Thank you, Madam Speaker. It’s a pleasure to rise to speak in this debate, especially when it’s one where, essentially, there is unanimity across the House. I think we have all said that we want the same thing. We’ve all said that we want warm, dry homes for everyone, Dr Lawrence Xu-Nan said that we wanted warm, available homes, and we all recognise that housing supply is an issue—we need to have enough quality housing to house adequately a growing population.
Actually, it’s interesting just to reflect on the growth of our population over the last few years. Until 2019, six of the seven highest ever net immigration levels were in the years between 2014 and 2019—six out of the seven—and then, of course, 2023 was stratospherically the highest, at 4½ times the long-run average.
Anyway, leaving that aside, not only do we want homes, but we also want homes built as part of well-designed, connected, supported communities with good infrastructure, because it’s not just about building homes; it’s about building in the context of a wider community and a place that’s good to live. They’ve also got to be not just warm and dry, but they’ve also got to be affordable, because we can have fantastic homes, but if nobody can afford them, that is not going to get us anywhere, and that’s true of whatever part of the housing spectrum you’re on. Whether it’s private housing, whether it’s social housing, or whatever, they’ve got to be affordable to somebody, because there is no magic money tree, and, as a country, we need to make sure we get good value for money out of all of these things.
I was interested that Cam Luxton—it’s always good to talk after Cam on building issues—made the point about our being a property-owning, liberal democracy and that being really, really important, and I agree with that 100 percent. But it was interesting to see the reaction from the Green Party, which almost questioned that, and I’d just like to say that the value of being property owning as opposed to property renting is really, really important. If we think about our ageing population, we’re now expecting twice as many people entering retirement to be living, potentially, on superannuation alone, with the hope that somehow people in that situation are going to be able to afford either rent or a mortgage, and that’s a ticking time bomb and it’s ticking quite fast. So having a property-owning, liberal democracy is really, really important.
We also need to think about creating community, as I said, and I think it’s far, far better when we have people who are an anchor in a community, and the longer you stay in a community, it’s generally the better. Now, whether that’s a long-term rental and a secure rental, or whether that is owning a property, I think that gives you a lot more commitment to a community.
But back to affordability: the fundamental problem here is that our housing construction is very, very expensive. We heard from the Minister for Building and Construction—at least when he was introducing this bill a few months ago—that it is, roughly, 50 percent more than across the Ditch, and that is really, really significant. Our materials are expensive—that’s what this bill is all about. Our labour productivity, he has also said, has not improved since 1985. Now, if you look at the things that people build with these days compared to what they built with in 1985, some of them have changed. They must have improved productivity, and yet, somehow, our regulatory processes have squeezed that productivity gain out so that the net is our building industry has not improved in its productivity since 1985. Cam Luxton, again, talked about liberating the building industry from red tape, and I would echo that and support that.
Regulations: our regulatory regime often does not help. The way those regulations are administered often doesn’t help, and we’ve all heard stories about a building site where building activity has had to shut down to wait for the building inspector to turn up at some point in time. That time really is money, not only to the builder but also to the clients, at the end of the day.
Our land is expensive. Our infrastructure to support housing development is also often expensive. As I said, there is no magic money tree, and if you start making a magic money tree and borrowing from someplace or subsidising from someplace, that is also a cost to someone, whether it’s a ratepayer, a taxpayer, or whoever else it might be.
This Government is trying actively to reduce costs, but there is no silver bullet. This is one of many things that the Government is doing. This is about reducing the cost of materials and increasing competition in the product market. There’s also work being done on speeding up consents, especially that disruptive asking for more information on prefabrication, although I note that Fletcher’s has got a bit of a problem recently and they are not continuing with some prefabrication work that they were doing previously, so they’re changing what a factory does. There is modular construction, the granny flats initiative—which, of course, came from New Zealand First in the first place—Resource Management Act changes, and also getting realistic development charges so that we don’t overburden but we also don’t cross-subsidise.
Why is getting house building costs down important—because there have been some people who’ve just said, “Look, what we want to do is we want to drive the market down, because if we can reduce the cost of existing houses, that’s a good thing, isn’t it?” Well, actually, if you look at the numbers, what you can see is that the market peaked at the end of 2021 or the beginning of 2022, and at that point in time we also had about 51,000 new houses being consented. The market subsequently has declined at the bottom at about 16 percent, and, now, at about 14 percent, but what’s happened also is there’s been a slide in the number of building consents applied for, which has been going down from about 51,000 to about 31,000. I think that those two probably mirror each other in some way or are related in some ways, so trying to, essentially, hope that house prices drop when the cost of building the houses is actually increasing is a recipe for not building more housing. If we want more houses, that is not going to be the way that solves it. As the Minister said, the cost of construction is up about 40 percent since 2019, so those numbers don’t work.
Fundamentally, we have to get the cost of building down, so this is about the building product part of that. It’s about having more competition from a greater diversity of products, which is expected to reduce price, give greater diversity, and give greater choice. The Commerce Commission, as we’ve already heard, noted the lack of competition in some parts of the building product market, and they believe that having greater competition will benefit consumers. Of course, the Commerce Commission is doing some great work across a whole range of different areas at the moment, and so I think we should hear that message.
This bill establishes a new, easier, quicker compliance pathway for the approval of new products and product groups from internationally certified products and product lines. It’s not just picking things off the shelf from whichever country it might be, but it’s saying, “Hey, this is a country whose certification process we trust.”, and it’s adopting those, and it’s a quicker pathway to adopting those certification processes.
The bill anticipates adopting products and product lines only from countries where we have confidence in these certification processes. We’ve already heard that 90 percent of something or other—90 percent of building, whether it’s products, product lines, or the different products that we’ve got on the lines. I don’t think it’s the value of those products, but if it’s 90 percent of something, we’re already importing a very large number of building products and we use them in our construction, so this just makes it easier for some more to come into our market.
But the really important thing is that it is really essential that the quality of those products is as good as what we already have. The Transport and Infrastructure Committee worked really, really well on this, as we normally do—our very collegial select committee. We talked about the safeguards and the processes that are there—and I traversed this comprehensively in my second reading speech—because we all remember the leaky building crisis. We do not want to go there again. That was painful for everybody and very expensive for everybody, but what we heard through the select committee process that processes are now much, much more robust with, of course, the changes to legislation as well, and we also have the safeguard of a highly skilled and qualified building advisory panel for the Ministry of Business, Innovation and Employment and for the Minister.
What’s good is that this bill does that but also it includes protections for local government, who can use these products which come through this scheme in good faith. If the product fails, it’s not local government’s fault—it never was with leaky buildings, and it shouldn’t be now—and now, at least, they’re indemnified against that. They’re not indemnified against a failure to make sure that it’s used properly, but they’re indemnified against the product failing. What it doesn’t do—and I raised this in my second reading speech—is provide safeguards to the end-user or end-consumer should the product fail, and this is a place which I hope the Government would stand behind and say, “Look, something’s failed. We certified that. We approved that. We let that come in. We will help you with that and with getting things put right.”
Just to finish off, this is a good bill, and I think there’s unanimity around the House. It’s shortly to become law. It is part of a multifaceted response by this Government to New Zealand’s housing challenge, and I commend this bill to the House.