Twyford Phil: Building Amendment Bill (No 4) — First Reading 
Text is incorporated into the Bound Volume 
Twyford Phil: Building Amendment Bill (No 4) — First Reading 
[Sitting date: 01 May 2012. Volume:679;Page:1823. Text is incorporated into the Bound Volume.] 
PHIL TWYFORD (Labour—Te Atatu) 
: 
 Labour supports the Building Amendment Bill (No 4) going to the select committee. It is for the folks at home the latest instalment in a long-running effort to improve the prospect and the performance of the building and construction industry. Ground zero for this story is the leaky homes catastrophe which began in the early 1990s and 14 years later some tens of thousands of New Zealanders had had their lives affected and some $22 billion worth of homes had been constructed with weathertightness problems. It was a disaster born of deregulation poor regulation contracting out building inspections inadequate product certification—which allowed the use of untreated timber to be used in New Zealand homes—and the abolition of apprenticeships among other causes.  
Thousands and thousands of New Zealanders paid the price for what was a terrible system failure in our building and construction industry. Since 2004 when the fifth Labour Government passed the new Building Act very few leaky homes have been built the experts tell us. Since then there has been something of a cross-party consensus to further fine-tune the regulation of the building and construction industry to improve the quality and durability of New Zealand homes to build right first time to protect the consumer and to get builders architects designers and other building professionals to be accountable for their work.  
The 2004 Building Act reinstalled proper regulation and since then there has been a lot of work to try to fine-tune building regulation to lighten the load of compliance while continually trying to improve quality and accountability. I pay tribute to the work of former Ministers Clayton Cosgrove and Shane Jones and also to the work of the current Minister for Building and Construction Maurice Williamson who has continued with this work.  
As I said there have been we are advised very few leaky homes constructed since 2004 but a number of reviews in the intervening period have underlined heavy costs which are ultimately borne by New Zealand families who are paying the bill for new homes that are being built with complexity weighing down the whole process and long delays in the issuing of building consents.  
The main thing on the menu with this bill is a new set of requirements for contracts for residential building. It requires pre-contract information that says a builder must not enter into a residential building contract unless that person has first provided to the client a whole lot of prescribed information. What else does it do? It provides that a residential building contract over a certain price must be set out according to a certain format and methodology and contain all sorts of particular information.  
The other key bit of it is around implied warranties. The bill sets out in some detail a whole lot of implied warranties that will follow as a result of these contracts being put into place—for example that the building work will be carried out in a proper and competent manner that all materials to be supplied for use in the building work will be suitable for the purpose that the building work will be carried out in accordance with all the laws and legal requirements and so on. There is nothing wrong with this idea. I do not think anybody on this side of the House will dispute the basic intention of this bill which is to bring clarity and some accountability to residential building contracts.  
There are a number of other bits and bobs in the bill. One of them that is probably worth mentioning in this debate is the question of dams. Lord knows how this particular issue got shoehorned into this particular bill but it is here nevertheless and what the bill does is try to focus the requirement for regional councils and their monitoring of dams. It changes the threshold so that I think 40 percent fewer dams will be required to be classified for a certain level of monitoring. That will save something like $1.1 million in compliance costs for dam owners. Let us hope that the officials have got the numbers right. Let us hope that this example of risk-based consenting and risk-based management is appropriate.  
The main thing I want to say is that even though there is a high level of cross-party consensus for the ongoing process of the Building Act review—and we will be voting to send this bill to a select committee—I do want to note that in the face of the huge challenges that are before the building and construction industry this bill like its predecessor the Building Amendment Bill (No 3) is a masterpiece of incrementalism. To say that it is a modest effort is an understatement.  
The challenges facing the building and construction industry are massive. It suffers year in year out from a chronic skills deficit that has not been helped by the under-investment by this Government in apprenticeships in the industry. The industry is buffeted by the boom-and-bust cycle possibly more than any other industry in our economy. Every time the cycle goes down skilled workers head across the Tasman and we have seen that time and time again.  
In our country’s largest city the building and construction industry is probably the most glaring example of market failure that we see in the economy today. In Auckland every year we are building more than 10000 houses fewer than we should be just to keep up with population growth. So the market is failing utterly to meet demand in Auckland and the consequences are appalling. Year on year that deficit compounds and the scarcity drives up prices and as a result we have some of the most unaffordable housing in the Western World.  
The building and construction industry is plagued by low productivity. We rank near the bottom of the OECD for productivity of our building and construction industry and as a result we have very expensive homes—unaffordable homes. And finally we are killing people in this country on building sites at more than twice the rate that people are dying at in workplace accidents on building sites in Australia. So something is terribly wrong in the building and construction industry and in the face of those challenges what we see in this bill and I believe in the bill that came before it the No. 3 bill is tinkering by this Government.  
 Instead of tackling the real issue about accountability by bringing in proportional liability what does this Government do? It legislates the definition of roles among contractors clients designers builders and architects. Instead of protecting consumers through a mandatory home warranty scheme backed by insurance what does this Government do? It writes into a bill screeds and screeds of so-called implied warranties.  
Instead of trying to smooth out the boom-and-bust cycle the Government makes no changes to its procurement policies and there is no programme of building State houses. But what does it do? It basically gives up in the face of this challenge and brings in overseas workers. This bill is tinkering in the face of massive challenges faced by the industry but we will support it going to the select committee and see what comes of it.