Twyford Phil: Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill — Second Reading 
Twyford Phil: Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill — Second Reading 
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PHIL TWYFORD (Labour) 
: 
 In spite of the strenuous efforts of the Hon Maurice Williamson to shrug off the responsibility of the National Government in the 1990s for the deregulation that led to systemic failure we on the Opposition benches support this bill because we acknowledge that the Government is attempting to tackle the problem of leaky homes. But in expressing support at the second reading we feel it is necessary to be very clear about both the limits of this package and a number of concerns we have about unresolved issues relating to this bill. 
We have three concerns. Firstly many many affected homeowners will be excluded from this package and they will not benefit from the provisions of this bill. Secondly there are many unresolved questions about the way the bill’s provisions will be implemented. Thirdly the Government’s failure to address the industry’s chronic skills deficit and looming labour shortages threatens to derail the very intent and potential benefits of this initiative. 
At the Local Government and Environment Committee we heard from many people who came to us saying they would not be able to benefit from the package and I will comment on some of those. It is clear that many affected owners of leaky homes will make the judgment that they can get more through court action. It is probably true that it will be owners with claims of relatively low value where the cost of the legal action is proportionately higher who may be first in line to take advantage of this package. Many people who now live in or own homes that are not weathertight will not know that fact within the 5-year period and the number of those people will also be significant. There will be even more people whose homes are more than 10 years old and they will be excluded by the 10-year time frame. Perhaps even more worthy of consideration are the people who simply will not be able to afford the 50 percent that this bill will require them to stump up. They are the people who are most deserving of support yet they are excluded from that support. They are the most vulnerable and the most disadvantaged by this problem yet because of the 50 percent rule they will potentially be excluded. 
Another group who will be excluded are the owners of dwellings in multi-dwelling complexes—apartment complexes and so on. These dwellings amount to about 25 percent of the total number of dwellings affected by the weathertightness problem. About 5500 dwellings are affected by the leaky homes problem and their owners will not be able in all likelihood to get any benefit from this bill. There are a number of reasons for that. The first is that the banks simply will not lend money to bodies corporate because they are unable to secure collectively owned property under a mortgage. Under the Unit Titles Act a body corporate would be required to get 75 percent of owners committed to an action in order to receive financial assistance under this package. 
Hon Maurice Williamson 
: It was 100. 
PHIL TWYFORD 
: I know it was 100 percent. Many body corporate owners told us at the Local Government and Environment Committee hearings that they will simply be unable to get the agreement of 75 percent of owners. So right there we have 24 percent of the owners affected by this problem who will be effectively excluded from the benefits of this bill. I think that means that a relatively small number of people will be getting the benefits of this legislation. 
We have a number of concerns about this bill many of which we raised at the first reading that have not been adequately answered or addressed during the select committee hearings. The first and probably the most fundamental is that this bill indemnifies the Crown and effectively indemnifies the assessors from the Department of Building and Housing who will be the ones who go in to assess the cost of the repair job. The Department of Building and Housing officials themselves advised against this and that is quoted in the regulatory impact statement. If the assessors make mistakes the homeowners will have no come-back; they will have no redress against that. The Crown is indemnified. I did not hear any argument from officials during the select committee process that satisfied me there was a good reason why the Crown should not be required like all other parties in this process to stand by the quality of its work. That question remains unanswered. 
There are a number of pitfalls that homeowners could face. It is not uncommon for a leaky repair job to get under way and then for people to find out a third of the way or halfway through the job when the cladding comes off that the damage to the internals and to the structure of the house is actually much worse than previously thought. In that case—and we were reassured about this at the select committee—it will be possible for a kind of reassessment and a renegotiation of the agreed repair cost. That is fine but what will that mean for homeowners who have already mortgaged themselves up to the eyeballs to meet the initial 50 percent cost? What happens then if they simply cannot take on any more debt? Will they be left to default on the contract? I think a lot more clarity is needed for situations when the repair jobs go pear-shaped. 
Under this bill as we have heard Department of Building and Housing assessors are indemnified but architects and builders are not. They are much more exposed than the Crown and if things go wrong in the repair jobs then it is the architects designers and builders who will get it in the neck. There are real concerns that because of the increased liability—the increased vulnerability—they face it is quite possible that architects and designers particularly in the kind of labour market we are going into will not be lining up to do this remedial work. 
The other thing we will also say at this point is that the bill does not differentiate between genuine homeowners who have been affected by the situation and people who are speculating. We raised that issue at the first reading and I do not think there was a satisfactory answer from the Minister. It will be quite possible for property speculators to buy up affected properties at bargain-basement prices—thereby getting the full benefit of this financial assistance package at the expense of the taxpayer—and then to flick on those properties for a significant profit. It would have been quite simple to solve that problem in the drafting. 
The third issue we have is less about the detail of this bill and more about the fact that this Government’s failure of leadership to address the entrenched problems in the building and construction industry could see a perfect storm developing in the coming months which will completely overwhelm the intent of this bill to make a meaningful contribution to those homeowners affected by the weathertight homes problem. The building industry is in crisis building consents are running at less than 50 percent of their peak and we face a severely depleted workforce. Until today the Government had done nothing; in fact it had done worse: it had slashed skills training in the industry and we have been seeing large numbers of skilled tradespeople heading across the Tasman. Thousands of building apprentices have been laid off. We are looking at an acute shortage of skilled labour in the building and construction industry. There are some estimates that when the leaky home repairs and the Christchurch rebuilding get under way we will have something like 25 percent of the skilled workforce that this country needs. If we have an acute labour shortage and a loosening of building regulations as we are seeing with the amendments to the Building Act this bill will be completely overwhelmed and will not achieve its objectives.