Smith Nick: Building Amendment Bill — In Committee 
Smith Nick: Building Amendment Bill — In Committee 
[Volume:645;Page:14723] 
Hon Dr NICK SMITH (National—Nelson) 
: 
 This issue of New Zealand’s building regulations is impacting incredibly negatively on ordinary families builders and everybody who is associated with the building industry. From the day that the Building Act 2004 was passed the National Party has said it is a bureaucratic monster. 
Today in the House I tabled the 110 pages that the Rodney District Council requires for even the most minor and simple building consent that one could think of. I drew to the attention of the House that the Nelson City Council had put its building consent fees up by 50 percent last week the Tasman District Council had put its fees up by 35 percent and the Dunedin City Council had put its fees up by 67 percent. The reason that matters is that it is impacting directly on the price ordinary New Zealanders are trying to pay to get into a home. So when I looked through the Building Amendment Bill I was hoping and praying that I would see that the Government had seen sense had realised the problem it had created and was trying to redress it; what I saw was the Government making it worse. What we have in this bill are more costs being imposed on local authorities and citizens. 
Let us look at the first clause in this part clause 92. I will read it to the Committee. It states that for the purpose of determining the calculation of the levy on building work the principal Act must be read as if at all times the definition is what it is now. So the Government is saying that for the last 4 years it has been overcharging and it now wants to justify that and make it lawful. I say to the Government that that is not good enough. 
You see the Prime Minister got up in the House at the beginning of the year and said in her statement to Parliament that even she acknowledges that we have created a mad building bureaucracy that is costing too much. I was hoping a month later that if we were debating a Building Amendment Bill it might contain something about that bureaucracy. In fact this bill does nothing of the sort. So I say to members opposite that if they really believe their rhetoric about home affordability let us do something about it and let us pull back the mad bureaucracy that was created with the Building Act 2004. 
Where are the provisions in this bill to put some constraint on building consent levies? There are none at all. In fact since the Prime Minister spoke we have seen building consent fees go through the roof. The Reserve Bank this morning had to confirm the second-highest interest rates in the Western World—the second-highest interest rates. What did the Governor of the Reserve Bank identify as one of the biggest inflationary pressures? He identified the Government’s regulatory costs. And right here in the Building Act there are huge increases in the Government’s regulatory costs—in building consent fees. How can the Government tell the building industry—the building suppliers—not to put their fees up too much when in this part of this bill it is driving up building consent fees? The Government is saying that it is going to put up its fees by 50 percent but it will get tough on anybody else who puts costs up. Well the Government is setting an awful precedent by driving up its fees on homes. 
I draw the attention of the Committee to what the Commerce Committee found out about building consent fees adding $30000 of unnecessary bureaucratic costs to the price of a house. That was according to the Registered Master Builders Federation. What does the Government say about that? Jill Pettis is silent now; she does not seem to give a hoot about housing affordability when it comes to daft legislation like this which will drive up the costs for ordinary New Zealanders to own their own home. The rhetoric of members opposite is hollow. If they were serious about trying to address the issue of home affordability—an issue that is huge for New Zealanders—they would not be passing on these unnecessary additional costs for which the councils have only two choices: slap them on the rates bill or put them on to the cost of a building consent. I ask the Minister in the chair Darren Hughes what his view is on that. Does he want rates to go up or does he want to slap more costs on to what first-home buyers have to pay for a house? The Minister in the chair does not give a hoot about the cost for the people of Horowhenua. I know that their building consent fees have gone up by 38 percent I say to Mr Hughes. How can he stand up and say he defends home affordability when his own Government’s legislation is driving up the cost of getting a building consent by 38 percent? That is the increase in costs in Mr Hughes’ area and here he is backing legislation that will only drive those costs higher. 
The select committee heard council after council pleading with the Government to see what it is doing to the costs of building regulation and to look at the accreditation costs it is imposing on them. This bill will allow the bloated bureaucracy of the Department of Building and Housing to dump that cost on the councils and the councils will have no choice but to dump that cost on either rates or building consent fees. I simply say to the Government that the huge increase in rates and the huge increase in building consent fees are actually part of the problem of home affordability. Until Ministers like Mr Darren Hughes who has responsibility for this mess or other members of the Government start to recognise the problem they have created they are making an awful mess in the building industry. 
Let me tell members what is happening. Only yesterday I had people from a building company in my office saying that their builders were so frustrated with the Building Act that they are shooting through to Australia. It is not just because of the lack of income or because of this Government’s high tax policy; it is the bureaucratic laws like the stupid Building Act that are sending good tradespeople to Australia. That is a tragedy for New Zealand. 
National says that the Building Amendment Bill will not do. It does absolutely nothing to address the issues that are facing thousands and thousands of people who work in that industry. It is doing absolutely nothing to address the issue of home affordability. Since the Building Act 2004 came into being the result has been a huge increase in the cost of homes. Let me just share the figures from my own electorate. Between the 2001 census and the 2005 census we saw the biggest drop in homeownership levels in this country since the first census in 1893 asked the question about homeownership. I will say that again. We saw in that census data that over those 5 years there was the biggest drop in homeownership since the 1890s. This bill is part of the problem. What the Government has done with its bureaucratic Department of Building and Housing and its Building Act 2004 is add to the costs add to the bureaucracy and add to the delays in building a home in New Zealand. 
I just want members of the Government to take some responsibility for the mess they have created. They have accepted that it is a problem. The Prime Minister in her own statement to Parliament has said that the costs for building a house are unreasonable. That is what the Prime Minister has said. Well whose fault is it? It is the Government’s fault because it passed the 2004 Building Act. Darren Hughes the Minister in the chair was one of those who voted for the Building Act 2004. My question for him is this: is there anything any clause in Part 2 that the Minister can say will address the issue the Prime Minister identified in her statement to Parliament? The truth is there is not one iota. In fact it will make it worse. This bill is about driving up building costs making homes unaffordable and sending good members of the building industry across to Australia because they have had a gutsful of the bureaucracy. It will be a very different building amendment bill that National brings to this House to try to inject some common sense into this important industry.