Post-Cabinet Press Conference: Monday, 18 August 2025

Well, kia ora, good afternoon, everyone. Building and construction delivers 7 percent of our GDP and its significance cannot be underestimated. Today, Building and Construction Minister Chris Penk is with me. He’s driven an aggressive and large body of work to liberate the building sector of unnecessary regulation and bureaucracy.

In just over 18 months, this Government has removed barriers to high-quality overseas building products to lift competition and to lower prices. We’ve made it easier to build garages, sheds and sleepouts, and exempted granny flats up to 70 square meters from consenting rules.

We’ve allowed trusted building companies to build without a consent and let plumbers and drainlayers self-certify their own work. We’ve provided certainty to the construction industry by stopping the rolling maul of building code system changes and moving to a predictable three-yearly update cycle, and we’ve cracked down on frustrating delays by requiring building consent authorities to complete 80 percent of building inspections within three working days.

All of this really matters because it is currently 50 percent more expensive to build a family home in New Zealand than it is in Australia. It matters because we want families to be able to get affordable homes and we want the construction industry to continue fuelling the economic growth that this country needs.

Today we’re announcing two further changes that will significantly unblock the system. First, we are changing our liability settings to relieve the onerous cost burden on councils and ratepayers, which lead to councils being highly risk-averse, and builders and home—builders facing delays and cost blowouts, and ratepayers paying higher rates.

Secondly, we’re dealing with the frustrating problem of different rules in different regions of New Zealand, which causes yet more cost and complications for Kiwi homeowners and their builders. We are determined to get the building and construction sector firing on all cylinders, and that requires bold change. I’ll now hand over to Chris to run through the details of the announcement for today.

Thanks very much, Prime Minister. Kia ora, good afternoon, all. As the Prime Minister has rightly mentioned, New Zealand’s building system is in desperate need of a productivity boost. The first significant change that we’re announcing today will free ratepayers from being unfairly saddled with the full cost of defective building work. Right now, councils are understandably hesitant to sign off on consents and inspections because they can be held fully liable for every defect in a build, even when most of the fault lies elsewhere. This often happens when one of the parties responsible cannot or will not pay for repairs, for example, if a business goes bust or chooses to walk away by filing for insolvency.

Building owners can claim full compensation from any responsible party and it’s often councils, with the deepest pocket and no option to walk away, that end up paying out. This is not a small problem and a 2018 report estimated that councils paid an extra $330 million over 10 years for defects for which they were not responsible. That’s money that could have gone into local services and infrastructure. One such example occurred in 2015, when the Oaks Shores body corporate in Queenstown filed a $160 million claim for weather-tight defects. The developer had already gone into liquidation and wasn’t sued, leaving ratepayers potentially on the hook for the entire claim. If that hadn’t been settled privately, rates could have gone up by $300 per year for the next 30 years.

So it’s time to put the responsibility where it belongs. The Government will scrap the current framework, known as joint and several liability, and replace it with proportionate liability. Under this new model, each party will only be responsible for the share of the work that they actually carried out, or the decisions that they signed off. This will remove the fear that slows down the consenting process currently, reduce costs, and reduce the risk to ratepayers having to underwrite someone else’s mistakes. Australian states have worked under proportionate liability since the 1990s.

We’ll also be exploring consumer protection measures, such as professional indemnity insurance and home warranties, similar to those in Australia. Private home warranty schemes already exist here as well, such as the Certified Builders Halo guarantee and the Master Builders 10-year guarantee. The price for this kind of peace of mind represents roughly 1 percent of a total build’s cost, and in many cases is already paid and accounted for.

The second major change that we’re announcing today will allow councils to voluntarily consolidate their building consent authority functions with each other. Right now, there are 66 different council builder consent authorities across the country, each with their own interpretation of the building code. This has resulted in a ridiculous situation where builders can have their paperwork rejected by one council, whereas it would be accepted by the one up the road. That’s inefficient, frustrating, and costly.

It’s particularly challenging for large-scale home builders, off-site manufacturers, and modular and prefabricated builders who work across regional boundaries. We need to support this kind of building if we’re going to boost housing supply. Many councils have been asking for this change. I expect that they will seize the opportunity to pool resources such as inspectors and IT systems, and pass the savings on to ratepayers.

Making commonsense reforms like these to supercharge building in this country is an important part of this Government’s economic growth plan. With that, back to you, Prime Minister.

Thank you, Chris. Look, just before we take any questions, a quick run through of the House this week. On Tuesday it’s a big day, with extended sitting hours until Wednesday. The third reading of the Local Government (Water Services) Bill; we’re at the committee stage on the Public Works (Critical Infrastructure) Amendment Bill; second reading for the Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Bill.

Wednesday, of course, is a members’ day, and on Thursday we will have the first reading of the Summary Offences Demonstrations Near Residential Premises Amendment Bill. And with that, happy to take your questions.

The first thing to do was to signal to the sector that we are moving to proportionate liability rather than the current joint and several. That means we can now work closely with the sector and all interested Kiwis to make sure we get the details of those schemes correct.

Yeah. Well, the cost of doing the business at the moment is currently already accounted for, in the sense that professional indemnity insurance is actually really common across design professionals such as architects and also engineers. So that wouldn’t need to change. And Cabinet will consider whether that kind of scheme should be mandatory, for example.

Yeah, look, I’ve engaged closely with the insurance sector and there is some appetite but it’s a chicken and egg situation. We need to give everyone the comfort and the certainty that we are moving to the system to see what the willingness of them to step up is.

I would point out, in addition to professional indemnity insurance, that group home builders often have their own bespoke schemes to provide insurance or comfort. Likewise, Master Builders have a 10-year guarantee and Halo is a Certified Builders product, likewise. Around half the builds are currently already covered in such a way, and then if you think about—the private market already provides through Stamford Insurance, backed by Lloyd’s. There are options available and we’re considering what more we could require or enable in that space.

That’s right, so that’s the work that we’re doing now. But we want to move at pace. Obviously, the detail is important, but if we are able to have legislation introduced with this framework—liability, a big change, signalled today—into law by the middle of next year, then we’ve got the intervening period of time to make sure those protections are in place.

Yeah. Well, it means we won’t have 66 different interpretations of the single building code and a smaller number. That will be helpful, particularly at a regional level where people often build within a region and are not confined, of course, in the real world to the council boundaries, city or district council. So we know that enabling them to consolidate those functions will be helpful for those who are building at scale within a region.

But also we know that from the council’s point of view it means they can share resources: things like the accreditation process that happens every couple of years, sharing the human resources, you know, with key staff being able to specialise within a region, and also share IT systems and costs like that to achieve the economy of scale.

Well, we think it’ll make the public sector options available at the local government level stronger and more robust and more consistent. Of course, there is a private option available already in the existence of New Zealand’s first private building consent authority. But I would distinguish that from the case where, at the moment, councils actually sometimes pass the work to other councils on a contract basis or to private certifiers, but that then still comes back to the original council when they still remain liable. So that’s the situation where we want to enable them the maximum benefit of the flexibility, but also to ensure that there is one accountable entity.

Yeah, well, I and the Government have been working closely with local government to understand what’s going to help them be efficient for their own sake, but of course, also for the purposes of the sector. And their feedback clearly—having consulted on a few different options, including non-voluntary consolidation of those functions—was that for those that are already keen to do this and to some extent do share services, that to give them the ability to formalise those would represent the quickest, easiest, and most affordable way to get that gain immediately.

Well, any number fewer than 66 would be a good start. But I can tell you, for example, in the Waikato region, there are eight councils that already work together as a building consent group and they’ve indicated that they’re keen to formalise that. And other examples around the country within regions, I think, indicate that we’ll have quite a lot of movement on that the minute that we allow it through the Building Act.

No. Again, any number smaller than 66 would be a win. But I suspect that at regional level we’ll see perhaps as many as half a dozen moves made quite promptly, based on the feedback that we’ve been getting throughout the discussion.

The only other thing I’ll add, Craig, is that what’s been interesting is that we’re now getting district councils working together collaboratively on, say, regional city deal proposals. They’re also working together on how they might reorganize their Three Waters assets, and obviously the ability for them now to either outsource or do arrangements with other neighbouring district councils on BCAs and how they might manage that. I think there’s actually been some really good grassroots progress of collaboration happening at the district council level, which is not unhelpful.

Yeah, I mean, we’re really clear that—and Cabinet’s agreed to progress consumer protection measures precisely because we don’t want the problem of the empty chair, where there is a gap in terms of, you know, what the homeowner might be left with. But we also know that if we have a proportionate liability system where all the key players in the system are either required to have the protections in place themselves and are also motivated not to make the errors in the first place, then we’ll have a more productive and efficient and better system overall.

Yeah. Well, the detail is important. We need to take time to, you know, bring the sector along with us for that, you know, and the nuance for professional indemnity insurance versus those other mechanisms could be quite meaningful, in terms of the design of the system. We don’t want to add costs simply by shifting the liability—and therefore the costs—from the ratepayer and the council to a private avenue instead, so we need to carefully balance those considerations as we finalise that detail.

Yeah, and that’s very much the point of having the consumer protections in place. And I would just add this intersects with work being done elsewhere in Government to avoid the problem of phoenixing, whereas obviously a building company or a trade company might try and walk away from their obligations currently, and under a limited liability company there’s nothing to stop them doing that. So that will broaden the ability of

Government to make sure that the responsibility, the liability, actually remains with those responsible for doing the work.

The cost of building will reduce as a result, because the delays that are currently associated with the model now, where councils are understandably risk-averse and take a long time to issue building consents, conducting multiple inspections and then issue a code compliance certificate—once you reduce that delay, then you get better productivity and cost will reduce. If you think about, as well, the fact that a lot of the costs of, you know, the insurance and the schemes that are already taken up in a lot of cases, that’s already baked in. And the experience that we foresee, as we’ve seen in Australia, is that you can get those efficiencies and actually have a better, more productive system.

Well, I mean, you could make an argument that the statutory time frame of 20 working days could be reduced and in fact, in some cases—for example, incentivising the uptake of solar residential—we have reduced those time frames, and we’ve also put an inspection time frame target of 80 percent of inspections within three working days.

But in terms of consents being issued, the key question is, really—from the point of view of those, you know, relying on the work being efficiently done—goes to the question of: first of all, we’re in a relative lull at the moment in terms of building activity. And there’s lots of green shoots and there’s lots of things we can say about the system going to ramp up nicely, but at the moment, where there are significant delays and we’ve got, let’s say, 34,000 consents annually as compared with more like 50,000, this is the right time to reform the system.

And secondly, in terms of the consents, we want them to be done as quickly as reasonably possible. And we also don’t want the scenario that’s sometimes raised with me, whereby the council doesn’t actually start the clock on the statutory time frame until such time as they’ve processed it, as opposed to when they receive it, or stop the clock through requests for further information or RFIs, which is a common bugbear.

Well, we’ve already indicated and Cabinet’s agreed that the penalties are increasing. But also, within the system design, we’re connecting up the ability of the practitioner boards, which are the licensing authority but also the disciplinary function, to hold those to account. In some cases, there isn’t a code of ethics against which they can hold practitioners accountable. There aren’t always reports for poor quality or unethical building work that gets reported to them by the councils doing the work.

And then finally, in terms of making sure that we have the occupational licensing, the importance is that we’ve got a system where if we trust people who are worthy of that trust and that respect—the experience, the qualification, the track record—then we can actually rely on that meaningfully, and actually that will help shift the incentives in the system for people to do good quality work, and carry it out much more quickly and therefore affordably.

Yes. I mean the former regime, as I’ve said before, is unworkable and had become too large, you know, too broad and too loose. We made the changes, as you know, back in May, and we stand by those decisions. I’ll be a little bit careful in terms of how much I pass comment about it, given there’s pending litigation around those issues. But, you know, again, from our point of view, you know, Labour changed legislation to make it much broader, much looser, and frankly, more unworkable. When you’ve got librarians being compared to fisheries officers, when you’ve got social workers being compared to detectives, you know, we needed to fix the system and that’s what we’ve done. Pay equity still remains. You know, it still remains. We still encourage people to exercise claims, we’ve put money aside to actually meet those claims, and we think that’s fair and gives people certainty.

Because we’re in a different time zone and it was about 1am in the morning this morning. And I’ve been to many of the Coalition of the Willing calls. I’ve actually been asked to speak at them as well in the past, as well. We had officials representing me there and importantly, you know, I’ve had—even in the last few weeks I’ve had direct conversations with, you know, President Macron and Prime Minister Starmer as well, and others.

Yeah, it is, and I normally do and I have tried to make them wherever possible I can. Obviously, this one was at 1 am in the morning, it goes for two to three hours, and then I’m on a media round this morning and obviously down here for Cabinet this morning as well. So I was well represented by officials. But, you know, what is encouraging is the progress that we are seeing, the fact that there is conversations happening, led with President Trump but also the European leaders. But again, you know, our message is pretty clear: Russia could stop this today if it wished, by having, you know, a ceasefire immediately on land, sea and air.

No, no, no, no. I have joined in the past. I was just saying that the decision was made that I was going to be well represented by officials in this particular instance. But I have joined the calls many, many times before, and I’ll continue to do so. It was just in the case of this instance.

Look, I mean, we just encourage dialogue and diplomacy where possible, and I think, you know, that’s—and it’s encouraging to see the signs that have taken place. Obviously, the efforts with President Trump and President Putin. You’ve had European leaders meeting with President Trump last week again, looking like they’re going to meet up this week. All of that is good stuff. You know, we need to make sure there’s a just and lasting peace that breaks out in Ukraine, and for that to happen we need to able to make sure all those parties are working incredibly hard to create the conditions for that. Obviously, we want Ukraine to be at the table in any of those conversations and it needs to be at the table to do so.

That’s ultimately a decision for Ukraine to make. You know, what we want to see is we stand with Ukraine because it was an unjust war and we want to see it ended, but we want to see a, you know, a lasting and just peace break out in Ukraine. For that to happen, it requires Ukraine to be at the table for those negotiations. But ultimately, that’s a question for them.

Well, I note that there is meetings, you know, taking place with European leaders and President Zelensky and President Trump this week, this Monday, US time. So, you know, they—that’s for them to—that’s obviously a decision ultimately for Ukraine, and they need to be in those conversations and party to those conversations. There is no way that a just and lasting peace is going to be achieved without Ukraine at the bargaining table.

Yeah, I noted that over the weekend. I actually called and asked for advice on what was happening there. I understood there was a network outage of some sort. I’d like, you know—I’ll make sure that our Minister of Transport and Associate Transport Minister get to the bottom of that.

Yes, I do. And the fact that, you know, there are so many redundancies built into the system in aviation is really important, and it may have meant that people were avoiding oceanic airspace for a period of time. That’s a good thing that actually they were avoiding that airspace if there was a network failure, and actually people who—an abundance of caution takes place and kicks in to the aviation system. That’s what you want to see.

Look, I’m not going to get into that. We’ve canvassed that before. Again, we’ve got a Minister of Foreign Affairs who coordinates our responses with the UN.

Again, I’m not—I’m going to go into that. We’ve got a very clear position, which is that Winston Peters is our Foreign Minister and he engages with the United Nations.

Well, again, you know, the situation is that Winston Peters is our Minister of Foreign Affairs. He responds to the United Nations, he is the one that is accountable for building and holding that relationship, and he will coordinate a response on behalf of all of the Government and of all the Ministers of which, you know, questions were raised in that letter, and it will be up to him to present that case.

Well, it’s pretty clear to them now. I’ve made it pretty clear.

Yeah, I’m not going to get into that, obviously, while that’s before the military court at the moment.

Yes?

Yeah, look, we are concerned. I mean, we’ve advocated very strongly for the status quo, you know, that actually the Pacific Island Forum family countries come together and then the dialogue partners, who are from all over the world, can be present as well. And we want all dialogue partners to be there. Winston Peters was present at a meeting of Foreign Ministers last week, as you know, in Fiji, and made that case pretty strongly that we want to uphold the status quo. We think that’s important. We can still continue our regional architecture conversations, which we need to close out, but we want to maintain the status quo.

I’ve spoken to Winston briefly about it this morning, where he reiterated that we had made the case for maintaining the status quo. Ultimately, that’s a decision for the members to make and to—and, you know, that’s why I think you’re seeing members are saying, “Look, this is a great opportunity for us to come together as a family Pacific island nations but also it’s an opportunity for our dialogue partners to be present, as they always have been”.

Well, again, I mean all we’re advocating for is the status quo. You know, we think the programme has worked well, where the, you know, the Pacific Island Forum countries can come together, have time to themselves, but also have an opportunity for, you know, dialogue partners to engage with the forum as well. You know, we’ve been advocating very strongly around the world that, you know, if you want to engage with the Pacific, the Pacific Island Forum and its centrality should be respected, and that’s the forum by which all partners should try and engage with the forum directly.

In what regard, sorry?

Well, it’s a good reminder for Kiwis everywhere to be fully compliant with the rules and regulations around immigration for different countries. I mean, it’s important for each and every individual to have their paperwork in check and to be—you know, to make sure that they’re fully compliant. But, you know, again, that’s my advice to anyone travelling anywhere outside of New Zealand, is to make sure that you’re compliant with the laws of the country that you’re visiting.

Yeah. So, Cabinet now having made the decision, the changes that we’re announcing today, the Building Act will need to be amended in both those respects, and we’ll tie that in with other amendments to the Building Act for areas that we’ve already indicated are going to be legislated between now and the election. So early next year will be the introduction of a Bill to take account of these changes. If it’s passed by the middle of next year, as we expect and hope, then we’ll be able to, you know, go from there, including any regulatory moves that need to be made for that finer detail from the second half of next year on.

Oh, look, I mean our advice to the unions is to get around the bargaining table. You know, that’s where negotiations and collective bargaining should be hammered out. We don’t think it’s fair that kids that have missed a lot of schooling already with COVID—we know we’ve got work to do on attendance and academic achievement with our kids. It’s important that they are in school. Likewise, the same way we felt about nurses striking as well is that, you know, there’s lots of patients that are missing out on surgeries as a result of those strike actions, and so we just encourage the unions to get around the table with the employers.

Well, actually, over the last three years there’s been about a 14.5 percent increase for secondary school teachers. I think the average pay now is just over $100,000. There’s been, you know, significant increases in pay over the last three years in particular. As you know, there’s an offer on the table. I don’t want to go into those numbers but, you know, in pretty challenging fiscal times I think that’s a pretty fair offer. But again, the issue here is that, you know, we’re interested in the interests of the kids. They need to be in school. They need to be in class. That’s really important. And we just encourage the unions to get around the table and actually continue negotiations with the Ministry of Education.

I’m not sure. You’d have to talk with her. All I’m saying to you is that with respect to the teachers negotiation, it’s really important that the unions come back to the table. You know, strike action doesn’t serve the interests of our kids and that’s really important that we’re doing everything we can to keep them in class and also teaching them everything that they need to know, particularly when we’ve got some challenges on making sure they—you know, the reading and numeracy scores have been poor and attendance has been poor and so it’s really important we keep kids in class, and unions. And their negotiations should be done in the right forum, which is actually with the Ministry of Education.

Yeah, I don’t have the breakdown of numbers with me now. All I can say is that I’m aware that the salary, average salary, I think, is just over $100,000. There is, obviously, a 14.5 percent increase that’s taken place over the last three years from 93,000 to 100,000, just over 100,000, I think, and there’ll be—

I’m very happy to get you the full breakdown of the numbers if that’s helpful.

Yes.

I’ve had the same conversation with the Insurance Council and other key players with the insurance sector and they made the same comments to me and I take those on board, and in fact those are all the things that we’re looking to do anyway in terms of improving standards, making sure that materials and products are equal to or higher than those already used in New Zealand. So providing assurance in those areas for the protection of the Kiwi consumer is exactly what the Government’s interested in doing, as well as the insurers from their commercial perspective. So we’ll remain engaged with them about their appetite and willingness to provide further products, but certainly in terms of the existing consumer protection guarantees that are available, we’ll think about how those could fit in with any additional measures that we might require within the next period of time.

Well, no. No. That’s why we’re looking at what we should have in place.

Well, certainly the detail is important and I think it’s important that we are clear as the Government, just as consumers are clear, about what exactly the coverage is: for example, whether insurance covers the building professional against a claim that’s been made against them, as opposed to being something directly that the consumer could sue or claim upon. So those are the kinds of detailed conversations that we’ll continue to have, to make sure that there aren’t any gaps in the system.

Yeah, I mean that’s exactly the kind of scheme that we’re interested in because people do go in and out of business and we don’t want an empty chair problem, essentially, where the vulnerable consumer is left with a gap in terms of their coverage. So those are the kinds of conversations that we’re having to make sure that there isn’t such a gap.

Well, that’s potentially true but the reality is that these products are available now and actually, in many cases, are relied upon already. So the additional cost that comes with the chilling effect of that joint civil liability that councils face is adding the time and the delay and, therefore, the cost in that realm as well. So we’re sort of paying twice in the sense that we’re trying to protect against the system and, therefore, being risk-averse and slow as councils, at the same time as people are also paying out for their Halo guarantee under Certified Builders or 10-year guarantee under the Master Builders regime, for example.

Yeah, I’ll let them obviously speak for themselves but having discussed this and other matters with the Labour spokesperson for building construction, I’m really confident that they’re on board with the general principle. And of course, you know, the appropriate role for them is to be interested in interrogating the detail, just as we as a Government are interested in getting the detail right as well.

No. PCO will draft that with the Cabinet decision having been made today, so that will take place from now on.

Yeah, no, we need to take into account all the concerns and the interests and the requirements of the system in the drafting of the legislation, although of course it’s also possible for detail to be in regulation and for that to take place as a secondary process as well.

OK, last question, team.

Yeah, we will have it ready at the same time. And the good news is, in terms of looking across the Tasman, the regime that Australia’s already got in place, we can frankly copy their homework on it to a large extent. In fact, earlier this year, at a liability roundtable symposium, we had an Australian judge who was very generous with her insights about how the system works there, including specific wording of the legislation that they have at a state level that they would potentially change and that we can take account of right now. So it’ll be relatively straightforward, I think, if we’re clever about the way that we learn from Australia’s lessons in a positive way and implement them here.

Yeah, it’s around half. But there are also different kinds of products, of course. So the group home builders often have, at that whole group franchisor level, an assurance scheme for, you know, those having work done by their local franchise of whichever of those they choose.

OK, thank you very much, everyone. Have a good week.