Acknowledgements:

Carl Davies - General Manager

Introduction

Thank you for inviting me today.

Steel framing is a small but growing alternative to wood. It has obvious benefits - its strength and durability for a start.

Competition is good for all of us. It gives consumers greater choice and can reduce prices and that must be a good thing. I want your businesses to grow so that the consumer can have that choice.  

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.

What do the latest consent numbers show?

Building consent figures show the seasonally adjusted number of new housing units authorised, excluding apartment units, fell 8.2 per cent in January 2009.

This series has been falling in recent months and is now at its lowest level since it began 17 years ago.

The trend indicates that the number of new housing units authorised, excluding apartments, has been falling since June 2007 and is now less than half the level it was then.

In January 2009 there were 812 new housing units authorised, the lowest monthly total since the series began in April 1965.

For the first time since June 1998, the value of consents issued for non-residential buildings - $362m - exceeds the value of consents issued for residential buildings - $329m.

This Government aims to improve the overall building and housing system

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

The reform process has already begun.

The Building Amendment Bill

The first steps in reforming the 2004 Building Act have already been taken with the first reading of the Building Amendment Bill earlier this month

The Bill will:

streamline the consent process for house designs to be replicated on a substantial scale and streamlines the process for making minor alterations to work already consented.

It also makes Project Information Memorandum (PIM) voluntary which will also save time and lower building costs.

While this Bill includes some useful initiatives, it is only a start and doesn't go far enough in addressing the compliance issues facing homeowners, developers and builders.  There's more to do.

Boosting the economy with an 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

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

Competition is a good thing for consumers as it brings choice and it can lower prices. As a small but emerging part of the housing market I want to see steel framing become a reliable and attractive alternative for New Zealand homebuilders.

Thank you.