Williamson Maurice: Building Amendment Bill (No 4) — First Reading 
Williamson Maurice: Building Amendment Bill (No 4) — First Reading 
[Volume:678;Page:1454] 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 I move  
That the Building Amendment Bill (No 4) be now read a first time. 
 I intend to move at the appropriate time that this bill the Building Amendment Bill (No 4) be considered by the Local Government and Environment Committee and that that committee report back to the House on or before 31 July 2012. The Building Act 2004 is the primary legislation that governs the building and construction sector in New Zealand. I want to make sure that members are fully aware of just how vitally important to our economy the building and construction sector is. I bet you that if we did a survey of this House and asked how big the building and construction sector is as a contributor to our GDP relative to say agriculture everybody would say they were quite different. In fact they are almost identical in their contribution. They are almost exactly the same in their contribution.  
To get some efficiency gains into the sector is vitally important. The National Government conducted a major review of the Building Act. We went out and sought submissions and we got over 380 submissions on the current legislation. I think—to be fair to Labour because it was Labour’s legislation—in general submissions were that the current system was not broken but we did need to reduce some of the costs and some of the red tape that was in there and try to improve some of the efficiency in the system. It is more to do with some amendments to the legislation rather than holus-bolus throw it out because productivity in the building sector is very low there is a lot of risk-averse behaviour and there are a lot of things that are needed. I welcome and thank the huge number of people from organisations like the Registered Master Builders Federation the Certified Builders Association the Building Industry Federation and a whole range of people who made submissions to this bill and who I believe will make submissions to the select committee. 
 Amendments to the primary Act have been done by two things. Just the other day in the House we passed the Building Amendment Act 2012 which actually started as the Building Amendment Bill (No 3) and now this bill the No. 4 bill brings them together. I think members will remember that when I was talking about the No. 3 bill in the last few weeks I said they should not judge it on its own merit but understand that it was part of a comprehensive package of changes. If I took the changes in both that No. 3 bill and now this No. 4 bill together I think I could really lay out what the Government’s goals are. The Government’s goals are a sector with the necessary skills and capability to build it right first time because so much of the building and construction sector up until now has been about redoing the work or coming back to fix up what was wrong. So it is about getting it right first time. The Government wants a sector that delivers good quality affordable homes and buildings and contributes to a prosperous economy; a well-informed sector a sector that shares its information and quickly identifies problems and corrects them; a sector where everyone involved in building work knows what they are responsible for and what they can rely on others to do; and finally consumers in the sector making informed decisions and understanding the risks and consequences of their decision. So that is what we are after.  
Let me take members through some of the substance of this bill which is having its first reading tonight. This bill completes the Government’s changes to the Building Act 2004. The review of it arose from as I said the big submissions we had received and it supports the Government’s goal of achieving a more efficient and productive building sector. I want to outline some of the key changes in this the No. 4 bill. The bill introduces new consumer protection measures to help New Zealanders who are building or renovating their homes. New Zealand’s housing stock—and this is a good number for members—is worth about $613 billion. That is about 10 times the value of the New Zealand stock exchange. So consumers and builders in the housing market deserve I believe to have clear rules about how they are expected to behave in such a ginormous industry with such a phenomenal asset base. The new measures in the bill will help homeowners to hold to account those responsible for building work and get any faults fixed quickly and more efficiently.  
The new measures include the requirement that all residential building work above a prescribed price must be documented in a written contract between the homeowner and the building contractor. This will ensure that both parties clearly understand from the outset what their rights and their responsibilities are. Before a contract is signed a building contractor will be required to provide information to their client about their company the people who will be carrying out the work their track record and any surety or financial backing they have to cover the costs of fixing any faults. This I believe will help consumers make informed decisions about which contractors to chose based on knowing those who have got a good track record with very few faults along the way and that will be where I think the market will gravitate very quickly towards.  
All building contractors will be required to fix any defects in their work reported by their clients within 12 months of completion. This obligation is additional to the existing 10-year limit for people to be able to sue for defects in building work. The 12-month period is intended to be a “no questions asked” requirement for the building contractor to stand behind the quality of their work similar to how faulty goods can be returned and repaired if they are not fit for purpose. We can do it for our colour TVs we can do it for our new motor cars so we should be able to for new buildings. The builder must put right any defects so that somebody’s new house—and the service they receive—is fit for purpose and the quality and the standard that they paid for. I think that consumers can expect no less. These measures will put in law what is already best practice in the industry—and I need to stress that. There are a number of good practices out there that do a lot of this. Builders will be more likely to build it right the first time because they clearly will be accountable for fixing their own mistakes. The Government anticipates these new consumer protection measures will support responsible professional building contractors and we expect to see contractors competing on quality as well as on price. The measures will also help owners to distinguish the professionals out there from the cowboys.  
The bill also contains some other important amendments to the Building Act 2004 to improve efficiency and accountability in the sector. These include increasing from $100000 to $200000 the maximum penalty for doing building work without a building consent which will better signal that the offence is one of the most serious offences that can be conducted in the Building Act; rewriting and reformatting schedule 1 which provides for exemptions for building consent requirements—schedule 1 has been amended several times since 2004 and has become difficult to access and to understand—and adding new powers for territorial authorities to deal with non-dangerous buildings that are near to dangerous buildings. Again I think members from Canterbury will know that is an issue that has cropped up time and time again—a building that is not dangerous but is right next to one that is—and this is giving the local authorities some power to act on that building which may be in danger. The Canterbury earthquake showed that there can be significant risks to undamaged buildings if they are next to those that are dangerous. Councils should be able to warn people about the danger or in the worst-case scenario prevent people from entering those buildings that may be adversely affected by what is next door. There is better targeting of the requirements of the Dam Safety Scheme to include dams that are large dams by virtue of their size and based on risk factors. Again I am a Minister who is and I think this Government is very fixated on trying to actually deal with things on a risk-rated basis and not on a one-size-fits-all basis. So this will I think improve the efficiency and effectiveness of the Dam Safety Scheme and reduce a lot of compliance costs for a lot of rural farmers in particular who have quite small dams on their land but have actually had to comply.  
This bill will empower consumers. It will increase confidence in the sector. It will reinforce incentives for the sector to upskill and it will reduce compliance costs by clarifying regulatory requirements. I am delighted to say that I think that every one of the major organisations and industry groups that I have talked to about the substance of this bill are supportive of it. In fact it was many of them that contributed to the writing of this as we got it to this point. I expect at the select committee it will get some modifications but the actual general intent of it I think will weather the select committee and come back to this House in July. I commend the bill to the House.