Hansard and Journals
Building Amendment Bill (No 2) — First Reading
Building Amendment Bill (No 2)
Hon MAURICE WILLIAMSON (Minister for Building and Construction) : I move, That the Building Amendment Bill (No 2) be now read a first time. At the appropriate time I intend to move that the Building Amendment Bill (No 2) be considered by the Local Government and Environment Committee and that the committee report finally to the House on or before 11 May 2009. I will also be moving that the committee has the authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, and to meet outside the Wellington region during a sitting of the House, despite Standing Orders 187, 189, and 190(1)(b) and (c). The current economic downturn is having a big impact on the building sector. Therefore, it is important that the bill moves quickly through the select committee process so that the sector can benefit from the proposed changes sooner rather than later.
The purpose of this bill is to reduce compliance costs and to improve the efficiency of the building design and consenting process. The bill was introduced just before the end of the previous parliamentary term, following consultation with the industry and with local government. It takes some useful steps to cut red tape and to improve consistency in decision making around the building consent processes. Although the bill includes some useful initiatives, it is only a start and does not go far enough in addressing the compliance issues that face homeowners, developers, and builders. There is way more to be done. The Government will be reviewing the Building Act and looking to make further amendments to cut red tape in order to drive down costs without, of course, compromising building quality. It is quite possible that Supplementary Order Papers may even be introduced and sent to the select committee to consider along with the bill.
The reviews that the Government is involved in include looking at what needs to be consented, based on better differentiation between levels of risk; providing better information and education on the building code and on how to meet performance standards without regulating everything that moves; removing unnecessary building control regulation and putting a greater focus on information and education, so that people can make informed choices rather than having them made for them; simplifying building licensing rules and providing recognition for trade qualifications, making it easier to get licensed but not dumbing down the system; supporting councils to work smarter through the use of technology, shared services, and online systems; helping consumers to make better informed decisions about building their homes and choosing products that best suit their needs; and, finally, focusing on how to get developers and builders to stand behind their work and to put things right when that is needed. Along with that, the Government will also be looking at how liability and risk around building is distributed between the parties and at how those factors might be better managed. That will include, of course, looking at some form of home warranty insurance.
Moving to the key measures in this bill, first of all I say it introduces a pre-approval scheme, which is a national multiple-use approvals process, to streamline the building consent process for house designs that are to be replicated on a substantial scale. That will reduce the time and cost associated with the approval of designs, particularly for volume builders. Once a national multiple-use approval has been issued, a building consent will still be required in the district where the home is to be located. However, decision making by the relevant building consent authority will be limited to site-specific matters only: things like foundations and connections to utility services. The bill provides that the time frame for processing building consents for pre-approved designs will be reduced to 10 working days. That compares with 20 working days for the standard building consent process.
Secondly, the bill enables regulations to be made that define minor variations that can made to building plans without having to go through a full building consent amendment process. That will clarify and simplify the process for making variations to building consents, and will reduce the time and cost involved. I think that this is a sensible approach. It recognises that the building process is a dynamic one, and that things can and do change on the way through the process that are not of any such great significance that that they need to go back through a full consent. In many cases, I have had builders say they just wanted to move a handbasin within a bathroom design, or change where the toilet and the shower were juxtaposed, and doing that meant going back for a complete and utter go through the process. If a variation is defined as a minor adjustment—as we would define it in those cases—then a consent would not be required.
Thirdly, the bill will also make it optional for a consent applicant to obtain a project information memorandum, reducing the time and cost associated with obtaining building approval.
This bill takes some steps towards reducing red tape and streamlining the decision making associated with the building consent process. However, more needs to be done and there is much more to come, and I signal that right now. I invite members of Parliament and the public to watch this space as we work through some of the issues that I have canvassed earlier in my speech.
SU’A WILLIAM SIO (Labour—Māngere) : Kia ora and talofa lava, Mr Assistant Speaker. Malo lava le soifua maua, malo le lagi e mama, i lau afioga ma sui mamalu o le Maota Fono. That is my way of acknowledging you, Mr Assistant Speaker, and the members of this House. I also want to recognise the members of the public who are listening in and watching the proceedings of this House, especially those who are listening in from my electorate of Māngere. It is, as we call it, the gateway to New Zealand, where Aotearoa touches the rest of the world. I acknowledge Minister Maurice Williamson for bringing back this Building Amendment Bill (No 2) into the House. Labour introduced this bill while in Government to help reduce unnecessary delays in the building consent process, which causes frustration among many of our builders throughout this nation. The bill, rightly—as the Minister has outlined—will reduce both the direct and indirect costs to owners and developers associated with the construction process, while ensuring that good-quality homes and houses are constructed. The bill is part of a coordinated approach taken to assist in increasing the supply of good-quality, affordable homes, but I suspect that many of the public who are listening in to this debate will be wondering what is going on with this Government.
You see, it is a shame that the National Government does not share the same commitment to having good-quality housing. Why else would it axe the $1 billion household insulation fund that would have improved the energy efficiency of Kiwi homes? Ordinary New Zealanders will also be looking at each other in puzzlement and asking what is going on here, and they will be making some important judgments about the National Government. I say this because when the public got over their initial shock last year after the election, and when they woke up and saw that National was in Government, being the fair-minded Kiwis they are, most people said: “OK, we made a mistake. But let us see what National has got. Let us see what this Government is made up of.” Then the National spin doctors got working and created an image that the Prime Minister and his Cabinet were the action team. I would say that those who are drinking Tui at my local pub in Māngere Bridge will all be shouting out: “Yeah, right!”.
Then the spin doctors got working and came up with the new Cabinet of Ministers, and after peppering that Cabinet with some new faces amongst the old faces, they announced that here was their new National front bench. What was the response of the Tui drinkers out in the public? It was: “Yeah, right!”. What we saw was a National Cabinet that promoted the Prime Minister’s close friends and demoted some hard-working, senior, long-serving National MPs. Some of the members of the National Cabinet were young, some were not so young; some of them had good hair styles, and some of them were without any hair. The public got to see that some of them were good-looking, and that there were others to whom the old expression would apply: “They have the looks that only a mother could love.”
The point I am making, as to why I think the public listening to this debate would be perplexed by what this Government is doing, is that at a time when the world is swirling in economic turmoil, there is a strong call from our communities for this Government to act quickly and do something substantial in support of low-income families. Although this bill is necessary, the impact of the global economic recession does raise the question of how many jobs this bill will save. Why is National prioritising this bill when the House should be using its valuable time considering measures necessary to help low-income earners who are struggling to make ends meet?
I conducted a meeting last week with some providers in our community—including the Monte Cecilia Housing Trust, Housing New Zealand Corporation, and a few others—just to try to get a handle on the impact of the recession on housing needs in Manukau. The key issues that emerged were overcrowding, which is getting worse; the re-emergence of infectious diseases; the cost, quality, and security of tenure of some private rental stock; issues around boarding houses; the need to support the community housing sector; and the increase in poverty.
In my electorate we had a series of redundancies during the Christmas period. Sadly, nobody kicked up a fuss about that, because we had a bit of money. Most people spent that money supporting their families during some happy times in the Christmas period. That is all gone. The Work and Income New Zealand office told me that when people come in looking for jobs, there are no jobs for them. It is very difficult for them to direct people who have been working in labour-intensive roles to other new roles.
That is the question that will probably be causing quite a bit conflict. Yes, this bill is necessary, but in a time when there is so much uncertainty, and there is the growing worry about making ends meet, and about job security, income protection, and being able to afford the basics, and when this Government ought to be coming up with something substantial, the public will be saying that this is just not enough, and that this is not what they were looking for.
Earlier today there was a debate about how this Government has sacked Ross Wilson, the chair of the Accident Compensation Corporation (ACC).
Hon Parekura Horomia: Shame!
SU’A WILLIAM SIO: Shame on them! I absolutely agree with my friend. This is the example of the 90-day bill, the fire-at-will bill. Ross Wilson, chair of ACC, is the first casualty
Nicky Wagner: Have you read that bill? You need more than 90 days.
SU’A WILLIAM SIO: It was not more than 90 days. The National Government sacked Mr Ross Wilson without any reason. It sacked a man who has the integrity to continue in the role, and who has the skills and the intelligence. The Government is determined to wreck ACC, and it does not want to have anybody chairing it who might be able to right the wrong it intends to do.
Labour supports the bill, but in terms of the timing, and the concern we have for communities, we feel that this is not the answer that the communities need to help with their housing difficulties. I think the Minister can do more by considering supporting the needs of those in our communities—as I have outlined earlier in the meeting that I conducted—in terms of overcrowding, the increase in poverty, and supporting a community housing sector. Although we are supporting this bill through the process, it is our feeling, and certainly my feeling, that National should be concerned about giving to the public the measures necessary to help low-income earners who are struggling at this particular time. With those words, I say that Labour supports the first reading of the Building Amendment Bill (No 2).
CHRIS AUCHINVOLE (National—West Coast - Tasman) : I am pleased to stand and support the Building Amendment Bill (No 2), which was introduced to the House by the Hon Maurice Williamson. It was wonderful to hear such a robust analysis by my learned colleague. This bill will make the necessary amendments to the Building Act 2004 for achieving the purpose of increasing the flexibility and efficiency of the building consent process.
Hon Maryan Street: This isn’t a school play, Mr Auchinvole.
CHRIS AUCHINVOLE: It will facilitate an increased supply of affordable homes—something the member Maryan Street talked a lot about but did not actually produce. It will seriously ensure that homes and buildings that are built are of good quality, which is a most important caveat.
We went into the last election with a clear manifesto, that the new Government would place a high priority on reducing red tape, would increase efficiency, and would reduce costs, and that is what we are about.
Hon Maurice Williamson: Red anything, actually.
CHRIS AUCHINVOLE: Red anything, yes. That is why we are pushing through with the Resource Management (Simplifying and Streamlining) Amendment Bill in order to reduce unnecessary delays and costs and to give consent applications a smoother passage without compromising our environmental obligations. That is why we have given priority to the Unit Titles Bill—which I spoke on last week—in order to streamline development processes and provide flexibility for those who are building big developments. That is exactly why I am in favour of speaking in support of the Building Amendment Bill (No 2) being passed into law. It is part of this Government’s ongoing commitment to cutting and reducing red tape, and it will reduce both direct and indirect costs to property owners and developers.
Let us look into this a little bit closer. The big problem with the status quo is that building consent applications are assessed on a case by case basis by councils, even where the proposed building work is to be replicated within the same subdivision. Developers are required to wait for each building consent to be processed before work can proceed. Labour would think that is good, orderly stuff. It seems a considerably cumbersome process, and one that can be streamlined to produce much greater efficiency by having a system of national multiple-use consenting for buildings that are to be replicated several times on a nationwide basis.
Under this legislation the building design would be approved on a national level, and building consents issued at the local level, with reference to the individual situation of each building, such as ground conditions, foundations, connections to water, and other utility services. In other words, decision making by the local building consent authority where the building is to be located would therefore be restricted to site-specific matters and any customisation or variation of a multiple-use consent.
Common sense would suggest that such an approach will reduce delays in workloads for processing building consents, result in quicker approvals overall, and give builders a greater degree of certainty. In the current Building Act one cannot distinguish between minor and major amendments to building consents. Variations to consented building work, following the granting of a building consent, are common. Some of these may be major and likely to affect compliance with the building code. It is perfectly acceptable that those variations to the original proposals are put through the formal amendment process. However, concern has been expressed by many in the industry that because all amendments are currently considered in the same way, and because many minor variations to building work—and I think we heard some examples from the previous speaker—have been put through the same rigorous formal process, unnecessary costs and delays are being added to the building process.
What the Building Amendment Bill (No 2) will allow, however, is the ability to define a variation as a major or a minor variation and to act accordingly. Hence, major variations will still go through the formal process, but minor variations, defined in relation to a national multiple-use approval as a minor modification or additional variation to the plans, will instead undergo a far less formal process. Naturally, this will result in improved efficiency, reduce compliance costs, cut through the red tape that minor variations are currently blighted by, and result in greater streamlining and simplification—all with no discernible negative consequences. Now that is what I call good National policy.
The Building Act 2004, Part 2, section 15(1)(c), provides “that a project information memorandum must be obtained before a building consent is issued:”. A project information memorandum is not a consent, nor does it require the applicants to do anything. One of the main purposes of this requirement in the previous legislation was to save owners or developers time and money by providing an advance warning of issues that needed to be taken into account when developing plans for building work. However, anecdotal evidence suggests that only in a minority of cases are project information memoranda applied for prior to a building consent application being made. Therefore, the benefit of the advance warning is not realised in most cases. Instead, this requirement has become just another example of extra costs being imposed on the owner or the developer. I will give two examples of such costs: first, the professional fees to the adviser who applies or considers the content of the project information memorandum; and, second, territorial authority fees for issuing the project information memorandum.
Different councils charge different fees for project information memoranda, but, to provide one specific quote, the Auckland City Council charges $241 for a stand-alone project information memorandum. The Building Amendment Bill (No 2) will instead make it voluntary to obtain a project information memorandum from a building consent authority that is a territorial authority. This will lower the burden of costs. We in the National-led Government are in the business of reducing costs—indeed, of eliminating unnecessary costs, rather than imposing them.
As we speak of costs, other aspects of the Building Amendment Bill (No 2) will continue this Government’s determined and motivated efforts to reduce delays and costs in general, particularly in the issuing of consents for various matters. Let me take a moment to dwell on the importance of the situation. The global recession is hurting our building industry and costing Kiwis their jobs. One of the most disturbing aspects is the effect on the younger builders—the apprentices coming through. We do not want to lose those future builders. The global recession is having that effect. These changes to cut red tape will make it easier for people to do business. There will be a boost for the building industry at a time when companies are struggling and builders are looking for work. Builders have complained of waiting up to a fortnight at a time to get onsite building inspections done—a fortnight at a time—adding to the cost that has been crippling for builders and frustrating for homeowners. This should not happen.
We are making changes to tackle problems like that. Actions that we are taking include reducing the statutory time frame for processing a building consent application from 20 working days to 10 working days where the application includes a national multiple-use approval. Indeed, we are halving the statutory time so that we can significantly reduce delays. Last year we also pointed out that the Building Act is estimated to have loaded up to $20,000 on to the cost of building a new home, making housing affordability very difficult for many, many New Zealanders. The Building Amendment Bill (No 2) will ensure that home affordability becomes more of a reality for ordinary Kiwis.
This Building Amendment Bill (No 2) is high-quality legislation that keeps up our proud work on reducing time delays and costs and on streamlining and simplifying processes that have become unnecessarily long and costly. Under this National-led Government we are embarking on a process of improved efficiency, rather than continuing under a culture of needless prevarication and expense. Multiple-use consenting will help drive improvements in housing costs and affordability through removing barriers to achieving potential economies of scale, distinguishing between major and minor variations to allow building consent authorities to focus on what is really important, and making project information memoranda voluntary, as they are of little benefit. This will drive down unseemly costs.
In conclusion, I am very happy to stand and support the Hon Maurice Williamson on this legislation, as it is time we recognised the problems inherent in the Building Act 2004. National is doing something about them. Thank you, Mr Deputy Speaker.
Hon GEORGE HAWKINS (Labour—Manurewa) : The last speaker—the National member for West Coast - Tasman, Chris Auchinvole—was very interesting. He tried to grab acclaim for the Building Amendment Bill (No 2), which the Hon Shane Jones actually did all the work for, as he also did last week with the Unit Titles Bill.
This Government is in a situation that is a wee bit like the hare and the tortoise. For the first 100 days the hares on the Government side of the House ran flat stick. They went everywhere, day and night, running flat stick, and then they went to sleep. They ran out of work so they picked up Labour bills to bring into the House. Maurice Williamson, a person whom I have quite a bit of time for—[Interruption]—no, I do not have any for Phil Heatley—got up to say that they were going to carry on this pretence a bit further. The Local Government and Environment Committee will sit day and night, and then he will do some work himself. Well, not really—his officials will do some work. They will get a couple of Supplementary Order Papers into the bill, as well.
This is typical of a Government that has run out of puff. A couple of weeks ago the Government had its big Job Summit. Just a few hundred yards down the road was the Manukau City Council. What are the council officers doing? They are suggesting that building consent and resource consent fees should be increased by 20 percent. They are doing that at the same time as the Government is bringing this bill to the House. You see, Manukau is doing something quite unusual. It is keeping on those officers even though it does not have the work for them.
Chris Auchinvole: Pardon?
Hon GEORGE HAWKINS: The council does not have the work but it is keeping the officers there in case there is a turn-up of work in the building sector.
This bill of Shane Jones’ is, I think, quite useful, but it is not as urgent as it was, because the number of buildings starting has reduced. Everyone knows it has reduced—
Colin King: Preparing for the country to grow again.
Hon GEORGE HAWKINS: Oh, there is a man who wants the country to grow again! He had better change party if he wants that to happen, because it will not happen under National. I ask members to look back. Things were rosy last year; what are they like now? We know who to blame; we know it is those members over there.
This bill has some very good purpose. However, the urgency that was there is not there any more.
I can remember when I was Mayor of Papakura that building inspectors used to have red pens and they would delight in finding fault. They would find only one fault on a plan, put a big cross by it, and give it back. If somebody fixed up that fault and brought the plan back the inspectors would find another one. Things have changed and it is really important that councils themselves make the biggest changes. This legislation will make it easier for them.
The key thing is that the bill is part of a coordinated approach to provide more affordable homes. We can hear Mr Heatley laughing in the background. Of course, he is trying to sell off State houses in the wealthy areas and make the old people living in them shift out. We know that. He can keep on laughing as much as he likes but this bill will be available to people to speed up the process. What I am saying is that councils like Manukau City Council, which is putting up its rates by a disgraceful 3.9 percent, will have staff twiddling their thumbs. The Building Amendment Bill (No 2) will not speed up the process initially; it will in the future, because things will change.
I do not think it is all doom and gloom. This bill comes at a time when the global recession is really just starting to get under way. Time will tell how many buildings will be started this year. I suggest that it will not be anywhere near as many as were started in recent years. When Shane Jones did the work on this bill the economy of the world was much healthier. I have to thank Shane Jones because without him the National Government would not have much on the Order Paper to deal with. I think the National Government should go and shake Shane Jones’ hand and say that this is good.
Hon Maurice Williamson: This is a leadership bid.
Hon GEORGE HAWKINS: Maurice Williamson has made his way up to the middle benches; I used to like it more when he was on the front bench. He deserves to be on the front bench, but I think John Key listened to Bill English too much, dumped Maurice Williamson out of the Cabinet line-up, and made him a Minister outside Cabinet.
I do not want to hold up this bill, because the Minister of Building and Construction has made out how urgent it is, and how the select committee will be sitting at all sorts of times, day and night, to get this bill through. But I say that the urgency is not really there any more. These bills are a part of the National Government’s bluster. It is trying to con the public that the Government is doing something, and that everything is urgent. Well, the people are not that silly, and they will realise what the Government is doing. I think that, in time, people will see through the very thin veneer of the National Government.
NICKY WAGNER (National) : I rise to support the Building Amendment Bill (No 2) because it amends the principal Act, the Building Act 2004, which was introduced by the Labour Government at that time. It is disappointing that we have to review the Act so soon. Considering the amount of time and work that goes into writing a bill, it would be expected that an Act might last a little bit longer. We would expect it to have a bit more longevity. Often we are amending Acts that have stood the test of time over, maybe, 20, 30, or even 40 years, but not this one. This Act has been on the books only for a little over 4 years, but already it needs to be addressed.
The need to review the principal Act is not surprising to National members. We predicted it when the Act was first passed in 2004. It was David Carter who said: “This bill will impose huge costs and huge complexity on the construction industry … I tell the Government that … this legislation will be one of the first pieces of legislation that is back before a National Government—because it will be a National Government that will tidy up this mess.” It is all very well for George Hawkins to talk about Shane Jones and all the hard work he has done, but it takes a National Government to bring the legislation to the House and to tidy up the mess. That is why we are here today. Back in 2004, Lindsay Tisch also warned the Labour Government. He said the bill “… introduces a very prescriptive regulatory regime. It is overkill and an overburdening of the industry with bureaucracy and administration … This legislation will add significant costs to all construction work, and compliance costs for residential buildings will increase the most.” How prophetic was that? He stated: “It will potentially affect economic growth, due to the significant increase in building compliance costs for both applicants and territorial local authorities …”. That has proved to be so true.
One of the most valuable Kiwi traditions is that of homeownership, but the Building Act has added so much additional cost that many New Zealanders are finding that homeownership is out of their reach. Many critics have talked about that increase in costs, and they estimate that it could be up to $20,000 per house. The National Government wants to make homeownership more affordable, and this bill is a step in the right direction. Why is the National Government so supportive of homeownership? It is because homeownership is good for individuals, families, and communities. On an individual basis, there is a real thrill, a real sense of achievement, when someone buys his or her own home. However humble it is, or however much DIY opportunity that building has, and however much it is a first step, everyone gets a kick out of earning his or her first home. Suddenly weekends are focused on the house, the garden, or the neighbourhood.
Homeownership is good for families and communities. Neighbourhoods are more settled, house-proud, and community-minded. Local kids get to grow up together, to go to school together, and to put their roots down in their neighbourhoods. Those neighbourhoods provide familiarity and security to young people. People say that it takes a village to bring up a child, and many members will remember what it was like as a kid growing up in a suburb full of young families in their first homes. That community of young families gave us and our young mates the caring and support of a village.
The amendments in this bill are designed to cut the costs of constructing houses and buildings without compromising the quality of those buildings. All amendments follow extensive consultation with the industry and with local government. Both the industry and local government are very keen to cut the costs, time, and energy that go into the consenting process. These amendments are part of the National Government’s ongoing commitment to cut red tape and speed up processes to stimulate the economy. It was interesting to hear George Hawkins talk about the fact that this bill does not need to be passed now. At what other time in our recent history has there been a time when we should stimulate the economy? At what other time has it been so important? Similarly, the National Government’s resource management reforms were aimed at simplifying, cutting costs, and stimulating the economy. The international recession is affecting our building industry. Consent applications are down, and builders and contractors are concerned about the lack of forward work that is coming on stream. The changes that we propose in this bill will cut the costs and time of the consenting process, and stimulate the industry at a time when workers really need to keep their jobs.
There are three major amendments. The first is the introduction of a system of national multi-use consents. The idea behind that is that designers and builders can get some sort of economy of scale for similar buildings, which can be consented together. Under the scheme, the building design can be approved at a national level, although each site will need to be consented locally to allow for individual variations. But to speed up that local process, the statutory time frame for processing a consent application that includes a national multi-use consent will be reduced from 20 to 10 days. This will increase the efficiency of the process and improve productivity.
The second major amendment is a differentiation between major and minor variations to a consented building plan. Most buildings require some minor variations to their plans, and this amendment will allow those changes to go through without having to go through the complete consenting process. Again, it will reduce costs, save time, and increase productivity.
Finally, this bill also makes obtaining a project information memorandum voluntary. The reason a project information memorandum was first introduced was to provide advanced warning of issues when developing a building project. But, as it has turned out, the majority of project information memoranda are not applied for until after the consent process has been completed. Making the project information memorandum voluntary will reduce unnecessary costs to owners and developers—and they are big costs. There are costs for professional fees, territorial authority fees, and delays in starting the building.
National supports this Building Amendment Bill (No 2) because it is time to streamline and simplify the Building Act 2004. Although the Act is only 4 years old, National has always considered it to be very prescriptive and overburdened with bureaucracy. These amendments will cut through that bureaucracy. In the face of a worldwide recession we urgently need to cut the costs involved, and the length of time required to consent building work, for two reasons: so we can keep our building industry working and so we can make housing more affordable for Kiwi families. Thank you.
RAHUI KATENE (Māori Party—Te Tai Tonga) : Less than a month ago I stood up during question time and asked the Minister of Housing what steps he would be taking to address the reported decline of homeownership rates amongst Māori. The context for my question was the staggering fact that the proportion of Māori who own their home has fallen from 61.4 percent in 1991 to 45.2 percent in 2006. Putting it another way, the proportion of Māori now relying on rental tenure has increased from 38.6 percent to 54.8 percent. Here we are, before a month has gone, with a solution of sorts. The Maori Housing Trends 2008 report told us that although the hike in property prices and rents has impacted negatively on Māori, as it has on other New Zealanders, the impact has been exacerbated for Māori, particularly because they often need larger houses, which are more costly to rent. So any initiative to help first home buyers is an initiative we look at with particular interest, in terms of how well it will assist Māori into homes.
The Building Amendment Bill (No 2) is a fast-track approach, which we in the Māori Party hope will be an avenue to providing starter homes to first home buyers at a quicker and more affordable rate. That would be good news for Māori and good news for Aotearoa. Māori homeownership is of particular concern to me as the member for Te Tai Tonga, with the Canterbury region having the lowest ratio of Māori homeownership in New Zealand. This bill amends the Building Act to reduce compliance requirements and costs to developers and homeowners, in order to improve the efficiency of the building consents process. According to the Registered Master Builders Federation, approximately 40 percent of all new homes in New Zealand are built by volume builders.
A key initiative introduced in this bill is that of national multiple-use approval. Multiple-use approvals will streamline the consent process for building work that uses the same design and that will be replicated nationwide. There will be a Lockwood in every street—Lockwood Homes, that is. Having multiple-use approvals in place will mean that developers and project managers can devote more time to the building itself. All of the time devoted to the paperwork can be compressed into one focused approach. A new pre-approval system will fast track the building consent process, but councils will still need to assess site-specific matters.
Another initiative introduced in the bill is the voluntary project information memorandum (PIM) proposal. PIMs—not the liquor—are currently required before any building projects can begin. In the usual order of things, project information memoranda are applied for at about the same time as a building consent is issued. Yet when we looked into that we found that, on the basis of evidence, less than 5 percent of project information memoranda are actually applied for in practice before the building consent application is made, so the point of the whole process is lost. What started off as a good idea—that the project information memoranda would be a one-stop shop boutique, hosting all information related to building consent—failed, in reality, because only a few project information memoranda were actually applied for prior to building consent application being made. This bill will make it optional for a building consent applicant to obtain a project information memorandum from a territorial authority. These measures are honourable in the intent to dramatically increase the supply of good-quality, affordable homes. The thinking is that the bill will help to reduce unnecessary delays in the building consent process, in order to streamline the process.
The whole point of the legislation is to increase flexibility and efficiency in the building consent process. The amendments include the reduction in the statutory time frame for processing a building consent application from 20 working days to 10 working days when the application includes a national multiple-use approval. The hope is that owners and developers will benefit from reduced costs associated with the construction process, while at the same time ensuring that quality homes and buildings are constructed. This is where the key concern rests for the Māori Party. Although we can fully appreciate that the potential economies of scale are able to be achieved through volume, we must not see any compromise in quality or building compliance. This is where we are pleased that the capacity to record the process is still formalised through the functions and powers of the Department of Building and Housing. There are still some specific requirements to meet the technical application, as set out in clause 30B of the bill. In short, this is that the application will be in writing and contain prescribed information, with the required plans and specifications necessary. The last thing we ever want to see replicated is leaky building syndrome.
Although this bill speeds up the process, removes unnecessary compliance requirements, and will achieve economies of scale, we must be mindful that in the haste to speed up things we do not dilute quality. We will be looking to the select committee process to ensure that there is due support for best-practice models to be expressed in managing amendments to building consents. Although we are sure that every party in this House will gladly support any proposals that reduce and remove unnecessary costs and delays to the building process, we must be careful that in streamlining the process we do not end up creating a rod for our backs. This is where I return to the questions I asked of the Minister not too long ago. In his response about how to improve the levels of Māori homeownership, the Minister said he would be speaking to a number of iwi and hapū groups and to the Māori Party. He also suggested that he would be seeking specific feedback from these groups about how the Housing Innovation Fund can help and how papakāinga housing can be advanced.
These were welcome signals from a Minister who is expressing a commitment to increase the availability of affordable social housing. We want that commitment to come alongside the goal to resource iwi and Māori organisations themselves to develop sustainable housing initiatives. We will therefore support this bill at its first reading to facilitate housing opportunities that we hope will reap benefits for Māori, alongside other New Zealanders. But we will be watching particularly for submitters to bring to the select committee their assurance that the quality of building construction will not be compromised by the amendments. We want to see, too, that the reduced construction costs for developers will actually translate to reduced housing costs for buyers and renters and that the downstream costs will contribute to improved housing affordability. And we want to be absolutely convinced that the monetary savings are actually substantial enough to affect housing affordability.
Having all of these factors in mind we will support the bill today in the hope for a better tomorrow for so many of our whānau who have not yet enjoyed the opportunity to buy their own homes. Kia ora, Mr Deputy Speaker.
JONATHAN YOUNG (National—New Plymouth) : Speaking as a person who has built three of his own homes, I am pretty glad I built them prior to 2004, by the sounds of things. I did not really build them; I was the project manager. I did build one wall, which had to be rebuilt, so perhaps my skills are in project management rather than with a hammer and nail.
The building industry is a very important part of the New Zealand economy. Housing is a basic necessity and a human right, and affordable housing has become an increasing concern for all New Zealanders and members on both sides of the House. In March 2008 the then Prime Minister’s office released a report into house prices. It claimed that, in real terms, house prices had increased by 80 percent since 2002. That is more than the increase in the 40-year period between 1962 and 2002. The cost of land has also doubled since 2001. We identified tremendous concern in our country, particularly for young people trying to get into their first home. The Building Amendment Bill (No 2) is very advantageous to the hope that we will see the price of housing come down, with measures taken to reduce compliance costs and regulation costs but without reducing the quality of the homes that builders in New Zealand construct.
House prices have fallen since those statistics were produced, but the historical house price to household income ratio of close to three and a half times annual earnings has changed considerably. Affordability requires household disposable income to increase by 80 percent or house prices to fall by over 40 percent. This bill will begin to address that alarming increase we have seen.
Although there are a number of drivers to this increase in unaffordability, one notable driver is the increase in regulation costs and compliance costs. Last year National members pointed out—and some members have stated so here this afternoon—that the Building Act was estimated to have loaded up to $20,000 on to the cost of building a new home. When we came to building our first home, if another $20,000 had been added, we would not have had a home. Not only would we not have had a home but I am sure that the builder and subcontractors—plumbers and electricians—would have been without the benefit of that employment.
So we see, as we begin to address some of these costs, that not only are we making the issue of housing affordability important so that it is within the grasp of young people and families, in particular, but also there is the opportunity for more work to flow to subcontractors. At a time such as this, when we are facing a global recession that is affecting the construction industry, in particular, there are people out there in our communities right now who are perhaps on their last job or wondering whether in a week’s time they will find more work. We will not get this bill through in time for that to be resolved, but it will address that issue and housing affordability and increase work opportunities in time to come.
Not only does this increased cost act as a huge roadblock to people but removing it will make it far easier for people who are in the subcontracting industry to find work. The National-led Government sees streamlining as important because it will free up our economy and promote growth, particularly at this point in time. As part of our first 100 days in Government we introduced a bill to streamline and simplify the Resource Management Act, to improve the processing of resource consents and cut compliance costs. The reform of the Building Act has the same intention as our work on the Resource Management Act. It is part of this Government’s ongoing commitment to cut red tape.
One instrument with which to streamline the building industry is to employ multiple-use consenting, which we have heard about this afternoon. It will help drive improvements in housing costs and affordability by removing barriers to achieving potential economies of scale. Another change this bill seeks to bring about is reducing the statutory time frame for processing a building consent application from 20 working days to 10 working days, where the application includes a national multiple-use approval. That makes great sense and enables expeditious timing to take place in building projects.
These proposals follow consultation with the industry and local government. As a member of the Local Government and Environment Committee I look forward to working in that group to progress the bill to the next stage.
The bill introduces another two changes. The first is to differentiate between major and minor variations to consented building work. Let me tell members, as someone who has designed houses and built them, that plenty of variations come along. Halfway through the project one sees a cost saving, or halfway through the project one thinks of a better idea. Kiwis have ingenuity and want to make things better, if they can, without having to load up extra costs for a good idea, or to save in the overall expense or put a better design element somewhere in the house. That is a good move and will offer the flexibility that people involved in construction and building enjoy. It will allow for creativity and changes to come, without making it overtly or unnecessarily expensive.
The second change involves project information memoranda, which we have heard about. They include great information for somebody who wants to go forward in a project, but many builders and developers know everything they need to know about a particular property. A project information memorandum is a compulsory requirement in the consenting process, but, as we have heard, only 5 percent of people seek that memorandum before the consent process takes place. Obviously, they get the memorandum at the same time as the building consent in order to comply, but the other 95 percent of people find it unnecessary. It adds cost. There is a range of fees all the way up to $1,189 for particular projects. It just adds cost that many people feel is unnecessary. It also adds time.
The project information memorandum is still available, and it is a very interesting and perhaps positive report for people to seek, if they are not sure. But many people are sure, and we feel that in making them voluntary, rather than compulsory, it will be very good in keeping down compliance costs. It is a great service that councils can offer. For example, a project information memorandum will show whether there could potentially be erosion on the property, falling debris, subsidence or slippage, or silt build-up because the land is susceptible to flooding or, in fact, whether flooding could happen on the property. All that information is very useful, and councils feel that giving this information is pre-warning people so that later on they are able to proceed with full knowledge.
Hon Maurice Williamson: It would have been good if that had been around in Noah’s time.
JONATHAN YOUNG: That is right. However, a project information memorandum adds expenses—professional fees to advisers, territorial authority fees, and the cost of delays in starting the building. All of those can cost money. Even though there is a fee regime from a territorial authority, there can be very high expenses, in terms of professional fees to support that project information memorandum. This bill does not do away with that cost but makes it voluntary whether someone seeks a memorandum.
This bill will streamline many aspects of the building industry, and in that regard I believe that it is very well supported in the House. It is part of National’s commitment to reducing red tape in order to get this country growing again. I thoroughly support this bill. Thank you, Mr Speaker.
KELVIN DAVIS (Labour) : I rise to support the Building Amendment Bill (No 2). Quite simply, the bill is about improving the efficiency and effectiveness of the building consent process, therefore ensuring that quality homes and buildings are constructed quickly and at less cost. I am in favour of any legislation that makes it easier for whānau to get into new homes.
I come from an area in the Bay of Islands where, not too many kilometres from the townhouses and condominiums on the Paihia waterfront, if one were to take the time to travel some of the gravel roads into the heart of Ngāti Hine and Ngāpuhi one would see whānau living in conditions that many would describe as Third World. It is not too uncommon to see homes that are little more than corrugated iron huts, which one would expect to see overseas and not here in Aotearoa. Those homes are usually unlined, leaking, cold, and damp dwellings.
I think of my home valley of Kāretu, just below our urupā of Puketohunoa, where there is a structure we call “the barn”. Not surprisingly, it has been used as a barn at times, but in-between being used as a barn it is used by cousins and family who come home to the valley and need somewhere to live while their homes are being built. So any legislation that shortens the length of time my whānau have to stay in the barn, and in similar dwellings, I am in support of.
Legislation such as this that extends the Department of Building and Housing’s functions and powers to allow it to issue multiple-use approvals for dwellings and buildings, and therefore to speed up and lower the costs of building homes, gets my support. Given that 40 percent of all new homes in New Zealand are built by volume builders, it makes sense that some efficiencies can be achieved by a streamlined approval process under the Building Act, for buildings that are replicated on a nationwide basis.
There is, as a number of members have alluded to in the course of the debate, the need for individual buildings to have consent sought at a local level, because each site has unique characteristics, such as ground conditions, slope, foundations, connections to water, and other utility services. So it makes sense that these are inspected and OK’d by the local authority. In fact, one of the conditions in my home town of Kawakawa that needs to be looked at is the fact that there is subsidence due to historical coalmining in the town, so that needs to be inspected at a local level.
This bill—which Labour introduced while in Government—is designed to help reduce unnecessary delays in the building consent process, which, aside from causing frustration amongst builders, also causes frustration for those whānau wishing to get into their new homes as quickly and as cheaply as possible. As well as cutting bureaucratic red tape around the issuing of approvals for dwellings, this bill also seeks to reduce the statutory time frame for processing a building consent application from 20 working days to 10 working days—again, as a number of members have alluded to. This is especially so when the application includes multiple-use approval.
Again, I say that I support any legislation that helps my whānau, hapū, and iwi members to move out of their small, cold, and dingy homes into larger new, warm, insulated homes. A point I failed to make earlier when describing the homes and living conditions of many of my whānau, hapū, and iwi up north is that those dwellings are, without any doubt in my mind, part of the reason many Māori suffer from poor health. I doubt that anyone in this House would be brave enough to say that living in cold, damp, cramped, unheated, and uninsulated homes would not put the health of the occupants at risk, thus leaving them susceptible to flu, colds, pneumonia, chickenpox, measles, and other diseases of poverty. If for no other reason, the lives of families is reason enough to support this legislation.
This legislation also differentiates between major and minor variations to consented building work. In other words, the homeowners who want to make minor, non-structural changes to their homes do not actually have to jump through major hoops in delays and costs in order to make simple alterations. This bill will also reduce for owners and developers both the direct and indirect costs associated with the construction process, while ensuring that quality houses are constructed. This bill is part of a coordinated approach to assisting in increasing the supply of good-quality, affordable homes.
Late last year I attended a housing hui in Kaikohe, a town not known for its glitzy homes and extravagant lifestyles. A local businessman there had a plan to build a housing estate for the elderly in three stages. Stage one consisted of 30 or so identical homes, and if that stage was successful, then stage two and stage three would be built, with 30 more homes, respectively, for each stage. I applaud the attempts of this businessman in his desire to care for the elderly, but if his plan is to be successfully embraced by the community, I would like to think that those of us sitting here could make it as simple as possible for the plan to be achieved, as we know that the elderly are some of our most vulnerable citizens. The intentions of this bill would help our kaumātua and kuia, both Māori and non-Māori, to have access to warm, comfortable, and, in that case, may I say modest dwellings close to whānau, friends, and community facilities.
There are a lot of more important things we could be talking about, such as developing work and jobs for New Zealanders, so, although not wanting to diminish what I have just been saying, I will conclude. Basically, multiple-use consents that reduce the statutory time frame for processing building consents from 20 to 10 days, and the ability to make minor variations, will help not only those elderly members of the Tai Tokerau community but also every other whānau up there living in their shanties—as well as the wider New Zealand population—to more easily afford warm, comfortable, and healthy dwellings. Therefore, I support this bill.
LOUISE UPSTON (National—Taupō) : I rise to speak in support of the Building Amendment Bill (No 2), put forward by the Minister for Building and Construction, Maurice Williamson. For many hard-working New Zealanders, 9 years of a Labour Government has meant that the dream of owning their own home has slipped further from their grasp. I am thrilled that this bill means that housing affordability will get a little bit closer for those who have that dream.
The issue at the moment is that to construct a house is very time consuming and very costly, and the layers of bureaucracy are incredibly difficult to navigate, to wade through. There is such an amount of unnecessary paperwork, steps, and hoops to get through in this process, so I am really pleased that this bill will fix a number of problems. Firstly, there is the issue raised in terms of issuing multiple-use approvals for dwellings and buildings. For those organisations or businesses that want to construct multiple dwellings, it will mean a much simpler process and therefore it will mean that the costs will be significantly fewer. There will also be less time involved in getting a project to completion.
Another component of the bill is the reduction of the statutory time frame, whereby the time for processing a building consent application will be reduced from 20 days to 10 days. This is significant if we look at the amount of time involved with these projects. Another key purpose is to differentiate between the major and minor variations to consented building work. That will mean that minor pieces of work do not have to go through this huge, drawn-out process. It will reduce time, and it will reduce money. Another thing that this bill will achieve is that it will be voluntary for an owner to obtain a project information memorandum—a PIM—from a building consent authority that is a territorial authority.
I thought it would be quite useful to look at a couple of case studies in relation to the proposed legislation. The first issue is around compliance costs. Any time compliance costs are added on to a business, they flow through on to the end-user, and the end-user in this instance is the person who wants to get into a house. I firmly believe that it is an important part of the New Zealand way of life that we, each and every one of us, are able to aspire to homeownership. Some of us have big hurdles to overcome, but if we can do anything to make that goal more achievable by reducing compliance costs, and by reducing the time and energy involved with the building process—without sacrificing quality, I might add—then it will be a great thing for average, hard-working Kiwis who want to get into a home of their own.
The other thing that is particularly important at the moment, given the recession we are currently in, is the impact that those sorts of extra costs and delays are having on those organisations or companies that are in the building trade. I met with the representative of one of those organisations in my own electorate on Friday. This is a local business that has been around for 10 years. It was recently employing 10 staff but is now down to four. The business has an apprentice but the owner is not sure whether he can hang on to his apprentice. The lag time between an owner deciding to push the go button and build, and all of the time involved before the business can actually start construction, is a delay that I hope will not put that business into the ground. Every time a building firm goes under in this recession, it also takes the guy who builds the cabinets, the person who sews the drapes, the carpet layers, and the people who put the glass in. You name it, there is a whole industry of people who go down every time one of our building companies fails. Anything we can do as a Government to reduce unnecessary compliance, reduce the time, and reduce the costs has to be a good thing.
I want to see that these local businesses are able to survive and weather the storm of the recession, and that they come out on the other side so we can build more houses and so hard-working New Zealanders can achieve their dreams of getting into a home. I agree with Kelvin Davis; I think it is disgraceful that we have large numbers of New Zealanders living in substandard housing. If we can trim $20,000 off the price of a house, then we can get more people into houses that are worthy of them and not tolerate the sub-standard conditions that too many of our New Zealanders are putting up with.
That is the first case study I wanted to look at. The second is around simplifying and streamlining. I know that changes were made to the Building Act in 2004, but I have to say to Labour members: “Sorry, guys, you did not do a good enough job, so we’re going to have to do some tidying up.” I worked in local government at the time that this Act came in, and I can tell members that the layers and layers of bureaucracy and additional work that got wrapped around the building process were absolutely outrageous. Possibly a small amount was necessary, but the reality is that there was extra paperwork and extra work built in for no sound reason. We are getting in there, cutting the red tape, getting it back to basics, and making sure that the process is as simple as it can be. The bill is getting rid of some of the things in the building and consenting process that are completely unnecessary.
It was really interesting to watch the implementation of the Building Act, and it will be interesting to watch from a different perspective now as a member of the Local Government and Environment Committee. I want to see that local government is efficient and productive, just as there should be a level of productivity in other parts of the public sector. It is really important that we get on and focus on the actual job. For me, the priority is getting people into housing at a price that they can afford. In terms of housing affordability, some would say that we are in good times at the moment. We should be seizing the opportunity and making the most that we can of the economic conditions in terms of affordability.
The third area I want to look at is the affordability side. Most days when I drive from Pūtāruru to my home, I drive past a Habitat for Humanity home. This is a project where people are getting into housing that they potentially would not be able to get into otherwise. It is about making sure that social housing and community groups are assisting people to get into their own homes through innovative programmes. I personally want to see obstacles like red tape reduced for those sorts of organisations. If people want to build multiple dwellings, then it should be much easier to do so. This legislation that I am standing in support of today will enable that. That is why I am really proud to support this legislation.
Another thing that is important in this legislation concerns waiting times. I want to emphasise the lag time for business people. From the time a person wants to start his or her project, there are time delays in terms of actually picking up the hammer and putting the first nail in a piece of wood. It is just a waste of time for any builder or the builder’s team to be sitting around and waiting for someone else to do the paperwork, and it does nothing for us in terms of productivity. I really believe that this bill will take us quite a way forward in terms of improving productivity. The end goal in respect of that productivity is that more people will be in homes that they can afford and that provide a good standard of accommodation.
Before I conclude, I make the point that, yes, we are talking about driving down costs, cutting through red tape, and reducing the costs involved. But we are not talking about compromising quality. It is really important that the houses built in New Zealand are of the standard we expect and that we are able to move people out of sub-standard housing. The measures we are talking about in this bill do not compromise the quality of the housing we are talking about. I am very thrilled to stand in support of this bill, which will ensure that home affordability and good-quality housing become an end goal for more of our hard-working, ordinary New Zealanders.
Hon MARYAN STREET (Labour) : I rise to take a brief call on the Building Amendment Bill (No 2). The origins of this bill do not lie in the recession. Although the provisions of the bill may have some positive impact on the recessionary experience that our construction industry is undergoing at the moment, that was not the origin of the bill. Its origin came out of the previous Government’s intention, commitment, and earnest desire to provide affordable housing in New Zealand. In order to get to a situation of affordable housing in New Zealand, a number of blocks and barriers needed to be taken down. Shane Jones brought this bill forward as a way of dealing with some of the frustrating and difficult regulations and red tape that compounded the process of arriving at building consents.
The bit that is particularly important in this legislation is that around national multiple-use approvals. The building industry was perfectly willing and able to recognise standard templates for building designs and to approve them according to the highest building standards, but the point was to enable developers to say they would like, in the course of building their hundred-house development, to build 20 C1s, 10 B2s, and five A3s, or whatever the name of the housing design was. The purpose of getting multiple-use approvals was that people could get standardised designs—they could be labelled anything at all; I have just used As, Bs and Cs—that could be replicated everywhere without having to go through the process of approval.
When in Opposition, the National Party thought that this meant the Labour Government was intent on building the same houses everywhere. That was absolutely not the case, and in fact I have not heard one of the Government members mention that objection in the course of this debate. Clearly, those members have now cottoned on to the fact that it does not mean that; what it means is that there are standard designs that can be approved nationally—across the country—and then be picked up by a developer, and all that the local body has to do is to ensure that that particular design is appropriate for the particular site. That eliminates the red tape and fast tracks the development for the developer. That is to everybody’s benefit.
The rationale behind this bill was the terrible situation that we found ourselves in by the end of 2007: recognising that the cost of houses had gone up by some 80 percent over the previous 5 years. That situation could not be allowed to continue without some remedial action being taken. This bill was a small step, but a tiny part of the jigsaw that needed to be put together, along with other Government initiatives—whether they be shared equity or using State-owned land for developmental and residential housing purposes—that could be brought together as a complete package to address the housing affordability problem.
- Sitting suspended from 6 p.m. to 7.30 p.m.
- Bill read a first time.
Hon SIMON POWER (Minister of Justice) on behalf of the Minister for Building and Construction: I move, That the Building Amendment Bill (No 2) be considered by the Local Government and Environment Committee, that the committee report finally to the House on or before 11 May 2009, and that the committee have the authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, and to meet outside the Wellington region during a sitting of the House, despite Standing Orders 187, 189, and 190 (1)(b) and (c).
- Motion agreed to.