What a pleasure it is to follow our resident builder. This time I think I can get away with saying that, because Mr Speaker is not actually in the Chair; it’s you, Mr Assistant Speaker, instead. So, look, I wanted to start off just by giving my thanks to, first of all, the Minister for Building and Construction for driving this through. I’m going to come back to some of the initiatives that he has been pushing through this House, which are all about trying to make sure that we can build houses cheaper because that is a really fundamental thing.
Secondly, I want to thank the Transport and Infrastructure Committee—which I have the privilege of chairing—for, as always, being collegial, constructive, and getting to the point and the heart of the matter, and I think it’s doing a great job. The officials who gave us a lot of good advice, technical advice, answering the questions that we needed answering, and also the submitters, who, again, were a lot of people with a lot of technical skills, which was very, very helpful to us.
The fundamental problem in New Zealand with housing is it’s expensive—it is really expensive. You can do a lot of things about making it cheaper. We can go through cycles. I mean, in Wellington City, where I have the sad pleasure at the moment of owning a house, the house prices have dropped by about 25 percent, or the house values have dropped by about 25 percent, over the last three years—I think it’s 22 percent, to be more exact. That’s not a great way, though, of getting house prices down for people who want to buy them, because as soon as you start doing that, what happens is that the cost of building starts becoming much more expensive than the cost of buying something that’s already there, and people just say, “I’m not going to build new houses.”, and that does nothing whatsoever for being able to create more houses, which we say that we need as a country.
Fundamentally, what we need to do is we need to get the actual cost of building houses down. So the solutions—there are a whole lot of those. As I said, the Minister, I think, is doing a great job there. One of the things he did say in introducing this legislation a while back is that the cost of building a house in New Zealand is about 50 percent more than the cost of building a house over the Ditch in Australia.
He also said that the productivity has not improved since 1985—1985. So that is a drag not just on the cost of building but it’s also a drag on the entire economy, if you have a whole sector which is not improving its productivity. If we want to make the boat go faster, that means the other boats have got to paddle even faster, and that is a real problem. So we have to make the building sector more productive and that is what the Minister is doing.
So this is one of several initiatives. Obviously, reducing the cost of building materials is very, very important, speeding up the way in which we do consents. And, especially, I mean, what Cam Luxton was talking about—I hear so often this issue: do you actually have to wait for the building inspector to turn up? That means down tools for quite a while, maybe somebody is sick, whatever it might be. That time really genuinely is money, so that is a real, real cost. We’ve got to get the building consenting process to be much, much more efficient.
Prefabrication, modular construction, the granny flats work which is being done at the moment to make those cheaper to deliver, Resource Management Act changes—there’s a whole suite of different things which are going through, and this Government is all about trying to make the boat go faster, trying to improve the economy, and in the building sector that is really, really important.
But coming back to the building products which this is all about, we know that more competition, generally speaking, improves productivity, improves performance. I think the point that the Minister was making is that you’ve got more productivity, you’ve got more different products being able to be brought in through the scheme, which I’m going to describe very shortly. That’s got to sharpen people’s minds in New Zealand, because you either sharpen their minds or you go out of business because you’re not competitive.
The Hon Julie Anne Genter just made some comments that it would be lovely to see more things built in New Zealand—100 percent agree. That’s why we’re New Zealand First. We’d like to see that. But we also need to know that we have to do that by being the best, by being competitive with other people. So having other products being brought into the New Zealand market has got to sharpen people’s thinking, sharpen people’s innovation, and so on, because we know that near monopolies or monopolies don’t perform very well. I mean, you’ve got to look across the banking sector, the supermarket sector, a lot of building products sector. That is a real problem in this country.
So what this bill is about is establishing new compliance pathways, speeding those compliance pathways up for the approval of new products or product lines. One of the things I would say, though, is it’s about, as the Minister said, making sure that the products which come in are not just picked off the shelf but are from established, approved, certified product lines and products that other constituencies or other jurisdictions have got. It’s only going to be the ones which we have confidence in. So you’re not going to pick them necessarily from every country in the world, but you will pick them from the countries and from those certification processes where there is confidence in those certification processes and in the products which come through their processes.
The important thing is, particularly, we all want confidence in any product that we purchase. It doesn’t matter what it is. We want it to be fit for its purpose. We want it to be able to last the length of time we expect it to be able to last. And, of course, when it comes to the product, which is the most expensive thing most of us will ever buy—a house—that is really, really important. Something that you would expect to last in New Zealand—a minimum of 50 years is what the building code says, and that to me is not long enough. We should be thinking about products which will last a lot longer than that. But it’s really, really important that it lasts the distance. So it’s not fit for purpose just now; it’s also fit for purpose for decades and decades and decades to come. That is really, really important. So people need to have confidence in that—the people who are building the buildings, but also the people who are buying those buildings.
We spent, as a select committee, quite some time thinking about safeguards and talking about safeguards and trying to say, “Are we going to see some of the risks that we saw going back to the leaky homes situation?” Because, for some of us, that is a very, very painful memory. For many New Zealanders, that’s a painful memory personally. But for those of us—for example, I was in local government for much of that time—that cost this city something like $150 million trying to clean up the mess that was made by substandard products and by substandard processes which were put in place to build those things. So it’s utterly essential that we make sure that this regime is robust and that people can have confidence in it. That is completely essential.
What we did here, because, as I said, we asked a lot of questions about this, is the processes are now far, far more robust than they were in the 2000s when we went through the leaky building process, or when those problems started to happen.
I must say, during that process it was so bad for us that I was certainly talking both as a councillor and as a mayor about handing our building consent warrant back, because it was just purely a liability for us. One of the things I do think is great is that the Minister is saying, “Why do we need 62?” You heard that from Cam Luxton as well. Why do we need 60-plus different building consenting authorities, because building consents should be pretty much the same across the country? You will have differences in insulation standards and so on, but, basically, building consent is about making sure you’ve got a building which is fit for purpose. It’s not about effects on other people. It’s not like a resource consent. It’s not like issues about effects on environment. So it makes sense to centralise those things and maybe the Crown should step up.
One of the things which we did ask about, and certainly I was very, very keen to ask about, is that this bill provides for, as you heard earlier—as I said, the leaky building crisis landed very heavily on local government, as the last man standing. Here, local government is, essentially, indemnified against the product itself failing. If the way in which it is constructed, the way in which it’s used, is wrong and the building inspectors don’t pick that up, then, yes, there’s an issue of liability. But the product itself, they’re indemnified against, and I think that is a great thing.
But that left the question, obviously, of: if the product does fail, who does the poor person in the street come to and say, “Well, who’s going to look after me? I didn’t know that this product wasn’t fit for purpose. You said it was fit for purpose.”? Oh, and in this case, who is the—oh, sorry, Mr Speaker, I can’t say “you” in this sense. But who is it that has approved that product? Well, it’s a product which has been approved in some overseas jurisdiction, and then it’s a product which has been approved by who? The Minister and the ministry of building, innovation and employment on behalf, essentially, of the Government. So should the Government, at the very least, be standing alongside the people who are reliant on these products which are approved through this scheme if something goes wrong? And we hope, of course, it won’t. And, of course, those processes, as I said, are much more robust. But should the Government be standing alongside those consumers? I think that they should.
This is all about trying to reduce the overall costs, which is a good thing. It’s about trying to give us more innovation, more different products. What it does is it reduces the expected time to process and to recognise those overseas products. Something like two years to about three to eight months is the expectation. What it should do is to help drive down the cost of housing. It is just one of many different initiatives that this Government is taking, and I think that is absolutely necessary because the cost of housing is a significant problem in this country, both for our people and for our economy. I commend this bill to the House.