Address to the Roofing Association of New Zealand Annual Conference , 15 June 2011

Introduction

Thank you for inviting me to talk with you today. 

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. 

That event 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.

 As you are aware, the Government has asked the Department of Building and Housing to undertake a program of work following a review of the Building Act 2004.

The review found the current system is more costly and less efficient than it could beand that current regulations make it hard to hold building practitioners and BCAs accountable for building performance.

The review also identified work skills issues across the sector and that change was needed to improve performance further, with a focus on accountability and liability issuesand improving skills across the sector including designers, builders, and other practitioners.

The Licensed Building Practitioner scheme

At the very base of this transformational program is the Licensed Building Practitioner’s scheme.

This scheme is being backed by practitioners around New Zealand as reflecting their status as true professionals and matches the pride they have in the work they do.

Already, more than 9000 practitioner licences have been issued and the demand is growing as consumers look for assurance that the practitioner they hire is capable and professional.

I know that the Department of Building and Housing is keen to work with your organisation, RANZ, and has had initial discussions to run workshops to help you with your applications to become licensed and I urge you all to take up these opportunities as they are presented.

Going forward, a lot of the building and construction work in New Zealand will be focused on the Canterbury rebuild and the Programme Management Offices leading the rebuild are asking all practitioners to be licensed.

Of course, with Restricted Building Work being introduced in March next year, if you aren’t licensed you not only risk missing out on the good jobs, you might also be prevented from working or will only be able to work under the supervision of someone who is licensed.

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.

Fines can be imposed of up to $20,000 for practitioners without the correct licence or to consumers who employ a practitioner without the correct licence.

I know RANZ has some concerns that the LBP scheme doesn’t go far enough and has suggested including re-roofing in restricted building work.

The key difference between roofing work on a new dwelling and that on an existing dwelling is that the latter usually has no design aspect. If redesign is required, then the process will need a consent and becomes restricted building work.

The idea of DIYers carrying out re-roofing work has also raised your concern. I think there are merits in professionals carrying out the work and I see huge opportunities to market yourselves and your professionalism around this.

DIY work must also comply with the Building Code and will be subject to building consent, council inspections, district planning and must appear on a LIM report. This will give protection to future owners of the property.

Experience and quality are definitely selling points and being licensed professionals certainly sets you apart form others in the market, as will the consumer protection provisions including warranty and surety arrangements which are contained in Building Amendment Bill (No 4) scheduled for introduction to the house this year.

However, there is no statutory mechanism which would require LBPs to undertake or supervise all re-roofing work where no building consent is required.

If we were to extend restricted building work into areas not requiring a building consent, it would be contrary to the policy of this Government and its predecessor and would require appreciable rework of the Act which, I believe, would give little benefit.

If we were to include non-consenting re-roofing work under restricted building work it could also apply to the replacement of windows and other replacement or repair work and that is not helpful to the industry as a whole.

Amendment Bills No. 3 and 4

Amendment Bill No.3 is currently making its way through the House and provides more incentives for building contractors to ‘build right first time’ because they will be clearly accountable for ensuring their work meets the requirements of the Building Code.

This Bill forms part of an overall package of changes aimed at lifting the overall performance and productivity of the building and construction sector. It spells out clear accountabilities for the Code compliance of building work for building practitioners, building consent authorities and consumers.

Also included in Bill No.3 are the changes to the way consents are issued. The proposed new Risk Based Consenting process includes:

• No building consent requirements for a broader range of low-risk work
• Limited prescribed checks and inspections for low risk or simple residential  design and build work undertaken by an LBP
• Detailed checks and inspections for more complex higher-risk residential work
• For commercial building work, current best practice will apply.  That is, third-party review and quality assurance processes in place of BCA checks and inspections.

The new risk-based consent system will allow owners to apply for different types of building consent based on the ‘risk of the work to be done’, rather than the current ‘one size fits all’ approach

The system, which reduces Building Consent Authority oversight depending on the complexity of the work and the competency of the practitioners, will only be implemented when pre-conditions are met. These are:

1. greater awareness and understanding of the performance requirements of the Building Code and how to comply with those requirements
2. a base of competent practitioners in the sector, the cornerstone of which is the Licensed Building Practitioners’ Scheme;
3. strengthened contracting requirements and related measures in the residential construction sector; and
4. an effective monitoring regime, which will ensure that building quality is maintained or improved. 

But Bill No.3 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 contracts for 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; and
• The principal building contractors must fix any defects in their work within 12 months.
• Consumers will have reciprocal obligations to notify building contractors of any defects as quickly as possible, and to maintain their dwellings.

A Nationally Consistent Consent Delivery System

Another major project of work for the Government is developing a Nationally Consistent Consent Delivery System.

Two broad options being investigated are a regionalised option, based on far fewer building consent authorities, and a centralised option – with a national building consent authority.  With either system, front line services, site visits, and one-on-one customer service would be retained in local communities.

Back room processing services could be moved to regional or centralised centres allowing access to a higher level of expertise.

Centres of excellence for technically complex consenting for New Zealand’s scarce specialist skills could be developed at either a regional or national level.

The new system has the potential for greater consistency and efficiency and provide a centralised platform for on-line consenting

New Zealand’s wealth and increasing productivity

The Building and construction sector is very important to New Zealand. It accounts for around 4.2% of GDP (excluding the multiplier effect), which is around the same as agriculture.

It also employs 8%, or one in 12, of the workforce.

Importantly, 70% of New Zealand’s household net wealth is held in housing. Yet, a recent survey undertaken by the Department of Building and Housing shows that 31% of all building work of $50,000 plus resulted in disagreements or disputes with 60% of those disagreements resulting in major disputes.

The leaky building legacy has also damaged the sector’s reputation with PwC estimating the repair bill will cost $11.3 billion.

The changes the Government is proposing are designed to raise the professionalism across the sector from architects and designers to building officials and specialised trades such as roofers.

We also want streamlined and sensible systems in place which will improve efficiency but without reducing quality and safety.

This Government has an aspiration to improve New Zealand’s economic performance. To do this, productivity will have to increase in the construction sector if the sector is to contribute to the aspiration of narrowing the gap between in the economic performance between New Zealand and Australia.

The Building and Construction Sector Productivity Partnership is a partnership between the Government and the sector and is aiming to achieve a 20% percent increase in productivity by 2020. That equates to an increase of $2.6 billion per annum.

The partnership is undertaking a number of workstreams including research, procurement methods, design and production systems/supply chain and skills.

As I said, this sector is important to New Zealand’s long term future but it is also very important to ensure safe, quality housing in earthquake hit Canterbury and to restore confidence in consumers hit by the leaky home legacy. 

I encourage you all to become involved and become leaders in your field. This sector has the power to increase the wealth of New Zealanders for all by working together as a sector.