Speech to the Certified Builders Association of NZ Annual Conference

Thank you for the opportunity to close the formal business of your conference this year - although I note there's still the "tool racing" final to come, so I promise I won't keep you too long!

I trust you have had a successful conference.  Judging by the programme there were plenty of opportunities to share ideas and learn about new developments.

This afternoon I want to talk to you about a shared goal for the building sector, and some of the steps we are taking to move towards that goal.

But first I want to thank CBANZ, and especially your executive, for your valuable contribution this year to some very important developments - in particular licensing and the review of the Building Act.  

I know Allan and Bax, and others such as Richard Merrifield, have put a lot of time into working with the Department of Building and Housing.  They have done a good job of representing the views of Certified Builders.

When they are at the table, I can be confident that the Government is hearing exactly what builders think - even if we might not always like it.

In fact I find myself in agreement with much of what CBANZ says - such as your commitment to achieving highest possible standards in both workmanship and business practices.

Unfortunately, one of the legacies of the leaky homes disaster has been that many New Zealanders have lost confidence in the building and construction sector. That has to change. 

Goals

I know that too much talk of "goals" or "visions" can sound a bit touchy-feely, but I think it is important to have an idea of where we are heading.

My goal is, a building and construction sector that is New Zealanders can have confidence in ... that is operating efficiently, and is made up of people and businesses who take pride in and stand behind the quality of their work.

I would hope that everyone in this room would agree that's a good place to head for. Just by being members of Certified Builders you're already on that track, as you are committed to quality and professionalism.

I am heartened by the recent setting up of the Construction Industry Strategic Group - it's a group of senior sector people with a lot of influence with whom I can engage with on key strategic issues.  Richard Merrifield is a member of the Group, representing small to medium builders.

From my discussions with the Group to date, they have a similar sort of goal in mind. So I think there's a shared view developing of where we want to get to. Now let's talk about how we get there.

Both of us have a role to play here - the Government can set the framework but you in the sector also have to tackle the issues. We in Government are taking a number of steps, all part of our Blueprint for Better Building. The first step is licensing.

I know I'm preaching to the converted, but licensing is critical to rebuilding confidence because it makes it obvious who the competent builders and trades people are.

CBANZ is actively helping members apply. Many of you who recently applied did so through the facilitation of CBANZ. We are most grateful for your ongoing support.

Streamlining

It was feedback from CBANZ and from the sector that guided our recent streamlining of the Licensed Building Practitioner scheme.

You said folk with relevant qualifications should have their efforts formally recognised. So in February I announced that people with recognised qualifications could apply to be LBPs using the streamlined process.

The Department now recognises nearly 30 qualifications. Many of you here today have taken advantage of this and used the streamlined process to apply. Some of you are about to apply - you too will find the streamlined application faster, easier and often cheaper.

We all know it's not about cutting quality. No one wants that. The recent changes to the scheme are about boosting efficiency and recognising the hard yards that those of you with qualifications have put in. With or without qualifications, the scheme recognises competent people in the industry. All LBPs have demonstrated recent industry knowledge in their areas of specialisation to be licensed.

We also took a look at the licence classes and made some changes to rationalise them. In April, I announced further streamlining initiatives to simplify the Site and Design licence classes, based on straight forward building categories.  While LBPs can only work within their competence, the change means you can gradually lift your skills and take on bigger work, without having to worry about working outside your licence or getting a new one. We also introduced a new licence class for foundations workers.

Ongoing Competence

Being an LBP is not just getting that licence card. LBPs need to keep their skills and knowledge up-to-date. That makes sense. It's about ongoing competence. You'll find that keeping current is not difficult. There's a raft of activities you can do to keep sharp.

Even being here at the conference has gained you six points for your skills maintenance. Don't forget to keep records though, as you'll need to prove you've kept your game up when you relicense. I understand there was a workshop on skills maintenance here yesterday - if you missed that, get in touch with the Department of Building and Housing.

LBP brand

Once you're an LBP, you become part of the LBP brand, that mark of quality that shows the sector and your clients that you are competent in your field. It's something you can be proud of.  You can hold your head high that you've stepped up and helped rebuild confidence in the sector.

Consumers are increasingly demanding licensed professionals. One of the first LBPs in 2007 told us recently that 70% of his clients ask him if he's licensed.  And we'll see more of that as the scheme is actively promoted later this year. You'll find that being an LBP really gives you that extra edge in a tough market. Being licensed is a wise choice with a definite marketing advantage. It's time to accept the recognition and benefits due to you. 

Building Act Review

When Craig Foss spoke on my behalf at your conference last year, we were just finalising the terms of reference of this major project.

This review is an opportunity to make sure that the regulations provide the right incentives for people in the sector to act responsibly and efficiently.

In short, we are looking at how to: 

• clarify the rules so that everyone is clear about what's required from them and what they're accountable for;


• hold people to their responsibilities through effective contract and warranty arrangements;


• sort out any disputes under contract, through agreed adjudication processes;


• focus building consent authorities on a risk-based approach to checking plans and building work


• improve the overall efficiency and effectiveness of the system to minimise costs.

In February this year I put some ideas on the table for discussion. 

More than a thousand people turned out to a series of meetings to discuss those ideas, and over 380 formal submissions were made - including a thoughtful and useful submission from CBANZ.

There were a couple of ideas in the discussion document which really got people going.

Risk-based consenting

The first was the idea of exempting more work from needing a building consent, and reducing council checks and inspections of low risk building work.   The idea is, that council involvement would be related to the level of risk, and that we could save some time and money by focussing their attention only where it was really needed.

Building inspectors around the country wasted no time telling us that many builders couldn't be trusted to do even simple work without supervision, and they were also pretty scathing about the quality of work of architects and designers. 

They quoted the number of consent applications that had to be re-done, and the number of failed inspections.  And some said that the way to save time and money was for the architects, designers and builders to get it right first time ... rather than blaming the council.

I was taken aback when I heard that some designers and builders admit they rely on the building inspector to tell them how to comply with the Building Code. I hope no Certified Builders are in that camp.

At the same time, there were some worrying examples of the difficulties people experience dealing with councils - in particular the inconsistency from one council to another.

What all this means is that we need to take another good, hard look at all the options, to make sure that anything we do to reduce cost does not compromise quality.  We're in the process of doing that at the moment.

Liability

The other hot topic during the consultation process was how to sort out the question of responsibility and liability.

It's a sad fact that all the discussion in this area is coloured by the leaky homes disaster, and the significant financial impact of rulings of joint and several liability in leaky homes cases.

I think it's time to start looking forward, at how we can fix any future problems without getting the lawyers involved.

The idea that we put forward in the discussion document is to get very clear, robust contracts between clients and builders, with warranty provisions and adequate financial backing, so that any problems that did arise would be fixed under contract.

That sounds pretty similar to what CBANZ offers now. I would expect that to see fewer disputes, and those that do arise being resolved under contract law, rather than people suing for negligence.

A lot of the submissions asked for a legal change away from joint and several liability. That is one of the areas we are still considering.   That would be a major change to New Zealand's legal framework, and we need to be very clear about the problem we're trying to solve, and the best way to solve it.   

The review's looking at some major issues for the construction sector, and for New Zealand, and if we have to take a few more weeks than we first planned, then we'll take that time to get it right.

Weathertightness 

I am hopeful that we are finally getting to a point where New Zealand can start to move on from the leaky homes disaster.

You will have seen that the Government has put together a financial assistance package to help affected homeowners to move on with their lives.

The priority is getting homes fixed and moving beyond the current state of endless disputes and litigation.  The only ones winning out of the current system are the lawyers.

I want to see this money used to get the builders in to get these houses fixed up. I think there will be plenty of work and it's important that it's done by competent builders, such as yourselves.

The Department of Building and Housing is putting together information and guidance for designers on how to comply with the Building Code when designing remediation works for a leaky building.

Product assurance

The Department is also continuing to work on ways to provide more assurance over products, especially those new to the market.

It has just published a product assurance framework to help manufacturers and suppliers demonstrate compliance with the Building Code and is about to start a series of seminars with product suppliers, to improve the quality of information they provide.

Work is also ongoing on improving the Product Certification Scheme so it better meets the needs of the sector. 

Sector input

I've talked about what the Government is doing towards our goal, of an efficient and effective building and construction sector that New Zealanders can have confidence in.

But you know as well as I do that it's not the Government out there building the houses - and changing the law will not on its own change the way the sector works.

That's why I put so much emphasis on working with you guys - the CBANZ executive and the others in the sector who are willing to show some leadership.

We've been talking for a while now about working with the sector to improve productivity.

The Department has been working with the likes of BRANZ, the Building and Construction Industry Training Organisation, and industry associations such as yours to set up a ‘productivity partnership' to run a sector-led work programme on several fronts.  

These fronts will involve research, work on the design and production process, skills, and the procurement process. I look forward to seeing this talk turning into reality in the not too distant future. 

Conclusion

I know the economic downturn has been difficult for the sector, but I think we are starting to turn the corner.

The building and construction sector is one of the engines of New Zealand's economy - we need that engine to be operating as efficiently as possible, delivering the quality results that we should be able to expect.

Thank you.