Tisch Lindsay: Building Bill — Third Reading 
Tisch Lindsay: Building Bill — Third Reading 
[Volume:619;Page:14912] 
LINDSAY TISCH (National—Piako) 
: 
 National has acknowledged through the first and second readings and the Committee stage of this bill that there are deficiencies in the Building Act 1991. We have acknowledged the leaky home problem and the subsequent weathertightness report. But we cannot support a bill that introduces a very prescriptive regulatory regime. It is overkill and an overburdening of the industry with bureaucracy and administration. Although we believed there were faults in the 1991 Act it was also our view that that legislation could have been amended to compensate for its deficiencies. 
This legislation will add significant costs to all construction work and compliance costs for residential buildings will increase the most. It will potentially affect economic growth due to the significant increase in building compliance costs for both applicants and territorial local authorities with regard to accreditation. We will see widespread bypassing of the new requirements for do-it-yourself projects. The economic impact of this legislation will see significant increases in labour costs. The labour component of the cost of a typical dwelling is approximately 35 to 40 percent. That labour component will bear the brunt of the increased costs as it responds more readily to supply and demand factors than the other components do. There is already a short supply of skilled tradespeople in the building industry—especially in bricklaying where they are able to name their price. The provision that building works need to be supervised rather than inspected will prove to be a major cost factor in any building project. To supervise the construction of a small home that would take about 4 months to build has been estimated to take about 85 hours. It will cost approximately $10000 just to meet the new requirements of this legislation. 
Will this legislation enhance customer safety and protection? National’s view is that it will not. This legislation will lead to delays it will fuel inflation and it will most probably lead to illegal construction work as people look to bypass it. The 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. Any person assuming liability for the overall supervision of building works as a principal licensed building practitioner will need to have wide knowledge and a high level of competency as well as substantial professional indemnity insurance—that is if he or she is able to obtain that insurance. Industry registration will have an immediate impact on the availability of skilled tradespeople because many of them will simply not wish to formally upskill themselves 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 will wish to upskill themselves to meet the new regulatory requirements that the bill provides for. That will be very noticeable in rural and remote areas and will have an adverse economic and social effect on owner-builders and on 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. In fact clause 173 requires that all work be supervised—not just inspected as the law states at the moment. That will add huge costs for those operators who are involved in building prefabricated buildings barns bridges glasshouses  and hothouses. All those structures require a building consent and their construction will need to be carried out or supervised by a licensed building practitioner. With the increased compliance costs the viability of some of the businesses operating in that area could become suspect and that will be a major concern. 
We also have a concern about the future of private certifiers who along with territorial local authorities will become building consent authorities. The issues pertaining to insurance have been widely canvassed and debated. In Australia—and I used examples of this in the Committee stage yesterday—private certifiers are used extensively. They are covered by proportionate liability compared with the system in New Zealand where the liability is joint and several. There is a distinct feeling within the industry that the Government does not want to have private certifiers. Although private certifiers are accommodated in the bill—the amendment to clause 381 tabled yesterday on Supplementary Order Paper 241 in the name of the Hon John Tamihere provides for a period of some limited comfort; in fact clause 381(1) enables them to work until 31 May 2006—they will not be able to continue in their work unless they have applied to become a building consent authority before then. In National’s view that is an escape clause for the Government and it will be difficult for a private certifier to operate after that date. 
The role of building consent authorities is important in the bill. It will be impossible for territorial local authorities to pick up all the work that is currently done by private certifiers and their own staff because they will not have the qualified personnel needed to do that. Some observers have commented that private certifiers could become the employees of territorial local authorities. That is quite right; they could. But it is certainly my view that many will move off shore where their experience and expertise will be valued. 
We had another major concern regarding the bill. I put forward an amendment to add land subsidence and geothermal hazards to the definition of the term “natural hazard”. Supplementary Order Paper 241 did include subsidence but the proposition that geothermal hazards should be included was defeated. The impact of that is that territorial local authorities will not be able to refuse to issue consents on the ground that the land could be subject to geothermal hazards—or hot spots in the ground. They will then not have the protection of non-liability as found in clause 344 of the bill. Councils have been able to use section 36 of the current Act to manage risk but under this bill the risk management provision is excluded when it comes to the matter of geothermal hazards. In the Taupo area where geothermal hazards are a major factor the liability that that council will face in the future could be quite extensive. It is my view that Parliament is exposing local government to future civil litigation—a minefield—and that that will have significant effects for both councils and their ratepayers. 
We also argued that if fences to hold people out of swimming pools were included in the definition of a building stopbanks should also be included. The devastation that we have seen in the lower North Island and recently in the Eastern Bay of Plenty would suggest that stopbanks are important in the protection of people property local communities and infrastructure. But our reasoning was not accepted by the Government. 
National has stated throughout this debate that there are problems with the existing law and the Act and that those problems needed to be fixed. But to throw the Act out in its entirety and to substitute 385 pages of bureaucratic red tape will do nothing to ensure the safety and confidence of the people whom this legislation is designed to help. National does not support this bill. 
BRENT CATCHPOLE (NZ First) 
: 
 I rise on behalf of New Zealand First to take a call in the third reading of this bill. New Zealand First supports this bill and we support it because it is the result of an extensive inquiry. That inquiry was held into the weathertightness of homes—the leaky homes debacle that we saw a few years ago. We also support the extensive research into and rewrite of a number of parts of the old Act. Although New Zealand First believed that the old Act was adequate we felt it did need a few adjustments the most important of which concerned the licensing of building practitioners. However with the catalyst for this bill being the inquiry into the weathertightness of homes it was a case of this bill having to go through a whole process that followed on from that inquiry. That process was carried out extensively particularly by the Government Administration Committee. Its chairperson Dianne Yates and the rest of the members of the committee did a very very good job in putting the bill together. 
New Zealand First believes that do-it-yourselfers are not affected in any way by this legislation. They do have to make sure that if they are working with the outer skin of a building or with any structural walls they have somebody there to sign off that they have carried out the work correctly. That person has to be a licensed building practitioner. A do-it-yourselfer—or DIY’er—is allowed to do everything else so the great Kiwi tradition of people being able to build their own homes has not been affected at all. It is essential to remember that because the structures that are put in place through this legislation ensure that do-it-yourselfers are not affected. People have to abide by certain rules but they can still build their own homes. 
People state that extra costs are a part of this bill. Yes there are some extra costs—some extra compliance costs—but we think of them as an insurance policy. That policy insures that the building or house is put together correctly with all the detail and all the facilities necessary for it to be an asset. Let us face it: people’s homes are the biggest assets they will ever own. Therefore they want to be sure that those assets will not become devalued which is what we have seen with leaking homes. Those buildings have been devalued. In fact there are a lot of homes out there that people are having difficulty in selling. No insurance company will touch them because there are huge problems with the way that the buildings were constructed and with the effectiveness of the repairs to them. So New Zealand First looks at the additional costs as an insurance policy—insurance that people have houses that will be ongoing assets for them. 
The fact that code of compliance statements for buildings were outstanding with territorial local authorities was an area we were very concerned about. We discovered during the select committee inquiry that there were tens of thousands of code of compliance statements outstanding and there had been no attempt to match them up with the building consents issued by building consent authorities. That in itself was a major problem because many of the houses concerned were completed many years ago. I have evidence that some buildings were completed from 5 to 10 years ago but they do not have a code of compliance statement. That was a remiss action on the territorial authorities’ part because they failed to follow up on that and cross-check the records. This bill corrects that and makes sure that they are responsible for checking to ensure that the correct paperwork has been completed. 
The provision concerning licensed building practitioners is the biggest addition in this bill. It is the major part of the bill and if anybody says that the old Act is being thrown out and that the 358-page bill now being brought in is a complete rewrite of the legislation he or she is incorrect. It is not a complete rewrite because large parts of the old Act have been just transferred straight into this bill with the addition of the provisions concerning licensed building practitioners. New Zealand First agrees that the licensing of building practitioners is an important step towards trying to unify the whole process. In the past the process has had a lot of inconsistencies as the economy has gone up and down. When the economy was on a high a number of new entrants into the building industry came in without the full training and skills that were needed and that was particularly true after the abolition of the old apprenticeship scheme. A lot of those people came in and they began to undercut others when the economy started to dive again. That then forced the full tradespeople out of the industry because they could no longer compete with them and it left a huge gap in the industry. Licensing people at the levels of their competence which will be done with peer review will allow for more consistency within the whole building industry. The industry welcomes that because it means it will have a better benchmark for deciding how the construction and building industries should develop. 
We in New Zealand First are very mindful of the need for the chief executive and particularly the licensing body to be very careful with regard to the licensing regime so as not to make it too difficult for some very skilled people who are reaching the end of their working lives. We do not want to see people with high skills walking away from the industry early because they have a valuable part to play in training the young people who are coming into the industry. If we allow those people to fall by the wayside early then we will lose their experience which will not be passed on. 
The Government crows about its Modern Apprenticeships scheme. Now that is a misnomer because although the Government promised that it would put the old apprenticeship scheme back in place Modern Apprenticeships are not the old apprenticeship scheme. The Government has just taken the scheme that was in place under the New Zealand Qualifications Authority rebadged it and called it the Modern Apprenticeships scheme. It does not provide the mechanisms and support for small businesses and highly skilled tradespeople to take on an apprentice. There is not the incentive or the mechanism for them to take on apprentices and to properly train the young people who are coming through. Therefore we are not getting the new entrants coming into the scheme. As a result the industry is very short of skilled tradesmen and tradeswomen—and there are a lot of very skilled tradeswomen within the building industry as well so they should not be forgotten. But it is important that the chief executive keeps in mind the entry levels and requirements in order to make sure that the skilled workforce is not forced out of the industry. 
As the bill has progressed through the House we have already seen an improvement within the industry. We have seen territorial authorities pick up on parts of the bill already. Many parts of the building code have already been rewritten as a result of the inquiry into leaky homes and the advancement of this bill. Therefore the industry is starting to regain the confidence of the public and I am pleased that it has taken into its mind the need to regain that confidence. We will see a much better economy resulting from that. 
Finally just to wrap up one matter that New Zealand First would have liked to see included in this bill was a provision to prevent phoenix companies from popping up just to develop a particular project and then disappearing again taking the assets with them.