Acknowledgements

Bill Smith - Chairman, Building Industry Federation

Introduction

Good afternoon. Thank you for inviting me to speak at your annual meeting. It's a pleasure to be here.

Many of you will know me and what I stand for. But I want to take this opportunity to underline some of my priorities.

I want to:

• Drive down regulatory and compliance costs by streamlining and simplifying the consenting process.

• Make builder licensing and building consent authority accreditation more efficient and make product approvals more consistent.

I also want to:

• Give a greater focus on providing information to allow consumers and building professionals to make well-informed decisions.

Work in all of these areas is progressing well. I want to spend some time today highlighting developments in these areas and touch on other initiatives aimed at making your life easier.

But first let me give you the bigger picture in terms of investment spending.

Budget 2009 gave New Zealand the shot in the arm it needed.

• Infrastructure spending

The Government has moved quickly to ramp up its infrastructure spend as a means of lifting economic growth and helping New Zealanders through the recession.

The recent Budget provides a significant boost to the building and construction industry with major projects set for a much needed funding injection.

$523m will be spend on building and upgrading schools;

$1bn is to be spent on state highways over the next three years;

$125m will be invested in new and upgraded state houses; and,

$50m has been earmarked to the national cycleway network.

This targeted investment in key construction projects will help pull the economy out of recession.

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,


• Income tax cuts.

And of course the $323m Insulation Fund, which I will touch on later.

These are some of the key investment decisions. But what is the Government doing to help your businesses work more effectively?

• Building Act review

The Government is committed to cutting red tape in your sector and to get rid of unnecessary rules and regulations that add cost and little value.

The first step in this work is soon to become law.

The Building Amendment Bill will speed up the consent process and reduce costs.

It introduces multiple-use building approvals - a measure that will reduce duplication and fast-track the consent process for group home builders who build the same or similar homes on sites across the country.

It also defines a new streamlined process to manage minor variations to building plans after consent is issued, saving time for applicants and councils.

While the Bill is a start, it doesn't go far enough in addressing the compliance issues. 

The Government will therefore be reviewing the Building Act 2004 to drive down the regulatory costs associated with building without compromising building quality. 

The terms of reference for the review are currently being finalised but I expect it to cover the following issues:

• Reassessing what needs to be consented based on actual levels of risk and complexity, with the aim of reducing the amount of building work that requires a building consent;


• Taking a good hard look at the underlying risk and liability framework in the sector - the current joint and several liability regimes drives risk-averse 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;


• Assessing how the role of Building Consent Authorities (BCAs) might change if more risk is transferred to builders, designers and consumers;


• Exploring the extent to which licensed building practitioners could self-certify their work;


• Examining the role that home warranty insurance might play in such an environment; and


• Removing unnecessary building control regulation.

In addition, the Government will be looking at a number of other non-regulatory ways to improve performance, such as:

• Supporting councils to work smarter using technology and leveraging the same technology to reduce design and building costs;


• Putting a greater focus on information and education, so people make informed choices rather than having them made for them;


• Facilitating and incentivising BCAs to consolidate and rationalise their functions - on the basis that it is unlikely that 73 BCAs can sustain the capability to do their job properly;


• Get better outcomes from the increased investment in trade training - we have concerns about the proliferation of qualifications (some of which are of dubious quality and value), the absence of good qualifications for some lower level trade skills, and the different funding and assessment models for apprenticeship training.

• Building Consent Authority accreditation

Let me briefly touch on the Building Consent Authority accreditation scheme, one of the main reforms of the Building Act 2004.

It aims to lift local government's building control operations by setting some minimum operating standards and capability requirements.

All 76 local authorities, and five private organisations currently providing services to councils, have achieved the first accreditation phase.

A report into that first phase has now been completed.  It showed what went well and what did go so well.

Department officials will learn from the process and the lessons highlighted in the report to ensure improvements will be made during the next phase which has already begun.

BCAs are already working with department officials to consider more effective collaborative approaches to their building control functions.  Individual authorities are being supported to further streamline and refine their consenting systems.

That's a snapshot of what's happening at a macro-economic level.

What's happening closer to home? What is the Government working on that might affect your businesses?

There's one project some of you will already be familiar with and that's the home performance rating tool.

• Licensing

A key component of a move to a more risk-based regulatory system, with an element of self-certification, is a licensing scheme that demonstrates a practitioner's competence and accountability.

 We also recognise that it will help lift productivity and skills. On this basis, I can assure you that the Government supports licensing. 

Time is being taken to make sure that we get the definition of restricted building work right, and that we take the opportunity to simplify and streamline the scheme.  

I know that you need certainty on licensing, and I expect decisions taking licensing forward will be made within the next couple of months.

• Home rating tool

As you know, I believe in consumer choice and allowing individuals the opportunity to take greater responsibility for the decisions they take.

A good example of that philosophy being applied in practice is the home rating tool - an initiative your Federation is supporting.

The single rating tool is a simple, easy-to-understand way for homeowners to assess how well their homes perform in terms of energy efficiency, water useage, indoor air quality and moisture.

In essence, it will help homeowners:

• Assess their home's performance and give advice and information on how it can be improved, and

• Produce a comprehensive, independent audit that could add to a home's value.

This work dove-tails well into the Government's Warm Up New Zealand: Heat Smart campaign which gives assistance to people who want to insulate their homes.

It is an example of a voluntary industry-led initiative which provides consumers with the information they need to make better decisions which can also drive non-regulatory improvements to the existing housing stock.

A large number of sector organisations including trade bodies, government departments, agencies, professional groups and builders are working together on this project.

I hope an initial scheme will be ready to be piloted by the end of this year.

As I say, this scheme compliments the Government's insulation fund.

• Warm Up New Zealand: Heat Smart

The Government's multi-million dollar scheme to help New Zealanders warm up their homes has been welcomed by many in the building and housing industry as well as the public.

Warm Up New Zealand: Heat Smart is a $323 million fund to help insulate thousands of Kiwi homes.

It will allow more than 180,000 New Zealand homes to have access to grants for insulation and clean heating over the next four years.

We all know how cold Kiwi homes can be during the winter months. This scheme is not only an important step towards warmer homes it will give a much needed boost to the retrofit industry.

The goal is to see up to 60,500 homes being insulated each year by 2012/13.

And it will have important knock-on effects for the economy as it will generate jobs for New Zealanders involved in producing and installing insulation and clean heating.

• Timber treatment

The Department of Building and Housing has been actively working with the timber industry to help ensure the integrity of timber supply for consumers.

Quality assurance procedures are being reviewed to ensure:-

• Timber is treated safely; and,

• Information is available to make it easier for the right timber to be selected for the job.

Simplifying the timber grading system is also being reviewed by the industry-led group to reduce the confusion that can sometimes result both among suppliers and consumers.

The Department is working with leading timber representatives to ensure that timber remains a reliable building product that consumers have faith in. Scope of the work includes:

• Structural timber which is simple to select for strength grading and preservative treatment;

• Timber that is clearly labeled; and,

• Robust audit / quality assurance process that applies to all timber suppliers and producers.

To assist in the programme the Department is working with industry to:

• Carry out reliable research for boron treatment for all framing; and,

• Develop standard operating procedures for timber grading and treatment.

In addition the Department of Building and Housing is working with BRANZ and others to ensure existing guidance is working effectively.

It is active in funding critical weathertightness research and intends to review and update published guidance in the coming year.

Parallel to these initiatives, the department is working with sector leaders who repair leaky buildings.

It has produced guidance on repair procedures and the methodology of leaking buildings for industry practitioners and consumers.

Staying on the theme of building materials, improving product approval processes is another important priority.

• Product certification

As I mentioned, I want to see a simpler and more consistent way to achieve approval for building products.

I recognise the need for a transparent product assurance framework that drives more consistent and efficient product approval decisions by local authorities. 

One of the things we have done to support the assessment of products is the product certification scheme.

The voluntary scheme is one way of restoring confidence in the materials we use and to speed-up the consenting process.

I recognise the benefits of such a scheme and support the principles behind it.

However I also recognise that the product certification scheme is targeted at high risk or new products and on its own does not address all of the concerns around achieving product approval at the consent stage.

The scheme is being reviewed as part of a wider review of the Building Act and I expect decisions on its future direction to be taken later in the year.

Finally, there has been some media interest recently on the leaky home issue. The Government's position on the issue has not changed.

• Fixing leaky homes

This Government is taking a fresh look at weathertight issues and is committed to getting leaky homes fixed.

On my direction, the Department of Building and Housing has undertaken a comprehensive review of the approach currently taken to weathertight issues. This review is currently being finalised.

Once the results are known, the Government will decide on the best option to address the problem.

This is a complex issue and time needs to be taken to fully consider the most appropriate way forward.

• Closing remarks

People who work in the building and construction industry are practical, can-do people. I want the Government to emulate that ‘can-do' attitude by ensuring that everything we do boosts growth, jobs and helps retain skills.

The action I've outlined today is a good start but there much more to do and I intend to see the job through.  

Thank you.