Retirement villages have proved to be highly successful at delivering comfortable, happy retirements to thousands of Kiwis for over 30 years.

They offer a healthy, safe and convenient way of living - many really are communities within a community.

But as businesses operating in very competitive markets they can be subject to the uncertainties brought by economic change.

The current economic climate has brought difficulties for the retirement villages sector but under the guidance of the Retirement Villages Association and others, supported by this government, operators should be confident of a healthy future.

• A healthier economy

Fewer projects are getting off the ground as capital becomes more difficult to obtain as lenders tighten their belts.

This is made worse by the shrinking construction sector.

But it's not all bad news as the service industry in New Zealand is set to grow once the upturn begins.

The Government wants to help you take advantage of that up-turn when it begins.

The Government's Job Summit held earlier this year was part of that. It was  important as it gave businesses, like yours,  a chance to put forward new ideas to help boost the economy and create jobs.

As a relatively big employer, retirement village operators have an important role to play in providing training and skills.

I congratulate you on creating ‘The Manager of the Year' competition.  The finalists will be addressing conference later today before the winner is announced this evening.  I congratulate all of the finalists - it is unfortunate that there can be only one winner. 

• Competition

As I said, retirement villages operate in a competitive environment. There are a range of providers, from small charitable, welfare or religious operators through to large commercial operators.

This government recognises the importance of retirement villages as a provider of homes to older people.

That's why it will continue to ensure the right conditions are maintained to promote growth and prosperity whenever possible.

But at the same time we should ensure older people can have confidence that they will be able to continue to live their homes within the retirement village and that in many cases, their life savings are invested in.

Older people should be assured of their tenure should the unthinkable happen and operators find themselves insolvent.

The example of Crossdale Courts, Christchurch demonstrates why the Act is necessary and how it protects residents in insolvent villages.  These residents faced eviction by the mortgage holder.  The recent Court of Appeal judgment has assured these residents of their right to live in their units.  This demonstrates the importance of the consumer protections under the Act. 

The Retirement Villages Act can help prevent cases such as this being repeated.  But of course it will not eliminate all of the less scrupulous operators.

Laws on their own will not give 100 per cent protection. It is up to residents and intending residents to be aware of their rights and obligations before entering an agreement.

• Greater assurances for intending residents

The downturn has increased competition in your market. Intending residents are in the driving seat as they are more likely to shop around to find a deal that best suits them.

This is an ideal opportunity for statutory supervisors to show how valuable they can be by stepping in to help protect the interests of both intending residents and operators.

If they find a business not to be stable they should work with the business to improve the operation.

• The challenges ahead

So what lies ahead for the sector?

As I've mentioned already, the general housing market will have an effect on residential unit prices.

This has knock-on effects to the retirement sector as intending residents are getting less for their property ending up with less to invest for their retirement.

Some people have lost money following the recent spate of finance companies collapsing.

And we are moving into a period where the number of people owning their own homes is dropping - these factors will all affect your business.

These are some of the challenges ahead but they should not deter individual operators or the sector in planning for the future.

• Cutting red tape

I believe in giving all businesses, including retirement village operators, the freedom to operate while ensuring the consumer is adequately protected.  

I want to cut red tape wherever I can. The Building Amendment Bill (No2), currently progressing through Parliament, is a good example.

The bill reduces compliance requirements for building projects and improves the efficiency of the building consent process.

Specifically, it introduces measures known as ‘national use approvals'. These approvals will be issued by the Department of Building and Housing, allowing specific designs built at scale to automatically comply with the Building Code.

This kind of approval could encourage the construction of retirement villages as it will streamline the building consent process for volume builders who replicate the same unit design a number of times.

It will reduce costs and speed up the consent process which is good news for all involved.

My colleague, the Hon Phil Heatley has introduced the Unit Titles Bill to the House.  The aim of the Bill is to have greater transparency in unit title transactions in the interests of the collective.

I am aware that there are a number of unit title retirement villages in New Zealand and that there is a great deal of interest in the Unit Titles Bill.  The Bill is now before the Social Services Select Committee and will report to the House in September. 

Officials in the Department of Building and Housing are assessing the potential impacts of the Unit Titles Bill on the Retirement Villages Act.

I have asked the Department to prepare work to amend the Retirement Villages (General) Regulations 2006 to simplify the disclosure statement. 

• Communication is the key to success

The Retirement Villages Act is based on good communication. Good communicators are less likely to face disputes and the converse is true.

The Retirement Villages Code of Practice 2008 comes into force on 2 October 2009.  The Code of Practice helps operators to communicate effectively with residents by requiring clear policies, processes and procedures on a range of operating issues.

The Department of Building and Housing can help you effectively implement the Code of Practice.

It has prepared a best practice guide on refurbishment and fair wear and tear to explain how to implement the refurbishment clause of the Code of Practice.  I understand copies have been placed in your conference packs, with additional copies being sent to every registered retirement village in New Zealand.

The Department is planning to develop more best-practice guides to build greater awareness across all aspects of the sector.

• Conclusion

The Retirement Villages Association leads the industry in providing good quality, stable accommodation for people in their retirement.

Kiwis should be able to choose how they spend their retirement. Having a strong retirement sector is good for everyone.

The market is competitive - which is good for the resident and healthy for the industry. 

I want to see that continue and I believe, with the right operating environment, it will.

Thank you.