Red Alert

Archive for the ‘Building and Construction’ Category

Court case another wake-up call

Posted by on November 7th, 2013

A pending Supreme Court ruling could impact on  hundreds of leaky home owners across New Zealand who have missed out on compensation due to the 10-year time limit.

Auckland couple John and Helen Osborne, who were told they were ineligible for the Weathertight Homes Resolution Service, have argued the time frame should have started from when the code compliance certificate was issued, rather than when construction ended.

Regardless of the outcome, this case is a wake-up call to Building and Construction Minister Maurice Williamson to take another look at the Code Compliance Certificate (CCC) regime that has been replaced under his Building Amendment Bill (No 3).

The Consent Completion Certificate set to replace the current CCC will create confusion and deliver uncertainties for both home owners and the construction industry.

On the one hand I’m glad that the Minister has not triggered the new regime for obvious reasons, but on the other I’ve remained concerned that the new regime had been instituted as part of the Minister’s piecemeal approach.

It appears the Minister was convinced that the licensing regime for builders, which Labour supports, was the main reason for the new CCC regime.

However I agree to the views by the submitters that the licensing regime at this stage is only ‘ticking boxes’, and not a standard that will guarantee the quality of craftsmanship and the design of new homes.

It is absolutely vital the Government gets this right ahead of the Christchurch rebuild and housing boom in Auckland and other regions.

Government must break stalemate with plumbers

Posted by on July 3rd, 2013

Labour will this evening introduce an amendment to the Plumbers, Gasfitters, and Drainlayers Amendment Bill to help break a stalemate between the National-Act Government and a large number of tradespeople in the industry.

The Plumbers, Gasfitters and Drainlayers Board, which was appointed by the Minster for Building and Construction Maurice Williamson, has been found to have illegally collected fees and levies from the industry.

The Bill, which is currently being pushed through Parliament under urgency, seeks to retrospectively validate the significant amount of money the Board collected unlawfully.

The Government’s failure to break the industry stalemate is a two-fingered salute to committed and qualified tradesmen just trying to get a fair deal.

The Ombudsman upheld Wellington plumber Wal Gordon’s complaints and recommended that the Board should negotiate an arrangement “whereby the excess levies paid could in whole or in part be refunded over a period or some credit could be given in respect of future fee or levy payments in compensation.”

But Maurice Williamson has openly snubbed the Ombudsman’s recommendations and instead adopted a closed and defensive approach and tried to fast-track the legislation. The National-Act Government is ignoring the industry’s valid concerns.

Labour’s Supplementary Order Paper implements the Ombudsman’s recommendations.

“A five-year licence configured around the Board’s regime costs $10,000 in New Zealand – according to the Plumbers Federation. The same five-year licence in Australia costs only $330. It’s no wonder we are losing quality tradespeople to Australia.

We agree to the sector that this Bill is about more than the payment of money, it’s about unlawful activities. It is about the trust New Zealanders place in the Accountability Agreement between the Minister and his Board, and more importantly, in their Government and Parliamentary systems”.

Labour’s SOP seeks to find a midway but it is only the first step. We are encouraging a culture that is open and engaged with the changing needs of the sector. We acknowledge the problem with the Board’s activities are deep seated and we must get to the root of the problem from all aspects.

The Board has been subject to complaints to the Office of the Auditor-General, Parliament’s Regulations Review Committee, the Office of Ombudsman, the Charities Commission and the Inland Revenue Department.

The Campbell Live show, the Politics of Plumbing, featuring particularly the “Minister Williamson artwork” is not a good look for his National-Act Government. Actually, it is a bad look for all politicians. I feel sorry for the Minister.


Williamson stymies leaky building debate

Posted by on March 7th, 2013

First we hear from the Dominion Post that Building & Construction Minister Maurice Williamson ‘barely broke his stride’ to talk to reporters and dismiss the issue of his directorship of an air-conditioning company.

And now, in reply to my written parliamentary question, we find he gave just one speech in December relating to his Building & Construction portfolio.

This comes at a time when his Building Amendment Bill No 4 is before the House; a Bill with an isolated and piecemeal approach that totally fails to address the accountability issues of leaky buildings.

Labour agrees with the submitters; that if all the cogs are not aligned and working effectively, then the building control engine will fail. We cannot afford to have a repeat of the leaky building saga.

Surely these issues are worthy of more than just one speech a month? Isn’t it the Minister’s role to put the issues out there, to generate the widest possible awareness and encourage informed feedback?  Apparently not.

Perhaps his most telling answer was in reply to my question about what goals he had set himself and his officials to achieve in 2013. There was no reference to solving the leaking building problem in the reply at all.

Williamson goes through the motions

Posted by on February 28th, 2013

Minister Maurice Williamson’s uncoordinated and piecemeal approach to building law review will do little except create more crises in the industry, and more stress for affected home owners.

The Building Amendment Bill No 4, now before the House for the second reading, is another example of his need to be ‘seen’ doing something, rather than the introduction of the meaningful reforms urgently needed to avoid a repeat of the leaky building saga.

The Minister has repeatedly ignored submissions from consumers, building professionals and the city councils, as the building consenting authorities. Without a genuine reallocation of responsibility and accountability, as the submitters have proposed, these partial instalments introduced by this current Bill will create more problems than solutions.

Protection for consumers is further reduced under this Bill No.4. It fails to offer consumers any effective remedies when left in the lurch by the cynical collapsing of a $1 shell company, despite that fact that the building sector failure rate is higher than the rate for all businesses before 2003 and after 2008.

No effective measures were introduced to address products warranty, although it is widely accepted that the leaky building saga was primarily caused by the use of inappropriate building products or systems. It is also unclear what the implication is for competition between local and foreign product manufacturers.

As usual, many provisions are yet to be ‘prescribed’ or ‘determined’ by regulation, meaning the law will be ‘prescribed’ by officials, rather than voted in by elected representatives in an open and transparent process.

I agree to the analogy used by submitters that the building control engine will fail if all the cogs are not all aligned and working effectively. A weakness in any of the processes will impact on others and result in risks and crisis.

Building Amendment Bill (No 4) — Second Reading

Sitting date: 27 February 2013. Volume:687;Page:82.

RAYMOND HUO (Labour) : I would like to start by thanking the officials and submitters for their contributions, and in reply to the Minister for Building and Construction’s questions, I would like to name not one, not two, not three, but 47 submitters. Particularly, I would like to urge the Minister to read again the submissions from Hawkins Construction, the Home Owners and Buyers Association, the Auckland Council, the Wellington City Council, the Christchurch City Council, and Local Government New Zealand.

I should reiterate that we support some good initiatives under this bill, the Building Amendment Bill (No 4). In particular, we have no problem in supporting provisions in relation to dams. Being a member of the Local Government and Environment Committee I have learnt a lot about issues in relation to classifiable and referable dams. Indeed, if this bill focused specifically on dams, making it the “Building Amendment (Dams) Bill”, we would support it all the way through. In that regard I would like to thank submitters such as Genesis Energy, the Greater Wellington Regional Council, Meridian Energy, the New Zealand Society on Large Dams, etc., for their thorough submissions.

We did support the Building Amendment Bill (No 4) to go to the select committee. However, listening to submitters and reflecting on the bill and, more importantly, the piecemeal approach this National – ACT Government has taken has led us to the view that this bill should not proceed. Labour supports the building law review process but cannot support the piecemeal and isolated approach, and therefore the passage of this particular bill.

The bill is the second of two bills to implement the building law review policy decisions. The review found weaknesses in consumer protection and a need to better allocate responsibility and accountability among building consent authorities, building professionals, and consumers. Since the introduction of the No. 3 bill, now the Building Amendment Act 2012, we, together with a large number of submitters, have urged the Government repeatedly that “In the absence of a more genuine reallocation of accountability, for example, through mandatory home warranties, the introduction of proportionate liability, and mandatory insurance, all parties (consumers, building professionals, and building consent authorities) will continue to be financially exposed, even for defects not of their making.”

To be fair to the Minister, Maurice Williamson, he might have good reasons for ignoring those issues. One of them is that he had referred almost all important matters to the Law Commission for review, such as the liability models and issues regarding mandatory home warranties or insurance-backed surety—fair enough, and I supported and would continue to support the Minister in doing so. But the problem is that the partial instalment will cause uncertainty and create false hopes for parties in the building and construction sector. This indicates that the Government is not ready to introduce a comprehensive reform package needed to genuinely achieve its stated goal.

For the second term and in its fifth year all we got was nothing but publicity gimmicks. Let me quote something to reinforce my position: “It is important to ensure the proposals are developed as an integrated package with a number of equally important and interdependent processes … To borrow the analogy of the discussion document—the building control engine will fail if all the cogs are not aligned and working effectively. A weakness in any of the processes will impact on others and result in an inefficient regime that is unbalanced and ineffective … It is disappointed that the Bill has been put forward in relation to a relatively narrow range of matters, although it recognises that the Bill is one component of a wider reform programme that Cabinet has approved. In it’s view, it would be preferable to delay legislative amendments until a broad range of changes to the Act (identified as part of the current reform package) can be promoted and consulted in an integrated way.”

Where are the quotes from? From the Wellington City Council in its submission on the No. 3 bill. It is still valid because the Government is still taking the isolated and piecemeal approach. It is dangerous because if all these cogs are not aligned and working effectively, the building control engine will fail, and we cannot afford to have a repeat of the leaky building saga.

There are other issues I wish to touch upon at the bill’s second reading. Firstly, the purpose of this bill is to introduce enhanced and more comprehensive consumer protection measures. However, we note the frustration of some of the submitters and agree with them that the measures included under this bill provide no effective new protection for consumers. Rather, the protection the relevant parties now have is further reduced. I agree with those submitters, particularly structural engineer Mr John Scarry, that the explanatory note of this bill is misleading.

Secondly, regarding company failings, concerns were expressed about companies that are formed for the sole purpose of a single building project and then liquidated as soon as the work is completed, leaving no legal entity that can be directly held to account for defective work that is later discovered. The bill fails to offer consumers any effective remedies when left in the lurch by a $1 shell company, despite the fact that the building sector failure rate is higher than the rate for all businesses before 2003 and after 2008. Even legitimate contracting and subcontracting firms have often ceased to exist by the time defects have come to light.

Thirdly, regarding products warranty, we welcome an introduction of a responsibility provision for product manufacturers or suppliers. It is widely accepted that the leaky building saga was primarily caused by the use of inappropriate building products or systems, or incompetence in, or lack of adequate oversight of, their application. However, given the complexity of the issue, particularly where prescribed compliance with the building code is often difficult to establish, the provision in its current form fails to address the problem adequately. It is unclear what the implication is for competition between local and foreign product manufacturers.

Last but not least are drafting issues. There are drafting issues in terms of how provisions in this bill will be implemented. Many provisions in this bill are yet to be prescribed or determined by regulation. Without proper definition it is difficult to put the clauses into context, which hinders their interpretation and the implementation of the Act. It is unfortunate that in this time of a building sector crisis, New Zealanders are seeing an experienced Minister simply batting away critics rather than showing real leadership. Thank you.

A glimmer of hope for leaky home owners

Posted by on November 21st, 2012

The Law Commission’s announcement today that it will revisit the ‘joint and several’ liability issue is to be welcomed, because it could have spin-offs for leaky home victims that are still being denied full compensation.

 The existing principle of ‘joint and several’ liability means where two or more people are liable for the same loss, then each defendant will be potentially liable for the whole of the loss.

 This principle has become very contentious, particularly where defendants in leaky homes cases argue they will only accept liability for their portion of the losses, and this seriously delays or stalls the whole process.

 So the Law Commission’s issues paper – discussing and calling for submissions on its Review of Joint and Several Liability – could be a trigger to get things moving – although it is unclear whether it applies retrospectively, which is a different matter.

We already know about the existing  ‘log-jam’ in settlements with the Financial Assistance Package. There have been reports that although 1232 owners had lodged expressions of interest by the end of September, only 35 claims were proceeding thus far and only 12 had received their final payments.

 The Law Commission is now seeking views on the options for reforming the system of liability, and also for the advantages of the status quo. The closing date for submissions is Thursday 31 January 2013. This media release and a copy of the publication is available from the Law Commission website at


Housing response a sham

Posted by on November 7th, 2012

I can understand why the Housing Crisis Action Group is planning to hold a protest at Parliament this afternoon against these drastic changes to the government’s social housing policy.

This has resulted in a severe loss of state housing across the country and meantime, the National-Act Government’s response to the Productivity Commission’s housing affordability report does nothing to help struggling Kiwi families get into their first home.

As Labour’s Spokesperson on Housing, Hon Annette King, said on November 2nd, “There is nothing in National’s response today that will make housing more affordable. It will do nothing to put the missing rung of the housing ladder in place and give people a leg up to it. The Government is in denial and is condemning the housing sector to a path of decline.”

From the perspective of my Building and Construction portfolio, I note Productivity Commission Chief executive Murray Sherwin said back in December that the cost of building a new house in Auckland is 25 percent higher than Melbourne and Gold Coast, and the difference was “not due to the requirements of the building code’” yet so far, all we have heard from this Government are the clichés about how we must “reduce delays and costs of RMA processes” to supposedly get things moving.

Mr Sherwin also said materials account for 55 per cent of the cost of a new house, and they are “significantly cheaper” in Australia. Although part of that was due to the small size of the Kiwi market, a lack of standardised products, combined with high domestic transportation costs, had hiked building costs in New Zealand.

Clearly, any investigation along those lines would sound a bit too much like intervention for this market-driven National-Act Government.

It’s also interesting how Mr Sherwin’s suggestion that the Commerce Commission “can investigate’ complaints about businesses fixing prices, carving up markets or abusing market positions has also gone completely unanswered.

In fact, the National-Act Government’s response will do nothing to get struggling Kiwi families into their first home.