Weathertight Homes Resolution Services Amendment Bill — In CommitteeText is incorporated into the Bound VolumeWeathertight Homes Resolution Services Amendment Bill — In Committee[Sitting date: 10 February 2016. Volume:711;Page:8900. Text is incorporated into the Bound Volume.]Weathertight Homes Resolution Services Amendment BillIn CommitteeDebate resumed from 21 October 2015.Part 2 Consequential amendments validations and transitional amendments (continued)PHIL TWYFORD (Labour—Te Atatū): It is good to recommence this debate on the Weathertight Homes Resolution Services Amendment Bill. The people at home who have been following the progress of this bill very closely through the House will be much relieved that the debate has recommenced. They will remember that Labour is supporting this bill because we want to see this final bit of fine-tuning of the Weathertight Homes Resolution Services funding assistance package. We want to see the benefits of the fine-tuning contained in this bill actually realised in the few months that remain before this bill expires.Before we were so rudely interrupted by the passage of time we were debating Part 2 of this bill and I want to direct the Committee’s attention to an element in Part 2 that deals with the widening of the definition of “qualifying claimant” in section 125B(1) of the principal Act. This provision is one of three important elements in the bill and this one particularly updates the Act in accordance with the Supreme Court ruling in Osborne v Auckland Council.People who have been following this issue will know that John and Helen Osborne had been denied access to the funding assistance package on a technicality and they took their case through the system all the way to the Supreme Court arguing that the 10-year limitation on leaky building claims should start from when the building is issued with a code compliance certificate by the council not when the building itself is physically completed. Because the terminology in the Act refers to the 10-year period kicking in from when the house is built that is a vagueness that subsequently tripped up a lot of people.The courts initially ruled that the Osbornes were not eligible for the funding assistance under the Act. Good for the Osbornes—they took that fight on. They won in the Supreme Court. The Supreme Court agreed with them that the 10-year limitation period—that the clock should start ticking from the moment that the code compliance certificate was issued. As a result of that the Government estimates that perhaps 300 families could benefit.I want to talk through one particular element. It is not a major issue but concern was raised by some submitters that the bill would have the unintended consequence of making it very difficult for some applicants who have gone ahead and made the repairs on their home after having been turned down for eligibility for the funding assistance package in that they would not then be eligible. Once the bill was passed allowing for the Osborne principle to be enacted these people having gone ahead and acted and done the repairs would no longer be eligible.So let me just talk through some of that detail. The bill deemed the owners who were regarded as ineligible based on the case law prior to the Osborne case to be eligible. It basically just deemed them eligible based on the Osborne principle. That is basically about correcting an injustice arising from an incorrect application of the law.The problem is that if owners had gone ahead and made their repairs to their house they still would not be able to obtain financial assistance under these provisions because they still would be unable to meet the contribution criteria which is one of the two key elements they have to meet. What section 125C of the principal Act does is it allows owners who are qualifying claimants to apply to obtain financial assistance. They have got to have an eligible claim. They have got to meet certain contribution criteria set out in the Gazette notice.Section 166(5) in clause 7 still requires those owners who have made the repairs—they have gone ahead having been deemed ineligible—to meet the status of qualifying claimant in all other respects. But that is not possible in the case of people who have gone ahead and repaired their homes. That was raised by submitters including the New Zealand Law Society who feared that this was an unintended consequence when there was no good reason to deny these people access to the assistance scheme. The Government has estimated that there would be about an extra 70 families in that position. As Paul Grimshaw of Grimshaw and Co. said at the Local Government and Environment Committee this would essentially require a number of these people to undertake lengthy and possibly expensive adjudication to get their result.What I would ask is for the Minister in the chair the Hon Nick Smith who is the Minister responsible for this bill—which is good for this debate—to get up and explain to us whether in fact the change that the select committee made to the bill in section 166(4) in clause 7 was designed to remedy that unintended consequence. I was not on the select committee. It is not clear to me from the reading that it is but I would invite the Minister to get up and explain whether or not those concerns have been met in this case.Su’a WILLIAM SIO (Labour—Māngere): I think it is fair to say that there is genuine interest on our part to ensure that this bill passes but to also ensure that we support the Government in making sure that we correct the injustice that arose from an incorrect application of case law prior to the court case. So in terms of Part 2 of the bill—most of the significant content was in Part 1—clause 7 attempts to clear up the confusion caused by the 2001 Gazette notice and the response to the Supreme Court decision.I did not have the privilege that the Government members had of sitting in on the select committee process. I note though that there were significant submitters who all raised similar concerns which I think my colleague Phil Twyford has attempted to articulate and at the outset I say that we want to make sure that this is right. It has taken us a long time to get it here so let us make sure that we do get it right. Grimshaw and Co. is a specialist litigation and dispute resolution firm that represents over 5000 clients in leaky building disputes. It raised that the Government has estimated that there will be about an extra 70 families with homes that will be deemed eligible as a consequence of the Osborne court case and the passing of this bill. Given that as of 31 January 2005 there were 1147 claims representing 3528 homes that had been assessed as qualifying for the Government contribution of 25 percent it suggested “it will not be a large cost for the Government to also assist some of these 70 families who were wrongly deemed ineligible and then fixed their homes.” But with this legislation those people would now be eligible.I know that the Minister in the chair Dr Nick Smith has a Supplementary Order Paper in place but I am not sure whether that covers what this organisation has raised in its submission. You see it again says that if the bill passes as it is it would allow certain owners who were deemed ineligible based on the case law prior to Osborne to now be deemed eligible. However if the bill is passed in its current form some of those owners will not be able to obtain financial assistance under the financial assistance package specified under this bill. So specifically owners who repaired their houses after their claim was deemed ineligible cannot now obtain financial assistance and the draft law does not appear to allow owners in that position to apply for the financial assistance package even if they would have met the contribution criteria at the time that their claim was deemed ineligible.I also want to draw to the Minister’s attention that similarly the submission made by the office of the Mayor of Auckland also raises the issue that the 2001 Gazette notice clearly distinguishes between the Crown contribution criteria and the participating territorial authority contribution criteria and that distinction is not reflected in part of this bill. So in the bill as currently drafted there is potential for confusion as to the extent to which the distinction applies. The submission said: “The Bill as currently drafted also does not clearly reflect one of the integral reasons why territorial authorities agree to become [participating territorial authorities] being that a claimant who has commenced proceedings naming a [participating territorial authority] cannot receive a financial contribution unless that territorial authority agrees.”The Auckland Council also said in its submission that “The proposed definition of ‘qualifying claimant’ also introduces some uncertainty as to whether a claimant who does not meet the relevant contribution criteria might nonetheless be a ‘qualifying claimant’ if the chief executive determines that the claimant is taking all reasonable steps to meet those criteria.” It said: “The effect of the proposed new subpart 9 is that any dwellinghouse which had a code compliance certificate … issued within the 10 years prior to the application for an Assessor’s report will have a claim which is deemed eligible. Conversely a claimant for a dwellinghouse for which no [code compliance certificate] was issued but building work continued within the ten years will not have an eligible claim despite the fact that the [court] decision … would include such a claimant (albeit that those circumstances would be rare).”So again I think for our part we want to get this right we want to pass it and we want to support it but given the time it has taken to get us to where we are today I think it is important that you are able to just assure the Committee about the concerns raised by submitters. There is one here by the New Zealand Law Society. Again it says “The Bill aims to widen the definition of ‘qualifying claimant’ … to include claimants who are actively progressing claims so that these persons are not prevented from having recourse to the … provisions in the Act. However if the Bill is passed without amendment there is a subset of owners who had previously been ineligible and will become eligible but will still not qualify for assistance under the [finance assistance programme] scheme.” Again that issue is emphasised in the Law Society’s submission.The other point I want to say is that in the last debate with reference to this bill a Cabinet member—and I am not quite sure now whether it was you Minister or somebody else—was reported to have said that you would be keen to free up the building industry and I would ask the Minister whether he was prepared to just clarify that decision to the Committee. The Minister may recall that we are in this leaky house situation as a result of a previous Government—and I understand that the Hon Maurice Williamson claimed ownership to being part of that Government—that freed up the industry and really set it aside at arm’s length from the territorial authority.My concern is that here we are attempting to fix the problem that arose from the freeing up of the building industry and instead of us looking at ways of strengthening compliance I am hearing that there is a possibility that this Government has set itself on another course where we could end up in the House attempting to find the money to support another leaky home syndrome. So again I would ask the Minister whether he would not mind just clarifying to the Committee whether it was him who was responsible for the media reports claiming that that is the direction we could be heading for. I appreciate any comments the Minister might be able to make.Hon Dr NICK SMITH (Minister for Building and Housing): I am delighted to be able to take a short call on the Weathertight Homes Resolution Services Amendment Bill to respond to the couple of questions that have been raised by members and I acknowledge the Opposition’s support for a bill that actually makes just common sense.Firstly I think it is important to put this bill in some context and I actually hope it is the last time that this Parliament debates the sad debacle that occurred around the whole issue of leaky homes. The very first point I would want to make though to Labour members is that this Part 2 is about making changes to the financial assistance programme introduced by a National Government for those homeowners who are affected by leaky homes. The leaky homes issue arose in 2002. Labour in Government steadfastly argued for 6 years that it would not spend a bean of public money to help the thousands of Kiwi homeowners who were affected by these measures and it was actually a National Government under a lot more financial pressure than it was that actually came to the party and provided some support.There are three changes in Part 2. The first of those is very straightforward and that is where the Government has by Order in Council and Gazette notice made decisions about eligibility for the financial assistance programme and is simply putting them in legislation to remove any uncertainty. The third point that is provided for in this bill is this highly technical question of when the 10-year liability period applies for someone making a claim on a leaky home. The original court decisions were that that should be based on the last date on which someone did work on the home whereas the Supreme Court took the view that it should be the date of the code compliance certificate.I actually welcome the decision of the Supreme Court around the code compliance certificate. An underlying issue we have with the building industry is that actually too many homes are completed and nobody bothers to issue a code compliance certificate. The reason I am attracted to the Supreme Court view around when a building project is completed is that if we take the interpretation that it is the date that the code compliance certificate is issued there is actually an incentive for the builder and those who are involved in a building project to properly complete it to get the inspections done and to get the code compliance certificate issued and I think our building system as a whole will work better for that. The Supreme Court gave that decision in a particular individual case but what it did lead to was a number of homeowners who were not eligible for the financial assistance scheme being in the equivalent position.We are a pragmatic Government. We said other New Zealand families that are in the same situation should be treated equivalent to the Osborne case and be included in the entitlement and that is what this Part 2 does. Two specific questions have been raised. The first question that has been raised by Mr Twyford quite appropriately is what happens if someone in the intervening period has done what a sensible person would get on and do which is get the house fixed? The answer with the amendments that have been provided Mr Twyford is that they remain eligible. The bit that we want to make plain though is that the financial assistance programme has always been about supporting the owner-occupier of a home. I think we all take a charitable view across the House that a man or woman’s home is their castle and that we take sort of a protective view of that.But where someone is a property investor and is renting the house out—I am sorry but that is a business transaction and we take a less charitable view of risk in that situation. The amendments and Supplementary Order Paper 125 and what the Local Government and Environment Committee has reported is that if you are an investor in a property or the property is sold you would not be eligible for the financial assistance programme and I think that is a pretty fair call for the Government to make when we are effectively disbursing public money to assist people who through some fault in the systems have been caught up.The very last point I would make in respect of the questions that have been raised is around the issue of dates given that it has been some passage of time since the bill was introduced to the House. Supplementary Order Paper 125 which is tabled in my name makes plain the introductory dates for that so that there is a smooth transition. The very final point I would make is—again I emphasise—it was a decision of this National Government to provide that pragmatic financial assistance and at the heart of that financial assistance programme is dealing with the uncomfortable reality of the leaky home dispute. The sensible thing for Government to do rather than spending huge sums of money on lawyers and disputes was to provide a subsidy—effectively 50 percent in the case where a council was involved; some practical 50 percent subsidy—get on and get the houses fixed.I want to make one last point to respond to the Opposition and that is more broadly around the issue of building regulation. To be honest let us get the parliamentary record correct—because I have been around for a while. It was a Labour Government that introduced the Building Act changes back in 1989. The bill was in the name of Margaret Austin. The number of speeches that I have heard in this Parliament from members of the Labour Party who say: “That’s nothing to do with us.” Actually it was a bill introduced by a Labour member and a bill that was passed all the way through the process with the support of the Labour Party.In respect of moving forward it is the Government’s view that there are issues of regulation that are not efficient in the building sector. We are going to be announcing some proposals this year where we actually think that in that balance of trying to get a regulatory environment that ensures that we do not get the sort of debacle that occurred around leaky homes while on the other hand we do not have excessive compliance costs that contribute to the very issues around the affordability of homes you are going to see reforms from this Government this year. The key component of those reforms is this issue: if there is an injustice around the issue of leaky homes it is the degree to which the liability for the building flaws rested with ratepayers rather than the building companies that were responsible for those buildings. If we are actually to get more disciplined and better commercial arrangements in the building industry we as a Parliament need to strengthen the commercial accountability for those who provide building products and get the bulk of the revenue in the building sector.I welcome having a discussion around issues of first-home warranties and how we can improve those disciplines because in my view an underlying issue is that it is unfair that when councils get less than 2 percent of the revenue of a building project they actually over the leaky home debacle end up with more than half the bill. I think there is an underlying issue that this Parliament needs to have a debate on as we move on from the issue of leaky homes to the future of the building industry and how we can structure it in such a way that there are the very best incentives of ensuring that homes are built once and built right.Dr MEGAN WOODS (Labour—Wigram): Thank you to the Minister in the chair Nick Smith for answering some of the questions that have been put to him. It was useful to get some clarification on those points Minister so thank you.I think that colleagues on both sides of the Chamber who have spoken on this legislation have traversed very well why we are here and how we got here. I want to address some of the issues in Part 2 of the Weathertight Homes Resolution Services Amendment Bill that the Minister just raised and pick up really where he finished off about what it is that we can learn from this legislation going forward in terms of what it means for the future. The Minister talked about two of the issues around eligibility—who is eligible—being covered off in this Part 2 and the need to validate the Gazette notice. The other point that he raised which I think is worth discussing and is of interest is the time frame around liability which Part 2 deals with and we have had to deal with in this legislation because as a Canterbury member of Parliament sitting through the hearings on this weathertight homes legislation it did from time to time send a chill down my spine around a number of issues.First of all there is the time period for liability which is covered in this and the precedent that this legislation puts in place which is around dealing with when it is that the certificate of compliance is issued in terms of when we start calculating liability—because of course in terms of Earthquake Commission claims we are dealing with a 6-year window in terms of liability in which people have a right to take the Earthquake Commission to court. But one of the issues that we have in Canterbury with the Home Repair Programme—and the Minister talked about the need to build it once and build it right—is that many of the repairs have not had a code of compliance because there has been the ability for the building industry to self-certify. We have laid aside in the name of speed the need for people to get building consents for quite significant repairs to homes. So in terms of the precedent that this legislation sets in terms of when we start calculating liability in the absence of certification as we would normally recognise it within the building industry in New Zealand I have great fears.My great fear is that we are going to be back here in a decade’s time having to put into place legislation that is going to clean up a mess that we could have foreseen—foreseen—around how it is that people have redress around their homes. The very ideas that we are talking about in this Committee tonight—the fact that for most New Zealanders their house is going to be the largest asset that they will ever own and the need to have security in that and to have some certainty around what is happening—are paramount. For so many Cantabrians the lessons of what we have learnt in terms of the leaky homes saga are not something that have been picked up. So I would encourage the sentiments that the Minister in the chair is expressing tonight around the need to get the regulation right to build once and to build it right or to repair once and repair it right.I would encourage that Minister to go and talk to some of his Cabinet colleagues and to warn them about the consequences that we could be facing because many of the themes that we have going through in this legislation about determining eligibility and setting up funds also apply when we are—and rightly so—spending so much time fixing Cantabrians’ homes. Not once in some instances but twice the Earthquake Commission is having to go in to do a patch-up on repairs that have been botched in the first place. In a decade’s time are we going to be in this House talking about setting up a fund so that that work can be rectified yet again? That is something that is truly disturbing to me that we have the potential to deal with now.None of us as legislators like being in this House doing fix-up legislation. It is not something we enjoy. It certainly is not something that we enjoy on this side of the House. We have got ideas for the future. We want to be talking about how it is that we can make New Zealand a better place and not fixing the mistakes of decades past—and we run the risk of doing that. We have ideas on this side of the House on how we can not only get people into houses but also get people into the Kiwi Dream so that we can set them up for a future and so that we will not spend our legislative timetable fixing mistakes that could have been foreseen in the past.So I think there are some lessons that we need to learn from this piece of legislation which Labour is supporting. We are supporting it for the reasons that the Minister outlined: it is sensible and it needs to be done for the people who have found themselves in this horrific situation of having their home their piece of security become something that is not as secure as they thought it was going to be. We are in that situation but for goodness’ sake let us learn the lessons of this unfortunate phase in our history and think about what we are doing in this very House at the moment in regard to the potential leaky homes issue that is going to face this country in a decade’s time. We know that it is coming we know what the risks are and we are talking about them tonight. I urge you Minister to talk to some of your Cabinet colleagues. Thank you.Hon DAVID CUNLIFFE (Labour—New Lynn): It is salutary to be back in the Chamber talking about weathertight homes. I thank Minister Smith for his contribution. Of course we are supporting the bill. In doing so however I think it behoves us to recall the folly that led to the situation how this bill then impacts the legal situation and how we might go forward. I want to concur with what my colleagues Dr Megan Woods and Phil Twyford have offered and to remind the Committee that “leaky building syndrome” was a phenomenon that occurred from around 1994 to 2004. Weathertightness was primarily an issue that derived from two things: the approved use of non-treated framing timber; and various changes to building techniques that compromised weathertightness through the combined use of things like mono-cladding and the lack of cavities and various technical changes that cut corners around window flashings and roof flashings and practical things like that.But what all those things have in common is that the building industry was deregulated during that period under pressure from for-profit enterprises with massive lobbying power. We all know who the largest companies were—I do not need to name names—but I do not think that there is a single member in this Committee who is not well aware with the painful lessons of history that we must never forget that it is the right and proper role of Government in order to have a healthy and mixed economy with a thriving market system to put boundaries around enterprise in the name of public safety and the sustainability of enterprise. In this case—and we are not blaming individuals or naming names—the reverse happened. With some recurrent naivety a kind of market malaria we thought we could trust the building industry to regulate itself. Self-regulation—have we heard that phrase before? The tragic thing about this particular tiptoe through the self-regulatory tulips was that the results have been manifest in broken homes and broken lives.I think every constituent MP in the Committee will have had the most tragic heart-rending cases come to their door. Families have been ripped asunder by the stress of not being able to deal with a leaky home but then not being able to afford to either sell it or fix it. Parliament—again accepting probably shared responsibility for this; I am an old dog and I can do that now—did not bankroll the solution. What it did do was sponsor a legal process that was as fair as we could reasonably get it but it was imperfect. Iteration by iteration by iteration we are back in the House on various occasions to fine-tune that process and I commend the Minister for the changes that are in this bill. They are limited but they are good. They make it fairer because they allow more claims to proceed. That saves 70-odd cases having to go to court—claims which this bill deems to qualify. It means that cases that are currently in progress rather than having reached a particular stage—and the Minister is taking the broad view and good on him—can continue through the legal process even though the expiry date of the legislation has been received and that is the right thing to do.We have no argument here about the content of the bill and we are supporting it all the way but it is a bit like Anzac Day—lest we forget. It would be a deviation to say that there are a number of other industries in the past where a halcyon view of self-regulation came a multibillion-dollar cropper. Telecommunications was one that I had direct experience with. Remember Telecom New Zealand Chief Executive Officer Theresa Gattung saying that confusion was a weapon that it used to keep prices up? It kept customers confused. Remember that? Do you remember the massive lobbying effort that that company put in place to prevent the public interest which was the removal of monopoly rents and the investment in faster and cheaper broadband from occurring? I want to commend Maurice Williamson and successive Ministers on both sides of the House including Amy Adams who have continued a drive towards the pro-competitive regulation of that industry.Sometimes in this House we get lost in a right/left dynamic where we think that either all intervention is good or no intervention is good. Usually as in most parts of life the truth is somewhere in the middle and regulation that sets clear boundaries for private enterprise can help everybody. It is like the rules of a sport. You know what the rules are and if you have got a good ref everyone can get on and play the game and have a good time. If either the rules are unclear or the ref does not know what he is doing or the Government stays on the sideline—or God forbid as in the leaky building crisis it removes the rules and says “Oh you guys just sort it out yourselves.”—then billions and billions of dollars later suicides and divorces later we are back in the House fine-tuning the solution.Have we learnt the lessons of history? Well I do not know but here are a couple of theories and I want to now acknowledge my former colleague Shane Jones. Have we learnt in the supermarket industry? My goodness me food prices are expensive in this country and yet we have really really high levels of production and a small population. We have got only two players in the industry. I wonder how competitive that really is and I wonder whether the Commerce Commission is going to take a close look at it.Closer to home on this one is building products. There are really only two companies that matter in that industry and we have per unit prices for building products in this country that are so much higher than in Australia. I would really like to see the regulators strip that down. That is the 21st century manifestation of the same market malaria that caused this mess—the blithe ignorance of commercial strategy and the abdication of the Crown’s role to be a good and prudent referee. I am not naming names. I am not casting aspersions. I am not pointing the bone.But I am saying that we have a shared public interest in fair rules of the game and good value-creating market behaviour hard work and enterprise.Labour stands for work. We are focused on the future of work so that we can all get on and build a better country. You know the divisions across the House are not that wide. Most of us would agree with that.Most of us agree that pure capitalism like in The Wolf of Wall Street ends in tears and most of us do not want to live in the Soviet Union either. We want a system that works for ordinary Kiwis. As the year unfolds we are going to be exchanging ideas in what is usually a robust but pretty decent sort of a process about how we do that.This is a great bill small but perfectly formed—nothing like the Minister.Hon Members: Aw!Hon DAVID CUNLIFFE: He is big and perfectly formed.RON MARK (Deputy Leader—NZ First): Thank you Mr Chairman and welcome back to you too sir. It is my first opportunity to say that to you the Hon Chester Borrows. I want to say that in this moment—and it is quite an interesting little moment that we are enjoying here in the Committee—we are seeing admissions from the right and from the left that everything that is done in this House in the name of good government policy is not always right. I think we need to just hold on to that thought for a minute. I appreciate that this debate has gone a little bit wide ranging so I am going to take the opportunity to add a little bit to that from New Zealand First’s perspective. I appreciate Minister Smith’s—The CHAIRPERSON (Hon Chester Borrows): We are going to keep it narrow.RON MARK: Well we talked about supermarket prices over here. That is pretty broad—The CHAIRPERSON (Hon Chester Borrows): And the member was pulled back into line so we are going to keep it narrow.RON MARK: I appreciate the Hon Nick Smith’s contribution but I have to say from New Zealand First’s perspective we have got a saying “Red or blue there’s nothing new—you’re both the same Labour and National in so many so many so many ways”. This matter probably reflects that. What I would say in contrast is that in the 13-odd years I have spent in this House the times when we think that Parliament works best is when the Government has taken time out to listen to opposing views and has accepted openly that it does not have a franchise on the font of all knowledge that it does not own the formula for the elixir of youth and that actually there are times when it needs to work across parties. We would like to think that that moment would have been here with the Trans-Pacific Partnership (TPP) agreement but clearly not. Despite the Prime Minister’s speech the other day it is going to be rammed through the select committee so why have a select committee process? It is pointless we would say.This piece of legislation smacks of the same things. It is a very—[Interruption] Mr Macindoe it is a very pertinent time right now to reflect on this. We are talking about the history of a piece of legislation started in Labour’s time when we had Roger Douglas running the country and the ideology which was Labour’s right-wing moment of “the market knows best” became the fashion. It bequeathed this—the deregulation era. Taxis were deregulated. There was a whole mass of sectors that were deregulated and up until that time I actually think National was opposing some of those steps. This is the consequence.Subsequent to that as the Hon David Cunliffe has just said this country saw an era of tragedy. People were committing suicide families were broken up and people were driven to bankruptcy. Small businesses small builders and small building companies were liquidated and folded and running away from the problem. Who bore the brunt at the end of the day? Well it was the taxpayer and the ratepayer. It was probably rightly so that Parliament should have been held to account because it was Parliament—the Labour Government of the time—that pushed through that move to deregulation.What were we talking about? Funnily enough at the time that this was all happening there was a whole bunch of people who were probably considered a bit old and a bit fuddy-duddy—small builders. There were a lot in provincial New Zealand. I can name a couple in Rangiora and I can certainly name a few in the Wairarapa who said: “Oh no no this is nonsense.” They took one look at this monolithic cladding the Mediterranean-style houses and the way in which cowboy builders—and it was mainly in urban metropolitan New Zealand that it happened. Apartment blocks—that is where it happened. The funny thing is that when you go to rural provincial New Zealand—go to Whanganui go to the Wairarapa and have a look at how many leaky homes there were. The Wairarapa—Alistair Scott knows do you not Alistair Scott? No he does not actually. He does not live there. Two—there were two in Carterton and I think probably half a dozen in Masterton. Why? Because the building practices of those tradespeople over there did not buy into this nonsense of small eaves monolithic cladding and Mediterranean-style houses. They did not buy into the cowboy style. They carried on building houses the way they had always built them. I guess you could argue that deregulation in the Wairarapa and in rural provincial New Zealand did not affect them because they stuck to tried and true practices.One of the other things that also changed—I am just reading back on a bit of history here—was the methodology behind the training of apprentices. Who did that? Oops—share the blame. Those things combined to give us a problem that was a multibillion-dollar problem which as we have just discussed here various Governments—firstly Labour and then National—have attempted to address in this piece of legislation we would all hope. New Zealand First is supporting it. Hopefully it will be another step and I hope it is the final step in the right direction to delivering justice to those people who own homes that were caught up in this. Many were driven to bankruptcy. Many have died and been buried over the years. There are many who never recovered their financial position. I can name right now people living in Auckland who are still to have their apartments repaired. These are bodies corporate that are still locked into the bureaucracy of trying to negotiate and fund the repair of those apartment blocks in Auckland right now. I know so because we have a family member stuck in one of them. And that is tragic.I would just ask at this point in time when we are all going back over the history and accepting that things were not done right that going forward we apply the same sort of thought the same degree of openness to ideas from across the House when looking at legislation and just for one moment consider that maybe we as the Government or you as the Government do not have all the answers and that maybe just sometimes there are people on the other side of the House who have something valuable to contribute and who do have some experience that is worth noting and listening to. I would like to think it would happen.There is one question that popped up when I listened to the Minister speaking. He quite rightly said that these changes specifically do not include landlords who are running commercial operations. This is specifically about homeowners—and rightly so we believe. But it does beg the question under the Warm Up New Zealand: Healthy Homes initiative where the Government is giving out funding to people to assist them to have their homes insulated why are we funding landlords to do that? Why do we have a system that allows a landlord to take the community services card of their tenant and book up and get the subsidy in the name of the tenant for the home that they are renting out? Why are we doing that—especially when it debars that tenant if they move on and rent another house or if they move on and buy a house from accessing that subsidy for themselves later on?I know of landlords in the Wairarapa who are real estate agents who have their own portfolio off to one side who regularly buy properties and access the healthy homes funding for home insulation from the Government to insulate their property portfolio. They pick up the capital gain on that. We have people in Carterton who have questioned that and they have just simply been told that that is the way it is.I just ask the Government to reflect on that. If the leaky homes legislation we are passing right now is not to be to the advantage of property investors why are we assisting property investors with subsidies for insulating their property portfolios?Hon Dr Nick Smith: Because the benefit is to the tenant.RON MARK: It would be good to hear that on the record Minister. We know and we accept that if a landlord insulates a home it helps a family in a low socio-economic bracket that needs that home insulated. But if it then stops that family from accessing that subsidy later on down the line when they have saved enough money to buy their own house the question is: is that fair? Is that the way it was intended? I do not think it would be and actually I do not think the Government would realise that that was probably the implication.New Zealand First will be supporting the legislation. We are happy to have worked on the Local Government and Environment Committee towards its conclusion. Thank you very much.ADRIAN RURAWHE (Labour—Te Tai Hauāuru): I am happy to take a call in the Committee stage of this amendment bill. I have just a few comments. When I spoke in the first reading I mentioned the families that are sitting at home listening and wanting resolutions. So it is good that we have a bill before the House thatwill hopefully resolve these real issues. I would like to thank the Osborne family for having the tenacity to take it to a place to force the Government to provide this amendment bill. I think that removing the doubt around the validity of claims in new section 164 under clause 7 of this amendment bill can be almost directly attributed to the Osborne family.One of the other things that I spoke about was the number of bills including this one that have come before the House to tidy somethingup. I have been a member of this Parliament for only 15 months and I think this might be about the sixth or seventh piece of legislation that I have spoken on that has needed to be tidied up. I certainly do hope that in the future there is legislation that comes to the House that does not need to be fixed up and that we get it right first up.I cannot talk about being inundated with constituent inquiries in my electorate of Te Tai Hauāuru. I am sure there are some within the general electorates but considering the low homeownership rates of my constituents I am hardly likely to get any inquiries about it. But I do feel for those people who are affected by leaky homes. I think they can draw some comfort from the clauses in Part 2 and now that these clauses in Part 2 have been put in place they can get some comfort that they have applied for adjudication and they can go through that process.Also for those who have made claims these claims are now eligiblethrough this legislation. I think the Minister should be commended. I thank him for his earlier clarification of the questions that we put to him on this side of the Chamber. Widening the definition of a “qualifying claimant” is important as well as we have heard from other members from this side of the Chamber. It did strike me as to why we do not hear of the same kinds of stories that must be going to the members opposite. Although it is important for the Opposition to be putting forward its views on these clauses I think we should also ask the Government to put its position forward as well—from members of the National Government who surely must be getting inquiries from their constituents.As I say I feel for those families who are waiting patiently for this legislation to pass and I will not take up any more of the Committee’s time except to say that we will support this bill.The question was put that the amendments set out on Supplementary Order Paper 125 in the name of the Hon Dr Nick Smith to Part 2 be agreed to.Amendments agreed to.Part 2 as amended agreed to.Clauses 1 to 3PHIL TWYFORD (Labour—Te Atatū):I guess the first thing to say about the first clauses of the bill is that the most notable thing is that the commencement clause is retrospective and that the Act is deemed to have come into force on the day it was introduced—that is 23 February 2015. The observation that you have to make at this point is that this bill is a fix of a fix and it is a desperate kind of last-minute scramble to fix a couple of problems with this bill in the 4 months before the Act is set to expire. We have said we are supporting it. We have said that we agree with the intent of the bill—the original Act and this bill—but retrospective commencement is never a good thing. It always raises questions I think about the quality of the process. I think also that the fact it is happening so late in the piece before the expiry of the Weathertight Homes Resolution Services Act begs the question of why the Government has taken so long to progress this and why it is really being tidied up at the last minute.Over the last hour or so we have had some reflections on both sides of the Chamber on this issue which has been really one of the dominating issues of political life in this country over the last 20 years. The Hon Clayton Cosgrove who has taken part in this debate as the bill has gone through the House has reminded the House on a number of occasions that the Hon Dr Nick Smith sat on these Opposition benches day after day and screamed at the Government of the day: “Why don’t you just write a cheque?”. But he learnt as his colleagues did in Governmentas well that the issue is not quite as simple as that. Although the Hon Maurice Williamson as the then building and construction Minister proudly trumpeted on the front pages of the newspapers that this billion-dollar package was going to solve the leaky homes problem—great largesse—what have we seen? Actually it has been a veritable trickle of homeowners who have come forward to avail themselves of the benefits of the funding assistance package for weathertight homes.I do not mean to trivialise that. It has provided those homeowners with a useful alternative to litigation adjudication and the expense and the uncertainty of going down that track. It has provided them with an alternative.As of a year ago the official figures were that only 87 leaky homes had been fixed. The ministry said at the time that it had approved repair plans for another 364 homes and I think there were 3000 in the pipeline that had been approved as having qualified for assistance. But it is a far cry from Maurice Williamson’s billion-dollar package. I am not aware of the dollar figure that has been spent under the funding assistance package. Perhaps the Minister for Building and Housing could just say because I am sure he has got that number at his fingertips but I do not think it is very much. The lion’s share of the appropriation for this funding assistance package has long since been siphoned off for other activities.In this debate I think there has been some reflection on the follies of deregulation and there has been something of a cross-party consensus in recent years that we need to continue to fine-tune and develop the Building Act and try to find the right balance between protecting consumers and trying to raise the quality standards in the building and construction industry without imposing undue and unnecessary compliance burdens on the industry. That is an ongoing process but it was disturbing to hear the Hon Paula Bennett—then Minister of Local Government—come to this House last year and declare that New Zealand had moved on and was over the leaky homes. Apparently according to Paula Bennett we have moved on and we are over the leaky homes crisis. Nothing could be further from the truth. And as Ron Mark was saying the whole problem of leaky homes is actually a much bigger problem of shoddy building poor building and systemic breakdown and deregulation is part of that.I trust the Minister is aware of what Auckland Council has described as an epidemic of shoddy building in Auckland at the moment and an industry that is very poorly equipped and that lacks the capability to scale up and meet the demand pressures in Auckland—as that Minister well knows because he wakes up in the middle of the night in a cold sweat worrying about the lack of actual houses. I do not mean consents I do not mean subdivisions and I do not mean consented sections; I mean actual houses that people can live in. That Minister knows more painfully than probably anybody in this Committee how ill-equipped the industry is in order to meet the furious demand pressures that we see in Auckland at the moment.One of the consequences of the inability of the industry to scale up is the shoddy building that Auckland Council says is responsible for something like 30 to 40 percent of building consents being failed at the moment. It is because the industry lacks skilled personnel and there is so much work on that you have got people who are under-qualified and who are not properly supervised to do the work that they are doing.We are also seeing as I think Ron Mark was alluding to a lot of multi-title buildings that were built in the 1990s—blocks of apartments and flats—that are now coming horribly unstuck and a Unit Titles Act that is simply not fit for purpose that simply cannot do the job and that is exposing residents in those blocks of apartments to financial catastrophe because they are being hit with huge repair bills. Particularly what we are seeing is older New Zealanders who sold up and invested whatever asset they had into a flat or an apartment being hit with massive repair bills. They are part of bodies corporate that have not had adequate long-term repair plans or the repair plans have not been funded properly. They have got poor Government standards and people are being driven to bankruptcy and it is a hideous situation.I would hope in the spirit of the funding assistance package that the Minister and his Government would consider providing on a case by case basis appropriate assistance to people who find themselves through no fault of their own in situations that are an exact parallel to the leaky homes problem that this legislation is seeking to correct—the injustice that it is seeking to fix I would hope that the Minister would exercise a kind of case by case and compassionate approach to assisting people who find themselves in those situations. It is not just leaky homes; we have seen large numbers of apartment buildings that have been built in breach of fire standards and frankly I am amazed given the data that is coming out on this issue at the moment that there has not been a catastrophe and loss of human life because some of these buildings were built with such appalling breaches of the fire standards.So Paula Bennett is wrong—we have not moved on from the leaky homes catastrophe. Any move to self-certification of building work or in fact contracting out and privatising the consenting process as has been raised by the Minister in the past would be absolutely mad and would demonstrate that this Minister has not learnt the lessons of history. It is not just the Earthquake Commission repairs that have thrown up so many cases of shoddy building but it is happening in Auckland right now and the lesson that we have to draw from this is that we have to be ever-vigilant and we have got to ensure that there are decent regulations and protections. If the Minister hints that he is consideringan insurance-backed proposal—and I think this is what he was suggesting—then we would welcome that.Dr MEGAN WOODS (Labour—Wigram): I too would like to take a call on clauses 1 to 3 and in particular start my contribution this evening by considering the title of this bill the Weathertight Homes Resolution Services Amendment Bill. I would like to acknowledge that we are putting in place a scheme that offers an alternative to litigation and allows homeowners who have been caught in this leaky homes nightmare a way in which they can get just and fair resolution for repairing their homes without needing the redress of the courts. I think that that is something that is positive. I think that we have traversed throughout this evening the long history of how we got here. My colleague Phil Twyford in the contribution that he has just concluded has also talked about how the Government members and the Minister who was previously in the chair Nick Smith had in Opposition quite a different approach to how it is that this may be fixed.I think that we have a very apt title for this legislation but I think quite clearly there are other names that we could have given this bill. One of them would have been the “Why Regulation Matters Bill”. What we have is a Government that often derides regulation. It talks instead about the need to be pragmatic to just get on and do things. But regulation does matter and nowhere can we see that more than in the leaky homes saga and what happened when we did deregulate an industry and let it go on and do things. Phil Twyford has talked about the deficit of standards that is occurring in the Auckland housing market. I in earlier contributions have talked about the fact that this Government has put in place at this very moment a system in Christchurch where we allow builders to certify their own work. We do not have an independent certification of some of the repairs that are going on in the Canterbury Home Repair Programme. We need to learn those lessons.And it is not just in the case of housing; it is in the case of so many things. This is a Government that is hell-bent on deregulating everything from employment to education and thinks that it is the answer. It dresses it up in all kinds of fancy words and says that it is making things easier but actually what it is doing is cutting the very kinds of protections in a way that has led to this leaky homes saga. So I think the “Why Regulation Matters Bill” name is a very very good alternative.I would also like to talk about the commencement of this bill and when this comes into force and to acknowledge that we are yet again doing validating legislation. We are needing to put into legislation things to fix up what has already happened and that is not the purpose of this House. I do not think it is why any of us came in here. We came into this House to make a difference. We may differ on how it is we think we can make a difference to the future but spending inordinate amounts of time validating what has already happened seems a bit like being shut in a bad episode of a bad sitcom—we are always having to deal with the past. We are better than that. Our legislation should be future-focused. It should be about what we can do to make New Zealand better not about fixing up disasters of deregulation gone bad in the past—and that is what we are here spending the time of this Committee doing tonight.Labour supports this legislation but we do not want to be in this situation. And we urge members and Ministers opposite to learn the lessons of how we got here why it is we are here and what happens when we do not put in place adequate protections for people and do not use the law to actually protect people and in this case their property. It is not just a nuisance; it is there for a reason.Su’a WILLIAM SIO (Labour—Māngere): I asked the Minister in the chair Nick Smith earlier whether he would clarify to this Committee whether it was him or Minister Paula Bennett who was reported in the media as advocating for a freeing up of the industry again. I think the terminology in one of the reports was that the industry would self-regulate—that the industry would certify its own work. I said to the Minister then and I say it again is that not the reason why we are in this problem? The Minister answered and said that it was Labour that put a bill through here in 1989 but I want to refer the Minister to the words of the Hon Maurice Williamson who in this House claimed responsibility and said that it was him and his Government that passed legislation deregulating the industry which has subsequently led to the situation that we now have.I want to say that I take on board what the Hon David Cunliffe said. Look this is not about blaming. Let us just take responsibility for where we are. But I did ask the question earlier whether it was his intent or the intent of Minister Paula Bennett to again lead this industry to a situation of more deregulation. I would caution the Minister and say look is not that why we are in this situation? We have got this Weathertight Homes Resolution Services Amendment Bill which is a mouthful and most people will not know what this is about. It should have been the “Leaky Homes Solution Bill” because that is what we are trying to identify here: a solution to help those people whose homes were leaky as a result of shoddy building and of the use of untreated timber during the period of the 1990s. If my memory serves me right that was again during the Jim Bolger period. I want to say that I do not understand why it has taken so long—why it has taken this long from when the bill was first introduced to this House. I am not sure whether the starting date is going to serve the interests of those people whose issues we are trying to deal with here tonight.The greater issue here is that most people as a result of the leaky homes syndrome do not feel confident about the building industry. In fact I think most people are asking their neighbours whether they know a builder whom they can trust and have confidence in before they embark on building work. This is what has happened as a result of a Government that was so set on a freer industry or deregulating the industry that it did not care what took place. And when it did not care what took place it actually was saying it did not care what happened to ordinary Kiwis and now we are having to foot the bill for the result of that. This is another example of how this Government attempts to pride itself as the master of our economy and promote the fact that deregulation is good.Once upon a time this country was hailed worldwide for having a mixed economy where business could operate within the regulations set by Government. Time and time again we have had politicians or members of Government step forward and say that freeing up industry was good. But here you have an example where greater freedom for an industry actually meant that it was looking at cutting costs without any concern about the subsequent consequences of shoddy work and the use of untreated timber. That is why we are here.We are told that there is a small number of people who are going to have their claims resolved through this particular bill—about 70 homes I understand. But Grimshaw and Co. identified that there were 42000 homes affected as a result of the leaky home syndrome and it also said that that is about 80000 New Zealanders. I do not know whether this bill addresses these 42000 homes affected but I am hopeful that if we are genuinely concerned and want to make sure that we resolve the issues raised by these people we will then have this Government consider seriously the consequences of its actions before it embarks on another deregulation exercise that it believes is good for the economy when all we have seen and all that these 80000 New Zealanders have experienced is that deregulation has not in fact helped them out. Thank you for that opportunity.Hon DAVID CUNLIFFE (Labour—New Lynn): The clock allows us a couple of minutes. May I make a concluding call in this title and commencement part of the debate. I think this has been a good summary of the issues. I think there is a consensus around the provisions in the bill that broaden the category of cases and elongate the process by which they can still qualify for assistance.There has been extensive discussion about the lessons of history around this and they are valid and the responsibility is shared by all in this House even though different things have occurred at different times. But I do want to pick up on a comment that my colleague Phil Twyford made—that some of those lessons we have to highlight. As my colleague Megan Woods has said Minister Bennett commented that we had moved on and we certainly want to demur from that. As Phil Twyford said the current Minister for Building and Housing declared when he was in Opposition “Just write a cheque and give them the money.” and we know that that does not work.Hon Dr Nick Smith: Never said that.Hon DAVID CUNLIFFE: Well words to that effect. That does not work. This is a much knottier problem. So we want to make sure that justice is done. Sadly the number of homeowners who have been helped through this process is low relative to the total number of—The CHAIRPERSON (Hon Chester Borrows): I am sorry to interrupt the honourable member but it is time for me to report progress.Progress to be reported presently.House resumed.The Chairperson reported the Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill with amendment progress on the Weathertight Homes Resolution Services Amendment Bill and no progress on the Radiation Safety Bill.Report adopted.