Smith Murray: Building Bill — In Committee Procedure 
Smith Murray: Building Bill — In Committee Procedure 
[Volume:619;Page:14845] 
MURRAY SMITH (United Future) 
: 
 I rise to speak in support of the National Party. Is that not a surprise! Something the National Party said that I think has some merit—which Shane Ardern suggested before—was that we should be looking at having a home warranty scheme and I agree— 
Brian Connell 
: That was me. 
MURRAY SMITH 
: Congratulations to Mr Connell. I agree that we should indeed have a home warranty scheme for homes in New Zealand and if we moved to have that it would have considerable advantages. Certainly it would take the pressure off the need to have joint and several liability. At the end of the day the reason we have joint and several liability is that we do not want the homeowner to have to carry the can for people who under a proportionate liability system would escape from liability because their companies had been wound up or because they had no resources or whatever. So a home warranty scheme that enabled the insurance company to pick up the tab for anybody who did not otherwise cough up would be a very good scheme to have. 
The trouble with the Australian scheme is that it is for only 7 years. I would have a lot of concern if we had a home warranty scheme that was for only 7 years. After all the structural integrity of a home is meant to be for 60 years. Even in the limited environment in New Zealand we have confined liability for a period of 10 years which is pretty restrictive given the full life of a building. Even now we allow claims for a period up to only 10 years. To bring that period down to 7 years seems to me to be quite inadequate. If we were to have a home warranty scheme I would want to see one that was at least 10 years in length and a period of even 15 years would be far preferable. 
How will we get to that situation? It seems to me that this bill assists us to get there because we will not be able to have a good home warranty insurance scheme unless we can assure an insurance company that we are building quality buildings. If the insurance company had to pick up the risk for the man with the ute the dog and the radio its premiums would skyrocket and the length of cover would be totally inadequate. Therefore if we want decent insurance cover for homeowners at an affordable price—which means we will be talking about several thousand dollars—we will have to deliver quality buildings. 
We will also have to deliver an effective enforcement regime which means that territorial authorities have to be doing their job properly that the central authority is doing its policing functions properly and that builders who are in default can be taken to task such as is provided for in this bill by the way of notices to fix. 
In my view then this legislation is a prerequisite to getting a solid building regime which in turn can be attractive to an insurance company and enable us to move towards a home warranty scheme. Certainly with that home warranty scheme we could then look at removing joint and several liability. 
There are justifiable arguments amongst those who are caught by the joint and several liability scheme that we should have proportionate liability. Why should a territorial authority who may be found to be only 10 percent liable have to pick up 100 percent of the tab because nobody else pays? Why should builders architects or other people involved in building work be in that situation? I think that a proportionate liability system is fairer but it can work only if we do not leave the homeowner to pick up the tab at the end of the day. That means there has to be some sort of insurance scheme so that the system has insurance company backing and some compulsory insurance and that means that a product must be delivered to an insurance company that will in fact insure that product. 
When the select committee went to Australia and talked to the Australian Building Codes Board at a federal level and at a state level in New South Wales about that home warranty scheme yes it did look at if there was some merit in it. In some instances the scheme in New South Wales was an example but the trouble is that it did not have the joint and several liability or the quality of building standards and the enforcement regime that our legislation will provide. So I am not surprised that Australia has very limited cover. We can do better than that. 
In terms of the registration of building practitioners I can tell members that I have talked to some of them and by and large they welcome the provisions of this bill. Those who are competent builders know that effectively the registration of building practitioners will be to their advantage because they will not be undercut by shoddy tradespeople who offer a cheap price and then deliver shoddy workmanship. In order to achieve that registration of building practitioners clearly what we need is training and competency.