Building Review Discussion Paper released

The Minister of Commerce, Lianne Dalziel, today released a discussion paper on the regulation of New Zealand’s building industry.

The paper, called Better Regulation of the Building Industry, sets out proposed changes to the Building Act 1991. The paper, written by the Ministry of Economic Development, suggests changes to the regulatory framework for the building industry, and for building trades and professionals.

Speaking with workers at the Waitakere Gardens Retirement Village, under construction in west Auckland, Ms Dalziel said the building industry is a significant part of New Zealand’s economy and society and a robust regulatory framework is important.

“Residential building alone accounts for 5% of GDP,” Lianne Dalziel said.

“It is important to realise that the weathertightness issue is not the problem. It is the symptom of a far more fundamental and systemic problem that flowed from changes to the Building Act 1991, which came into effect in 1993. Ten years later we are seeing the results of the deregulated and ‘hands off’ environment created for the building industry.

However, Lianne Dalziel said it was important not to lose the opportunity for innovation that the less-prescriptive framework has allowed.

“It is my view that the pendulum has swung too far one way, and it is my hope that we can restore it to a balanced position,” said Lianne Dalziel.

The discussion paper focuses on creating a regulatory regime designed to ensure quality assured designs, methods and products, capable people and reliable information as well as putting things right. “The Hunn Report on weathertightness found that New Zealanders know relatively more about the pitfalls of purchasing a used-car than buying a new home. The used-car market has better safety and quality performance, ongoing warranty, and consumer protection regulation,” said Lianne Dalziel.

“This to me is a real wake-up call for better regulation of the industry. One of the reasons for the regulatory framework for buying cars is that this is the second largest personal investment most people make. Their home is number one.”

“We should be able to rely on the regulatory framework of the building industry to produce homes and other buildings that are not only safe and sanitary, but are also durable.”

Key issues raised in the discussion paper are: Extending the scope of the Act so the interests of consumers are included and the need for buildings to be durable and fit for their purpose is emphasised. Greater emphasis on getting it right first time. This will be aided by better building methods and products and stronger building controls: The production of more “how to” standards for design and construction, and More scrutiny of designs and building methods. Strengthening the monitoring and enforcement, and a more proactive Building Industry Authority Regulation of Building Practitioners and accreditation of Building Inspectors and Certifiers.

The document also raises questions about whether the building industry needs its own dispute resolution body and whether there should be broader options for consumer redress.

Problems with the Building Act have been demonstrated by the weathertightness issue, pointing to a systemic problem with regulation of the building industry.

Copies of the discussion paper can be obtained by calling 04–472 0030, emailing buildingreview@med.govt.nz or by visiting www.med.govt.nz.

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