Speech to the Retirement Villages Association Conference

Good morning. Thank you for the opportunity to open the Retirement Villages Association Conference 2010. I'm pleased to be able to join you here in Surfers Paradise for what I'm sure will be very successful conference.

I note also that it is the Association's 21^st birthday - congratulations on this milestone.

This morning I want to talk to you about how important it is for retirement village operators and residents to work together. I also want to discuss some of the work the Government is doing that contributes to the retirement village sector.

Compliance with consumer protection measures

As you will all know, the Retirement Villages Code of Practice came into force in October last year. The introduction of the Code of Practice was the final stage in the implementation of the Retirement Villages Act 2003.

When I addressed your conference last year, I talked about how the Code of Practice sets out clear policies, processes and procedures on a range of operating issues. It provides a useful basis for operators to communicate effectively with residents.

The Code of Practice, together with the Act and the regulations, provide consumer protection for residents and enable operators to manage villages effectively.

This past year has been a tough trading year. Development finance became more difficult to obtain, the commercial construction sector showed a downward trend, and housing consents rose tentatively from a low base.

Two of New Zealand's 324 registered retirement villages were temporarily suspended from the retirement village register; one village worked its way out of receivership, and one went into receivership. The majority of retirement villages have weathered the challenging economic times and continue to provide residents with first class services and facilities.

However, the competitive market is no excuse to avoid the obligations of the Retirement Villages Act, the regulations, or the Code of Practice. In tough times it is even more important that industry leaders such as yourself lead by example. The Association's mentoring panel is an ideal forum for sharing business ideas, and I encourage members to take the opportunity to access this help if they are struggling to comply with requirements or want some ideas on how to follow best practice.

In the case of the villages that went into receivership during the past year, the Retirement Villages Act provided protection by way of memorials on the titles, which gave affected residents security of tenure over the mortgagees and other securities holders.  The statutory supervisors also worked hard to keep residents informed and to protect residents' rights. As a result, negative publicity was avoided, and the relationship with residents was maintained.

The message here is, compliance with the Act, the regulations, and the Code of Practice, as well as effective communication, will help maintain relationships with residents and ensure difficult situations are resolved successfully.

Disputes resolution

Although the Retirement Villages Act 2003 is finally in place, the Act on its own will never provide operators and residents with 100 per cent protection against disputes. Good communication and information are also critical.

It is essential that operators, residents and intending residents are aware of their rights and obligations, and agreements are based on a full and frank exchange of information.

Accordingly, this Government is now focused on working with the sector to ensure practical advice and information is available and readily accessible.

The Department of Building and Housing has already produced a best practice guide on refurbishment for operators. The Department intends updating this work regularly. 

Disclosure statements

Under the Retirement Villages Act, village operators must provide intending residents with disclosure statements. The disclosure statements give intending residents the information they need to decide whether or not to move into a village, and to choose a village that will suit them.

At my request, the Department consulted the operators, residents and other key stakeholders about the content of disclosure statements. I want to thank those of you who responded; we received a total of 128 submissions.

After analysing the submissions, we have decided not to amend the regulations at this time. The views expressed in the submissions confirmed my belief that many of the problems with disclosure statements do not require law change. 

Disclosure statements simply need to be clear and able to be understood by every person who has an interest in them. 

So, rather than lengthy and time consuming regulation change, I have asked the Department to provide retirement village operators with further information, support and guidance on how to produce appropriate disclosure statements. I also urge you to work with your residents to ensure your own disclosure statements are clear, well presented and easily understood by those who will be reading them.

Information and advice

To support better communication about the Retirement Villages Act, the Department of Building and Housing provides operators and residents with a variety of tools to understand their consumer rights and obligations. These include a quarterly e-newsletter for the retirement village sector, regular retirement village sector group meetings, and various publications providing valuable information and advice about the sector.

If disputes arise, experienced mediators are available to mediate disputes. Ask the Department for a list of these mediators, or go to its website.   Support is there - take advantage of it.

The Financial Reporting Act

I recognise that meeting the International Financial Reporting Standard requirements can be expensive. This Government is prepared to amend legislation where necessary, but we do not believe in duplicating legislation. The Financial Reporting Act provides a mechanism for not-for-profit villages who are struggling to meet the requirements to propose an alternative financial reporting standard, enabling them to meet their financial reporting obligations.

I was disappointed to learn the Association did not submit an alternative financial reporting standard to the Accounting Standards Review Board. A successful alternative proposal would have reduced accountancy costs considerably.

Until a village, a group of villages, or the Association, proposes an alternative reporting standard to the Accounting Standards Review Board which the Board turns down, I will not consider amending the Retirement Villages Act or seek amendments to the Financial Reporting Act to reduce the financial reporting required for small not-for-profit retirement villages. 

The ball is firmly in your court.  The Department can assist the Association in its discussions with the Accounting Standards Review Board.

Retirement Villages (Fees) Regulations

This year, I have asked the Department to review the Retirement Villages (Fees) Regulations 2006. We need to ensure that fee levels are appropriate and that operators are not paying too much.

Further information about this review is available from the Department, and will be updated as the review progresses.

The Better Building Blueprint

The Government is working hard to give all businesses, including retirement villages, the freedom to operate while ensuring the consumer is adequately protected.

In my building and construction portfolio, the big picture we are putting into action is called our Better Building Blueprint. 

This Blueprint encompasses a number of initiatives to reduce regulatory barriers, putting in place a new generation of building control - combining quality and cost effectiveness to get a more productive and efficient building sector. 

The Blueprint is about cutting costs - not cutting corners. 

MultiProof

One of the Blueprint initiatives I launched in February this year was MultiProof - the National Multiple Use Approval Service. 

This service allows volume builders to obtain a one-off approval of a basic building design, which helps to simplifying the building consent process where ever and whenever those plans are used.

By having a design that will be replicated a number of times pre-approved for Building Code compliance by the Department, building consent authorities need only assess site-specific details when issuing a building consent.

This could encourage the construction of more retirement villages. It will make the building consent process easier and faster for volume builders and for those who replicate building designs more than 10 times over two years.

Building Act Review

Another significant component of the Blueprint for Better Building is the Building Act Review. 

In brief, the Building Act Review is looking at options to reduce the cost and complexity of consenting - and to ensure the people hired to do the work take responsibility for building it right first time and stand behind their work.

We put some ideas on the table in February and the Department has received more than 380 submissions on those proposals.

There is now a lot of work underway to analyse the submissions before any policy decisions are made.

Part of this review was to look at introducing disclosure. The Department has drawn heavily on the responses to the Retirement Villages Disclosure Statement when considering the design and implementation issues.

We are still on track to make decisions on the outcomes of the review over the next couple of months. 

The Unit Titles Act

Another piece of legislation of interest to this Association is the Unit Titles Act 2010, which changes the governance of unit title developments.

As a result of the Association's submission to Select Committee, the Unit Titles Act has limited impact on unit title retirement villages, avoiding doubling up on compliance costs for businesses.

Conclusion

The Government recognises the importance of retirement villages as providers of homes, services and facilities to older people.

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

We will continue to actively work with the retirement village sector and to promote a partnership between operators and residents for the benefit of all.

Finally I would like to belatedly congratulate Denise De Tai, Manager of Selwyn Heights, for winning last year's ‘Manager of the Year' competition - and to congratulate this year's finalists.

The competition is a reminder that retirement village operators have an important role to play in providing training and skills.

I now declare your conference open.