Tisch Lindsay: Building Bill — Second Reading 
Tisch Lindsay: Building Bill — Second Reading 
[Volume:619;Page:14533] 
LINDSAY TISCH (National—Piako) 
: 
 The Building Bill will introduce a very prescriptive regulatory regime. When we look at the size of this bill we can see that it is an overkill as a consequence of the issue of weathertightness in leaky buildings. The bill contains 358 pages. We could have had a tidying-up of the Building Act with a bit of twinking here and some changes there because there were some points in that legislation that needed to be corrected but this bill is an overkill. It will add significant costs to all construction work and further compliance costs for residential buildings in particular. Those areas will be hit the most. It will potentially affect economic growth due to significant increases in building application costs for applicants and in compliance costs for both applicants and local authorities in respect of accreditation. We will see widespread bypassing of the new do-it-yourself regime which goes against the Kiwi ethic and spirit of being able to get out there and do something for oneself. 
The construction industry in New Zealand is an $8 billion industry. In terms of economic activity the industry is huge throughout the whole country. In addition to housing it encompasses apartment buildings high-rise office blocks shopping malls hospitals factories wharves bridges warehouses mills and agricultural buildings. It is an enormously complex industry spanning the entire economy and society as a whole. The impacts of this bill will be adverse on many of those sectors. In fact the economic impact of this bill will lead to significant increases in labour costs. There is already a short supply of skilled trades people—especially bricklayers—and because there has been a short supply of those people they have been able to name their price. We have seen huge price increases in that particular trade. If we look at the comparative building costs between here and Australia we see that the cost of building an executive home in Auckland is $2300 per square metre but in Adelaide the cost is $1170 per square metre. There are huge differences in the costs of construction between Australia and Auckland. To construct a module home of 120 square metres on a flat section that would normally take say 4 months to build—that is the minimum construction time—under this legislation will require supervision of 5 hours per week with a total of 85 hours of construction time. The estimated cost of that supervision just to meet the new requirements of this bill will be between $6500 and $10 000. 
Will this legislation improve and enhance customer safety and satisfaction? Will customers be protected? In my view the answer is no. The bill will lead to delays fuel inflation and most probably to illegal construction work as people look to bypass this very heavy-handed regulatory regime. A very considerable shortage of skilled personnel will impact on the number of licensed building practitioners available from 1 July 2009 when that part of the bill becomes law. That will be noticeable in rural areas and will have an adverse economic and social effect on owner-builders and farming communities. The traditional Kiwi attitude towards building one’s own home farm building or backyard shed is compromised by the very prescriptive nature of this bill. Clause 173 states that licensed building practitioners must carry out or supervise building work. That is a huge change. In the past work has had to be inspected but this bill talks about “carry out” or “supervise” not inspect. It states that a licensed building inspector must carry out or supervise work. What does “supervise” mean? We could try this for a definition: the inspector has seen it with his or her own eyes. This is where the bill becomes so prescriptive that everything that happens will have to require a licensed building practitioner to supervise—not inspect but supervise—construction. 
What will happen to buildings that are prefabricated—that is barns bridges glasshouses or hothouses? They will require building consents and building work will need to be carried out or supervised by a licensed building practitioner. The firms that specialise in prefabricated buildings can expect to see huge costs. My view is that additional costs of 10 to 15 percent could occur in those particular areas and we will probably also see of course that the viability of those businesses may well become suspect. We can look at the other costs that we will see with buildings and with houses in particular—because I mentioned that it would be small houses that would be most affected. A cost-benefit analysis was done and the report suggested that the cost of building a 150 square-metre home would increase by 2.9 percent. It is my view that that figure is well out of line. It is too low and it should probably be in the vicinity of 12 to 15 percent. These are the things that will have to be taken into account if one is to have a new home built. 
Any person assuming liability as a principal licensed building practitioner for the overall supervision of building works will need to have wide knowledge and competencies as well as substantial professional indemnity insurance if he or she is able to get it. The labour component of a typical dwelling is approximately 35 to 40 percent. The labour component will bear the brunt of the increases as it responds more readily to supply and demand. Industry registration will have an impact on the immediate availability of skilled trades people because many will simply not wish to formally upskill in order to meet the requirements to become licensed and will leave the industry. The training industry does not have the resources to meet the expected demand from those who may wish to upskill in order to meet the new registration requirements. Consumers will demand the employment of those who immediately meet the registration requirements placing undue demand and workload pressures on too few trades people unless the licensing registration process is to be stepped. 
We have other major concerns that I want to look at. The first relates to natural hazards as found in clause 159(3). In that particular clause a natural hazard has been defined as erosion falling debris slippage and a number of other matters that I will not go into. That is how a “natural hazard” is referred to in clause 159. In the Building Act subsidence is included but it is excluded in this bill. We believe that subsidence should be included. It is a natural hazard but under this bill local authorities will be unable to refuse to issue consents on the grounds that the land is subject to subsidence and more important will be unable to issue building consents with the protection of non-liability provisions such as those found in clause 344. 
The omission of subsidence from the definition potentially exposes ratepayers and developers to very high-risk damages to property. In my own electorate of Piako we have potential subsidence in housing areas around the Huntly area. In Waihi we have seen houses disappear down old gold shafts. In Taupo where there is geothermal activity there are also major concerns. At the present time councils are able to control construction on subsiding land. Many structures can accommodate subsidence provided they are designed and constructed properly. However under this bill councils will not have those controls available to them as subsidence is not included in the definition of a natural hazard. We believe that that is one of the major issues and is a huge compliance cost and risk that councils will face. 
The bill does nothing to give consumer protection and adds absolutely nothing. National is opposed to this bill.