Building Bill — In Committee Procedure 
Building Bill — In Committee Procedure 
[Volume:619;Page:14823] 
Building Bill 
In Committee 
Debate resumed from 10 August. 
Part 1A Building ( 
continued 
)  
Dr WAYNE MAPP (National—North Shore) 
: 
 I note that the Hon John Tamihere the Minister who has just been referred to extensively in various contributions is in the chair. Do members know what the unfortunate thing about that is? He has not taken a single call on this bill. He is in charge of it and he has not taken a single call. This Minister is the man who goes out of his way to say he supports small business. It is one of his ministerial portfolios. 
Clayton Cosgrove 
: Talk about the bill. 
Dr WAYNE MAPP 
: Small business for the benefit of the member who interjected and who does not really know a great deal is in fact the guy out there with his ute his dog and his radio working hard building houses doing renovations and getting ahead. These are the sorts of guys—the red-blooded blokes—that Mr Tamihere and his mates “Swainy and the boys” are supposed to be representing. Are they going to do that? 
What they have done instead in this bill is put barriers in their way because we now have registered building practitioners and there is an enormous complexity of compliance around that. So instead of making it easier to get into business they have made it harder. We know that there are things to be fixed in the Building Act. We know that New Zealanders deserve to have good homes that are well built and so forth. This kind of regulation will not achieve it. I was amazed to hear that the lapdogs of the Government the United Future party are so— 
The CHAIRPERSON (Ann Hartley) 
: Please be seated. The member cannot refer to a party in that manner. A party is made up of members. Please withdraw that remark. 
Dr WAYNE MAPP 
: I will withdraw that particular remark and refer to the craven supporters of the Government—the party known as United Future which never exercises its own judgment. 
HELEN DUNCAN (Labour) 
: 
 I move  
That the question be now put 
. 
BRENT CATCHPOLE (NZ First) 
:  
This part as mentioned earlier on is substantial. The building consent provisions require the owner to apply for consent. They also require the owner of the building to apply for the code compliance certificate at the end of the whole process. The bill has altered the status slightly from the previous Act in that the regional and territorial authorities are required to keep a much better record of those compliance documents. 
As I mentioned in the debate on an earlier part the outstanding building consents that the territorial authorities have failed to follow up on and match the code compliance record details of amounted to tens of thousands. Those outstanding consents relate not just to buildings still under construction but to buildings that have been completed and I have examples where they have been completed for in many cases 5 to 10 years. Those buildings still have outstanding code compliance. That is an area that this bill is tightening up on and it is requiring territorial authorities to tighten up on it as well. 
Another area in this particular part highlights the requirement for disabled access and it has brought access for the disabled further forward in the bill because it is recognised that public buildings do need to be accessed by everybody in the public not just the able-bodied but also the disabled. I am very pleased that the provisions relating to disabled access have been brought a lot further forward in the bill. They are now a substantial part of the bill and receive proper recognition which is a much improved situation for the disabled. All public buildings will be recognised as having disabled access available. 
The next part I want to touch on is the dam safety assurance programme. This is a programme being run by the dam owners and the bill recognises that. The expertise to be able to examine dams and ensure they are up to a particular standard is just not there within territorial authorities. Often these dams impact on more than one territorial authority and therefore the industry has got together and put together a substantial and internationally recognised dam safety programme. This bill recognises that programme and ensures that there are audit safety checks and other safeguards to make sure that the dam safety assurance programme is up to date. They require a regular audit and the world international standards are recognised within that audit. 
It must be pointed out that the safety programme has to be notified to the territorial authorities so that they can see that it is being operated in a satisfactory manner and should the territorial authorities require an independent audit that that is available to them. In particular with dams that are considered to be high risk those audits are essential and certainly the dam safety programme is essential. On the other hand there are a lot of very small dams on farms. In fact one submitter who came to us had 26 dams just on his property alone. For a territorial authority to be able to identify every single one of those dams would be a major task. 
Brian Connell 
: That’s a damn big property. 
BRENT CATCHPOLE 
: I guess it would be a damn big property; it certainly had a lot of dams on it. The requirement by the territorial authorities to be able to identify those dams is essential because they impact on other people at various stages. We have seen during the floods in particular that additional disasters can occur if any of those small dams gives way. It is important that those dams are obvious. 
Shane Ardern 
: Not just the dams but the stopbanks. 
BRENT CATCHPOLE 
: The stopbanks are important as well. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
MURRAY SMITH (United Future) 
: 
 I must say that National’s contribution to this debate has been somewhat confusing. We were promised by Wayne Mapp that we would hear National’s alternative to this bill. He promised us that yet what have we heard? We have heard National members say that they think there should be more training. They say that there should be apprenticeship training and more training of people involved as building practitioners. They want building quality improved. They want the Building Industry Authority— 
Brian Connell 
: I raise a point of order Madam Chairperson. I am sorry to interrupt my colleague but if he would like to yield his call I am quite happy to put National’s alternative view. 
The CHAIRPERSON (Ann Hartley) 
: I warn the member that that is not a point of order. The member should not interrupt the member’s speech. He knows that it is not a point of order. 
MURRAY SMITH 
: National members want the Building Industry Authority improved presumably with more powers and a clarity of its functions because that was clearly missing as we found with the weathertightness homes. They want territorial authorities to perform better. Presumably they also want the code compliance scheme to be improved. We heard that tens of thousands of homes had never received a code compliance certificate so something needs to be done. 
National members say that they would somehow make all these magical things happen and bring in all these improvements without legislation. I find that an amazing claim. How are they going to bring about a new regime that provides and delivers on the things we are looking for in terms of our building stock in New Zealand without making some legislative change? How will they give the Building Industry Authority more powers and more clarity in terms of its functions without changing the Act? How would they make territorial authorities perform better and give code compliance schemes the strength and the enforcement powers they need in order to ensure compliance without those changes? 
 How will we stop shoddy builders although National says that it will not stop shoddy builders. It says that the person with the ute the dog and the radio should be allowed to build his or her own house. It says that owner-builders should be able to operate without any fetters. I know that there are some very good owner-builders. There are some very competent people doing their jobs. I have also talked to owner-builders who have admitted that there were things beyond their knowledge and that they had to get in a professional to do the things they were incapable of doing. Some people recognise when they need expert help and others do not. The difficulty is that with owner-builders who think they know more than they actually do it is a case of “a little knowledge is a dangerous thing” and houses are being built that are not up to scratch and not effective. 
If we look at Part 1A further we will find some of the good things that it will produce. Clause 174 requires owners to notify licensed building practitioners who have worked on their homes. That is an important asset to any future purchaser of a home. Those practitioners will be able to go to the local territorial authority to get a list of all the tradesmen who worked on a house. If there is a problem they will know how to track them down. At the moment they have no idea. 
A person may have bought a house from somebody else who had it built by somebody else who bought it from a developer. An owner may not have any idea of the history of a place who had done the work or who to go to to blame for the faulty work. Now they will know because it is mandatory that that information be provided by the previous owner so that there is a clear record. 
The idea of clause 177 “Notices to fix” is also very important. I alluded before to the fact that tens of thousands of code compliance certificates were outstanding and there had been limited remedies in order to be able to enforce them. Now a code compliance certificate will need to be assessed 2 years after the building consent has been provided. Either a house is finished and will receive one or it is not finished and will receive a notice to fix. Once a house has a notice to fix the whole enforcement regime can start. That will stop the bizarre situation where houses have had building consents and they have never ever been signed off with code compliance certificates. It is a ridiculous situation and shows a lack of control by local authorities and this legislation will remedy that. 
The enforcement options are also included. The chief executive has far more enforcement powers to step in where shoddy work is discovered. One problem we found in the leaky home crisis was that the Building Industry Authority had difficulty moving with any pace because it did not have the power to do so. It had to consult in order to have the rules changed. Now there will be the ability to ban things at short notice and where urgency is required there will be the ability to put stops on products and systems very quickly. The legislation provides for warnings and time limits are built in in order to protect and ensure that things happen quickly. The legislation has a lot of things that improve the situation. I also refer to the Greens proposed amendment. The Greens were looking for two things in its Supplementary Order Paper and I think they have merit but United Future will not support them. 
Hon RICHARD PREBBLE (ACT) 
: 
 I rise on behalf of the Act party to speak to the bill. First I shall declare my interest in the matter. I am a director for a holding company of one of New Zealand’s larger building companies. I have to say on behalf of the company that builders are not greatly worried about this bill because costs will just be passed on. 
Now I will speak on behalf of the ACT party. We are worried because costs will be passed on. The effect of this bill will be to increase costs. When we look at the issue of leaking buildings—and I am not saying that it is not a serious issue—we see that that situation fundamentally arose from changes in materials and from some regulations to which changes builders are not adjusting fast enough. The idea that the licensing of builders will solve that problem is nonsense because it assumes that the leaky building crisis was caused by do-it-yourself builders. We all know that that is absolute rubbish. 
Members should have listened to the contribution made by Ken Shirley who at the age of 19 built his own home. The New Zealand tradition is for people to be able to do things for themselves. Under this bill—which is supported by United Future a party that says it is in favour of families and people doing their own thing—people will not be able to do that any more because now they will have to be licensed builders. The cost of that will be considerable. 
Is the cost worth the problem? No it is not. Members just have to look at the size of the bill. It is 358 pages of new regulations that people will have to meet in order to get a home. If members look at one of the problems ordinary Labour voters have they will see that under this Government the cost of people getting into their first homes has become more and more difficult to afford. Affordability is going the wrong way and this bill makes it worse. 
The ACT party says that with the leaky building problem the Government should have allowed—as it should with every other problem—prosecutions and the like to sort the situation out. Do we need 358 pages to meet a problem of public relations and public perception? No we do not. 
Yes maybe the Building Act does need to be revised. However a revision should be done to make it simpler to lower compliance costs and minimise red tape. I say with some authority that the fact that the building industry is not jumping up and down does not mean to say that this is a good bill. The industry just realises that the Government is taking out a substantial competitor group in this country—New Zealanders who do it for themselves. 
I am amazed that members do not realise that licensing builders is not the answer to the problem. Indeed I say that we should vote against the bill. The ACT party which comes to this matter as it does to a lot of other business matters with some experience says that this bill is not the answer for the solution; it will be an additional problem. 
I tell the member who suggested having a registered list of the people who worked on a building that if he thinks having that list will enable people to pursue the fly-by-night builder he is mistaken. The very nature of the name “fly-by-night” means that if he thinks people will come back from Perth in order to fix the really ripped-off - type buildings he is mistaken. 
All this bill means is that the cost of going down to one’s local council to get a building permit will increase. In my area the cost of a permit went up 90 percent 2 months ago; I think it was by 90 percent that the Waitakere City Council increased the permit cost. If that member thinks that that problem will be made easier by this bill he is mistaken. Of course the bureaucrats and those who will be doing the licensing see that the bill will mean another growth industry. 
But does any member consider that the real problem existing for a large number of young people—that is the cost of getting their own home—will be made easier by the new Building Bill? Does anyone think that? I notice that a number of Government members are looking in any other direction rather than mine to give me an answer. Of course they do not. 
BRIAN CONNELL (National—Rakaia) 
: 
 This bill has 358 pages and contains 386 clauses. It is a knee-jerk response to an issue— 
The CHAIRPERSON (H V Ross Robertson) 
: Part 1. 
BRIAN CONNELL 
: Yes I am coming to that Mr Chairman. It is a knee-jerk reaction to a syndrome known as leaky homes. I understand the intent of the bill but as the ACT member who has just spoken pointed out trying to license builders is simply not the solution. When we think through what this bill will do we see that it will simply add compliance cost on compliance cost and will put out of the scope of the average Kiwi the opportunity to build his or her own home. I am talking with some experience on this issue. A number of years ago I did build my own home but under this nonsense I would not be able to. 
Hon Member 
: I wonder whether any Labour members have done that. 
BRIAN CONNELL 
: Well I can tell the Committee for certain that they will not be able to do it under what is being proposed here. Licensing builders will simply kill the entrepreneurial spirit of do-it-yourself Kiwis. That is what will happen. There was a very simple alternative to this. Rather than licensing builders and putting in place huge compliance costs we could simply have modelled what the Australian states have done and introduced a builders warranty insurance. It is not complex and it is very easy to administer. The burden of responsibility is not passed on to the builder or to the consumer; it goes to insurance companies which insure by virtue of a very small premium—[ 
Interruption 
]. 
The United Future member is calling out. He wanted the alternative and now he is not prepared to listen to it. Licensing builders and putting in place this type of complexity will add something like $6300 per project. It is the death knell of do-it-yourself builders. Garden sheds like the one that member may have built on his property will no longer be part of the landscape. The solution was very simple: rather than licensing all we had to do was look at best practice in another jurisdiction and the answer was the Australian building warranty insurance concept. The idea is that home handymen who want to build or renovate their own homes have to get an insurance warranty that states that the work will be done to specific standards. For the exchange of a small premium—about $350 when I last looked at it—the insurance company involved said it would accept that responsibility and that that responsibility would be good for 7 years. Any other person coming in and purchasing the property would have a guarantee that the work done by the previous party was to an acceptable standard. That would have been a much simpler solution than putting in place knee-jerk reactions that run to 386 clauses in a 358-page bill and that simply will not be adhered to. 
Clayton Cosgrove is calling out as is his wont. He is a man who is not practical in any sense. I am sure that he has not built his own home or has any experience in this area but he is prepared to yell out across the Chamber rather than make a constructive contribution. He claims to have lived in Australia. If that is right and if he had had his wits about him then he must have heard of builders warranty insurance. Rather than be an unconstructive critic in this Committee stage he could be saying: “Yes I am aware of it.” He should have said what should and what could have taken place. That would be a far better response than what is being suggested here. 
I challenge any member in the Committee to pick up this bill and quote me chapter and verse because it simply will not happen. Can members imagine hard-working builders out there saying: “Oh I think I’d better refer to clause 207 to see if I’m doing OK.”? 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: 
 I move  
That the question be now put. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 239 in the name of Sue Kedgley to clause 119C be agreed to. 
MIKE WARD (Green) 
: 
 I raise a point of order Mr Chairperson. I have here the Maori Party proxy vote to be cast against the whole bill. I do not know how that party stands on this vote so I will cast it against on this occasion. 
The CHAIRPERSON (H V Ross Robertson) 
: The member is casting one vote against? 
MIKE WARD 
: Yes indeed. 
Hon RICHARD PREBBLE (ACT) 
: 
 I raise a point of order Mr Chairperson. I appreciate the problem the member is having but if he has not had an instruction on the matter he should not vote. 
The CHAIRPERSON (H V Ross Robertson) 
: I say to the honourable member Mike Ward that unless he has a proxy vote for the Maori Party he is unable to cast it. I thank Mr Prebble for his advice. Can the member please explain the situation to the Committee? 
MIKE WARD (Green) 
: 
 I have a proxy vote against the bill in total. I do not have a vote on the amendment so I will withdraw that vote. 
The CHAIRPERSON (H V Ross Robertson) 
: We will now continue with the vote. 
MIKE WARD (Green) 
: 
 I raise a point of order Mr Chairperson. I should also withdraw the previous Maori Party vote. 
The CHAIRPERSON (H V Ross Robertson) 
: The member is seeking leave of the Committee to delete the first vote as well? 
MIKE WARD 
: Indeed. 
LINDSAY TISCH (Junior Whip—National) 
: 
 I raise a point of order Mr Chairperson. The first vote that we took was the closure motion which we voted against and the Greens voted against it as well. That is all over. I think if you were to look at the votes you would see that the Government had the numbers to actually allow it to go ahead. I think Mr Ward needs to get his instructions before we continue; otherwise he is misleading the procedure. 
Hon RICHARD PREBBLE (ACT) 
: 
 In fairness to Mr Ward he has been quite frank with the Committee. He is now considering his position and realising that he did not have an instruction on procedural matters and is asking for leave to correct the voting. By the fact that he has to ask for leave it is over to the Committee but it is my view that it is better that the voting record actually be accurate. We can see the position that Mr Ward is in; he has only just received a proxy vote for another party and maybe he will have to get better instructions later. But I think he is doing the honourable thing in asking for the record to be corrected and I believe that you should put it to the Committee that we correct the previous vote. 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the honourable member for his contribution. I think that is sound advice. Mr Ward should ask for leave of the Committee. 
MIKE WARD (Green) 
: 
 I ask for the leave of the Committee to withdraw my previous vote for the Maori Party. 
The CHAIRPERSON (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There appears to be none. So on the previous closure motion the Ayes are 70 and the Noes are 49. We will now proceed to the next vote which is an amendment in the name of Sue Kedgley to clause 119C. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 9 
Green Party 9. 
Noes 110 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Progressive 2; Independent: Awatere Huata. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Lindsay Tisch to clause 159 be agreed to: 
to amend subclause (3) by adding the following new paragraphs: 
(e)subsidence: 
(f)geothermal hazards. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Noes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 239 in the name of Sue Kedgley to add new subparagraph (iii) to clause 195(1)(a) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 9 
Green Party 9. 
Noes 110 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Progressive 2; Independent: Awatere Huata. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 239 in the name of Sue Kedgley to add new subparagraph (iii) to clause 195(2)(b) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 9 
Green Party 9. 
Noes 110 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Progressive 2; Independent: Awatere Huata. 
Amendment not agreed to.The question was put that the amendments set out on Supplementary Order Paper 241 in the name of the Hon John Tamihere to Part 1A be agreed to. 
Lindsay Tisch 
: I seek leave for the question on the amendment to clause 159 as set out on the Minister’s Supplementary Order Paper to be put separately rather than all being put as one. 
The CHAIRPERSON (H V Ross Robertson) 
: That of course is something that the Minister can decide but the member is seeking leave. Is there any objection to that course of action being taken? There is objection. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 8; Independent: Awatere Huata. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1A as amended be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 8; Independent: Awatere Huata. 
Part 1A as amended agreed to. 
Part 2 Regulatory responsibilities and accreditation 
LINDSAY TISCH (National—Piako) 
: 
 This part gets to the heart of the bill—the responsibilities of the building consent authority. That is the area I want first to look at and I intend seeking a number of calls. I hope I will get more than one call because on the last part I got only one call. I was a member of the Government Administration Committee. I was seeking calls throughout the last part. On such important legislation when the time comes that members on the select committee—[ 
Interruption 
] I raise a point of order Mr Chairperson. 
The CHAIRPERSON (H V Ross Robertson) 
: I know what the member is going to say. That is a personal reflection as I understand it under Standing Order 116 and the member will stand and apologise. 
Clayton Cosgrove 
: I apologise. 
LINDSAY TISCH 
: Shane Ardern and I were members of the select committee and we had a lot of input into this legislation. The point that I was making was that during the last part I got only one call. I will later be seeking other calls and I will be interested to have those. 
I want to look specifically at clause 72 “Duties of building consent authority”. The private certifiers made very strong representations to us about it. Members will be aware that private certifiers are currently having difficulty with insurance so their role over the last few years has been limited. But our view is that it is also a very important point that they have a part to play and we should be accommodating them in such a way that they are able to provide the services that will expected under this new legislation. 
It is interesting to consider what is actually required of the building consent authorities in this clause. The authorities include territorial local authorities and private certifiers. An interesting point came to my attention this morning. Someone involved in the industry came to visit me. He told me that products are certified; that under this bill builders will become licensed building practitioners; and that the building consent authorities who will be the certifiers will also have to be certified. The point was made that probably only one person in New Zealand has all the qualifications required to meet the specifications of this bill—only one person. 
Clayton Cosgrove 
: Name the person. 
LINDSAY TISCH 
: No I will not name the person. For example if we look at roofing we see that many different types of roofing are involved and special recognition has to be given to that in the bill. The same applies to windows doors or whatever. My visitor said that throughout the whole country there are probably only 10 to 20 people who over time with some training would be able to meet the requirements yet the ministry has determined that we need a minimum of 200 people. To train those people up to the level of skills required under this part would take a minimum of a couple of years. He made the point that 30000 houses a year are built and if those properties can be inspected and certified for 50 weeks of the year then the 20 staff who are currently available would have to do 30 inspections per week. It is absolute nonsense to expect those people to do what this bill is looking to achieve. Even if after a couple of years there are 200 staff which is the number the ministry has said is the minimum requirement they would have to do 600 inspections a week or three per week each. 
The point I am making is that the people with the expertise required are just not there. The territorial local authorities just do not have these sorts of people available to do the work the bill expects them to do. They are just not there. In fact some councils like the Tauranga District Council do not have certifiers. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 I have been seeking a call for some time and it is with pleasure that I rise to speak against Part 2. I do so for a number of reasons. I listened with some interest earlier on to the contribution made by the member of the ACT party Richard Prebble when he talked about the huge layer of cost that will be placed on people as a result of the passing of this legislation. I know that the member may not agree with this but I say to members who are listening that this legislation is what we get when we have an urban-based lawyer in a party—the United Future party—that is elected to Parliament on list votes yet gives unconditional support to the Government and that party is asked how to fix leaks in houses—358 pages of bureaucratic regulation. That somehow or other— 
Hon Richard Prebble 
: I am also a member of a list party. 
SHANE ARDERN 
: That is why I thought the member may not agree with me. The bill contains 358 pages of bureaucratic nonsense which of course will sit on the ute’s seat under the dog next to the radio when a poor small-business person out there tries to go about his or her work. This legislation will not work; it will not stop a house from leaking. It will not address the problems faced by those in the building industry and it certainly will not address the problems faced by the supporters of the Labour Party who thought they had elected a practical party that would represent their best interests. 
I say to the Government members that one of their great former leaders Norman Kirk built his own house with his own hands. The question is under regulation such as this would he have been allowed to do that? 
Hon Richard Prebble 
: No. 
SHANE ARDERN 
: The member over here—I think he was probably around Parliament at the time of Norman Kirk—can say because he has a law degree that the answer is no. I invite the Minister in the chair the Hon John Tamihere to take a call and tell us how Norman Kirk would have got on under provisions such as those in Part 2 whereby a certified building practitioner would have had to tell him whether he had done his job right. I can vaguely remember some of the comments made by Mr Kirk at the time towards the kinds of professional stickybeaks who poked their noses into things he was doing. They were not complimentary and they certainly were not parliamentary—and that is exactly the response that we on the Opposition side of the Chamber have to this bill. It just will not work. 
The Government Administration Committee heard from 150 submitters and spent 29 hours and 30 minutes listening to those submitters and considering this bill—and I acknowledge the officials who gave advice when questions were asked—and this is what the committee came up with. As my colleague Lindsay Tisch said this legislation will not work and it will run small businesses out of business. 
I now come to clause 42 which refers to the special powers of the chief executive for monitoring the performance of functions under this Act. I ask the Minister in the chair the Hon John Tamihere who is also the Minister for Small Business to take a call and explain to us how the chief executive will make sure that the person with the dog in the ute next to the radio who is going about his or her work ends up with a solid building that will not leak. How will the chief executive do that? Presumably he or she will be based in Wellington although maybe not; the position could be based in Auckland given that the Minister comes from Auckland. What matters is how he or she is to achieve that goal. The only way the chief executive will achieve it is to tie that small-business person up in so much red tape—driven out of a law office in Lower Hutt or wherever it may be after the next election—that he or she goes out of business. That may stop that person from building a shonky house but will it stop the fly-by-nighters who come from Australia or somewhere further afield get involved in a major contract in Auckland where this problem originated use the wrong materials and bring about a systemic failure such as that identified in the leaky house report? Will it stop such a person from coming in doing that work and then disappearing over the horizon never to be seen again or be tracked down by the law office in Lower Hutt? The answer is no it will not. This legislation will not fix that. 
BRENT CATCHPOLE (NZ First) 
: 
 It was interesting to hear other members on this side—the doomsayers—say that the measures in this part will not assist anyone. This part covers the functions powers and duties of the chief executive. One of the chief executive’s key powers is the power to act proactively. He or she will have the power to monitor the emerging trends in building materials design and construction and to act immediately to ban any practices or materials until such time as they are proven to be acceptable. The chief executive will also have the power to prevent builders from practising if they prove themselves to be unworthy. 
Everybody is saying that this will stop the DIY’er. It will not. The DIY’er—the good old Kiwi do-it-yourself bloke—who is handy has the skills and has the drive to do the job will still be able to do it. 
Judith Collins 
: The red-blooded male. 
BRENT CATCHPOLE 
: If he has the ability to do the job he will still be able to do it. The only part of the building process for which he will require the input of a licensed building practitioner is that regarding the outer envelope and any structural walls of the building. In everything else he will have all the abilities and freedoms to carry on. I can see that a process will develop under this bill whereby small businesses will put themselves out there to provide that service as a licensed building practitioner for those particular cases. Yes there will be a slight increase in cost but hang on— 
Brian Connell 
: Slight? Quantify it. Is $6300 slight? 
BRENT CATCHPOLE 
: I ask the member how much it would cost him to insure a house that is likely to end up as a leaky home. I can tell him that no insurance company would touch that house. 
Brian Connell 
: Yes—nil. 
BRENT CATCHPOLE 
: The member says nil—therefore that house would be worthless. The owner of that house would lose considerable value in that house and a considerable amount of money. If the cost imposed by this bill comes to $6000—some say it might even be $7000—that is a small insurance policy for a guarantee that a house will be to a standard whereby it will not lose its value and will not end up worthless. I note that in many cases leaky homes have had to be demolished and the owners have got absolutely nothing for it. Those people have had to start from scratch. 
I would like to take up a point that Lindsay Tisch mentioned about private building consent certifiers. They are the experts. They have basically come out of territorial authorities and they have the expertise. To shut them down now would be basically to tell them to go overseas and find ready work in Australia—because that is where they would go. They would not stay here and place themselves back with territorial authorities; they would move out of the whole industry and disappear across the Tasman. We can guarantee that. Many of them have spoken to me and raised that issue. They will not go back into the situation they were in prior to being able to become private building consent certifiers. So that is an issue the Government needs to sort out. 
MURRAY SMITH (United Future) 
: 
 Part 2 outlines the roles and responsibilities of the chief executive and the local authorities. It puts us again in the situation of addressing the whole idea of private building certifiers. In terms of the bill as it stands we will see a situation whereby four categories of people will certify buildings. We will have the territorial authorities if they take the responsibility; we will have other territorial authorities that adopt or are passed the responsibility for their neighbouring authorities; and we will have council-controlled organisations—in my discussions with the Tauranga City Council the council made it clear that effectively that is the way it will go. 
That council is a very good case study because at the moment in Tauranga as some members will know all certification work is done by private building certifiers. I went to Tauranga to talk to the council in terms of where that work was going to go and what was happening in the whole area of private building certification. They made it clear that they were very well aware that come January 2005 there would be no private building certifiers. The council is already starting to gear up to the idea of having a council-controlled organisation—separate from the Tauranga City Council but that will involve other councils—as a separate company that will do all the certification work for the Bay of Plenty area. That is how that council will address the issue. They reckon they can gear up with about a month’s notice which belies what National members said earlier today when they suggested that that situation would be quite chaotic. 
So we will have territorial authorities and neighbouring authorities doing the work for those authorities we will have council-controlled organisations and then there will be this thing called a “private building certifier” which effectively will not exist. Under the terms of this bill private building certifiers will be required to show they have sufficient financial backing in order to meet all civil liabilities. The only way they can do that will be either to inject into their companies millions of dollars of assets that are available as liquid assets to any claim which is simply unrealistic or to take out professional indemnity cover. But they cannot get professional indemnity cover. 
The Government has assured me that it will stand firm on the requirement for financial backing so therefore come January when all the building certifiers’ licences come up for renewal none of them will get renewed. The Tauranga City Council is expecting that but other councils will be taken unawares and will find all of a sudden that there are a whole lot of building consents for which they have no building certifiers to action. That situation will suddenly be dumped on them. I have said continually—my second reading speech outlined this in depth—that the more responsible attitude would be to recognise the fact that there will be no building certifiers in January and to provide in this legislation a phase-out period that would phase out private building certifiers within a certain time because they cannot provide public back-up— 
Dr Wayne Mapp 
: Is that good or bad? 
MURRAY SMITH 
: Well if the certifiers could get back-up cover to provide consumer protection for the work they did I would be very happy with them. The thing is that they cannot. Our trip to Australia made it abundantly clear that while we have joint and several liability in New Zealand we will not be able to get professional indemnity insurance. The only reason the Australians have any cover is that they do not have joint and several liability. Even then the coverage is restricted. They can get it for only 6 years. They cannot get any run-off cover and limitations are placed on building firms by their insurance companies that state for example that the firms are not allowed to do more than $1 million worth of work in a year. So the insurance companies are constricting the amount of work those consent authorities can do in 1 year and therefore are inhibiting their productivity and financial viability. We will get that situation. 
I have put forward a Supplementary Order Paper that would effectively provide for a 3-year period of transition to phase out private building certifiers. Effectively I have provided that the only private building certifiers that can get certified under this bill are those that are council-controlled organisations. I have no problem with council-controlled organisations. They will still have to meet the requirements but because councils can get sufficient cover through their rating base and through the provision of guarantees—[ 
Interruption 
] Well I have no problems with the rating base being used because a regulatory authority is providing an assurance to the consumers of our society—homeowners—that those homes will be to a good standard for the benefit of future purchasers. 
Hon RICHARD PREBBLE (ACT) 
: 
 I will make just a quick response to the points made by the United Future party. No one else in the country thinks the country’s dozen or so private building certifiers are responsible for the problems facing the industry. I am amazed that United Future which says it is in favour of small business at the Government Administration Committee actually turned out to be more militant and opposed to private enterprise than the Green Party. It is quite extraordinary—but those members have a number of inconsistencies. 
I want to slate the committee for another matter. I refer to clause 119B in Part 1A “All building work must comply with building code”. When I go to the definitions to find out what “building work” is I discover in clause 7(1)(b)(ii) to my astonishment that “a fence as defined in section 2 of the Fencing of Swimming Pools Act 1987;” is a building. Let me declare yet another interest: I own a swimming pool—quite a large one apparently—in west Auckland in the eco-city of Waitakere. That gives—[ 
Interruption 
] The Committee should be aware that this sort of power is going to be delivered to councils. What will they do with it? I will just give members my personal experience. I bought the house and it had a swimming pool. There was no fence. The Waitakere City Council had done nothing about the Fencing of Swimming Pools Act. I arrived and immediately fenced it. I actually rang up the Waitakere City Council and said: “I know you can’t answer this question but if you could who’s a good reliable fencing contractor?”. The council gave me a name—and of course I would never mention that it did that so I will not but it did—and I hired that person. He fenced my pool and the Waitakere City Council came around on another matter and complimented me on the good job. 
 Last year I was amazed to get a letter from the Waitakere City Council stating that my pool was not fenced. I looked out to see if the fence had gone and found it was still there. I wrote a note to say that the fence which the council had complimented me on was still there. The council came back and said that the pool should not be fenced—it should be caged. I could not believe it. The council told me I had to put the fence right around the edge of the pool to stop children from going in. I said it would mean that we adults would be outside watching our children drown and unable to get over the fence to save them. 
The council has carried on with this lunacy and is prosecuting 200 swimming pool owners in Waitakere City each one of whom has a fence. Many of them are in the same situation that I am in whereby at the other end of my property there is a creek owned by the Waitakere City Council. Is it fenced? No it is not. I draw to the attention of members the fact that not one child has been drowned in a fenced pool in Waitakere City but children have most certainly been drowned in creeks. 
I say to this Committee that when we pass these sorts of regulations we have to realise that councils have “little Hitlers”—but perhaps I should not call them that. 
Opposition Member 
: Morons? 
Hon RICHARD PREBBLE 
: No they are worse than morons; they are power mad. They do not like the fact that some people can afford a swimming pool. They want to put up regulations that have nothing to do with safety but are all about power. People like Bob Harvey the mayor is completely in the hands of his bureaucrats and is not able to get up and ask for common sense. 
We can see why that is—because the common-sense party United Future thinks 10 private building certifiers are responsible for the problems we have had with buildings. There is no evidence to support that. United Future thinks this sort of regulation will make New Zealand a better country—no it will not. New Zealanders will be tortured as a result of Mr Smith’s contribution. When John Terris introduced the swimming pool legislation he cannot have possibly imagined that responsible owners who had fenced their pools without being asked to by the council would be dragged through the courts and required to cage their pools which is quite contrary to any intention of this House. Somehow or other the select committee has agreed to declare swimming pools as buildings so that these bureaucrats can persecute ordinary law-abiding New Zealanders. 
I say to the Minister Mr Tamihere who says he has had enough of political correctness that this is political correctness on steroids. The Minister lives in Waitakere City; he knows what an eco-city is like and the nightmare it can be. He knows that it is quite prepared to persecute its own citizens. 
JUDITH COLLINS (National—Clevedon) 
: 
 I thank Mr Prebble for that fine contribution to the debate. If there is one speech that I have heard this afternoon that has shocked me it is the speech from United Future. That party has constantly said it stands for common sense. Common sense my foot! It is absolute political nonsense. 
Ron Mark 
: From a racing driver. 
JUDITH COLLINS 
: No it was from the mate of a racing driver. That party said it was for small business; well it will see business get smaller and smaller under this sort of regulation. In my electorate I have dealt with people from A1 Certifiers—the first building certifiers to be persecuted under the leaky homes situation. Those good business people were driven to the wall because as soon as the leaky homes situation happened their insurance company pulled their cover which meant that A1 Certifiers could not be certified under the former Act—and that situation will be replicated in this bill—and they lost their business. That is a disgrace. They had done nothing wrong other than to have their insurance renewal come up on that particular date. 
I am amazed that United Future thinks the leaky homes issue was caused by a few building certifiers. Until the last few years most of the homes in which I have lived have not had building permits. Mr Catchpole is shocked by that but the reason is they were built well before building permits were the norm. And not one of them leaked. They were built before we had treated timber but we did have good-quality native timber and the people who were using those sorts of products understood that if the house leaked they would be in trouble and would ruin their reputation. This particular bill is supposed to stop leaky homes. It is a sad sad travesty. We have here a bill that is about an inch thick and the best thing it can do for a leaky home is to be shoved into the corner of a roof that happens to be leaking. That is about all it can do. 
Then there is the cynical attempt to tell building certifiers that if they can get insurance and can prove that they can afford to pay back the hundreds of thousands of dollars that a leaky home might cost someone they can be certified. The Government is setting up some rules here that it would not apply to itself. Mr Smith from United Future is a lawyer and knows full well that lawyers do not have to have professional indemnity insurance. He knows that yet he also knows that lawyers can do a lot more damage to a lot more people in one go than one building certifier can. But Mr Smith is advocating that the building certifiers—these nice decent honest people—have stricter and tougher rules placed on them than any lawyer in this country has. That is completely wrong and Mr Smith should know that. In fact words come to my mind that cannot be said in this House; “double standard” would certainly be one such phrase. This bill is a cynical and disgraceful attempt. If the Government wants to outlaw ordinary people from being building certifiers—people who have trained and are qualified and experienced—then it should say that. Mr Smith should not be telling them that they will be called an authority and that laws will be set up for them that lawyers would not put on themselves. Mr Smith is happy to say he represents a common-sense party that is for small business. Well it has got it in for small business—that is all I can say. 
That party says we should get rid of GST on rates yet Mr Smith has also said United Future is happy to have ratepayers pick up the bills for everything. It is happy to have councils be certifying authorities. He thinks they will do a better job than registered certifiers. Well he should have a little think about that and should think about what it is that councils generally do better than anyone else and that is pretty much charge people rates that they have no control over then waste that money on silly services that nobody wants. Most ratepayers would say Mr Smith is not doing them any favours. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I will pick up on the topic of political correctness and point everybody in the direction of clause 26 under Part 2 which is about applications for determinations. A party—I looked up “a party” in the definitions and it does not happen to be there but I presume it could mean any person—may apply to the chief executive for a determination on any building consent authority’s decision either to issue or refuse to issue a building consent. In making that determination the chief executive has to do a number of things. Some procedures are set out in clause 35 which states: “(1) In making a determination the chief executive must—(a) avoid unnecessary delay and formality; and (b) recognise tikanga Maori”. We have a situation where people throughout this country apply for resource consents—sorry I mean building consents; but this bill is strikingly reminiscent of the Resource Management Act—and suddenly under clause 26 the chief executive in making a determination regarding a building consent has to recognise tikanga Maori. That is political correctness gone mad because tikanga Maori means whatever it means to the party wanting the chief executive to make a determination on a building consent. Anyone wanting a building consent in this country will now possibly have to go through the process of a party asking for a determination and the chief executive in doing that has to recognise tikanga Maori. That is an absolute disgrace. 
Could we have a response from the Minister in the chair John Tamihere as to how he expects that to happen? Every single person wanting to build a home for himself or herself on his or her own property could now be challenged by any party on the basis of tikanga Maori. It is my understanding that “tikanga” means all things visible or invisible in the universe. Please correct me if I am wrong; certainly the Minister might like to take a call to challenge me on that. It is extraordinary. This type of policy has slid into our legislation in this country and is causing the sorts of problems we have today. The Minister is allowing it to happen with this bill and that is an absolute disgrace. I cannot believe he is allowing it to happen. So much for the red-blooded male stuff! So much for all those things that the Minister tends to purport in public! When it comes to putting through law he has a whole other set of principles and guidelines. 
I am disgusted by the fact that if I were to build a house now I would face the possibility of a party asking for a determination on my building consent and in the making of that determination tikanga Maori would need to be recognised and evidence received—written or spoken—in Maori. 
Judith Collins 
: Really? 
SANDRA GOUDIE 
: Absolutely. If members care to bring their attention to clause 35 and if they couple that with clause 26 they will see it there in black and white. National will certainly be making the public of New Zealand aware of those provisions. This Minister John Tamihere is allowing those provisions to go through in the Building Bill. It is an absolute disgrace to all New Zealanders. 
Hon Member 
: Very good. 
SANDRA GOUDIE 
: I have not finished. I want to stand up for territorial authorities. This bill tells them that they have to be building consent authorities whether or not they like it. One needs to read very carefully the sorts of obligations that are placed on local authorities in meeting the requirements of this bill. Those requirements are substantial. The authorities have to keep every single scrap of paper and piece of information and have to impose a fee or charge for their services. On top of that they have to collect a levy for the chief executive; that is identified in this bill. 
MITA RIRINUI (Labour—Waiariki) 
: 
 I move  
That the question be now put 
. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I thank Sandra Goudie for drawing members’ attention to clause 35 “Procedure for determination”. She is absolutely correct. Clause 35 states that in making a determination under this legislation—not under a resource consent or anything like that but for a building consent: “… the chief executive must—(a) avoid unnecessary delay and formality;”—that seems fair enough—“and (b) recognise tikanga Maori and receive evidence written or spoken in Maori;”. 
I guess that Maori is an official language so that point might be reasonable but tikanga Maori in relation to the Building Bill seems quite extraordinary. As my colleague pointed out as we have seen from the foreshore and seabed legislation “tikanga Maori” has an extraordinarily broad definition. It includes things tangible and intangible and the Minister in the chair John Tamihere knows that. The bill now creates enormous uncertainty. Surely the intent of the Government and its handmaiden United Future must be to produce some level of certainty for New Zealanders. Surely the intent of abolishing the Building Industry Authority—as bad a decision as that is—and replacing it with the Ministry of Economic Development is to improve New Zealand’s building regulations. That must have been the intent as bad as it is. Now the Government has this enormous extraordinary new process of tikanga Maori in this bill. There are places where tikanga Maori has relevance. I think everyone in the Chamber would acknowledge that. 
Jill Pettis 
: Such as a pa. 
Dr WAYNE MAPP 
: But how on earth does it relate to determinations by the chief executive in the way— 
Hon Richard Prebble 
: It might help me. Could I declare my swimming pool to be a Maoripa? 
Dr WAYNE MAPP 
: That is the sort of thing that could happen. Where we had flawed but at least relatively certain legislation under the 1991 Act the political correctness of this Government means that it has brought into play concepts that frankly have no place in Building Code determinations. I heard the chief Labour whip say: “What about a pa?” That is not the subject of a determination. That is something that a marae committee itself would take into account as it produced its own designs. It has nothing to do with the determination by the chief executive. Determinations relate to general rules that relate to buildings overall—in other words to the building code if one likes. So now we have taken something from the private domain—something relating to a particular marae or iwi in relation to their own buildings—and transplanted it into the building code as a general proposition. That is fundamentally wrong. 
One thing that National has stood for is equality before the law. We stand very strongly for that because we believe that on most issues the rules should be the same for everyone and should be understandable. Issues of culture and so forth by and large relate to an individual’s or a group’s culture. Culture does not have a specific role or place in economic regulation which is what the Building Bill is about. Now the Government is importing into the bill cultural concepts. I say to the Minister that that is the reality. The Minister has some understanding of the bicultural world so I think it is reasonable to us in this Chamber and around the nation for the Minister to explain how come this provision is in this economic regulation and why we would bring these cultural concepts into legislation that is about the general rules relating to buildings. I find that extraordinary. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 I take a further call in the Part 2 debate to bring the Minister’s attention to clause 47 “Territorial authority must undertake research” which states: “A territorial authority must gather any information and undertake or commission any research that is necessary for the territorial authority to carry out effectively its functions under this Act.” I say to the Minister that that sounds interesting but in this country— 
Brent Catchpole 
: I raise a point of order Mr Chairperson. I would like you to consider that the clause the member is mentioning has been struck out. 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the member. The member on his feet may like to consider changing the issue. 
SHANE ARDERN 
: I challenge the member to go and look at the page I am looking at in the Building Bill. I have it in front of me and I am prepared to bring it over and show it to the Chair or to the Minister if he likes. But he should have a look at it and if he does he will see that as I have quoted it it is still there. It has not been struck out. So I say to the Minister in the chair that he should take a call and explain to members how the 76 local authorities in New Zealand that I know of are to carry that out. In my own electorate there are seven territorial authorities—seven—and the whole lot will have to go through this process. What cost will that place on those territorial authorities if they have to do what is proposed? The Minister may like to take a call and clarify that for the Committee because it is certainly a huge compliance cost. 
I also say to the Minister that clause 48(1)—and this clause certainly has not been struck out either; I suggest to members that they look at this—provides that a territorial authority will have to consider any building consent granted under the application. I invite the Minister to take a call and explain why the Minister for Small Business believes that a territorial authority is the only authority in New Zealand that can carry out that function. Once this bill is passed there are private certifiers out there who will inevitably have to go out of business. It was submitted to the Government Administration Committee that it would be hugely difficult for them to meet the regulation requirements placed on them by this bill. The argument was primarily around insurance. I know that the Minister knows the argument well but I ask him why he believes that those 11—I do not know the exact figure; I think it is 11—private certifiers in New Zealand are the villains in this process. No evidence at all was submitted to the select committee that any particular private certifier had a record of bad performance that the leaky house problem came about as a result of their work or that for some reason they should not be allowed to carry out the work they have always carried out. I ask the Minister to take a call and clear up that point. 
I know that the member Murray Smith from United Future had a particular interest in this issue and he raised it on numerous occasions in the select committee. As members said earlier he is from a party that campaigned on common sense and that says it stands up for small business yet it feels the need to run small-business people out of business through heavy-handed regulation. I ask the Minister to take a call and explain to members why that is so. Further I want the Minister to tell us why he believes that this piece of regulation will fix the problems with the leaky house syndrome. They are known as the four D’s: deflection which is the ability to deflect or shield water into gutters or other such structures; drainage which is the ability for water lodged behind cladding to drain back outside; drying which is the ability for residual moisture to evaporate through ventilation; and durability which is the ability of materials to stand up to all the conditions they are expected to stand up to in New Zealand such as untreated timber or treated timber. 
Maybe the Minister will explain how he believes that this bill will fix those problems because nobody else out there knows. Certainly those who submitted to the select committee had no idea how the bill would do it. They asked why if there is a problem with building the Government does not get some builders to look at how to fix it. 
Hon JOHN TAMIHERE (Associate Minister of Commerce) 
: 
 I would like to make a number of reflections on a number of the challenges made to the Minister as follows. As the member for Taranaki-King Country rightly opined Norm Kirk—great man that he was—did build his own house in the Christchurch area. He did so at a time when men were made of steel and wood with chips. Things have changed. After 10 years of Tory rule in the implementation and application of the 1991 Building Act a large number of matters have fallen into disrepair whether in terms of the capacity and capability of apprenticeships or of standard certification processes and the like. I do not want to rearticulate those. Mr Ardern was on the Government Administration Committee and is aware of the manifest and multifaceted problems that needed to be reviewed and fixed. This bill goes a long way towards doing that. 
I want to also acknowledge one of our great Prime Ministers and in doing so say that the only difficulty we have with his great prime ministership is that he was a member of the National Party. But what he did say which I thought was marvellous in terms of the principles that the great National Party used to stand for was: “Never forget that we are a property-owning democracy.” The nub of this bill goes to protecting the Kiwi battlers out there who are making one of the most significant investment decisions in their lives. They need to be protected from the rorts that were occurring and that will continue to occur with regard to the building industry. 
A number of other matters were raised by members about the powers of the chief executive officer and the like. Somebody will have to conduct the bringing together—and have the discretion with regard to a number of the authorities and powers—of four or five agencies to form a new department of building and construction. I commend those authorities and delegations that have been provided to the chief executive officer. 
Dr Wayne Mapp 
: What about the tikanga Maori issue? 
Hon JOHN TAMIHERE 
: I want to conclude—as challenged by Dr Wayne Mapp—on the issue of tikanga Maori. There are 66 million square acres of land in this country—I will use acres because those are the land measurements I think in—and over 3 million square acres is Maori Land Court title. It is different title—absolutely—to the general title system. In the MacIntyre amendment of 1967-74 Maori-owned land owned by four or fewer owners was transferred arbitrarily mandatorily and without notice into general land holdings. So there are also tens of thousands of acres of general land held by Maori under Maori Land Court jurisdiction. The application of this law must apply to that land block as well. So in the first instance I say to members opposite that instead of turning this into a race issue they should acknowledge that this Parliament legislated different laws. At one time all land was Maori land save for the land that was confiscated and we are having a debate about that. The issue therefore is not about whether there are separate rights available in this country; it is about Parliament having decreed that different rights are applicable to different levels of land tenure. That is the first point I wanted to make. 
I want to conclude on the tikanga Maori issue by stating quite carefully and clearly that it is as in the United States: where there are sacrosanct pieces of land where tens of thousands of US citizens lost their lives in the Civil War Americans uphold that land and protect it. It is iconic heritage land. It is great history nation-building land and it is right that in the Maori world view of tikanga certain things are supported. So I indicate quite carefully and clearly that different rights have been applied by this Parliament with regard to Maori land tenure. It is large it is there we cannot deny it and we must make laws that acknowledge it. It is about time that people started to move on. I commend the bill accordingly. 
LINDSAY TISCH (National—Piako) 
: 
 I want to pick up on a point that Richard Prebble made about swimming pools. I had a similar experience with a spa pool that was outside and was required to be fenced. I never used the spa pool because it leaked. So it never had any water in it but I still had to have it fenced. Right across the paddock just 25 metres away from my gate was—guess what—a big trough that had been dug into the ground. It had been used for dairy farming but because the owners had sheep now they had dug it into the ground so that the sheep could drink out of it. So that situation was absolutely ludicrous. It was OK to have a trough in a paddock but my spa pool—which I was not using because it had a leak in it—had to be fenced. 
 I draw the Committee’s attention back to the issue of private certifiers the question of liability and the problems they have with insurance. The members of the Government Administration Committee visited Australia a month ago and it was interesting to see what the situation is in Australia in terms of private certifiers. Over there they have proportionate liability. I think that that is significant in terms of their cover and the liability they are exposed to as opposed to the joint and several liability that is the requirement in this legislation. But there are also a number of insurance companies that are prepared to work with the private certifiers in Australia. They are CGU Insurance Royal and SunAlliance and QBE Insurance. They are an established part of the building scene. In fact it was interesting to note that the state of Victoria the Northern Territory and ACT have only private certifiers so they are an established part of the building scene in those three areas. In New South Wales South Australia and Queensland the territorial local authorities also have private certifiers. It is Western Australia only that does not have private certifiers. The local authorities do the inspection work there. 
National’s issue is with the huge costs associated with the question of who carries the can at the end of the day. Under the provisions of the bill the building consent authorities—the certifiers in councils—will be the parties holding the liability. Why is some of the responsibility not devolved down to the architects the engineers the builders the developers and the other sub-trades involved? At the moment the backstop will be the territorial local authorities and the private certifiers. The Government says this bill is about consumer protection but we say that there is no consumer protection at all in it. The reality is that the consumer will have a backstop through local authority rates if the local authority has to pick up the costs of all those other areas. So that is the area we have major concern about. As I said in Australia the insurance is proportional liability but here it is joint and several liability for the entire construction process. That is the major difference. It is our area of concern and it is certainly a concern of private certifiers. 
The second area I want to draw the Committee’s attention to is clause 23 “Chief executive must consult in performing certain functions” which gives the chief executive huge powers. As the Minister said it will take some time to set up the new administration. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
New Zealand Labour 51; Green Party 8; United Future 8; Progressive 2. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the following amendment in the name of Murray Smith to clause 41 be agreed to: 
to amend subclause (1) by inserting the following new paragraph: 
(ba)in the case of a person who wishes to be registered as a building consent authority but who is not a territorial authority the person is a council controlled organisation as defined by the Local Government Act 2002; and. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 17 
Green Party 9; United Future 8. 
Noes 101 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; ACT New Zealand 7; Progressive 2; Independent: Awatere Huata. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 241 in the name of the Hon John Tamihere to Part 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 35 
New Zealand National 27; ACT New Zealand 7; Independent: Awatere Huata. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 35 
New Zealand National 27; ACT New Zealand 7; Independent: Awatere Huata. 
Part 2 as amended agreed to. 
Part 4 Regulation of building practitioners 
The CHAIRPERSON (H V Ross Robertson) 
: The question now is that Part 4 clauses 243 to 316G including debate on schedule 3 stand part. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 This is the part where the heavy-handed regulation reaches out and grabs hold of everybody. The rubber hits the road in this part of the bill. It would have stopped former Prime Minister Norman Kirk from building his house. Under its provisions Mr Kirk would have had to have a licensed building practitioner come along and tell him whether he knew how to lay the concrete blocks—whether he was up to standard. [ 
Interruption 
] That is right. I know who would have worn the concrete blocks and it would not have been the former Prime Minister. I know where he would have liked to stick his engine if that building practitioner had arrived to tell him what was what. 
 That is the sort of thing that one would never consider could come out of a party that believes in the blue-collar worker. For example the member down there Clayton Cosgrove who is talking to the Minister at the moment represents a seat that is a traditional Labour seat—the seat of a former Labour Prime Minister another blue-collar worker. One would never believe that this kind of thing would come into this Parliament under a Labour Government. But here we are today with a bill that means that anybody for example that man with his ute and his dog and his radio will now have to have a proper building practitioner come along and tell him whether the wall on the hay barn that he has built that is over and above the criteria for what is allowed to be built without having to have a building practitioner is in fact up to standard. 
It is going to be very interesting to see where these building practitioners will come from in Waitomo when they have to travel out to somewhere like Kinohaku to have a look at a construction that has taken place there. Of course it will not be required on the school because Government departments I presume like they were under the old Act will be exempt. But under this Act anybody else who is building anything substantial out in Kinohaku miles from anywhere will now have to have a licensed building practitioner come out to certify that the work meets the standard according to some bureaucrat in Wellington— 
Clayton Cosgrove 
: Good. 
SHANE ARDERN 
:—and the member over there who comes from a former Prime Minister’s seat nods his head and says it is good. Well I think Clayton Cosgrove should go back and have a talk to Mike Moore about this because I do not think he would agree with him nor would anyone else who votes Labour unless of course it is the urban-based lawyers who will benefit from it. 
This is the worst possible piece of bureaucratic politically correct regulation that has ever come to this Parliament in the time that I have been here. It stymies the very essence of being a New Zealander—that is to be able to go and do some repairs to one’s own house; to be able to buy and then to upgrade an old bungalow somewhere in Wellington as a young couple that has just got married. On their weekends they can do it up and get a bit of capital gain and get some benefit from it so they can move on as they climb up the ladder to becoming a successful couple. This will say to such people that they cannot do that unless they are prepared to pay through the nose and find some building practitioner who will turn up and inspect their work on the weekend because that is the only time they have available to spend time on site with that licensed building practitioner. On the weekend they will be paying triple time under the new employment law for him to turn up and do that. I have to say to the members opposite particularly the Labour members that I could not believe it when I saw this measure being introduced by a Labour Party. 
This whole business came about as a result of a process that has taken place under this Government. In 2002 the Building Industry Authority released its weathertightness report and made 20 recommendations aimed at fixing what it described as a systemic problem or a systemic failure in the building industry. I go through this bill and I look at how having a licensed building practitioner as will be required under this part will address that. I ask the Minister in the chair John Tamihere who I notice is suddenly paying attention to take a call and explain to members how— 
BRENT CATCHPOLE (NZ First) 
: 
 This is the key to the whole building and construction industry now—licensed building practitioners. This now brings this part of the building industry into line with everybody else involved in the building industry. People have to be licensed to be a plumber a drainlayer or an electrician. Every other person involved in building construction has had a licence except the person who is putting up the main structure. 
Hon Richard Prebble 
: Who never has. 
BRENT CATCHPOLE 
: Who as the member says has never had to have a licence. 
 Let me just take the Committee through some of the processes over the years. In the past there has been no consistency in the building industry and as we have had troughs and peaks in the economy we have seen that as the peaks arrive we have a great influx of people and there is a demand for additional builders and people involved in the building industry. Those people have not always had the necessary training because they have entered at a time when there has been a desperate need for additional manpower. As we have reached a trough in the economy those people have then stepped forward and undercut everybody else. Therefore the experienced practitioners have fallen by the wayside and we have had an inconsistency that has gradually built up until the 1991 Act and the regulations that resulted from that Act. The issue has been left wide open for the problems that have been the catalyst for this bill—that is the leaky homes. 
Sadly some of the knowledge of those people meant there were a few problems. The cutting of corners and costs and the lack of detail in many of the designs and the drawings meant that councils accepted them on the understanding that the builder knew to include those details. But if the builders had quoted on the plans without including those details then there was no way that they were going to be out of pocket and include them. So we ended up with a lot of missing detail on those buildings. 
Then there was the demise of the apprenticeship schemes. 
Clayton Cosgrove 
: Who did that? 
BRENT CATCHPOLE 
: Well unfortunately it was National. National got rid of the apprenticeship schemes. Although the Labour Government has called its new scheme the Modern Apprenticeships scheme it is nothing like the old apprenticeship schemes that were in existence 20 years ago. The new apprenticeship scheme is simply a rebranding of the New Zealand Qualifications Authority modular scheme and it does not have the practical side of the old apprenticeship schemes. Therefore it will not produce the quality of person that we need to come through. The building industry desperately needs quality. 
One point I would like to make sure that the chief executive has in mind when the licensed building practitioners are registered is that we do not make it too difficult for them to register. There are a lot of very qualified members of the industry who are reaching the end of their working lifespan for climbing ladders and heavy lifting. They are valuable and vital in the industry for training and that is required to continue. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I want to touch on a couple of the things that Mr Ardern said on Part 4 and schedule 3. This debate is very interesting because there is such a large contrast. We have those members opposite and I think this may include Mr Prebble who say that market forces will fix this problem. We have heard a bit about Norm Kirk tonight and how he built his place in Kaiapoi. 
I can also give an example from my patch to members opposite. It is the case of a woman who came to see me about a leaky home. A builder a number of “subbies” and other folk had built this place in Kaiapoi and it was a disaster for her. Market forces did not help her. She could not go and chase down the builder the developer or the “subbies” many of whom had gone broke. She could not seek recompense and she did not have the wherewithal to have—[ 
Interruption 
]. Of course Mr Prebble would not give a rat’s about her he would only give a rat’s about people in his position who could afford to chase those people down. My constituent could not do so. She did not have the wherewithal to chase those people down and even if she did she was unlikely to get recompense from them. Mr Prebble may be a great proponent of market forces but they did not help that person. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
CLAYTON COSGROVE 
: I shall pick up where I left off before the dinner break. We were speaking to Part 4 and schedule 3. It was raised by a number of members opposite and I was referring to Mr Prebble that market forces would somehow fix the great evils in the building industry. Members mentioned the great man Norman Kirk who built his house in the town of Kaiapoi and I referred to a constituent of mine who had been done over by builders and who asked me what she could do. She had a leaky home she said that the builders and “subbies” had done a shoddy job and asked what would be her recourse. The truth was that she had no recourse. If she were Mr Mapp he being one of the landed gentry with the means to pursue a builder then maybe she would have some recourse. But this person did not have the means to pursue those responsible. I invite Mr Prebble being the great constituency member of course that he is— 
Hon Richard Prebble 
: I was. 
CLAYTON COSGROVE 
: Was past tense and the people dealt to him. I say to members opposite to be honest about it and I ask Mr Prebble what he has nailed recently. I do not think he has nailed a nail into a piece of wood recently. [ 
Interruption 
] I will not make that comment. 
Let us be honest about it and say that market forces will not fix the evils in the building industry. For the life of me I cannot understand why Mr Ardern is opposed to licensed certifiers checking work. In a couple of speeches on this bill some time ago I said that the greatest asset a Kiwi has is his or her house. In many cases Kiwis put their life-savings into a house and in the case of Mr Mapp and Mr Prebble they probably put in half a percent of their life-savings. This bill seeks to have a certified licensed practitioner check whether a building is up to grade so one has a bit of insurance. Mr Connell talked about the Aussie insurance scheme. I tell him that in this country we do not insure for mediocrity. We know that Don Brash Mr Power Mr Key and a few others are insured for mediocrity but we on this side do not believe that we should insure for mediocrity. 
This bill goes back to having registered trades people doing good standardised work not the sort of shonky scene the National Government presided over. When members such as Mr Prebble try to say that somehow market forces will fix the problem that is probably true for some who have the means to pursue some of the sharks but for the average Kiwi market forces will not do the job. My constituent looked around and asked what the State would do or what someone would do to protect her so that she could either pursue those people or more important ensure that this sort of shonky workmanship does not happen. 
I note that the deputy leader of the National Party in theory is a trades person. He is a woodwork teacher from my college St Bedes. I ask tonight what he has nailed recently. Has he recently hammered a nail into a piece of wood? I am sure that although that member has not taken a call he would probably agree with the Government and say that we need standards. To pay some tribute to him he is a trades person. He has done his time in a few places and got his trade ticket. He would not want shonky individuals in his industry. I invite Mr Brownlee to take a call to express those views. I tell members opposite that this legislation is about securing the homes of average Kiwis—their castle—and as I said I cannot understand why Mr Ardern would oppose building certifiers. 
MURRAY SMITH (United Future) 
: 
 I rise to speak in support of the National Party. Is that not a surprise! Something the National Party said that I think has some merit—which Shane Ardern suggested before—was that we should be looking at having a home warranty scheme and I agree— 
Brian Connell 
: That was me. 
MURRAY SMITH 
: Congratulations to Mr Connell. I agree that we should indeed have a home warranty scheme for homes in New Zealand and if we moved to have that it would have considerable advantages. Certainly it would take the pressure off the need to have joint and several liability. At the end of the day the reason we have joint and several liability is that we do not want the homeowner to have to carry the can for people who under a proportionate liability system would escape from liability because their companies had been wound up or because they had no resources or whatever. So a home warranty scheme that enabled the insurance company to pick up the tab for anybody who did not otherwise cough up would be a very good scheme to have. 
The trouble with the Australian scheme is that it is for only 7 years. I would have a lot of concern if we had a home warranty scheme that was for only 7 years. After all the structural integrity of a home is meant to be for 60 years. Even in the limited environment in New Zealand we have confined liability for a period of 10 years which is pretty restrictive given the full life of a building. Even now we allow claims for a period up to only 10 years. To bring that period down to 7 years seems to me to be quite inadequate. If we were to have a home warranty scheme I would want to see one that was at least 10 years in length and a period of even 15 years would be far preferable. 
How will we get to that situation? It seems to me that this bill assists us to get there because we will not be able to have a good home warranty insurance scheme unless we can assure an insurance company that we are building quality buildings. If the insurance company had to pick up the risk for the man with the ute the dog and the radio its premiums would skyrocket and the length of cover would be totally inadequate. Therefore if we want decent insurance cover for homeowners at an affordable price—which means we will be talking about several thousand dollars—we will have to deliver quality buildings. 
We will also have to deliver an effective enforcement regime which means that territorial authorities have to be doing their job properly that the central authority is doing its policing functions properly and that builders who are in default can be taken to task such as is provided for in this bill by the way of notices to fix. 
In my view then this legislation is a prerequisite to getting a solid building regime which in turn can be attractive to an insurance company and enable us to move towards a home warranty scheme. Certainly with that home warranty scheme we could then look at removing joint and several liability. 
There are justifiable arguments amongst those who are caught by the joint and several liability scheme that we should have proportionate liability. Why should a territorial authority who may be found to be only 10 percent liable have to pick up 100 percent of the tab because nobody else pays? Why should builders architects or other people involved in building work be in that situation? I think that a proportionate liability system is fairer but it can work only if we do not leave the homeowner to pick up the tab at the end of the day. That means there has to be some sort of insurance scheme so that the system has insurance company backing and some compulsory insurance and that means that a product must be delivered to an insurance company that will in fact insure that product. 
When the select committee went to Australia and talked to the Australian Building Codes Board at a federal level and at a state level in New South Wales about that home warranty scheme yes it did look at if there was some merit in it. In some instances the scheme in New South Wales was an example but the trouble is that it did not have the joint and several liability or the quality of building standards and the enforcement regime that our legislation will provide. So I am not surprised that Australia has very limited cover. We can do better than that. 
In terms of the registration of building practitioners I can tell members that I have talked to some of them and by and large they welcome the provisions of this bill. Those who are competent builders know that effectively the registration of building practitioners will be to their advantage because they will not be undercut by shoddy tradespeople who offer a cheap price and then deliver shoddy workmanship. In order to achieve that registration of building practitioners clearly what we need is training and competency. 
LINDSAY TISCH (National—Piako) 
: 
 I want to draw the Committee’s attention to the clauses in Part 4—this bill does not contain a Part 3 as the Labour member said. 
Brian Connell 
: Which Labour member was it? 
LINDSAY TISCH 
: The one who spoke earlier and who had to have a break over dinner to remember what he was actually saying. 
Clause 259 is the clause in relation to the register of licensed building practitioners. One has to go through an interesting process actually to get on this register. The whole process here which the Government would argue is that if consumer confidence is wanted then consumers need to know who is actually licensed. They forget about the principle of caveat emptor—buyer beware—and if buildings are being built they go down the road to see who has done the best job so they actually have first-hand knowledge. That is the best advertising there is—word of mouth. But no—this bill is becoming so restrictive that there is going to be a register of who is capable of doing the work. 
If members look at clause 262(1) they will see what information is to be on the register. I draw the attention of members to that clause: “The register must contain all of the following information to the extent that the information is relevant for each licensed building practitioner whose name is entered in the register: (a) full name: (b) any aliases:”—I like that one because I am sure that Labour members will be looking for aliases to be registered on the register and—“(c) date of birth:”. That is really significant. People have to enter their date of birth to become registered. What an absolute nonsense that is! 
If people want a building practitioner they will go to somebody who has experience in the field. They can look through the Yellow Pages and find master builders or certified builders or talk to people who have had their houses built. They can do that; they do not have to go to a register to get the information. 
Clause 262 lists half a page of things that have to be contained in the register. Paragraphs (d) to (h) state that people have to include their addresses phone numbers and email addresses. Everything has to be identified. 
Brian Connell 
: What is the point of those questions? 
LINDSAY TISCH 
: That is a good question. I will tell the Committee what will happen. Builders who are out there will not go through this nonsense; they will bypass it. 
What a great article I have here from the  
National Business Review 
: “Government puts another nail into home improvements.” Members should look at the photo there. The article appeared in the  
National Business Review 
 on 16 July and what a great article it was about how stupid this legislation is. The points I made in the article are exactly what will happen because builders will bypass these stupid provisions. 
Builders will go out and do the building work. They will not be shackled by this sort of nonsense and the old way will go on. We will have those do-it-yourself people—Bob the Builders—who will do their own building. They will not even go for consents. That is what will happen because this legislation has become so prescriptive in having to register and in having all of those details that people will say: “To hell with this. We know what we’re doing.” or “I have been in the building industry for the last 20 years. I know how to build a building.” People will ask: “Why should I have to go through this rigmarole if I want to build my own extensions or additions to my own dwelling farm building or whatever it is going to be.” 
We identified a real issue in earlier parts—that is the compliance costs that will be associated with this legislation. The increased compliance costs that will be associated with the sort of nonsense we see in this part have been mentioned plenty of times. 
I also want to draw the Committee’s attention to another important area where this Government has talked about how it wants to have consumer protection. In that respect Part 4 ties back to clause 175. 
Hon RICHARD PREBBLE (ACT) 
: 
 I want to respond to a few points made by the honourable member opposite who said that I was just relying on the free market and that this bill would help people. Also Mr Catchpole remarked that because all the rest of the world has licensed building so should we. First in the case the member cited he pointed out that builders had gone broke or had gone out of business. If they had gone broke this bill would not have solved the problem—unless it is the Government’s intention that ratepayers will be the insurers of all new buildings. If that is what is intended then that will be very very expensive. 
On the question of licence New Zealand has been a country that has never licensed builders. I ask members to look around this nation and see how we have managed to build it without licensing. Now suddenly we are told we have to have it. I can give an example. I said I was in the building industry. When I was out of Parliament or had been retired by the voters— 
Clayton Cosgrove 
: Rejected. 
Hon RICHARD PREBBLE 
: —or rejected; I like to think I was given a holiday. However there I was in Vietnam and I noticed that the New Zealand Government intended to build an embassy there. It was going to get an Australian company to do it and I thought: “That’s no good; we must have a New Zealand company build it.” I persuaded a New Zealand company to put in for the contract and it won it. I rang the Ministry of Foreign Affairs and Trade and said that the contract was needed immediately. I was told that it was OK; that because the building was an embassy it would be under New Zealand law. I told the officials that they did not understand because in Vietnam there are so many regulations—everything is licensed. The biggest problem would not be building the embassy; it would be the time it took to get the regulations through. However I put in the application and the Government—the Vietnamese Government—literally wanted to know my grandparents’ names. The application documents were almost as big as this bill. I was visited the next day and told there had been a terrible mistake. I asked the officials what it was and they asked me where my company’s licence was. I told them that in New Zealand we do not have to be licensed. They said that that could not be so; that everybody is licensed. I said that we have a licence in Hong Kong and in Singapore but we do not have one in New Zealand. In the end I told them we were members of the Master Builders Association and I got the permit. 
Darren Hughes 
: Was that a fib? 
Hon RICHARD PREBBLE 
: No it was absolutely true. In fact I rang the Master Builders Association saying that it had no idea how much it cost to make a call from Vietnam and asked it to send me a copy of our licence immediately. It was sent by DHL Worldwide Express. Vietnam does not accept faxes. I would never dream of fibbing. I actually knew what the next question would be: “Where is the Master Builders Association licence?”. How would the member answer that question? I had a day to think about it because I knew I would be asked. I said that the Master Builders Association was licensed and I produced the certificate of incorporation as well. 
All I am saying is that that did not make our embassy building any better. Neither did it improve the building standards in Vietnam. People who think that licensing and bureaucracy result in better building are out to lunch. We have managed to build this whole nation by doing it the Kiwi way and we now have a Government whose Ministers appear to be saying that they think there is too much political correctness but are now trying to tell the nation that 358 pages of extra bureaucracy will result in better lawmaking. I say to members opposite that that is nonsense. This is rubbish legislation. It will take us down the bureaucratic route—the route of the loony left that thinks that having more and more rules is the way to govern New Zealand. The truth is that it should always be a matter of buyer beware. People contracting with a builder have a responsibility to find out whether that person is a registered builder. At the moment—if the member thinks that registration is important—people can go to a master builder; but if a Kiwi decides that he or she wants to take a risk why should we remove risk taking from our community? 
Hon Damien O'Connor 
: Who’s a master builder? 
Hon RICHARD PREBBLE 
: A member of the Master Builders Association. Has the Minister never heard of that association? 
Hon Damien O'Connor 
: Anyone can join. 
Hon RICHARD PREBBLE 
: No that is not true actually. Where is the Minister’s master builder’s certificate? He cannot produce it. I can produce mine. In fact is there anyone in the Labour Government who is a member of the Master Builders Association? There is not one. 
BRENT CATCHPOLE (NZ First) 
: 
 I would like to follow on from my earlier speech and pick up on the classes of licence for building practitioners. This is where a builder has to reach a certain standard before being able to take on a certain level of construction. Under the regulations there is a series of levels. At the basic level are the licensed building practitioners who are not fully qualified. They can enter at that lower level provided they meet the criteria. They are peer reviewed and they are allowed to tackle only certain styles or types of houses. If they want to move up to the next level then they have to prove their ability to take on multi-story buildings. They can prove that through the peer review system and the registration board. There is a mechanism whereby if they fail to live up to the standard expected at the different levels they are disciplined by a disciplinary board which can deregister them to a lower level. Ultimately if they are completely beyond recovery they have to prove their capability of taking on work. 
I would just like to pick up on the do-it-yourself builder. Everybody has been talking about a former Prime Minister being able to build his own house. There are a lot of stories about that. Even today he would be able to build his own house but he would require a licensed building practitioner to sign off the outer envelope of the building— 
Lindsay Tisch 
: He has to be supervised. 
BRENT CATCHPOLE 
: Yes he has to be supervised and anything to do with structural walls has to be signed off by a licensed building practitioner. Anybody else can participate in building a house so the former Prime Minister could and would be able to—[ 
Interruption 
] No probably this one cannot—although we cannot say that because as it was pointed out to me in the dinner break: “Hey what about the red-blooded sheilas who can wield a hammer?”. There are plenty of these women and there are very very good ones. There was an excellent woman who helped on Women Build 2000 for the Habitat For Humanity project. She did a very good job and is highly recognised in the industry. 
So this measure is a clear indication that the licensed building practitioner regime is welcomed by the industry. It will sort out a lot of the inconsistencies. The only thing—and I think Richard Prebble touched on this—is that we in New Zealand First feel there is one feature of the licensed building practitioner regime that should have been taken further. That is in terms of dealing with phoenix companies where a builder or developer forms a company purely for the development of a particular project then winds it up without any assets. The assets are held in another company which are then leased to the building company. Basically there are no assets for the client to then claim on. New Zealand First believes that this bill should have gone that extra step with the licensing regime and taken that aspect further. There is still potential for it to happen although the Minister and the chair of the Government Administration Committee assured us that the issue will be picked up in another Act within the commerce area. We look forward to that. Believe me we will be watching for it very very closely. In the meantime the licensed building practitioner measure in this bill is very welcome in the industry. It is important so that the industry can progress and can regain the public’s confidence. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I am very pleased with the enthusiasm with which this call has been greeted by members of the Government because they are now going to learn something about the deficiencies of this regime. We have been hearing from the member for Waimakariri who seems to be extraordinarily proud that he represents hard-working Kiwis who struggle to own a home. Well that is actually a good aspiration. We are all proud to do that. The real test however is: does the legislation help them? The answer here is no. 
One point I have to remind Mr Cosgrove of is this. Did the Government make a serious effort until pushed and pushed hard by the Opposition to deal with the leaky homes crisis? The answer is no and that member knows it. In fact the whole process of the adjudication tribunal had to be established as a result of drafting work that I and my colleagues had done. Members should remember what the initial response of Government was. It said that a special dispute resolution procedure was not necessary. It was only when it was faced with continual and relentless pressure from this side of the House and by distressed homeowners up and down the country that it felt compelled to act. So let us not hear anything from the Government about claiming credit. It acted only under pressure. 
The fundamental fault of the leaky homes crisis was not the lack of registration. That was not the problem. The problem was essentially building techniques primarily and poor supervision by the Building Industry Authority in relation to the development of the codes. If those codes had been well designed there would not have been a problem. Let us after all look at reality. This country for 100 years—well more in fact—has worked perfectly well without requiring a bureaucratically cumbersome approach to the registration of all builders. What we have had instead is an inspection regime. If that is conducted well and there are clear and transparent building codes there is no problem. There is certainly an issue about skills and that can be rectified. The Government’s solution of requiring registration of all building practitioners is flawed. 
One of the issues is this. The speaker for United Future claimed that it will be unnecessary to inspect most work because one has to have first work governed by a building consent and second structural integrity. Of course the two issues are kind of synonymous. That is the reality. All work subject to a building consent will also have structural integrity issues with it. So in reality every piece of work now done pursuant to a building consent is going to require close supervision—not just inspection but close supervision by a registered building practitioner. Now if the regime had been a stronger inspection regime that would have been a different story. I imagine that on this side of the Committee we would have supported that. We wanted a strengthened Building Industry Authority. We wanted the local authorities to be doing their work more rigorously. We wanted better building codes and better approved systems of construction. If those things had been done there would be no problem and we would not be requiring this excessively bureaucratic approach that the Government has now imposed upon the entire industry. 
I heard Mr Prebble say that many parts of the industry will be happy. But that is in part because it excludes new entrants. It is anti-competitive. One of the things we have always treasured in this country is the ability of people to get ahead—get into their own businesses work under inspection regimes and basically make progress. This bill will act against that. I have seen Minister after Minister in the chair fail to defend small businesses and people getting ahead—the very people that the Government purports to represent. When the rubber hits the road it completely fails those people. 
BRIAN CONNELL (National—Rakaia) 
: 
 I listened to Clayton Cosgrove’s contribution earlier and I have to say that there are occasions when 5 minutes is a long time for a member to be on his feet and that was one of them. It was clear that the member did not have a clue what he was talking about. He obviously has not been a member of the Government Administration Committee. [ 
Interruption 
] No it reminded me of Peter Sellers when I heard it—it was quite clever but the content simply was not there. 
I turn my attention to what the New Zealand First member said. He told us that the 386 clauses in this bill are not enough and that there would be more if New Zealand First had its way. 
I also refer to what Mr Smith had to say. When I took an earlier call I talked about the builders warranty insurance. He picked up on that concept and I congratulate him on having the initiative to do so and to start looking at it. His concern was that it was for only 7 years. Well the whole point of having the builders warranty insurance is to provide certainty to people who buy houses on spec that those houses were built to a standard that will stand the test of time. It is to ensure that quality building practices are in place and that shonky builders do not have a market in which to ply their wares. That is why I say that the builders warranty insurance would be a very suitable alternative. Certainly it would be an alternative to the 358 pages of bureaucratic nonsense that we have in front of us. 
Some of the powers that the chief executive has under Part 4 are almost more than those of the Building Industry Authority. One would have to say that the chief executive probably replaces the authority. I know that Dr Mapp was a critic of the Building Industry Authority but when he was criticising and bringing down that shonky regime I do not think he expected that this type of legislation would replace it. 
The other thing that concerns me about this legislation is simply that although it is really a response to leaky homes nowhere in it has that issue been addressed. Nowhere in the 358 pages I have gone through clause by clause page by page have I found any mention of that issue at all. Rather than concentrating on shonky design the legislation puts in place an inspection regime. The leaky homes issue was not about treated timber or lack thereof it was about poor building design. This bill is a very poor way of addressing that issue—a very poor way indeed. 
This bill will take from the New Zealand landscape that icon of the do-it-yourself builder—the New Zealand handyman. I would have thought that people like the New Zealand First member who spoke previously would stand up and fight for those types of people. But no he told us that he was comfortable with what is being suggested and that somewhere between $6000 and $7000—it might be a small cost to him; I would love to see his bank balance—is just a small cost that New Zealanders will be prepared to pay with absolutely no guarantee that they will get a better building as a consequence. All it is is a compliance cost and when he talks with his boss this evening which I hope he does I hope he wears a very thick coat because he will get tanned something awful. Essentially he stood up in the Chamber this evening and argued for a compliance regime that will stop the average Kiwi from being able to afford his or her own home. Even Clayton Cosgrove is nodding in affirmation. He knows I am right. He knows this will put people in Waimakariri who want a home 10 years further behind and that their dream will just be that—a dream. 
Poor old Norman Kirk must be turning in his grave. He was a guy who had that Kiwi spirit. He was prepared to get out and build a home. But under this regime no he would not be able to do that—and the irony is it is a Labour Government that is doing it. 
MURRAY SMITH (United Future) 
: 
 First of all I want to respond to Mr Connell. Yes he did have a good idea before but I am afraid he just lost it in that diatribe. He suggested that this bill had nothing to do with leaky homes and that is simply an unbelievable statement. His suggestion that this bill is only about inspection is also pretty ludicrous. If Mr Connell reads Part 4 “Regulation of building practitioners” he will see that the building practitioners who are to be registered are not just builders they are also designers. Right from the very beginning the design of buildings will be regulated. Designers will also have to be licensed building practitioners. He will also see that products need to have certification. 
One of the key problems and to my mind probably the primary problem in terms of the weathertightness of homes was the question of the interface between monolithic cladding systems and frameworks such as windows and doors. It was the interface between those products that was creating the problem. I took steps in the Government Administration Committee and was adamant—and I am now satisfied—that the bill provides that when the product certification is done it is not to be just a certification of products saying: “This monolithic system is OK.” but is also to be a look at the way the system interfaces with other systems such as windows and doors and with systems that are not monolithic cladding. That is where our attention needs to be. From my own personal experience as a lawyer I know of situations where builders were not using flashings. Instead they were putting silicon in the joints. 
As a lawyer I have acted for builders and for people buying houses. I have also worked with clerks of works and I picked up a lot of information about that. The registration of building practitioners is a fundamental part of the measure and it covers the whole spectrum of things. 
However I want to make some comments by way of caution. It is my concern in terms of United Future’s position that when it comes to the regulations which are still open slather here the Government needs to ensure certain things. Part of my concern about this bill is that a lot is left to regulations and to the chief executive and when it comes to licensing of building practitioners and the qualifications for that we have to keep some key things in mind. 
The first is that there is currently a shortage of tradespeople. People are finding it hard to get good quality tradespeople; in fact they are finding it hard to get any sort of tradespeople. The bill does provide—and National criticises this although I cannot understand why—that this part of the regime will come into force only on 30 November 2009. That then gives us 5 years in which to bring about a licensing regime and to try to facilitate as many people as possible into the industry of the standard that is required in order to get registration as building practitioners. It is important that that happens but it is also important that people who are senior building practitioners and who may not have the qualifications but who nevertheless produce good quality work have been in the trade for years and are very competent are not left out of this. If the Government came up with something saying that in order to be a licensed building practitioner one has to have passed a certain tertiary course it would lock out some people whom the industry cannot afford to lose. 
So when the Government looks at that it is important for it to consider whether there may need to be some grandparenting provisions for people who have done some old apprenticeship schemes or who can otherwise show their competency in terms of their building skills. That is absolutely critical. It is also critical that the Government moves with pace in terms of increasing apprenticeships and the number of people going into the trades. 
I know from talking with educational authorities and also with industry players that the whole area of trades has been lost in our schooling system. I went to look at the business of an award-winning engineer who told me that he had approached a college and asked to talk to the metalwork teacher. The woman he spoke to asked him what a metalwork teacher was. She had no idea. In fact that college had no classes in that area. It is therefore very hard to get good students coming out of college who know anything about engineering and what the tertiary institutions are producing is inadequate. So a lot of effort has to go into that. 
For this bill to be effective and if we are to meet the time line of 30 November 2009 it is absolutely imperative that we move rapidly to increase our stock of building practitioners and tradespeople who have the competency to meet the requirements under this bill. I would really encourage that. 
GEORGINA BEYER (Labour—Wairarapa) 
: 
 I move  
That the question be now put 
. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 I have some new material Madam Chairperson that we have not covered. I say in response to Murray Smith who has just resumed his seat that that is what happens when we apply an academic answer to a practical problem. That is what happens; that is the result. What we get is 358 pages of legislation. It is a classic example of what happens when people apply an academic response to a practical problem. Let me just say to the Hon Richard Prebble who talked about trying to build an embassy in Vietnam that I went to Vietnam on a Speaker’s tour about 3 or 4 years ago. 
Hon Richard Prebble 
: Is it still there? 
SHANE ARDERN 
: Well it is a great building and it is still standing. Do members know what I found out through an interpreter when I was there? I found out that the Prime Minister had been there about 3 or 4 months before us. Now I know where the genesis for this bill came from. I wondered what she was doing in Vietnam. People said she had been tramping. She had certainly been tramping around the Government departments up there having a look at how to fix up the leaky housing problem in New Zealand. I can tell members that there are a few leaky houses in Vietnam. There certainly were some fairly dodgy-looking construction sites when I was there. 
But let us come back to the problem we face in New Zealand as a result of the leaky house inquiry. What the DIY’ers had to say when they came to the Government Administration Committee was that the bill was an overreaction to the leaky house problem. That is the first point they made. They acknowledged that there were some faults in the 1991 Act—and we accepted that that was so—and they said that most industry players had little appreciation or understanding of the existing Act which is over 100 pages long. In other words they were implying that the existing Act is too bureaucratic and that no practical person was ever going to sit down and study 100 pages of bureaucratic nonsense. They said people had no understanding of the current Act after 12 years of it being in existence and without significant expenditure and resourcing it was unlikely the industry would have any greater appreciation of the proposed legislation which was to be at least double the size of the current Act. Well the DIY’ers were wrong of course about that. They underestimated what the Prime Minister would bring back from her trip to Vietnam which was that doubling the size of the legislation was not enough. So we now have 358 pages—over three times the size of the original Act—of regulations and compliance costs. 
The DIY’ers said at the select committee that the compliance costs of this legislation may drive some businesses to cease trading. Nobody in the Committee tonight—or at any other time—has been able to come up with any evidence to say that that is not so. In fact most people have acknowledged that there will be additional costs. The industry itself through its submission on behalf of the do-it-yourselfers said that the cost would drive some people out of business. We know that there is a shortage of competent builders in this country at the moment and we can argue about why that may be so. We can talk about the training provided in the past. We can talk about careers advisors going around schools and telling everybody to be a rocket scientist instead of a builder. But the bottom line is that we do have a shortage of builders in this country. So perhaps a Government member could take a call on that issue. 
I know that the Minister in the chair the Hon John Tamihere has a lot of knowledge on this matter. Perhaps he could take a call and tell us how dumping the new regime that is in Part 4 and all the extra compliance costs on the industry will help to address the shortage of builders in this country. How will it help to train young people? How will it allow the older experienced builders who are semi-retired to carry on operating while training a young apprentice at their side? We all know in New Zealand that the best way to learn is by doing. There are some people who will never be rocket scientists. Despite what the Prime Minister might have found out when she was in Vietnam some people never will be rocket scientists—that is the reality. Some of her own caucus never will. That is for sure! But they may become builders; they may look for a career in the building industry once they leave Parliament at the next election. But they will not be able to get in because the Government they are members of and this Minister have regulated in such a way that they will never get a chance to get across the hurdle. 
One of the underlying causes of leaky buildings is poor design. It was interesting to hear Mr Smith talk about that. But where in this bill does it address those who are involved in architecture and draw up plans which builders then put into practice that result in poor design? 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I move  
That the question be now put 
. 
BRENT CATCHPOLE (NZ First) 
: 
 I would like to follow on from a couple of points I was making earlier to do with the licensing of building practitioners and the register. One of the issues I mentioned was to do with phoenix companies. A very good point was made in the  
Independent 
 on 21 July. One of its articles stated that the bill fails to curb shonky property developers. It pointed out that this bill does not deal with that issue and New Zealand First agrees with that. John Scarry also indicated that one way to solve the problem—and it is quite a simple one to do with the licensing of building practitioners—is to license not just individuals and not just individual developers but the companies. If we license the companies we have the key to stopping the phoenix companies from appearing because if they do not come up to the standards they will lose their licence and they cannot just form a new company and expect it to be licensed overnight. They would have to prove to the industry that they are a worthwhile company and a worthwhile business. So that is one simple means of solving the problem of the phoenix companies. But this bill sadly did not take that extra step and license the companies including development companies and building companies. That would have solved a lot of the problems. 
Others have talked about the fly-by-nighters. This bill stops the fly-by-nighters— 
Brian Connell 
: How? 
BRENT CATCHPOLE 
: It is simple: someone cannot just get a licence to build one particular structure. So someone cannot just walk in and say he or she wants to develop a project. 
Brian Connell 
: So the home builder is gone. 
BRENT CATCHPOLE 
: No the home builder is not gone; the home builder is quite able to continue. It is just the fly-by-nighters who come into the industry to build a structure and then disappear who will be affected. They are like the phoenix companies but if they are licensed then they cannot just disappear. If they want to continue to practise they have to keep up their standards. Otherwise they will lose their licences. 
Brian Connell 
: How are you going to police it? 
BRENT CATCHPOLE 
: Well there is a simple way to police it. If we have the register—which some members were complaining about—it will show that a member is able to take on the structures that he or she is licensed to build. 
The other part of the issue is the extra cost which other members have been complaining about. They have been saying it is just an extra compliance cost but it is not. It is an insurance policy to make sure that the public gets a builder who is capable of doing the job and doing it properly—so that people are not stuck with a house that is substandard and is likely to end up as a leaky home. The leaky homes problem came about because people were taking short cuts purely because they were trying to trim costs for developers. The developers screwed down the prices and the costs and therefore this measure is an insurance policy. 
Other members have mentioned the shortage of builders and the need to keep semi-retired builders—the ones who are reaching the end of their working lives—involved. Shane Ardern mentioned those semi-retired builders having a young person beside them as an apprentice. That does not happen these days and it will not happen as long as the Government has an apprenticeship scheme that is without that practical side and that does not encourage older workers and businesses to take on apprentices. We have to have the support mechanisms and incentives in order for businesses to take on apprentices. Otherwise they will not take them on we will continue to have a reduction in the workforce and as the older builders get to the end of their working lives we will not have the younger people coming through to replace them. 
Hon DAMIEN O'CONNOR (Minister for Racing) 
: 
 I move  
That the question be now put 
. 
LINDSAY TISCH (National—Piako) 
: 
 The next piece that I will dwell on regarding the licensed building practitioners is the process of what a licensed building practitioner has to do. The example I will give relates to a builder but as we know from the bill any professional in the industry can become a licensed building practitioner. In fact when we move to debate the Architects Bill sometime in the future we will see it states that people involved in building who are registered licensed or otherwise recognised under other legislation will be treated as licensed building practitioners. So the licensing will cover a range of other occupations apart from builders. In order to show how stupid the process is I will give the following example. 
This is the process: I get a builder to build a house for me. The builder after getting consent from a territorial local authority builds the house. When it is finished the licensed building practitioner certifies it is built in line with the building code and the local authority issues a code of compliance. But let us suppose that in the first winter after it has been built the house leaks. I call up the local authority and say that I have a problem as my house is leaking. But the council says that it will defend itself and that the issue lies with the builder. It is the builder who built the house but it is the council that issued the code of compliance. If the builder in this example does not have insurance who carries the can? It is the local authority that carries the can. That comes back to the point that I made earlier on: the onus is on the ratepayers because it is the local authority that will carry the liability. 
So how does the process of registration that a licensed building practitioner must go through—providing a name an alias and a date of birth—actually help the building industry? It does not. There is no consumer protection whatsoever with regard to these licensed building practitioners. The best means of getting a competent tradesperson is through word of mouth. It is still best to go and look at a building and ask the owner who built it what it is like and whether it has stood the test of time. I mentioned before the principle of caveat emptor—buyer beware. That is the sort of approach that we should be adopting instead of what is involved here—very prescriptive legislation that is an overkill and at the end of the day does not give the consumer the protection that the Government expects it will give. 
I will draw that point back to Part 1A. Under that part licensed building practitioners have to certify some restricted building work but there is a very important out clause where they can skip any liability at all. Clause 175(4) states that when a licensed building practitioner gives a certificate under subsection (1)—and the bill identifies what subsection (1) states—that does not in itself “create any liability in relation to any matter to which the certificate relates”. That is absolute nonsense. The owner of a building is lulled into a false sense of security and the certificate creates absolutely no obligation in relation to the value of the building. Licensed building practitioners will be able to opt out and that will be a major concern. It will not help the industry one little bit and it does not meet the requirements that the Government has been pushing about consumer protection. 
If we look at the home builder—and these are points that have come up earlier—we see the home builder has to have someone to supervise his or her work. That is a new requirement. They do not have to be inspected; they have to be supervised. What does the word “supervision” mean? There have been plenty of examples given. In my second reading speech I spoke about the process one has to go through to supervise work. The extra hours associated with supervising the construction of a small dwelling of 120 square metres—a very small home—on a flat section will cost about $6500—$10000 in compliance costs. 
Hon TAITO PHILLIP FIELD (Minister of State) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 48 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 241 in the name of the Hon John Tamihere to Part 4 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 35 
New Zealand National 27; ACT New Zealand 7; Independent: Awatere Huata. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 4 as amended be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Part 4 as amended agreed to. 
The CHAIRPERSON (Ann Hartley) 
: Before I call the next part I have a vote to correct. The vote on the closure of Part 2 was incorrectly announced as Ayes 70 Noes 48. It should have been Ayes 69 Noes 48. Is there leave to correct that? There is no objection. 
Part 5 Miscellaneous Provisions 
The CHAIRPERSON (Ann Hartley) 
: This includes debate on schedule 4. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 Part 5 of the bill is where the offences are taken into account—where people start to implement their muscle where the Government gives bureaucrats muscle over the ordinary Labour voter and where the Government comes down with the full weight of the law against that poor little Labour voter who lives in Otaki and wants to get on and do some work. There is nothing in here that is probably more offensive—[ 
Interruption 
] Mr Smith should listen so that he can check and see that this section is not one that has been struck out. New by majority is clause 317A: “Offence for residential property developer to transfer household unit without code compliance certificate”. 
 On the surface that does not sound too bad but the question is: what happens when a person does not have enough money to build the house to completion? Let us say that some Labour voters from Otaki or down south have enough money to build two-thirds of the house. They have one room to live in and one room to sleep in and the rest of the house is left unfinished. The builder cannot not go away having issued a code of compliance—that is against the law—and the owners cannot not take possession and shift into the house simply because the law will not allow that to happen. So how do we overcome that? How will the member over there give us an explanation tonight as to how to overcome that problem? 
Does it simply mean that those people cannot not shift into the house and still have to pay rent? Let us say that they are paying the mortgage on the half-built house and want to move in. They have a place to sleep in and a roof over their heads but they cannot move in simply because the builder will not allow it. The builder cannot get paid. The builder and the owners could have come to an agreement about what they want to do and the owners may want to finish the house as and when income allows them to do so from that point on. But no according to the socialists in this Parliament they cannot do that. The Government will not have a bar of that. I say to members opposite and to the Minister—[ 
Interruption 
]. Mr Smith will get his chance. The member interjecting should take a call and point out how the owners could get around that problem—I am sure the lawyer will figure something out. 
My reading of the bill—and most builders’ reading of it—will be that those owners cannot not move in. For every lawyer who says they can there will be another lawyer who will challenge that view and the territorial authority will say: “No you can’t do it.” I say that it will not be able to happen. So I ask the Minister to take a call. He should get some advice from his officials and clear this up for members tonight. He should clear it up also for those poor Labour voters up in Otaki who employ a builder to part-build a house and who cannot shift in and get their house finished because they run out of money—maybe the owner loses his job in Parliament as a result of the election—and cannot carry on. 
Further the bill introduces a whole raft of abilities to prosecute and chase people through the court system run them through the legal system and cost them heaps of money. The payment of infringement fees is mentioned right throughout the bill. Mr Tamihere should take a call about that—I am sure it would frighten even him. This bill is the sort of thing that one could design only if one decided that everybody in the country was a villain. We are taking the worst possible case and developing law around it. One thing we learn very early when we come to Parliament is that bad cases make bad law and this bill is a classic example of that. The Government is using a sledgehammer to crack a nut. The old legislation which had 100 pages was prescriptive in some areas—and obviously not prescriptive enough in some other areas which is why it was found wanting—but this bill overdoes it overwhelmingly. The Minister should take a call to clear up a number of issues that have been raised tonight. 
Clause 338 “Liability of principal for acts of agents” may well be useful but I suspect that it is not good enough. I have another question for the Minister. If as has been stated in the Chamber tonight a developer were to come in employ a lot of subcontractors including building contractors on an hourly or weekly basis slap up a development in central Auckland not comply with the code and then disappear into the sunset because he did not have to be a registered builder or comply with all of the detail in this bill—he just put his name up as the investor the developer the entrepreneur the former MP or something—then I presume that the subcontractor who of course has to comply with this legislation would be left holding the baby. But I do not know. This clause is about the liability of the principal for acts of agents. 
MURRAY SMITH (United Future) 
: 
 Mr Ardern has shocked me. I am absolutely shocked. Mr Ardern sat on the Government Administration Committee which dealt with this bill. [ 
Interruption 
]. He was not there? He must have slept through it. I just do not understand. The other thing I do not understand is that National with all its resources and Mr Ardern somehow could not get the answers to very simple questions about what this bill says and what it actually means. Mr Ardern has come to the Chamber during the Committee stage asked questions of other people and pointed at me to ask me to explain to him how this bill works because he does not understand it. For some reason the National Party with all its resources has not been able to explain to him how it works. 
Mr Ardern has raised two issues. Regarding the first one he asked us in his previous speech to show him where this bill applies to people who design houses. Mr Ardern has consented to me— 
Shane Ardern 
: Architects. 
MURRAY SMITH 
: Mr Ardern wants clarification and the clarification is that the definition of “building work” includes building design. Building work that has to be signed off by a licensed building practitioner will include the design of the building. Licensed building practitioners of the design class will have to sign it off and architects will be licensed building practitioners of the design class. That answers that. Mr Ardern seems to be satisfied with that explanation. 
Now he has said that clause 317 means that people will not be able to move into their houses until they have a code compliance certificate and that people will be locked out. He has been asking for someone to show him how people will get on because he cannot see how they will. He should read subclause (1) which is a very brief subclause that states: “This section applies to a building that is intended for public use.” “Public use” does not relate to a residence. “Public use” relates to a public building. The provision applies only to a situation involving public buildings. The public will not be able to use public buildings until such time as the buildings get code compliance certificates. This provision does not apply to residences. Residences are not intended for public use. That answers Mr Ardern’s question. Mr Ardern just wasted his last speaking opportunity by coming up with a red herring that can easily be answered. 
This part raises some fairly key issues one being the transitional provisions. I alluded in my last speech to the 5-year provision for licensed building practitioners. There is also a modification in the Minister’s Supplementary Order Paper in terms of the way that private building certifiers will be treated that will tighten up the process by which private building certifiers will be able to operate. Now unless those builders have applied for registration within 18 months of the bill coming into force—18 months after 30 November—they will not be able to carry out any more building work but they will be able to finish off what they had been doing. So there is some transition which will last for a period of 3 years. 
There are some positive things in this bill that I think will add a lot to consumer protection. Clause 349 in particular gives for the first time some implied warranties as far as building work is concerned. Consumers will have the protection of implied warranties that are found in legislation like the Consumer Guarantees Act and that is important. They are the sorts of protections whereby materials to be supplied will be suitable for the purpose for which they will be used; building work will be carried out in accordance with and will comply with all laws and legal requirements including the Act and regulations; and building work will be carried out with reasonable care and skill and will be completed by the date or within the period specified in the contract or if no date or period is specified within a reasonable time. That is a provision I was particularly keen to push for. 
As a lawyer I dealt with a lot of contracts whereby some people would sign up for a house to be built and would get an indication from the builder that it might take 3 or 4 months then 6 or 8 months later the house would still not be finished. Twelve months later the house would still not be finished and the people would not know when they could move in. They would have rental commitments and the whole thing would be up in the air. Some classic cases have happened in the Wellington region whereby buildings have not been completed and people have been hamstrung because they signed a contract that they cannot terminate and have been caught. This bill will give considerable protection in this area. 
Hon RICHARD PREBBLE (ACT) 
: 
 Let me take up Mr Murray Smith’s view. I realise he has acted for a few purchasers and has never really thought about it from the builder’s point of view. 
Murray Smith 
: I read the bill. 
Hon RICHARD PREBBLE 
: Well God help them because from looking at clause 317A one is up for a $200000 fine if one transfers completes the sale of a household unit or allows a purchaser of a household unit to enter possession of that unit without a compliance certificate. [ 
Interruption 
] Wait a minute I say to Mr Smith. He has been telling members that there are not the people in the country to do those certificates. He has told members that. He said it would take 3 years. So members now know that houses will be completed and it will take 3 years before there is time for people to issue the compliance certificates. 
I put it to Mr Smith that what one could do if one has not signed a waiver is hold the builder to ransom. The builder has built the building and done everything but cannot transfer or be paid because the builder cannot get a certificate. So of course if one is acting for the builder one would say: “You must not sign any contracts to build anything unless there is a waiver to a compliance certificate automatically agreed to.” I say to Mr Smith that that is what one would do is it not? So what is the point of the bill? What is the point of the bill if no competent builder will build anything—I assure members—without a waiver certificate in advance. 
Then I come to Mr Smith’s great claim that there cannot be any residential buildings that could ever be qualified as a “public place”. Well there are some members of Parliament I have heard of who have electorate offices in their houses at the moment. They have done that. [ 
Interruption 
] Thank you. I did not quote a name. It is a public place. There are tens of thousands of people who have offices in their houses. 
Shane Ardern 
: Where does the Speaker live? 
Hon RICHARD PREBBLE 
: Where does the Speaker live? Well we could just go through it. I do not know what Mr Smith was doing when he was waving this bill through but this provision has a $200000 fine for anybody who has permitted a house to be used that does not have a building consent. I just ask where do those members of Parliament come from? 
I have given a couple of stories; I will give another one. I once bought a house in Parnell. It was four grotty flats and I wanted to turn it into a decent-sized house for my decent-sized family. I rang the carpenters union—I was getting on well with it then—and asked who I should have. It recommended to me a person whom I will not name who was a good member of the Communist Party but also a very good carpenter. He came around and saw me and said: “Look Preb I’m happy to do it but there are—[ 
Interruption 
] If the member listens she will hear it. He said to me: “There are two prices. If I have to get a building permit”—and that was under the old rules—“I’ll charge you $30000 but if you can assure me that you have a building permit it’s only $25000.” I said: “From you—a ‘com’?” and he said: “Mate you don’t want to have those building inspectors around. They just delay you forever.” I said: “I’m sure I have a building certificate here somewhere.” so we went and built it on that basis. Then I asked him: “What will we do now?” after he had finished it and he had done a very good job. He said: “I’ll ring up the council and they will come and inspect it.” So he rang the council and an official came and inspected it. Then I said to the council official: “I have moved four flats down to one. I should get a rating change out of the Auckland City Council rating value.” and he said: “Do you really want to do that Preb?”. I asked: “Just hypothetically why wouldn’t I?” and he said: “Well you have actually lifted the value.” So I saw him off the property and we decided not to revalue it. 
But the point I am making is that is how Kiwis do things. That is how it was under the old rules. If under the old rules any sensible communist carpenter would not want to have a building inspector coming around following him around and delaying him for weeks trying to get approvals then under this bill if I did what I did I would be up for a fine of $200000 and all I was trying to do was save my family some money. I did not want the Government coming along and guaranteeing the job. I knew the builder. I knew he was an honest “com”. I knew he would do me a good job—which he did. He did an excellent job; so much so that my rateable value went up. I ask the Government: who does it think it is trying to help when it puts out $200000 fines? 
BRENT CATCHPOLE (NZ First) 
: 
 I have some serious concerns about this particular part and I would like to ask the Minister to take a call and give us an assurance. This bill dissolves the Building Industry Authority and transfers everything into the Ministry of Economic Development or the new ministry that is being formed—I cannot recall the full name for it now. But my concern is that I would hate to see the Building Industry Authority being dissolved like a phoenix company and having all its responsibilities dissolved also. I hope the Minister can assure the Committee that the authority’s responsibilities and liabilities will be transferred across to the new ministry and therefore anybody who has any outstanding claims that may involve the authority will be able to continue with those claims. 
I am mindful of the approach the Building Industry Authority took with the Weathertight Homes Resolution Service. That was a process whereby all the parties were to get together to sort out their differences under mediation or arbitration. Unfortunately the one party that should have been leading that charge—the Building Industry Authority—decided it would go to court regardless and forced a lot of the smaller operators involved in the process to accept a substantial sum but it was nowhere near the figures they were trying to claim. Put simply the might of the authority had the finances behind it but the smaller parties did not and they were unable to take on the authority head-on in the court case. 
I hope the Minister will take a call and assure the Committee that those liabilities will be transferred over and also that the Weathertight Homes Resolution Service will still have that recourse to mediation with the new entity that will come into force in place of the Building Industry Authority. The authority has responsibilities to people and there are a large number of problems concerning weathertight homes. I believe there are many that still have not come forward or to fruition yet because the timberwork in those properties has not started to rot or the rot has not been noticed yet. That recourse must continue right through to allow the owners to have the opportunity if necessary to take the equivalent of the Building Industry Authority to arbitration or mediation and also provide the funding so that they can even take the new ministry on. I hate to think that the big money behind the authority was responsible for quashing a lot of that responsibility and the subsequent payouts. It was a sad day for the whole weathertight homes resolution inquiry. 
The Weathertight Homes Resolution Service was put in place under the Construction Contracts Act which was ultimately split off into a separate Act of its own. So it was sad to see the Building Industry Authority being able to dodge its responsibility. I would like the Minister to take a call to assure us that that will not be the case when this bill comes into force and that the new ministry will take on the full responsibilities and liabilities of the Building Industry Authority. 
LINDSAY TISCH (National—Piako) 
: 
 I want to continue the points Richard Prebble made regarding clause 317 and 317A. Clause 317A “Offence for residential property developer to transfer household unit without code compliance certificate” concerned a number of submitters because there is a liability on the council and the developer if they transfer a property. Subclause (3) states: “A person who commits an offence under this section is liable to a fine not exceeding $200000.” 
From a local body’s point of view it is important to know exactly what the provisions in the clause mean. Officials of the Waitakere City Council came before the Government Administration Committee and made a very important point about code compliance certificates. We asked them how many outstanding code compliance certificates there are in Waitakere City. I want the Committee to listen to the reply carefully because it shows how stupid the whole clause is. The answer was: “(a) A year or two ago an internal review concluded that only 48 percent of all building consents issued had code compliance certificates issued in respect of those consents. (b) We interrogated the consents database for the status of incomplete building records in the system which covers the period 1 January 1993 to date.”—the date being the end of December last year. “There are 15184 records of incomplete consents indicating the lack of code compliance certificates. In the period 1 January ‘93 to 30 November ‘03 this council issued 38300 building consents. If the electronic interrogation is correct then this is indicating that around 40 percent of all building consents in that period have not had a code compliance issued. (c) We asked a further question. The response to the question”—which relates to flats unit apartments and stand-alone dwellings—“was 2009 incomplete records. To put that information in context I note that in the 12 months to 30 November 2003 this council issued 920 new building consents for flats units apartments and dwellings. That is with an average construction period of 4 months approximate.” 
The submission goes on to state: “By way of conclusion may I say that I am staggered by these numbers. My experience as a solicitor in practice in Christchurch was that you could not sell or mortgage a property without a code compliance certificate. Why in Auckland it might be so different I do not know but this is a major issue. Finding a mechanism to ensure code compliance is obtained is not easy.” 
I ask the Minister in the chair John Tamihere given the number of dwellings in Waitakere City that do not have code compliance when this clause states that it is an offence for a developer to pass those buildings on and that there will be a fine of up to $200000 for a person who commits that offence whether it is the Government’s intention that those people be put out in the street because they do not have code compliance. That is what clause 317A states. That is a major concern. The clause states quite clearly that that is an offence. 
Hon Richard Prebble 
: Is it retrospective? Are there 50000 buildings in Waitakere City that are going to be unsaleable? 
LINDSAY TISCH 
: That is right. They do not have code compliance. The clause states that it is illegal and an offence for residential property developers to transfer household units without a code compliance certificate. 
I say to the Minister that National is not supporting the bill because the sort of nonsense appearing here affects the lives of innocent people who do not know the importance of code compliance certificates. The same issue came up in Northland. An official from the Far North District Council submitted that there were thousands of homes up there that were substandard. What will happen to those people when the bill comes into effect? Will they be out on the street? We know that housing is a major issue in some parts of the country. I do not know what it is like over on the East Coast. In Northland it is a major issue and this bill is wrong. 
Hon JOHN TAMIHERE (Associate Minister of Commerce) 
: 
 I take up the challenge that a couple of members have made in regard to Part 5 of the Building Bill. Firstly I invite with the greatest of respect the member who has just resumed his seat Lindsay Tisch to read in full Supplementary Order Paper 241 which gives territorial local authorities a range of discretions with regard to the transitional provisions. I would be grateful if the member would be kind enough to read the full intent and expression as outlined in the Supplementary Order Paper. 
More particularly I rise to comment on the challenge from the honourable New Zealand First member Mr Brent Catchpole. He asked a number of questions that I will now refer to specifically. I respectfully request that the member read clause 361 “Assets and liabilities vest in Crown” which states: “All rights assets liabilities and debts that the Authority had immediately before the commencement of this section must be treated as the rights assets liabilities and debts of the Crown”. That is moving towards a Government department and acknowledges that a Government department is a successor and an assignee in all things conducted by the Building Industry Authority. I also request that the member look at new clause 368 in Supplementary Order Paper 241. You must read— 
The CHAIRPERSON (H V Ross Robertson) 
: The member is bringing me into debate. 
Hon JOHN TAMIHERE 
: As the Chair pleases. Members must read the Supplementary Order Paper which is a very important Supplementary Order Paper in respect of the bill before them. I invite you to look at clause— 
The CHAIRPERSON (H V Ross Robertson) 
: No the member cannot refer to the Chair. 
Hon JOHN TAMIHERE 
: I would like members to look at clause 368 “Proceedings of Authority” which states: “Any proceedings to which the Authority is or becomes a party (whether before or after the commencement of this section) may be commenced continued completed and enforced by or against the Crown.” I give a clear expression and undertaking to the New Zealand First member that it is quite clear that coverage is given in respect of any acts the Building Industry Authority may have conducted prior to the passage of this legislation. Notwithstanding that I bring his attention to new clause 361A which is set out on the Supplementary Order Paper. I do that in the best interests of the questions he raised. Subclause (1) of new clause 361A “Protection from civil liability for members building referees and employees of Authority continued” states: “Despite the repeal of the former Act and the dissolution of the Authority no civil proceedings may be brought against any of its members building referees or employees for any act done or omitted to be done by that person in good faith”. 
We have transported a range of liabilities into the name of the Crown by way of the new department but we have also acknowledged that members of that authority who have conducted themselves in good faith should be provided with some cover but the standard law with regard to any act of negligence conducted by members of the authority will be able to be pursued legally. I give a clear undertaking that the framework we have put around that issue is the way it works. 
I conclude by stating that Part 5 is extraordinarily important. Not only have we recalibrated a range of undertakings to the consumers of this country but we have also clearly erred on the side of the great Kiwi battlers and consumers who invest significant resources in the greatest asset purchase they are likely to undertake in their lives. This legislation does not contain the rorts that have been perpetrated on them and that have forced us to put it forward. We on this side of the Chamber make that quite clear rather than being in business for vested interests or acknowledging that the market achieved everything because it did not and we know it. I make it quite clear that Part 5 is not just about the carrots that are involved it is about the sticks as well. There must be a clear message sent to the industry that a range of remedies is available in the event that the good and worthy practice and warrantable tradesmanship that we expect from good Kiwi tradespeople should exist and be available and that if it is not there must be an opportunity for us to take recourse. 
Dr WAYNE MAPP (National—North Shore) 
: 
 Part 5 has two important provisions that I will focus on and they are the abolition of the Building Industry Authority and the second topic I will deal with is clause 386 which states that the chief executive of the Ministry of Economic Development—although there will be a new ministry—must review the building code. 
My first point is that the problem with the abolition of the Building Industry Authority is that a degree of control has been taken away from the industry itself. The Government has decided to impose the centralised statist approach that it has become so infamous for and which is its ready recourse. The solution to any problem it has is to get the State involved. If I look at areas in which each of my colleagues is involved the Government has increased statism. That is exactly what has happened. For example in Brian Connell’s area of forestry there are more powers for State intervention by the Ministry of Economic Development. It is just extraordinary. So right across the board there is a statist approach and in this bill the Government has abolished the Building Industry Authority and given the power completely to the State. 
The problem is that there is no industry involvement. It is always a top-down solution where directions are simply given to the industry. At least one of the advantages of the Building Industry Authority—had it been properly reformed because that is what it needed—was that the industry itself had a genuine and real input. It had membership effectively through that input but in this instance that will not happen. At best the new authority will become an advisory committee to the chief executive. So that is wrong it is a bad solution it is just old-fashioned statist solutions. 
The second issue I want to deal with is this revision of the building code which has to take place within 3 years. The requirements are to review the building code prepare for a ministerial report etc. The problem with this is that because the Government has abolished the Building Industry Authority which did have the expertise around the building code notwithstanding its deficiencies it could have done this job much more rapidly. Although the Government trumpets this legislation as a great protection for consumers the statist solution actually delays the reform of the building code particularly around fixing up the leaky homes problems—the approved solutions around claddings ventilation spaces and so forth. It slowed it up and delayed all those sorts of things. In other words the consumers will still have to put up with deficient solutions. 
Our criticism of this bill is that the statist solution has delayed the correction of the problems whereas in contrast a reform of the Building Industry Authority would have meant a speedier fixing up of the building code. We in the National Party will vote against this bill. We realise we cannot stop the Government in its madness and there are other parties that are contributing to the madness that we are seeing tonight. The United Future party—we are not allowed to refer to them as lapdogs but that is what they are—and the New Zealand First Party— 
Murray Smith 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (H V Ross Robertson) 
: I know exactly what the member is going to say. It is a personal reflection and can be considered unparliamentary as well so the member will stand withdraw and apologise. 
Dr WAYNE MAPP 
: I withdraw and apologise. I was told by the New Zealand First whip Mr Dail Jones that New Zealand First is proud to be part of the Government. That is what he actually said in a select committee today. I asked him whether he wanted me to repeat that in the Chamber and he said yes that he wanted me to repeat the comment in the Chamber. So I will put it on the record for the nation at large that this— 
Brent Catchpole 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (H V Ross Robertson) 
: Points of order will be short and to the point. They will be heard in silence. 
Brent Catchpole 
: The member well knows that New Zealand First is not aligned with anybody. 
The CHAIRPERSON (H V Ross Robertson) 
: That is not a point of order. That is a debatable point. 
Dr WAYNE MAPP 
: I obviously need to remind Mr Catchpole that Dail Jones said to me today—and he said that I could repeat it in the Chamber—that for this and other purposes New Zealand First regards itself as part of the Government. I was amazed at that but that is what he said. 
The CHAIRPERSON (H V Ross Robertson) 
: The member should stick to the bill. 
Dr WAYNE MAPP 
: New Zealand First is helping to pass this deficient legislation. New Zealanders will suffer consumers will suffer and the industry will suffer. The Minister in the chair John Tamihere has failed small business consumers the building industry and economic growth generally. This bill is deficient. [ 
Interruption 
] In reply to the interjection from the member for New Zealand First I add that New Zealand First has made a mistake. 
BRIAN CONNELL (National—Rakaia) 
: 
 We are now on to Part 5 and could easily forget that the genesis of this bill was leaky homes. 
Hon Richard Prebble 
: Where’s that in the bill? 
BRIAN CONNELL 
: It is not in the bill. I have gone through it. 
Hon Richard Prebble 
: Are you sure it’s leaky homes? 
BRIAN CONNELL 
: It was that long ago that one starts to test oneself and to question oneself. However it was to do with leaky homes. Then we narrowed the issue down to not the timber industry or the forestry industry which this Government was so quick to pounce on but design. Now we have a list of offences a list of penalties and criminal proceedings that are out of all proportion to the issues at hand. 
Mr Catchpole has said throughout the course of this debate that his party supports this legislation but we could have been forgiven for thinking that it did not after listening to his last call and to his series of questions to the Associate Minister of Commerce. I wondered why the Minister responded to those questions—he did not have to. I thought the answers were pretty self-evident. However what I am concerned about like so many others is— 
Brent Catchpole 
: I raise a point of order Mr Chairperson. The previous speaker and the member who is speaking now have implied that New Zealand First has made certain statements. The statement quoted by the previous speaker came from somewhere other than the whips’ office. It is definitely not part of New Zealand First policy. 
The CHAIRPERSON (H V Ross Robertson) 
: If the member considers that he has been misrepresented then he should look at Speaker’s ruling 35/3. 
Hon Richard Prebble 
: I raise a point of order Mr Chairperson. As the member has already been disrupted I point out that I have been trying to listen to him but there is a Government member standing in the aisle carrying on a conversation. I regard it as grossly disorderly for Government members to come across the Chamber like that. If they want to have a conversation with their mates they should go out in the lobbies to do so. 
The CHAIRPERSON (H V Ross Robertson) 
: Yes Standing Order 82 states that members should be seated. 
BRIAN CONNELL 
: The tactics of the New Zealand First member to disrupt me will not put me off. What they do is bring into clear focus that a vote for New Zealand First is a vote for the Government. That is the way New Zealand First members are positioning themselves. We have called them to book and the member does not like it very much but that is the reality. 
Clause 317 lists the penalty for not having a code compliance certificate and that penalty is $200000. John Tamihere the champion— 
Hon Richard Prebble 
: For not having a piece of paper. The building might be perfect. 
BRIAN CONNELL 
: The building will in all probability be perfect—I have a lot of confidence in the hard-working builders of this country—but people will be penalised if they do not have a piece of paper. John Tamihere the self-proclaimed champion of small-business people in this country is sitting there mute and letting that happen. But it gets worse. For every day thereafter that there is not a compliance certificate John Tamihere allows his Government to whack these people for another $20000 and Mr Catchpole gets up and says: “We in New Zealand First are voting for this because we think it is good.” 
“Mr Gorbachev” took a call before on clause 317A and he spoke about Mr Ardern being wrong about residential property not being part of clause 317A. That member cannot understand that clause but I can. Clause 317A is titled “Offence for residential property developer to transfer household unit without code compliance certificate”. That is the point he was making! 
Murray Smith 
: I raise a point of order Mr Chairperson. It appears that the member has referred to me as “Mr Gorbachev”. That is not my name and I think he should get it right. 
Hon Richard Prebble 
: Under the Standing Orders one is supposed to keep awake and one is supposed to raise a point of order at the time—not realise 3 minutes later that perhaps one has been referred to as “Mr Gorbachev”. But in that member’s case he should be flattered. 
The CHAIRPERSON (H V Ross Robertson) 
: Mr Prebble is quite right. The member might like to look at Speakers’ rulings 20/2 and 19/2. 
BRIAN CONNELL 
: One would be forgiven for thinking that this legislation had been developed because the whole building industry was out of control. Leaky homes accounted for 1 percent—perhaps not even that; 0.5 percent if that—of all the building problems in this country. For generation after generation the builders of this country have built very solid longstanding quality homes. Now we have legislation that is targeting the probably 0.01 percent of builders in this country who are shonky. The probability that those people will be caught out is remote because people who are engaged in shonky practice will not stay in it anyway. The biggest concern is that we are creating legislation that will penalise 99.9 percent of builders in this country. 
Hon DAVID BENSON-POPE (Minister of Fisheries) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the following amendment in the name of John Tamihere to the amendment set out on Supplementary Order Paper 241 in his name to insert clause 358A be agreed to: 
to insert immediately above new clause 358A as set out on Supplementary Order Paper No 241 the following heading: 
Outline of transitional provisions. 
A party vote was called for on the question  
That the amendment to the amendment be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Amendment to the amendment agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 241 in the name of the Hon John Tamihere to Part 5 as amended be agreed to. 
A party vote was called for on the question  
That the amendments as amended be agreed to 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Amendments as amended agreed to. 
BRENT CATCHPOLE (NZ First) 
: 
 I raise a point of order Mr Chairperson. I wonder whether you have missed some amendments. Other amendments in the Minister’s name were on the Table. Have they been withdrawn? I refer to amendments to clauses 356D and 356E. 
The CHAIRPERSON (H V Ross Robertson) 
: They have been withdrawn. 
A party vote was called for on the question  
That Part 5 as amended be agreed to 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Part 5 as amended agreed to. 
Schedule 1 
A party vote was called for on the question  
That schedule 1 be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Schedule 1 agreed to. 
Schedule 2 
A party vote was called for on the question  
That schedule 2 be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Schedule 2 agreed to. 
Schedule 3 
A party vote was called for on the question  
That schedule 3 be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 37 
New Zealand National 27; ACT New Zealand 8; Maori Party 1; Independent: Awatere Huata. 
Schedule 3 agreed to. 
Schedule 4 
The question was put that the amendment set out on Supplementary Order Paper 241 in the name of the Hon John Tamihere to schedule 4 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 37 
New Zealand National 27; ACT New Zealand 8; Maori Party 1; Independent: Awatere Huata. 
Amendment agreed to. 
A party vote was called for on the question  
That schedule 4 as amended be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 37 
New Zealand National 27; ACT New Zealand 8; Maori Party 1; Independent: Awatere Huata. 
Schedule 4 as amended agreed to. 
Clause 1 Title 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 I rise to talk on the title of the Building Bill because I believe it is totally wrong and totally misleading. In fact a much more suitable title for this bill would be what the Rt Hon Helen Clark found when she was tramping down the Ho Chi Minh Trail. That would much better describe the over-the-top regulation that is in this bill. This revelation came about earlier tonight when we found out that the Prime Minister herself had been to Vietnam to have a look at what they do there with regard to building regulation and qualification. That is where it came from because we cannot find anybody in the Labour Party who will admit to having been the genesis of this brilliant piece of bureaucratic nonsense. So that is the only conclusion I can come to. 
Let us just go back a bit and find out as we debate the title how this whole process started. It started as the result of the National Opposition putting a huge amount of pressure on the Government to go through an inquiry as to the problem that was starting to develop and resulting in leaky buildings. The problem was starting to develop in a very small percentage of buildings which were mostly in Auckland. 
What did that inquiry find? It found that there was a systemic failure within the building industry. It was not due to one particular thing but the inquiry pointed to a use of monolithic cladding to a failure in terms of training and qualified builders and to a major problem in how supervision was taking place. At the end of the day— 
Simon Power 
: And the problem with design. 
SHANE ARDERN 
: Yes—and to a problem with design; architects were particularly mentioned. But when we return to the bill we find that under the title there is absolutely no solution to those problems. 
I ask members opposite: when Bob the Builder is driving down the road in his ute with the dog and the radio and with this piece of doorstop sitting on the seat underneath the dog how will that stop the problem of leaky homes? I look forward to a member on the other side taking a call to explain that to the Committee tonight because I am sure that anybody who is listening will be very interested in how under the title that will happen. 
I have here before me a list of things that were suggested as recommendations by the do-it-yourself people out there in the building industry. They said that the Government should consider overhauling the current warrant-of-fitness regime. They also said that the Building Industry Authority should be empowered as a self-governing body to make sure that those who slipped through the cracks—and remember they comprise only 1 percent or less of those who built homes in New Zealand during this period—should be brought into line so that people had some redress. 
They also said that we should remove all references that are misleading or difficult to follow. What do they mean by that? They mean terms or references such as “may”—which should be replaced with “shall”—and “it is unclear in the terms of the code of compliance what it means to be responsible.” They said that some of that stuff should be cleared up and that it should be written in plain English not in the kind of English we get in Parliament that needs half a dozen lawyers. 
The lawyers have debated this bill tonight and not one of them can agree on what each clause stands for or states. I have noticed some wide-ranging views in the Committee amongst the lawyers. It is quite interesting for somebody who does not have a law degree to listen to the debate that has come from the lawyers. 
Simon Power 
: Depends on who’s paying the bill! 
SHANE ARDERN 
: Of course—it depends on who is paying the piper. That is probably how it works; it depends on what side of the fence one happens to be sitting on at the time. But it seems to me as somebody who does not have a law degree that there is a reasonable amount of ambiguity amongst the lawyers here about what various clauses in this bill stand for. 
Further the bill will take 5 years to come into force. I know there have been other Acts of Parliament that have been slow finding their way through but surely the title of the bill should be the “Very Slow-Release Solution Bill” or the “Will take 5 years to be enacted and still not fix the problem Bill”. 
LINDSAY TISCH (National—Piako) 
: 
 This is like the house that Jack built. That is what we have been going through in this Committee stage—the bill is an absolute nonsense. It will add considerable costs where there need not be costs. The genesis of this bill was the leaky homes issue. It actually goes back further than that. There was an industry group that got together in 1998 and said the current Building Act 1991 needed to have some changes made to it. Industry players got together and started to work through improvements that needed to be made. A change of Government a year later in 1999 meant that all the good work that was done at that time was shut down. It was not even considered. The point I make here is that at that time it was said that the process to review the 1991 Act would have taken at least 4 years. As a consequence of the weathertightness problem and the leaky homes we have legislation on which the industry has not been widely consulted. 
Dianne Yates 
: Absolute rubbish. 
LINDSAY TISCH 
: That member chairs the select committee and we would not have had that sort of nonsense if the industry players had been involved. The only time they had any input into this was when they made submissions to the committee. 
 If a bill was drafted one would have thought that the whole industry—everyone—would have been involved and of course the players were not involved in that. It is an overkill. It will increase the regulatory burden that all players in the industry will be faced with and at the end of the day it will not do what the bill is supposed to do and that is to give consumer protection. 
We know there are issues with the present Act. We have acknowledged that. We know there are issues with leaky homes. But in no way does this bill prevent the problem and that is why the bill is not titled the right way. The “Building Bill” should actually be “The House That Jack Built Bill”. If we were to look at the whole question of the benefits and the costs associated with this there was a cost-benefit analysis report that said that for a 150 square metre house the costs could increase about 2.9 percent. I think that is on the light side. In fact the figures we have used in previous debates and also in National’s minority review suggest that the costs are going to increase by about 12 to 15 percent. 
The economic impact of this bill will lead to significant increases in labour costs. There is already a short supply in some trades especially those skilled trades such as bricklayers. They are actually naming their price at the moment. It is a very competitive field to be in and they are doing extremely well. If we look at comparative prices between homes in Australia and in New Zealand to build a home in Auckland it is $2300 per square metre; in Adelaide it is $1170 per square metre. To build a smaller home a 120 square metre home will take 4 months. The actual costs are not $6500 that we have talked about before because I did a rerun of the figures. It will take 85 hours of supervision time and that is what the bill says. The bill does not say “inspect” it says “supervise”. That is what it now says. One has to supervise everything not inspect so it will be 5 hours per week over a 4-month period—85 hours in total which will be closer to about $10000 just to meet the new requirements of the bill. 
We have the Minister for Small Business John Tamihere who is sitting there and he has not taken any notice of what this is going to do. I ask the Minister whether this is going to enhance protection give customer safety or give a sense of security. 
Hon John Tamihere 
: Yes. 
LINDSAY TISCH 
: The Minister says that it is. Well we will find out very quickly will we not when people are having to pay these huge costs. There will be absolutely no guarantee that there will be anything in it for them. We will see a lot of people building new homes for the first time being disadvantaged by this. What will that lead to? It will lead in my view to illegal construction. People will go through the back-door. They will say: “I’m not going to go through this process. I’m actually going to go and do those renovations to my own home. I’m not going to get a consent. I’m not going to have a licensed building practitioner come around. I’m going to do it myself.” 
DAVID PARKER (Labour—Otago) 
: 
 I move  
That the question be now put 
. 
BRENT CATCHPOLE (NZ First) 
: 
 As we all know this bill was the result of an inquiry into the weathertightness of homes and the leaky homes problem that we had. It was recommended that there be some changes and this bill is the result. I would just like to pick up on a point made by one of the previous National speakers who claimed that it was National that brought about the inquiry into the weathertightness of homes. I find that laughable because New Zealand First could also make exactly those same claims. We did exactly the same amount of work on that problem. However we are not going to make the same claim as National. We could do but the real claim to the weathertight homes inquiry into the leaky homes was in actual fact the direct actions and the direct result of Prendos and the O’Sullivan brothers. They had a huge hand in that. For years they lobbied the Building Industry Authority the industry and also the Minister. It was not John Tamihere the Minister who is in the chair now it was the Minister of Internal Affairs who refused to acknowledge— 
Brian Connell 
: Who was that? 
BRENT CATCHPOLE 
: It was George Hawkins. He refused to acknowledge that there was a growing problem. The other thing was that he was being very poorly advised by the head of the Building Industry Authority Dr Porteous. He failed to acknowledge or take any action. He had all the evidence put in front of him time and time again. Even when the information from the Hunn report was put in front of the head of the Building Industry Authority he failed to do anything. He refused to acknowledge that there was anything happening. Even the Barrett report from Canada was put in front of him to show what was happening. He failed to acknowledge and follow up on it. It was Prendos and the O’Sullivan brothers who eventually went to the media and published the problem. 
Before any action was done one can go back 2 years to find those media releases and media claims that were being published but everybody was ignoring them. That was the real catalyst and the real ones who were behind bringing the weathertight homes inquiry into the leaky homes problem. It had been happening for years and nobody else would acknowledge it. But Prendos did not give up and I give credit for that. That company did a lot of work in eventually forcing the inquiry and finally we end up with a rewrite of the Building Bill which is what we have here today. This will go a long way to avoiding a similar situation provided everybody acknowledges that the Building Bill is important and that they also had a part to play in the weathertight homes problems. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
Hon RICHARD PREBBLE (ACT) 
: 
 I rise to speak to the title of the bill which I think is misnamed; this is not a Building Bill but it will be a bureaucratic nightmare of a bill. It is worth drawing to the attention of the Committee that Government members have not got up to defend the bill and have not set out what the bill is supposed to do. The bill was originally as a result of the so-called leaky buildings weathertightness syndrome but I notice that the Minister now says that it is on behalf of battlers—the idea being that battlers are somehow helped by bureaucrats who will put up the cost of housing. That could account for the fact that under this Government the affordability of housing for people in the Auckland area—the members’ own constituencies—has deteriorated considerably. The Minister has not actually denied that the bill will worsen that problem. Some figures have been given as to what it will be. I tend to be on the pessimistic side because I think bureaucracy is like an acorn: one ends up not only with an oak tree but eventually a forest although one must have been cut down in order to print the bill. 
I do ask the Government where it found the figures for the fines that are provided for in the bill. There is a fine of $200000 just for not having a certificate a piece of paper. It does not say that the building is a bad building. As Mr Shane Ardern pointed out this is an example of taking a problem and then saying that there has to be a law. Well what we actually know about the leaky building syndrome is that it was caused by two different things: firstly fundamentally the introduction of new materials and people not knowing how to use them; and secondly regulations. 
 When we insisted thanks to our Green friends here on buildings being energy efficient they were sealed. People have been referring to old buildings being weatherproof. That is nonsense. The truth is that most buildings in New Zealand have leaked but the water has flowed right the way through and out the other side. It is thanks to the Green Party that they had to be energy efficient so they were sealed. The water came in then had nowhere to go and it rotted the buildings. It is part of the problems that the Greens have given us. But this is the second part—and I notice they are consistent and are voting for it— 
Shane Ardern 
: The rot set in the moment they came into Parliament. 
Hon RICHARD PREBBLE 
: No there was a bit of rot here before that; they have just made it worse—sort of sped it up. But I say to the Committee that this is bad lawmaking. It will not help battlers. It will not help the construction industry. Well actually it will help those who are in it. Those who like me are established will do well out of this bill because it will cut competition. It will make it harder for people to start building businesses and become bigger because this compliance cost as dozens of studies have shown will fall disproportionately on companies according to their size. For large companies compliance costs are small in relation to their overall business. They have the ability to employ people full time working just to meet the council’s requirements. But for small builders—and most residential buildings in New Zealand are built by small builders—this will be a very very heavy compliance. 
Of course if one runs into a council such as the Waitakere City Council—with my friend who wants to prosecute me over my swimming pool—one will get hit with a $200000 fine and there are very very few builders who could survive a fine of that magnitude. A Government that passes such a police-State measure and then says that it is in the interests of the country deserves to be thrown out. So does the United Future party. What is the point of having an MMP Parliament if parties like United Future and New Zealand First compete to see whether they can say “Yes” before the Government can? That is all we have seen tonight. We have not seen any proper scrutiny from those parties. They are a complete waste of space. 
SANDRA GOUDIE (National—Coromandel) 
: 
 This bill should be called the “Why Would You Build It Bill”. I do not think many people will want to build anything at all because they will not be able to afford to. This bill establishes a chief executive body a building accreditation body a product certification accreditation body a building advisory panel a building practitioners board a building practitioner registrar and independent certifiers. Then at the end of it all comes the territorial local authority. That is all part of the product of this bill. 
One of the matters I wanted to raise during the earlier debate but I did not get a chance to was the consultation requirements for making regulations. Again this comes back to why one would do it. The regulations are made through Order in Council and there is a bit of a reference to consulting. Clause 354(3)(a) states that the chief executive must “consult with the persons or organisations that appear to the chief executive to be representative of the interests of persons likely to be substantially affected by the making of the relevant Order in Council or regulations;”. However subclause (5) states: “A failure to comply with this section does not affect the validity of any Order in Council or regulations made.” So on the one hand the chief executive can do that but on the other hand if he does not do it well hey it does not really matter anyway. 
I really feel sorry for local authorities in all this because they will be caught in the middle. There will be people who are building houses who will not get their certificate of compliance. Effectively they will not have a home to move into until they do. 
 That happens now and does that mean that people will have to wait some time? And what happens if they actually move into their house without that certificate of compliance? Who bears that liability? Is it the builder or is it the homeowner? I would suggest that it looks to me a bit like it is the builder. So if I were getting a house built and it all got finished and the council was waiting to deliver me a certificate of compliance I would move into the jolly thing. I would not wait around for the council. But that means I would be making that builder liable for the fact that I had moved in. I would break a window and do it because it would be my house and the thing that is stuffing around is the council not coming forward with a certificate of compliance. 
So who gets caught in the middle of all this? The council! This is an absolute travesty that the Government is dumping on local authorities. They get to bear the brunt of most of this. 
There is no certainty about business for any of the independent building certifiers in all of this. Territorial local authorities are bound into it. They have to do this—the Government has made it compulsory. They cannot get out of it whether they want to or not. I guarantee that they probably do not want to because they have to do a heck of a lot to actually comply with the provisions of this bill. 
Then I look at the provisions concerning levies and I see that councils have been charged with the responsibility of collecting the levies. They wear the liability of paying the levies to the chief executive or whichever other body is supposed to collect it. One of the registrar’s functions under clause 353 “Regulations: general” is that the registrar sets “(d) prescribing the fees or charges payable in respect of the performance of the Registrar’s functions” and these include an application to be licensed. Is there a payment also for the issue of the licence? Is there also a payment for the renewal of the licence? So suddenly there are three payments—and I have barely started. 
Then comes the levy. Well there are different levies for different classes of licensed building practitioners. I guess that means there is a different levy for an architect who might be licensed as a building practitioner and a different one for a builder who is licensed as a building practitioner. There is a different one for a lawyer maybe who is licensed as a building practitioner. These are the sorts of things that the Government is providing for in this bill. So there are different levies for different classes of licensed building practitioners and as we know it has previously been revealed that a building practitioner can be anybody who wishes to so apply. The amount of levy can be set at any level I guess because that is what the registrar’s function is—to set the amount of the levy and the method by which that levy will be calculated. So that method could be whatever method he or she determines is appropriate and then there are all the other criteria and other requirements. On top of that when someone actually builds a house— 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 37 
New Zealand National 27; ACT New Zealand 8; Maori Party 1: Independent: Awatere Huata. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 37 
New Zealand National 27; ACT New Zealand 8; Maori Party 1; Independent: Awatere Huata. 
Clause 1 agreed to. 
Procedure 
The bill was reported with amendment. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 92 
New Zealand Labour 51; New Zealand First 13; Green Party 9; ACT New Zealand 8; United Future 8; Progressive 2; Independent: Awatere Huata. 
Noes 28 
New Zealand National 27; Maori Party 1. 
Report adopted.