Fenton Darien: Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill — Third Reading 
Fenton Darien: Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill — Third Reading 
[Volume:674;Page:19957] 
DARIEN FENTON (Labour) 
: 
 I come late to this debate but it is a pleasure to take a call in the third reading of the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. I will make a contribution in respect of the conclusion of the work that has been done by the Minister for Building and Construction and the Local Government and Environment Committee. Labour supports the bill and we support the Government’s efforts to find a resolution to what has been a very sorry tale and a long tale for a long long time. It is a systemic failure as the Minister said and a disaster in the building industry and in many people’s lives. 
The leaky home crisis which emerged in the 1990s is an ongoing construction and legal crisis in New Zealand in which many thousands of newly constructed houses and apartment buildings built in the 1990s and early 2000s suffered from severe weathertightness problems. The total cost of the leaky home crisis is estimated at around $11.5 billion with a reported estimate of between 22000 and 89000 homes affected and only a minority of around 3500 repaired to date. 
Behind those eye-watering statistics are many ruined lives. I believe the Minister when he says he has had to look people in the eye. He described the other day in the Committee stage the difficult meetings he had had to attend where people were crying. We have all met those people; we have all had them come into our offices. People have lost their homes and their livelihoods because of this crisis and sadly as we have expressed throughout the debate many will not be covered by this scheme. 
Buying or building a house is part of the Kiwi dream. I can only imagine the joy of moving into a new home that people have built from scratch or taken over soon turning into despair as the leaks appear the building rots the house starts to stink and damaging fungi begins to creep through the house and damage the family’s health. Imagine what it is like not knowing where to turn or whom to hold responsible especially when the builder or numerous contractors or subcontractors have disappeared when the council takes no responsibility or when liquidations occur. 
We have a slightly less political view of what happened—well I certainly do. I will not talk about who was responsible but there is no doubt that this crisis began in the early 1990s when the system of construction changed dramatically. It was the building code 1991 that re-regulated construction by setting performance criteria to be achieved rather than prescribing the precise manner in which buildings were to be constructed. For instance builders were told only that the structure must last 50 years the cladding must last 15 years and the walls and roofs must be impermeable to water. 
Other factors that led to leaky home problems involved many developers builders and architects who knowingly or carelessly constructed buildings with numerous faults and shortcuts. These changes coincided with our passion for new architectural design based on the Mediterranean-style flat roof. Perhaps too many people had been visiting Italy during that time; that design is traditionally for a dry climate. I can understand the attraction to those kinds of buildings; I find them very attractive and appealing as well although now I am very suspicious of them. They have low-angle mono-pitch roofs and no eaves. 
Numerous local authorities failed in their inspection duties and we have heard the stories of those failures. Local authorities now share significant financial responsibilities along with the builders who in many cases have simply disappeared or removed themselves from liability and the owners. Court cases generally assign around one-third of the financial responsibility to local authorities. 
In 1998 the New Zealand standard for timber treatment was changed—and I am not saying any politicians were involved I say to the Minister—to allow untreated timber to be used for wall framing. As that timber gets wet it starts to rot. Due to increased insulation being used over that time any moisture that came into contact with the timber was slower to evaporate. Additionally some house designers used the opportunities to cut back water-protecting features such as eaves. 
Another related problem was the collapse of the apprenticeship system and the operation of some unqualified builders. Cowboys entered the market—[ 
Interruption 
] I raise a point of order Mr Speaker. I am speaking to the bill. I am rehearsing the history of this issue as indeed the Minister did. 
Mr DEPUTY SPEAKER 
: The member is right in saying that but for 5 minutes the member has been talking about things other than those that are in the bill. A third reading debate is about what has been reported back from the Committee. With the remaining time I ask the member to concentrate on what is in the bill not on other peripheral things. The member is entitled to touch on them in response to what the Minister said but we would like to hear something about what is in the bill. This is a third reading debate. 
DARIEN FENTON 
: I do want to mention if I may one of the problems that I think will continue and that is the growth in contracting sub-contracting and sub-subcontracting which we still have in the market today. 
The total cost of leaky home problems has been estimated by PricewaterhouseCoopers at around $11.5 billion. We are talking about up to 89000 homes that need some repair. Those are huge eye-watering numbers. Only 23000 homes were recently estimated to be covered under the financial assistance package outlined in the bill. I know I have to talk about the bill but I think it is important that I put on the record that Labour did take action during the 2000s because other members have said that we did nothing. I think it is very important that we put on the record that we did take a lot of action including setting up the Weathertight Homes Resolution Service to assist leaky home victims. 
The history of this bill is that when the National Government came into power it offered to fix the problem. It offered a package in November 2009 with 69 percent of the costs being borne by the owners 26 percent by the councils and only 10 percent by the Government. That package would have also forced homeowners to sign away their rights to sue for more. The package was widely rejected. There was a lot of criticism of the package and several mayors noticed that by paying only 10 percent then receiving 12.5 percent back in GST the Government would make money from the crisis. So in February 2010 building experts said that the Government had seriously underestimated the true scale and cost of the problem and advice from officials stated that 89000 homes would fail the test at a cost of almost $23 million. At the time Maurice Williamson warned and has continued to warn that the issue was so ginormous that even a Government with Budget surpluses would struggle to compensate leaky home owners. 
On 17 May 2010 the Government came to an agreement with local authorities and others which forms the basis of this bill. Local authorities and the Government will contribute 25 percent of agreed repair costs and affected homeowners will fund the remaining 50 percent backed by a Government loan guarantee. The Government anticipates that its share of the package will cost around a billion dollars over the next 5 years. Maurice Williamson said that it is bigger than Christchurch when we look at the numbers. He said the numbers are eye-watering; we agree with him. 
One of the concerns we have expressed during the debate on this bill is the 10-year limit. Again the Minister has said that is tough—it is tough—and we agree with that. Some building experts believe many cases have yet to be found out and they will come to the fore in coming years as building rot becomes more advanced. 
We have also expressed our concern as did my colleague Nanaia Mahuta that the lack of skills could derail this very very important bill passing today which will give hope to people. We are facing a severely depleted workforce. The forecasts for the reconstruction work in Christchurch and the leaky homes are enormous—they are in the billions of dollars not in the millions—and the work is over and above the normal demand for new houses. This was discussed in the Committee of the whole House and it was discussed in the select committee. There does not seem to be a resolution coming through in this bill and I am worried that the homeowners who want to start building projects and fixing their leaky homes will face delays and increases in cost. 
However this bill makes a good contribution to giving relief to the thousands of people affected by this awful crisis. I believe the Minister when he says that this has been one of the most difficult jobs he has ever had to do and without wanting to impinge on his reputation I want to say I think he has done a very good job. That is why Labour is supporting this bill. Sadly many people will miss out and I think this will continue to be a problem.