Huo Raymond: Building (Earthquake-prone Buildings) Amendment Bill — First ReadingText is incorporated into the Bound VolumeHuo Raymond: Building (Earthquake-prone Buildings) Amendment Bill — First Reading[Sitting date: 05 March 2014. Volume:696;Page:16352. Text is incorporated into the Bound Volume.]RAYMOND HUO (Labour): It is no problem for me to take this call to support this Building (Earthquake-prone Buildings) Amendment Bill. I do agree with what the Minister for Building and Construction and earlier speakers said in their earlier contributions in that this bill is seeking to strike a balance between public safety and the costs to be incurred by those individual or corporate owners. The bill is designed to improve our legislative system for managing earthquake-prone buildings but there are several issues that we must address in order to enact a piece of legislation that will have the scope and flexibility to deal with the diversity of this type of building stock and the problems that presents. Before I start I would like to thank the submitters who raised valid points during the review of the earthquake-prone building policy the Canterbury Earthquakes Royal Commission and the stakeholders professionals and experts whom I have spoken to particularly the structural engineer Mr John Scarry.The first issue is what level of strengthening is required. Under section 122 of the primary legislation namely the Building Act 2004 a building with a seismic performance strength that is less than 33 percent of the design standards is defined as an earthquake-prone building. It is also known as the so-called one-third rule. The Christchurch City Council had earlier expressed a view in its submissions on other bills that the test should stay the same for the next 5 years while the Canterbury Earthquake Recovery Act 2011 is in force and the Canterbury Earthquake Recovery Authority exercises powers under that Act. In the Canterbury region the seismic loading factor changed in May 2011 and more buildings will now be classed as earthquake-prone without any change to the 33 percent test. For example a building that had a strength of 34 percent in 2009 that is undamaged and in exactly the same condition in 2012 as it was in 2009 is estimated to have a strength of only 25 percent of the 2012 code requirements.This bill requires that once a building is classed as earthquake-prone it needs to be strengthened to be marginally above 34 percent of the new building standard in order to be no longer earthquake-prone. But the performance of unreinforced masonry buildings in the Christchurch earthquakes shows that even buildings strengthened to 50 percent of the new building standard are likely to suffer heavy or major damage or be destroyed particularly in earthquakes with a long duration of intense shaking. Therefore what is expected to be gained in a major earthquake if the level of strengthening required is only just above 34 percent?The Building Act 2004 provides a more realistic treatment of earthquake-prone buildings. The cut-off of one-third of the new building standard was used then as a means of identifying the most at-risk buildings and it was then up to the local authorities to determine what level of strengthening was to be required. Wellington City Council’s current policy on earthquake-prone buildings for instance states that the council wants strengthening to at least 67 percent of the new building standard and that any strengthening less than that will not prevent the council demanding further strengthening in future should the council get the power to do so.Having said that I note that we now have two identical but different terms to define the buildings in question. One term is “earthquake-prone buildings” and the other is “at-risk buildings”. We can learn a huge lesson from the 4 September 2010 earthquakebecause it is still a fact that over 70 percent of the fatalities from 22 February 2011 earthquake were caused not by the collapse of earthquake-prone buildings but by the collapse of two earthquake-risk buildings the CTV Building and the Pyne Gould building which were later rated to have been at 40 percent and 50 percent of the new building standard respectively. The very large and modern Hotel Grand Chancellor was only seconds away from collapse. So from these examples we can see that this bill does nothing to require earthquake-risk buildings—that is those rated at between 34 percent and 67 percent of the new building standard but containing critical vulnerabilities—to be strengthened at all. Therefore any claims that this bill is about life safety in extreme seismic events is to some extent misguided.The other side of the coin is the social economic and environmental impact this bill may have on the building owners. A survey by Wellington City Council last year indicated that around half of earthquake-prone building owners had difficulty getting insurance and that many faced premium increases of more than 50 percent. We do not want to see businesses go belly up nor do we want to see community character and heritage interests overlooked. Submitters at the policy review stage were also eager to communicate that a lack of insurance impacts on the building owners’ ability to obtain a loan in order to pay for the strengthening work to be done and that this process sadly can be a costly chicken and egg situation. Submitters such as the Heritage NZ trust board noted that although many heritage buildings are privately owned these places are often of value to society as a whole yet private owners are shouldering these costs single-handedly. I urge the affected parties and stakeholders to make their submissions to the Local Government and Environment Committee and have their voices and concerns heard.One idea that has been floated among affected and concerned parties is about tax concessions and subsidies. With regard to the Government scheme to contribute 25 percent to leaky building repairs it was widely stated that this could have cost the Government $1 billion if there had been full take up. But according to some experts—and this point has been addressed earlier by New Zealand First MP Mr Andrew Williams—by the time GST direct PAYE and company profit tax were considered the actual cost to the Government was minimal. Whether or not it is a good idea for us to deliberate with regard to tax concessions and subsidies I think the affected and concerned parties should seriously consider this option and make their views known to the committee because as I said this is kind of a chicken and egg situation and many private owners or even corporate owners in this situation who may have similar problems as well have issues with insurance companies and with their banks. So to conclude we have no problem in supporting this bill at this stage but we urge the affected and concerned parties to make submissions to the committee and to make their voices heard. Thank you.