Jones Shane: Building Amendment Bill (No 3) — Third Reading 
Jones Shane: Building Amendment Bill (No 3) — Third Reading 
[Volume:678;Page:927] 
Hon SHANE JONES (Labour) 
: 
 I will begin my speech by saying taringa whakarongo! Please listen. No. 1 it is with some disappointment but some joy that we stand and speak on this Building Amendment Bill (No 3) because as I said earlier a number of the elements were started with us. So I do not want to focus during this third reading speech on the elements that cause us to be in different camps. I want to draw on a figure that the New Zealand First member put out into the House and I understand it is sourced from the PricewaterhouseCoopers consultation document about the costs of the leaky buildings. I have checked with an august source of information who shall remain nameless that the actual $20 billion figure associated with the leaky homes is verifiable. The figure that I was a tad more familiar with was $11.5 billion which is frightening enough as it is. 
When you add that figure to the $7 billion or $8 billion that the garden-variety Kiwis lost in the debacle of the finance companies and then you add the Reserve Bank figure of $30 billion - odd which is the rebuild costs of Christchurch then you are getting up to a figure arguably well in excess of $50 billion. Then you divide that into $190 billion which is about the size of our GDP and it gives you an indication of how important the construction sector is not only from a carpentry design and architecture point of view but in how we fund that activity. A lot of the funds that were squandered in the debacle of the moms and pops etc. who put their dough into the Mark Hotchin schemes etc. did find their way into property developments some of which are the subject of this bill in the sense that had we had a better level of stewardship a better quality of oversight and better skills the overall costs might have been smaller. 
 So this is very serious business. To quote Mr Williams’ figure—and I am told that it can be attested to by looking at the consultants’ report—of $20 billion - odd the $30 billion that we are talking about coming out of the Reserve Bank and the $7 billion or $8 billion associated with the debacle of the finance industry we are at a figure that is nigh on 25 percent to 30 percent of the value of our GDP and that is an enormous challenge to us as parliamentarians. There are aspects to this legislation that were started in our time but this is not about authorship. This is about showing how grey the experience has been that we have all lived through irrespective of whether we were in Government. Much to our chagrin you are in Government but it is a reminder about the level of pain and burden that has been shouldered by far too many New Zealanders. 
Of course there is another problem that we have yet to get our heads around and that problem is local government’s ability to insure itself. Part of the reason that local government is shy—and Mr Williams will know this—about who ought to stand up and bear the costs of the leaky buildings lies with its own insurance liability. Local government has its own insurance company and that company has sought even in the short but eventful time when I was the Minister to secure reinsurance from one of the large behemoths of that particular obscure industry—i.e. lawyers. It is struggling to do that and that actually drives the behaviour of a lot of the consent authorities and the officers working in those consent authorities. So if we do not get I say to the Minister the actual balance right you can understand how its fears about its own inability to get insurance for consent authorities is driving that kind of behaviour. 
I have no doubt that in short order associated with the role of a consent authority is going to be the challenge that we as a Parliament—and naturally as a first line of defence the Government—are going to have to deal with: can local government building consent authorities ensure that their decisions related to building work are themselves insurable? Rest assured that when in the future problems arise they are going to go for the builders the designers and the architects and they are going to struggle to find suitable insurance as well because insurance is emerging as a new taniwha with long fangs about to create all sorts of problems for the garden-variety Kiwi—make no mistake about that—in this particular sector. 
We need to ensure that the work— 
Hon Maurice Williamson 
: There’s nothing about taniwha in this bill. 
Hon SHANE JONES 
: Well there was one taniwha that did annoy me and it was the one that was stopping the inner-city rail loop which you do not agree with but we kind of like because it is our signature policy. The only thing I said about that taniwha was to ask whether or not it was GST-registered but that is another matter. I am told that that actually cost me votes with my relations in Ngati Whatua but that is another matter; that has come and gone. 
Naturally we will not agree to vote for the bill because of I guess the piecemeal approach. But a lot of the content—we do not want to be too churlish about it—does resonate well with us. We look forward to entering into the debate and hearing the submissions about the Building Amendment Bill (No 4) contribution and we hope that there is a level of coherence when all these things come together. 
The other thing I would suggest is that the references to housing affordability are partly related in our view to the length of time it might take for a council inspection or to the costs associated with the council actually processing the application. But it also depends on the structure of the industry: whether or not there is enough competitive tension and whether or not the mountainous corporate entity known as Fletcher’s with all its tentacles going into concrete construction and building in itself represents an absence of competitiveness. In addition to that the cost of land has got to such an extent in key parts of New Zealand—and I am not talking about the blighted areas of Christchurch; I am really talking about our largest urban area Tamaki-makau-rau. So it is fair not just to look at the building construction costs; it is also important that we look at land. That is a debate that this House at some point in time is going to have to revisit. To what extent do we go up and if we go up as opposed to out in terms of dealing with housing quandaries how comforted can we be with the quality of the work the quality of the engineering the quality of design and how affordable it is? These things are interconnected and whoever has got the responsibility on that side of the House to deal with these things one day might be surprised to learn that we have a great deal of interest and we might have some shared interests in that regard. 
It is disappointing that the bill does not capture our vote but we look forward to working on future contributions to the building sector. I would restate that that is the size of the liability. That is the size of the financial penalty that garden-variety Kiwis have faced and dare I say it also us as taxpayers because we have ended up being the insurer of last resort in this instance. I say that about us not only as taxpayers but also as ratepayers. 
The point I would round up on is that local government reform is obviously not over. In that reform agenda whichever direction the Ministers intend to take it in it is going to be a challenge for each local government authority to maintain a level of confidence and a level of efficiency that gets the investors the property developers—the people who are actually going to have to spend money to redevelop those areas—either to meet the housing needs of Auckland or to redevelop the capital assets of Christchurch. We need to be confident when they implement the regulations—because that is where the power is going to come from—and that the mahi the actual deeds are done after the regulations are passed through this piece of legislation. What types of building activity can be excluded from the process of a building consent and how onerous will the regulations be? I would make a plea to the current Minister that there is a genuine case here for having a balance between those who do not want to repeat this $50 billion experience and at the same time the pendulum not swinging so far that we thwart and we suffocate those who are prepared to take the risk to ensure that the capital assets in the property sector of New Zealand are continually rebuilt. Kia ora tatou katoa.