like 70 percent saying that this member’s bill would make a significant difference to their ability to do the business. 
It became very clear even from those who were not in favour of this bill that a high level of sympathy was being generated for the reason for bringing it forward. There was real sympathy from pretty much all the people who came in. They acknowledged—and this was a comment in the report—that more delays are occurring in the processing of building consents than is acceptable. 
Local authorities quite understandably are concerned about this bill. I can feel for them. They understand and feel the downside on this. If they miss a deadline they have to carry the can for it—it is all on them. They will get no fees and that is a concern for them for sure. So they understandably have a concern. 
But this is where Brian Donnelly has it wrong. He was talking about the fact that a lot of extra people would have to be employed if this legislation were to pass. He said that all the extra building inspectors that would have to be employed would add a cost to the council wage bill and that the wage bill would follow through in the rates. Well every consent that a council processes has a fee attached to it so it is a matter of self-recovery. There is no added cost to a council when building inspectors are employed. All the cost of all staff being added to the council wage bill will actually be recovered by cost recovery. 
One of the reasons I do not have the issues that the Government has with this bill and why I am very very supportive of it is that there is a very simple fix for the problem and that fix came though loud and clear in the submission process. It comes down quite simply to the fact that councils understand that the problem is caused by a lack of qualified staff—that is the issue full stop. Let us be honest about it. I have not yet met a kid leaving school who is saying: “I want to be a building inspector when I leave school.” It is not what one would call the sexiest profession. I do not think I have ever heard—or that other members have either—any one leaving school saying: “I’m going to be a building inspector when I grow up.” 
Jacqui Dean 
: They don’t say: “I want to be a politician.” either. 
MARK BLUMSKY 
: Yeah—I did not say that when I left school. I did not say I would be a politician. So the building inspector career is not one that people are racing into. We can compound that with the problem that my colleague John Carter alluded to and that is the fact that the Department of Building and Housing is absolutely taking the top people from local government. That is a fact for true. Also business is going great for private consultants because of the inability of local government to do the business so private consultancies are also taking the good people. 
But good things are happening because local government is actually making a difference. We heard very clearly that the answer is on its way in that the New Zealand Society of Local Government Managers has commissioned research into shortages and is developing a staff recruitment and retention programme. That is happening and the society is confident it will fix the problem. This means that the 20-day issue will not be a problem which means that a disincentive like a no-fee for a late consent is actually more effective because it will move the slack councils forward. It will move those who do not have the excuses to be late. It will move them onwards because they will not want to incur the wrath of ratepayers by having to write off fees. 
So the fact that a training and career programme is in development gives us the confidence that there will not be a shortage of building inspectors which means there will be enough inspectors to do the business which means that will not be an excuse for a late consent which means there should not be as many late consents which means those late consents are due only to very poor management or council governance and administration practices which means authorities jolly well should be fined by a late fee if they cannot do the business. So I say to Nick Smith that his bill is a cracker it has made a difference and congratulations. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 I want to briefly compliment the previous speaker. I did not agree with everything he said but I agreed with the tone with which he addressed the House. He emphasised the very good Local Government and Environment Committee we have which is ably chaired by Steve Chadwick. In the select committee we take a very cooperative approach to a number of things even in the case of this Building (Late Consent is a Free Consent) Amendment Bill where there was genuine division. 
I also want to commend particularly the contribution of the Hon Brian Donnelly. I have to say I was a little sad that one member on the National Party benches took it upon himself to interject and interject rather than listen to some of the words of wisdom from the Hon Brian Donnelly and I say for the benefit of that member that as he grows older he will realise that Mr Donnelly is a very wise man indeed. 
I acknowledge that in the House we have a difference of opinion on the bill. I certainly acknowledge the work and effort that Dr Nick Smith has put into presenting it. I think the actual debate in the House is a good thing and I think the work we did in the select committee is a very good thing in terms of highlighting this issue. I respectfully differ as to the solution but certainly the debate is a very important one to have. 
I note that Labour opposes this bill for the simple reason that in our view it shifts the cost of building consents that take more than the 20 days provided for under the Building Act from the user to the ratepayer. We also believe that the bill risks adding to ratepayer or business costs and risks leading to a reduction in the quality of building consent processing and inspection. In our view it would also put at risk capacity development initiatives for building practitioners who are already under way. I will quote in a moment from the majority conclusion in the select committee report. It is Labour’s view that certainly as a result of our very buoyant economy under this Government New Zealand’s current building boom is partly responsible for processing delays. We note that existing provisions in the Building Act are already largely remedying these problems. 
I also want to acknowledge the good work of many councils around the country—and I will talk in a moment about a collaborative relationship which I do not think this bill will achieve—that are taking some very sensible steps to manage their workloads and to process those building applications. 
 In respect of the issue of staff recruitment which I think is something that previous speakers on this side of the House including Brian Donnelly and others from other parties have highlighted I just say that it was the considered view of the majority of members on the select committee that this bill would unfairly penalise territorial authorities that have had real problems in recruiting enough staff. 
I think the bill would set negative precedents in the consent process such as benefiting poorly prepared applications which take longer to process than well-prepared applications. Notwithstanding the arguments I have heard tonight it is still our considered view that low-fee applications would be disadvantaged as clearly local authorities would have a real incentive to give top priority to the high-fee applications. In our view high-fee applications in effect would be the priority. 
I acknowledge there is a range of views on either side for and against this bill. On balance however I would agree—and I am not being gratuitous—with the East Coast electorate chairperson for the National Party quoted in the  
East Coast Informer 
 newsletter which I think is a parliamentary publication from the local member where he disagreed with this bill. I would not use— 
Darren Hughes 
: What did she say? 
MARTIN GALLAGHER 
: “She”—I apologise to Ms Seymour. I personally would not use Pat Seymour’s language. I would not use the terms she used that from a local authority perspective this is “a daft piece of potential legislation” that will mean “the only one that will end up paying every time is the general ratepayer”. I am not going to use the words “daft piece of legislation”; I am actually going to acknowledge that having sat on the select committee and having listened to the evidence first hand I will not agree with the words of the electorate chairperson Pat Seymour. I will not agree with her. 
Sandra Goudie 
: This Government has probably already jumped on the council enough. 
MARTIN GALLAGHER 
: I do not think it is appropriate that the member for Coromandel should be criticising the East Coast electorate chairperson. All I am saying is that I respectfully disagree with Pat Seymour the National Party’s East Coast electorate chairperson. I am not going to use the words “daft piece of legislation” because I accept absolutely that there is a legitimate concern with reference to this issue— 
The ASSISTANT SPEAKER (Ann Hartley) 
: Please be seated. We have a point of order. 
John Carter 
: I raise a point of order Madam Chairperson. I can tell you that Pat Seymour opposes the Labour Government. I wonder whether the member agrees with that. 
Hon Members 
: Yeah! 
The ASSISTANT SPEAKER (Ann Hartley) 
: I just remind members that I am ruling on a point of order. There are two members who are very lucky to remain. They know very well that a point of order is heard in silence and when I am ruling on it there is to be silence. That is a warning. The member knows very well that was not a point of order. Please continue. 
MARTIN GALLAGHER 
: Thank you. My politics and those of Pat Seymour differ but I acknowledge her community service. All I am saying is that the fact I have quoted a hard-working chairperson of an electorate committee of the National Party whom I acknowledge means that the views on this are not straightforward. There are even people who are strong supporters of the party opposite who do not agree with this bill. I was merely using that as a respectful example of the diversity of viewpoint. I said that I would not have used the word “daft” because I respect that there were many submitters who came before the select committee who disagreed with the conclusion I eventually reached. I will not call them daft because of that. 
In terms of the select committee considering a member’s bill this was a useful useful exercise. I listened very intently—as did the chair of the committee Stevie Chadwick who does a fantastic job and other members—to the local authority submissions in particular. I think that local authorities are well aware that in some parts of the country there is genuine concern around delays in processing applications. But the majority of the committee respectfully do not believe that this bill is the way to change things. We believe that this bill is something of a mallet to whack a problem that is not necessarily as great as perhaps other members would say it is. 
Hon Member 
: It’s a huge problem! 
MARTIN GALLAGHER 
: Is it not sad that when someone with a slightly different point of view makes a respectful contribution to this House we have members opposite—not all of them because there are some good members opposite—who probably have not done too much work themselves on this bill ready to heckle and interject. I think it is sad that one or two members opposite did not listen to the very considered wisdom of Brian Donnelly. 
In the time I have left I will quickly summarise the conclusion of the select committee. I compliment Dr Nick Smith in the sense that I think that this bill was a very useful bill. It really enabled us to consider the very serious questions around this issue. It certainly enabled us to consider what I thought were some very thoughtful and conscientious submissions particularly from representatives of local government in New Zealand. 
I quote from the select committee’s report: “We acknowledge that delays in the building consent process have caused frustration and increased costs for the building industry in recent years. However the majority of us do not believe that making late consent a free consent is an effective solution. Many of the factors that cause delays in the consent process are not entirely under the control of local authorities. The most significant of these is the ability to recruit and retain qualified experienced staff at a time of expansion in the sector and low unemployment. The majority of us are satisfied that initiatives planned or operating will reduce the problem of consent delays but they must be given time to work. These initiatives include accreditation of building consent authorities and the recruitment drives being undertaken by some authorities.” The committee goes on to note: “The majority of us are concerned about the equity issues raised by the negative financial incentive set out in this bill. Poor applications which take longer to process would be more likely to be free than well-prepared applications thus rewarding poor practice.” That is the view of the majority of the committee—its considered view in the light of the submissions we received. As I mentioned before: “Small (low-fee) applications would be disadvantaged as authorities would give priority to high-fee applications. The consent process might be hurried in some cases”—and this is my real worry—“with poor-quality buildings being constructed as a result.” We certainly do not want to see that. 
We oppose this bill but I do want to commend the work of the select committee and all members of the select committee in raising what I believe to be a very serious issue. The select committee members however disagree on the solutions that have been suggested in this bill. 
JACQUI DEAN (National—Otago) 
: 
 The Building (Late Consent is a Free Consent) Amendment Bill is a very very good bill. This bill brought by my colleague Nick Smith is an excellent bill and I will tell members why. It is an excellent bill because it seeks to make councils accountable. It seeks to make councils accountable for providing building consents in a timely manner. 
You know I often reflect and have often reflected in the past that there is a difference between those who work for a local authority or indeed any bureaucracy and those who work out in the business community. On the one hand the person who works in the bureaucracy gets paid every fortnight. They get their annual leave their other entitlements and whatever else accrues to them. It does not really matter how they perform; they still get paid. On the other hand the builder the architect or whoever is working in that sphere gets paid only if he or she does the work—and there is a bit of a difference there. That is why this bill the Building (Late Consent is a Free Consent) Amendment Bill is so excellent. 
Today and this evening we have been debating in this House the conflict and the friction between those bureaucrats who get paid regularly every fortnight whether or not they provide the consents and those who do not get paid if they do not do the work. Under the Building Act 2004 all building consent applications must be dealt with within 20 working days—and we know that. If a consent authority requires further information from the applicant—and that is fair enough—it can suspend the 20-day period until it gets the information. In other words it can stop the clock and that is fair enough. There is a contract here between the local authority and the person seeking consent. The person seeking consent should provide robust information and the local authority should deal with that information in a good and timely manner. 
It is interesting is it not that the Department of Building and Housing estimated—and I am reading from the notes here—that in November 2006 approximately 20 percent of consents were not issued within the right time frames. Twenty percent is actually quite a bit when one is talking about those builders who get paid or not depending on whether they get their building consent and can proceed with their building project. Maybe that 20 percent does not really mean much for those people who have dined on the public purse for the amount of time that a lot of the Labour members opposite have. But I can tell members that that 20 percent actually represents a lot of building consents that have been lodged with local authorities. The Government may not think it is a problem but I do. 
In fact the Registered Master Builders Federation reckoned that the situation was even worse than that: “While [building consent authorities] might contend that on average they are processing consents within 20 days (as required by the Building Act) the truth for the building industry practitioners”—and these are the guys that stand or fall on whether they get their building consents which means whether they can get on with their building project—“is that the consents are taking much much longer.” Who cares about that? Does the bureaucrat who gets paid every 2 weeks care about that? Or does the builder who lives or falls on whether he gets his building consent and can proceed with his client’s building project care about that? 
As the building consent authorities have noted publicly with some building consent applications it takes longer to sort out consent issues than it actually takes to build the house. Those are words that one can gloss over and say: “Oh well never mind it is just a problem. It’s only 20 percent.” But I can tell members that for a builder in a small town like I live in any delay in a building project costs money. Any delay in a building project means that the subbies do not know when they will be coming to work. Any delay in the building consent issued means that the solicitor will not get paid that the architect will not get paid and that the family who is hoping to move into the house will have to pay rent a little bit longer in its rented accommodation. 
This excellent bill that my colleague Nick Smith has brought to this House is raising some absolutely critical issues for the building industry in New Zealand. I have noted that as the Registered Master Builders Federation told the committee it now takes longer to get a building consent in many parts of New Zealand than it actually takes to build a house. Where is the onus on the local authority to provide a timely building consent? Where are the penalties for the local authority if it fails to provide a building consent in a timely manner? Interestingly when we were hearing submissions—I was part of that Local Government and Environment Committee that heard those submissions and I was there on the day—we heard that there are no practical consequences of non-compliance for local authorities. I think it was Nick Smith who asked the chief executive how often he invoked the powers of section 203 of the Building Act in any of those cases and the answer was—“What was it?” I ask Dr Smith—not once. 
So there are no consequences for the local authority that fails to issue a building consent in a timely manner. What does that tell our local builders our local architects and our local architectural draftsmen? It says that actually it does not really matter. They will not be paying their bills they will not get paid at the end of the month but oh well never mind that is OK. The local authorities are only doing their job and shucks we heard through the submission process that actually it is not the local authorities’ fault because they cannot find enough planners. I have some sympathy for that position but I note also that we heard submissions on this excellent bill in May and I have not seen a Government bill come into the House to address the issue of the lack of planners in New Zealand. Where is the sense of urgency on behalf of this Labour Government to fix this problem so loudly identified by the local authorities? Well the silence has been absolutely deafening. 
There are a few basic truths in the discussion of this bill: councils should be accountable—they should be accountable to the elected members and they should be accountable to the people who come to them to get consents. Interestingly I was at a local government planning conference in Hamilton back in 2003 where the Hamilton City Council planners outlined their plan to become 100 percent compliant in dealing with Building Act requirements. That was back in 2002 or 2003 in Hamilton with the Hamilton City Council. The local authorities want to be able to provide good service but they cannot because they are absolutely tied up with the red tape associated with the new Building Act. In the small councils which I am particularly familiar with the engineers and the building officers—who all work in the same room because the authorities are small—are tied up in red tape as handed down by this Labour Government. I will quickly go through those requirements. There is the long-term council community plan process and the annual plan. The engineers are also trying to comply with the new drinking water standards and trying to comply with new sewerage scheme standards—in fact they are busy. 
I want to refute the argument that a local authority providing a free consent will provide a cost to the ratepayer. That is not true because that will not be covered under the general rate. Building Act activities are rated on a cost recovery basis so it would be quite proper to recover the building cost. [ 
Interruption 
] If the members would care to listen—which they are not very good at doing for the building community—I will tell them that the building industry agreed at the submission process that it would be happy to pay a premium to get good timely service from building consent applications. What we are looking for here is accountability. We can provide a timely consent and it can be cost effective. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 During the course of Jacqui Dean’s speech the junior Government whip suggested—and I thought it was a very good suggestion—that we have a general election immediately. I seek the leave of the House that we have a general election as suggested by the junior Government whip. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Leave is sought. Is there any objection? There is objection. 
A party vote was called for on the question that the Building (Late Consent is a Free Consent) Amendment Bill be now read a second time. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I raise a point of order Madam Speaker. Party votes are meant to be conducted in silence and the National Party is being very noisy. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I just say to members that it is very difficult to conduct a vote if people are making a noise and everybody knows that there should be silence during voting. 
A party vote was called for on the question that the Building (Late Consent is a Free Consent) Amendment Bill be now read a second time. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I raise a point of order Madam Speaker. You have just given a ruling that party votes are to be heard in silence. Mr Bennett who finds it hard to control himself at the best of times failed to listen to your advice and called out while one of the parties was casting a vote. It is a very simple rule. We conduct a vigorous debate then we conduct party votes in silence. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is quite right and I guess I probably should ask the member to leave the House. But I will give the member a chance seeing as it is nearly the end of members’ day. But I ask the member to apologise for his behaviour. 
DAVID BENNETT (National—Hamilton East) 
: 
 I apologise. 
A party vote was called for on the question  
That the Building (Late Consent is a Free Consent) Amendment Bill be now read a second time.  
Ayes 52 
New Zealand National 48; ACT New Zealand 2; Independents: Copeland Field. 
Noes 69 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1. 
Motion not agreed to.