Retirement Village Association Annual Conference 2012

• Good morning. Thank you for inviting me to open your conference - it is a pleasure to be here again.

• I would like to acknowledge Andrew Giles, CEO of the Retirement Villages Association of Australia who is attending the conference.

• When we get together I often find myself talking about the detail of various matters that are under discussion. That’s valuable and important, but today I want to take a moment to remind you of the bigger picture. I see from your theme, Accomplishing the Intent – Direction, Community, Challenges, that’s exactly what you plan to do at this Conference.

Grey tsunami

• There’s a phrase that has become common in statistics-talk – the Grey Tsunami. As you know, currently around 13 per cent of the population is aged 65 or older and projections show that by 2020, this will rise to 17 per cent. By the time the last of the Baby Boomers turn 65 in 2030, almost a quarter of the current population (22 percent) will be over the age of 65.

• Not only does this have enormous implications for your group, it also has implications for many areas of Government, as many people in this group will need residential care in the future.

• The Grey Tsunami is approaching in the way all these waves roll in – at an alarming rate. So it’s vital that we – your sector and the Government – are ready for it. That means ensuring that the structure underpinning the way retirement villages work is fit for the demands that will be placed on it. We’re making good progress, but there’s real urgency to getting the structural framework shipshape.

Code of Practice Review

• A key part of that structure is the Code of Practice. This will be an excellent tool that will ensure there are clear, understandable processes in place for operators and residents to follow if residential units have been damaged or destroyed in no fault situations. It's important that we take the time needed to get it right.

• To recap, since the closure on submissions for the public consultation on the proposed variations in November, the Department developed a set of variations for these clauses, obtained a legal view and advice from the insurance industry and, with the Retirement Commissioner, briefed me in March.

• The upshot of that meeting was that I agreed to further limited consultation on the proposed variations, and they were circulated to key stakeholders.

• Soon I will be weighing up the views of the Department and of the Retirement Commissioner and a range of other factors.

• A primary factor is the insurance industry’s situation. The industry has yet to fully stabilise following the earthquakes in Canterbury and economic events outside New Zealand. That means the future availability, coverage and cost of insurance is uncertain, and that must be taken into account.

• We must find the right path for this important matter, and make sure that any variations to the Code are equitable and workable – legally and operationally – for residents, operators and insurers. I ask for your patience with this as we work through the issues.

Disclosure statements

• As you know, under the Retirement Villages Act, village operators must provide intending residents with disclosure statements giving intending residents the information they need to choose a village that will suit them.

• I firmly believe that many of the problems identified with disclosure statements do not need law change but rather an education and awareness approach, and the response to the consultation process backed this view.

• Accordingly the Department has provided you with further information, support and guidance on how to produce appropriate disclosure statements that are clear, well presented and easily understood by those who will be reading them.

• I’m confident any changes arising from the review will only have a minor impact on overall disclosure requirements.

Christchurch earthquake situation

• When it comes to the situation in Christchurch, you have specifically asked me if residents of retirement villages in the red zone will receive a payout based on the 2007 valuations, plus a top up from CERA.

• Initially the Department advised that there was no valid argument for providing additional financial assistance to red zone retirement village residents. It suggested that CERA treat retirement village operators in the same way as other commercial enterprises in the red zone for compensation purposes, and that retirement village residents should not receive additional specific compensation.

• This advice was based on information available at that time that suggested that all retirement village residents displaced by the earthquake had been successfully rehoused.

Super Ministry

• Days from now on July 1 the new ‘super’ Ministry of Business, Innovation and Employment will be formed.

• As you know, the Ministry will bring together the existing functions of the Ministry of Economic Development, Ministry of Science and Innovation, Department of Labour and Department of Building and Housing.

• This is an exciting development. The new Ministry will play a central role in shaping and delivering a strong economy and backing New Zealand’s talent, ideas and enterprise. As far as business is concerned it will help the Government drive forward our business growth agenda and make it easier for businesses to engage with us.

• As far as the Department of Building and Housing is concerned, it’s in the mix because its building and construction policy, regulatory and support functions are closely linked to the business growth agenda.

• Many of the policy decisions needed to make our economy more productive and competitive relate to the building and construction sector. It also makes sense to align building control and regulation with other infrastructure areas to create a more integrated regulatory environment.

• There won’t be any change to the Office of the Retirement Commissioner because the Ministry of Economic Development already monitors it. There are no plans to change any of the Commissioner’s roles and responsibilities, as to do so requires a change to the Retirement Villages Act 2003, which is not a priority for review.

Costs of statutory supervisors

• I know you’re concerned about the varying rates of the costs of statutory supervisors. This matter is in your hands. If you consider your current statutory supervisor is not offering value for money, you can take action. You could consider appointing an alternative company; or seek an exemption from appointing a statutory supervisor from the Registrar of Retirement Villages – it’s up to you.

Value from the Department of Building and Housing

• Good communication is vital and I’m happy to say I consider the Department of Building and Housing is committed to providing good, accurate information and education to the retirement village sector.

• The Department’s Advice, Information and Education Plan includes stakeholder engagement, advertising, provision of printed resources and website information. There’s also a list of mediators available to mediate disputes in retirement villages. The support is there, so take advantage of it.

• Having said that, the support each village receives from the Department does vary. That’s because the larger, self-managing villages need little in the way of assistance, while other villages find the Department’s resources useful.

Conclusion

• I’m concluding by going back to my starting point: the grey tsunami is on its way. To roll with it and make the most of its opportunities, we need to work together, get the foundation structures right, and adapt to changes – some of which may be as unexpected as the Canterbury earthquakes.

• As a Government we recognise the importance of retirement villages as providers of homes, services and facilities to older people and will keep working with you to develop a partnership everyone benefits from.

• Again, I thank you for inviting me to open your annual conference. I wish you well for the rest of your event.