Manukau Building Consultants Client Function

Speech notes

Hon Maurice Williamson

Minister for Building and Construction

Manukau Building Consultants Client Function

Auckland

Thursday 26 February

Acknowledgements:

Chief Executive: Hamish Aitken

Board chairman: Alan Bickers

Directors: Keith Avery and Adrienne Young Cooper

• Introduction

Thank you for inviting me today.

Today is a great opportunity for me to listen and learn from those at the sharp end of building and construction - consenting authorities and those that use their services.

I value the chance to hear about the views and ideas you may have.

• The building and construction sector is a key part of the economy.

These are difficult and challenging times for the building and construction sector - in fact for all of us.

The building and construction sector is important to the New Zealand economy. It contributes more than 5 per cent of GDP.  The total capital spend in the building and construction sector is more than $20 billion per annum.  It can play a pivotal part in lifting us out of the recession.

We need to continue to invest in skills and capability and we need to lift productivity. It's important the sector retain critical mass and skills to be able to respond to the upswing when it comes.

As you know the housing market has corrected, and is likely to continue to do so for a while yet. The commercial sector is adjusting now.  But demand will return to the market. We need to be ready for when it does.

Let's have a quick look at what the consent numbers show?

• The number of building consents for new housing units authorised in December 2008 was 1,127 units. This is the lowest monthly total since January 1987. The trend for the number of authorised new housing units each month, including apartments, has fallen 49 percent since the June 2007 peak.

•  For the year ended December 2008, the authorised number of new dwellings, including apartments, fell 28 percent to 18,456 units. This is the lowest annual total since the August 1993 year.

• The value of these new dwelling consents fell from $6.4 billion to $4.9 billion over the year to December 2008.

• For the year ended December 2008, the value of consents issued for residential buildings fell $1.5 billion (20 percent), while the value of for non-residential buildings rose $322 million (7.7%), compared with the year ended December 2007

• What this Government can do is to improve the overall building and housing system so that it delivers better outcomes for New Zealanders and supports the sector

This means a focus lifting and maintaining skills and capability across the sector

This means completing the reform process albeit with changes.  I want to make some changes to the consenting process and simplify and streamline stuff around licensing.

This means using twenty-first century technology to make the "boat go faster"

We will do this through:

• Amending  the Building Act 2004 to cut red tape, drive down costs but maintaining quality

• having another look at what needs to be consented and providing better information and education on the building code and how to achieve or meet performance standards without "regulating everything that moves"

• removing unnecessary building control regulation and increasing focus on information and education

• support consent authorities to work smarter using technology to do so

• leveraging the same technology to reduce design and building costs - investigate the potential for an on-line national consenting system to reduce costs, and get consistency and standardisation across the country.

• simplifying building licensing rules, providing recognition for trade qualifications, making it easier to get licensed but not dumbing it down

• helping consumers take better informed decisions about building their homes and choosing the products they need

Greater competition

• Phase one of the building consent accreditation process is now complete with all organisations providing consenting and inspection services now accredited against some minimum standards.

• This accreditation is now being evaluated by PricewaterhouseCoopers who will provide insights into how the consenting process can be further streamlined.

• Manukau Building Consultants is one of four private organisations to be accredited.

• I am aware you are interested in being a fully registered BCA.I welcome this interest and see competition as a key part of how we can lift the performance of the consenting process while acknowledging there is a balance to be struck between competition and ensuring consumers are protected.

• Officials in the Department of Building and Housing will continue to seek to develop this area of work and I look forward to hearing more about your future plans.

 Boosting the economy with investment in infrastructure

The Government has fast tracked $500 million worth of publicly-funded building projects in the latest in a series of initiatives under the Government's Jobs and Growth Plan.

About $100 million worth of fast-tracked projects will start before June 30 this year.

The $483.7 million spending brought forward include:

• Education - $216.7 million of spending, including five new schools, school refurbishments and maintenance and ICT infrastructure improvements.


• Transport - $142.5 million of spending, spanning five large state highway projects and a programme of smaller, regional roading improvement projects.


• Housing - $124.5 million of spending, allowing Housing New Zealand to upgrade and renovate 10,000 more state houses, and build 69 new state houses over the next six months.

The Government economic stimulus package also includes:

• a $480 million helping hand of tax and regulatory assistance for small and medium businesses;


• sweeping reforms of the RMA; and


• a programme of income tax cuts over each of the next three years.

Other key priorities in this portfolio

• Getting more leaky homes fixed

The Government is looking at an alternative approach to weathertightness with greater emphasis on getting homes fixed - less on process and more on outcomes.

• Re-assessing risk and liability

It's time to look at the issue of the allocation of risk in relation to who carries what risk and how this is managed

The current joint and several liability regimes drives risk-adverse behaviour by councils because too often they are the last man standing

Developers and builders need to stand behind their work and put things right where needed.

I have asked my officials to prepare advice on:

• whether various parties are currently bearing an appropriate level of risk?

• whether territorial authorities are bearing too much risk, and whether some developers and builders are bearing too little given their ability to use shelf company structures)?

• There is a question around what is a reasonable level of risk for consumers to bear. How to can we improve consumers' access to good information and advice so they can make good decisions when buying or building a property?

• whether consumers would benefit from access to a greater range of options and products for managing risk such as home warranty insurance products?

In conclusion

Thank you for the opportunity to talk with you today.

To conclude, my priority as Building and Construction Minister is to help lift performance and promote efficiency across the sector.

As one of the largest building processors in New Zealand, Manukau Building Consultants has a unique and important role to play and I and my Department look forward to working with you in the future.