Address to the Building Industry Federation Annual General Meeting, 27 June 2011Building and Construction
Good afternoon and thank you for inviting me here to speak with you today and it is with pleasure I do so.
I know we share some common concerns in regard to increasing quality in the building industry, not just through practitioners but also in ensuring the quality of products used.
Like you, I support practical regulation of the industry through national and consistent application of the New Zealand Building Code and New Zealand standards.
The Canterbury Earthquakes
I am sure that for you as for me, the topic at the forefront of your mind is the devastating aftershock that struck Christchurch on 22 February, resulting in substantial loss of life, serious harm to people, and severe damage to buildings and property.
And on Monday, June 13 the city was again struck by two powerful aftershocks that added to the substantial building damage.
These events reminds us that New Zealand is susceptible to earthquake and enforces the vital importance of good design, quality construction, and a building controls system that focuses on safeguarding human life.
As Christchurch begins to re-build and as the Government takes steps to help owners of leaky homes to get their houses fixed, the need for robust building controls is reinforced.
In the wake of the severe damage to some buildings and the consequent loss of life, it is important we ensure that our building regulations will deliver the kind of earthquake-resistant buildings that New Zealanders are now demanding.
That is why the Department has already used its powers to make immediate changes to the Building Code supporting documents. Effective three weeks ago, from 19 May, the seismic hazard factor for Christchurch has increased by 35 percent – from 0.22 to 0.3 – and the foundation requirements for the city’s new houses have been strengthened. This means homes and buildings on flat land in the Christchurch area will need increased bracing and stronger foundations.
The Department’s technical investigation into the Canterbury Television, Pyne Gould Corporation, Forsyth Barr and Hotel Grand Chancellor buildingswill give us invaluable insights into construction methods, including on land prone to liquefaction.
The Department is being assisted by independent technical experts. It also has evidence from people who have photographs, video recordings or can give first-hand accounts of the performance of these buildings, both before and after the earthquake of 4 September 2010, and during the earthquake on 22 February 2011.
The Department of Building and Housing is also working with Christchurch City Council, Waimakariri District Council and others to supply additional temporary accommodation for Canterbury residents who need alternative accommodation because their homes have been badly damaged by the earthquakes.
From an economic perspective, the Treasury has estimated the combined financial cost of the two Canterbury earthquakes at $15 billion – about 8% of GDP and 2.5% of the nation's capital stock.
But the rebuild of Christchurch will support economic growth as homes are repaired and rebuilt.
And productivity in the building and construction sector will help New Zealand and the Government reach its goal of closing the income gap between New Zealand and Australia.
There is a lot of effort going into improving long term future of the sector while ensuring the quality of the New Zealand’s building stock.
The Productivity Partnership, a partnership between the sector and Government, has a goal of increasing productivity in the sector by 20% by 2020.
Currently the sector contributes 4.2% of GDP. Increasing productivity by 20% will lead to a 2% increase in GDP which equates to around $3.6 billion per annum.
The partnership has identified four main work streams – procurement, skills, design and production systems/supply chain and research.
By thinking about these areas and what applies to you in your businesses, you can improve your own profitability while increasing the country’s productivity.
For example, I can see the government having a leading role in assisting in improving New Zealand’s procurement methods. By planning our work program and looking at the outcomes we want from the building, we will improve the sustainability of the sector and help alleviate the traditional boom/bust cycles.
Just as easily, I can see your organization becoming actively involved in the design and production systems/supply chain. An area that is very important going into the Christchurch rebuild.
An example of speeding up the consenting process while retaining building quality is the national Multiple-Use (Multiproof) approval regulations which have now been amended to accommodate a wider range of clients.
Multiproof is a streamlined national multiple-use approval service for volume builders that enable them to obtain fast-tracked building consents for standard multi-use building designs.
It was introduced last year to cut red tape without cutting corners and has attracted interest from a wide range of volume builders, including those who develop retirement villages.
Initially, the eligibility criteria was deliberately limited to detached or semi-detached houses and outbuildings and did not allow for units of six or more grouped together as often happens in retirement villages.
Now the service has proved itself, we have removed the reference to specific types of buildings and have opened MultiProof up to a broad range of building designs including granny flats, holiday cabins and large marquees as well as retirement villages, with the key criteria that applicants must have the intention and ability to replicate their design at least 10 times in a two year period.
Building Act Review
But assisting productivity and ensuring quality and sustainability in our building and construction sector needs further support from the Government and that is why a program of work has been developed following a review of the Building Act 2004.
I am committed to the goal of a more efficient and productive sector that stands behind the quality of its work. A sector where there is no need for someone else to pick up others’ mistakes, because designers and builders “design and build right first time” and understand their rights and obligations.
In this sector, building consent officials will continue to play a key part, but they will be focussed on areas of greater risk, as others are clearer about their accountabilities for ensuring building work complies with the Building Code.
The earthquakes have highlighted the importance of building to Code and the accountability of owners, designers, builders, and building consent authorities, all of whom are responsible for ensuring that all buildings comply with the Building Code. Your role, in particular, is integral to this.
And the huge re-building task which lies ahead of us makes the Government’s goal even more important. With so much work to do, and resources so stretched, it is essential that all those involved do a quality job, first time.
Amendment Bills No.3 and No.4
The changes arising from the Building Act review cover the following broad areas:
Clearer accountability for design and building practitioners, consumers and building consent authorities.
Consumer protection and remedy through disclosure, contracts and dispute resolution options.
Risk Based Consenting and clearer accountability, are outlined in Bill No.3 but it does not stand alone. Amendment Bill No.4 is being introduced this year and contains the consumer protection measures.
This Bill proposes a number of protections such as:
- Mandatory written contractsfor building work over $20,000.
- The principal building contractors must disclose information, for example information about their skills, qualifications, licensing status, track record, financial back-up or insurance and dispute history;
- The principal building contractors must fix any defects in their work within 12 months; and
- Consumers will have reciprocal obligations to notify building contractors of any defects as quickly as possible, and to maintain their dwellings.
Licensed Building Practitioners
LBPs are an important part of ensuring quality and competency into the future.
Under the scheme, building practitioners are independently assessed as competent and they’re accountable to independent Board – anyone can make a complaint if they feel the work is shoddy.
Licensing confirms a practitioner’s level of expertise and practitioner responsibility and accountability becomes clearer.
Nearly 10,000 licences have been issued and I am confident there will be enough competent licensed practitioners in place for the introduction of restricted building work next March.
Restricted Building Work
From March 2012 only an LBP will be able to carry out or supervise the design and construction of critical work known as restricted building work on houses and small to medium sized apartments.
If you don’t have the correct licence you will be excluded from carrying out the work and fines can be imposed up to $20,000 for practitioners without the correct licence and consumers who employ a practitioner without the correct licence.
If you have, or are employing people who have already become licensed - well done. If not and your staff have yet to apply, I encourage you to get them to apply now to ensure they are an LBP by March.
I also suggest you put pressure on your subbies, those involved in the specialised trades, to make sure they are licensed – you don’t want to have your building projects delayed while your subbies scramble around to get licensed or you are forced to get licensed subbies in at the last moment.
I don’t need to remind you that the Licensed Building Practitioner scheme underpins a quality and accountable building and constructions sector going forward something which is important to all of us here in this room, and also to the whole of New Zealand.
Thank you again for giving me the opportunity to talk to you today.
I think this is an exciting time for the industry, and I look forward to working with you in the future.