Smith Nick: Weathertight Homes Resolution Services Amendment Bill — In CommitteeText is incorporated into the Bound VolumeSmith Nick: Weathertight Homes Resolution Services Amendment Bill — In Committee[Sitting date: 10 February 2016. Volume:711;Page:8903. Text is incorporated into the Bound Volume.]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.