Smith Nick: Residential Tenancies Amendment Bill — Second ReadingText is incorporated into the Bound VolumeSmith Nick: Residential Tenancies Amendment Bill — Second Reading[Sitting date: 11 May 2016. Volume:713;Page:11012. Text is incorporated into the Bound Volume.]Hon Dr NICK SMITH (Minister for Building and Housing): I move That the Residential Tenancies Amendment Bill be now read a second time. This bill is part of the Government’s programme of improving the quality of our older building stock. It is about making our homes warmer our homes healthier and it is about saving lives.Just last night Parliament passed the Building (Earthquake-prone Buildings) Amendment Bill by 120 votes to one to upgrade our buildings in respect of earthquake risk—legislation that is expected to save the lives of 300 New Zealanders over the course of the next century. This bill too is about improving New Zealand’s building stock but is focused on our rental properties.The first important change is the requirement for smoke alarms to be in all of our rental properties by 1 July this year. Seventy-five percent of fatal fires are in properties without a smoke alarm and most of those are rental properties. We currently are going into winter with 120000 properties that are without a smoke alarm. It is estimated that the provisions in this bill will save three lives a year. That is about the same as the earthquake-prone buildings legislation although it is interesting to note that where that legislation will cost $800 million this bill is expected to cost only $4 million—emphasising just what a no-brainer smoke alarms are in our homes. It comes with a cost benefit of over $17 for each dollar of cost.The regulations to implement the smoke alarm requirement have been consulted on and are in the public arena. We are requiring all smoke alarms—the new ones—both where homes do not have them or where they are replacing existing smoke alarms to be the new long-life 10-year smoke alarms because there have been too many tragedies where batteries have not been replaced with a consequent loss of life. We are requiring in those regulations that those smoke alarms be installed to the manufacturer’s requirements. We are requiring that the smoke alarms cover the different floors of houses that they cover sleepouts that they cover caravans and that they require the spread through a home to be able to provide that protection. I would be very surprised if there was a single member of this House who would question that very practical requirement.The second very important change is in respect of the insulation of houses and it needs to be seen in the context of how progressive our Government has been in making progress on this issue. The first thing we did when we came into Government was say that a Government needs to get its own house in order. We had 30000 State houses that were not insulated and in our first term we got on and got those insulated. The biggest single item of new Government expenditure in the term of this Government has been the hundreds of millions of dollars that we put into the Warm Up New Zealand programme of providing a subsidy to insulate houses and I acknowledge the Green Party’s support for that programme. We have done 290000 houses with those subsidies.The next step addressed in this bill is a compulsory requirement for landlords to insulate those 180000 homes that are not insulated. The combination of these initiatives comes to a total of over 500000 homes. I do find a bit rich the comments from the likes of Mr Twyford that these measures are inadequate and too little too late when—let me compare the numbers. They are 500000 homes insulated in programmes by this Government and fewer than 50000 under the previous 9 years of the last Labour Government—that is this Government is doing 10 times as much in terms of getting our homes insulated and those benefits are coming through. This bill requires all social housing—that is where the Government is paying a high level of subsidy—to have these insulation requirements in place by 1 July this year and it requires them to all be done by 1 July 2019.I do find it ironic that only last week we debated a member’s bill from Mr Little. That member’s bill has a timetable that is 4 years slower than the requirement for homes to be insulated under this bill. There is a debate about the insulation standard and some misinformation and I want to make it absolutely clear because we have published and consulted on the regulations to support this law about the level of insulation that every new home has to be insulated to the 2008 standard. Any home without insulation has to be insulated to the 2008 standard. Any home that is insulated but the insulation is no longer in a fit state has to be upgraded to the 2008 standard.The debate is on those properties the hundreds of thousands of properties that were built after 1978 that have insulation and it is in reasonable condition—should they have to upgrade to the 2008 standard? I want to put forward a logical case as to why that is not included in the bill. Firstly it is this: delivering on having 180000 homes insulated requires 60000 per year. The advice from the insulation industry is that it is going to push them to limit to get that job done by 1 July 2019. Secondly—and let me specifically give you the numbers—a home insulated to the 1978 standard has an 84 percent reduction in heat loss to the 2001 standard it is 87 percent and to the 2008 standard it is 92 percent. In other words when we take an uninsulated home and we insulate it we get a 92 percent reduction in heat loss—a massive gain. Actually requiring a home that was built in 2007 to be insulated gains only an extra 5 percent reduction in heat loss and the cost-benefit analysis is absolutely clear that it does not stack up.Members on this side of the House do not live in that world where when we impose costs on a sector—whether it is the rental sector or any other—it is a free good because it is not. It is a cost that is passed on. If we pass on costs particularly to those who are families struggling with the rental cost then we are passing that cost on in rentals. So it is absolutely proper that when making these regulatory decisions we do look at the cost-benefit analysis and frankly requiring every home to be upgraded today to the 2008 standard does not stack up in a cost-benefit analysis. Actually we are imposing more costs than benefits.I would also point out to members opposite that this Government is also requiring from 1 July this year a disclosure requirement in every tenancy agreement around the level of insulation that is in the walls in the ceiling and under the floor because it is our view that the rental market will function better as a consequence of having this level of insulation there.The last point I want to make on this bill is about the three extra requirements that we are making in residential tenancies. The first of those is in respect of giving my ministry the practical powers to be able to enforce the existing standards. One of the nonsenses in this debate around levels of dampness issues of ventilation and the safety of electrical plumbing and other fittings is that all of those are currently covered—including heating—in the existing regulations. The issue is not the regulations; the issue is enforcement. The two provisions in this bill to enable my ministry to be able to prosecute those slum landlords and ensure those properties are brought up to standard is an important practical step and so too are the provisions around retaliatory provisions to support tenants where a landlord takes a retaliatory action by giving them notice.Sitting suspended from 6 p.m. to 7.30 p.m.Hon Dr NICK SMITH: I just want to conclude by saying this is a sensible practical bill that will make our homes warmer it will make them drier and it will make them safer. It provides the tools to ensure that abandoned properties do not sit vacant for ages. It strengthens for the first time the powers of the ministry to be able to go after those slum landlords and deal with those issues that rightly concern this House and New Zealanders. It is a bill that is based on good evidence and is part of this Government’s broader programme of practical policies that will work for New Zealand families. I commend the bill to the House.For the information of the House I do want to seek leave to table a diagram provided by my ministry in respect of the relationship between the “R” rating of insulation and heat loss which is core to the debate about the level of insulation to support the comments I made in my speech.