Speech To The Local Government NZ Annual Conference

Good morning. Thank you for having me along today, and for the opportunity to address your group.

The last time I spoke to you was November last year. At that time, Government was launching a huge programme of work aimed at helping to set the building sector right, and get New Zealand on the path to economic recovery.

The Building Act Review, practitioner licensing, the consenting system, commonsense regulation... these topics were all covered. It was very much a case of "here's what we're going to do."

Well, I am back today feeling pretty good about where we've got to - plenty of what we set out to do has been achieved. There's still a great deal to be getting on with, but in 2010 there is a fresh set of goals on the table.

Engagement with myriad sector groups over the past year has given us a rich mine of information, and now many of our work programmes, overseen by the Department of Building and Housing, are well on their way to realising benefits.

Today, I want to spend time talking about the new goals we have, and give you an idea of how things are tracking just under a year on.

Goals

The theme of this year's conference is "building prosperous places."

Now, I'm aware this has a range of applications - we're not just talking about timber and nails - but I think this theme ties in nicely to what we are working to achieve in the building sector.

My goal is a productive building and construction sector that New Zealanders can have confidence in. Any former confidence has been shot to pieces by the leaky homes disaster. That's an unfortunate legacy, but one we have to deal with as we move forward.

In order to establish that confidence, the sector must operate effectively, and be made up of people who take pride in and stand behind the quality of their work.

It also needs to be supported by robust central and local government systems. That won't be news to any of you. But, all the goals in the world aren't any good without a plan; so how do we get there? How do we realise our prosperous place?

Productivity concerns

The issue of low productivity has been chewed around for a while, and there is no easy fix.

But in a sector that contributes 5 per cent of this country's GDP and employs 150,000 people, we can't just sit idly by while it remains the least productive part of the New Zealand economy. This has to change.

The Department of Building and Housing is working closely with industry to see what can be done to improve productivity and there is a clear message that government cannot fix the problem on its own.

We are asking industry to step up here. Government - and that includes all of you - can provide a solid framework, and we certainly have an important part to play, but it's the sector that needs to tackle the issue head on.

Following on from an industry-led productivity taskforce through 2008 and 2009, the Department has been working with the Building Industry Federation, BRANZ, and training organisations to build a 'productivity partnership'.

Your Association has been at the table assisting with this work, and helping identify the priorities for the various work streams.

Through work on research, skills, supply chains and procurement we hope to see a lift in productivity of 20 per cent over ten years. Regardless of where we sit in the grand scheme, a productive, high performing sector benefits us all.

Building Act Review

More than a thousand people, including many council officers and building officials, turned out to a series of meetings held all over New Zealand so they could have their say on the Building Act Review. The Department also collected over 380 formal submissions.

This is a piece of work that has people talking, and has people engaged.

What I want to get out of the Review hasn't changed: it's about reducing cost and complexity in the system, without cutting corners. Less cost, better quality - simple.

As a result of some good points raised in submissions, we are thinking carefully about how we achieve that and how much time it might take.

Responsibility and liability have been hot topics throughout this process, with many of the discussions in this area coloured by the leaky homes disaster and the financial impact following legal rulings on the basis of joint and several liability.

The idea we put on the table for feedback was to get clear, robust contracts in place between clients and builders, with warranty provisions and disclosure of financial backing.

Clear messages were sent about capability also - both in terms of concerns around the industry's skill level and the willingness of builders and other practitioners to stand behind the quality of their work.

Yes - I want unnecessary costs gone, but quality remains of the utmost importance. If we are going to allow builders to do more with less oversight, we first need to be sure they have the skills and know-how to get it right.

I expect to be able to announce decisions soon, and will ensure these outcomes are communicated to you as a priority as soon as possible.

Better Building Blueprint

Everything we're doing right now has an effect at the local government level.

It has been important as we work through our various programmes that we don't lose sight of that, and several initiatives with either very direct or trickle down impacts are part of the Better Building Blueprint.

I am pleased with the work being done in this area, pulling together a range of functions and initiatives into a package that represents the next generation of building control.

As well as the Building Act Review, we have the Licensed Building Practitioner Scheme and MultiProof.

The first MultiProof certificates were issued earlier this month, so standardised designs by two firms can now be used around the country. This is a fantastic milestone and I am really looking forward to seeing some of those developments come to life.

Many of you will all be familiar with how MultiProof aims to simplify and streamline consenting, and I think we have achieved that here.

Licensed Building Practitioner Scheme

Aside from the Building Act Review, the LBP scheme is another topic of immense interest. Local government continue to play an active role, and how the scheme operates going forward will have an effect on your business.

We are aware that some councils have expressed certain concerns about the scheme and this goes back to the roots of competency and skills. But that is precisely what the scheme is all about.

Designers, builders, carpenters, roofers, bricklayers, blocklayers, external plasterers and foundations workers - all need to be highly skilled and reliable if we are to achieve a sector that consumers have confidence in.

Local authorities and LGNZ have been instrumental in developing the scheme since 2007, and last year your feedback helped determine its final shape.

I want to thank you for your expression of your views on the scheme through Building Act Review submissions.

Recent developments include streamlining of the scheme. In February, I announced that people with recognised qualifications could apply to be licensed using the streamlined process.

This has been central to boosting efficiency in the scheme and recognising the hard yards so many of our best builders have put into their careers.

We remain convinced that the Licensed Building Practitioner scheme benefits everyone in the sector. You need to know the designs and the work that your officials inspect is competent, and that the people behind it are accountable.

Consumers are demanding licensed professionals and we will only see more of that as the Department of Building and Housing gets an active marketing and promotion campaign underway later this year.

And your job becomes easier if you can be confident that what you're signing off on is in good hands.

You all play a crucial leadership role here and government hopes you'll continue your support as we rebuild confidence and aim for that prosperous place.

Dam Safety

As part of the Building Act Review, the Government agreed in February of this year to appoint an independent, suitably qualified person to review the Dam Safety Scheme.

The aim of the review is to ensure that the schemes efficiency and effectiveness are at optimum levels, while costs are kept reasonable.

Dam Safety Regulations were originally expected to come into force on 1 July this year, but there were concerns about whether the scheme as it sat would do its job.

During such an important time of change, when our minds have been turned to efficiency, effectiveness and compliance costs, it seemed right to have an experienced person come in and take a hard look at what we were about to put in place.

Like much of the other work we're doing, there needs to be a balance struck. In this case it's between the costs proposed by the scheme, versus the potential risk to human life.

Some of these structures are holding back huge amounts of water, and failures could be absolutely devastating.

The scheme has now been deferred until 1 July 2012. Consultation will soon be underway seeking feedback on the review report and its various recommendations, and this will be wrapped up by mid-August 2010.

We hope you'll take the time to have some input during this valuable process.

Weathertightness

Monday 17 May was a big day for the Government. Supported by the Prime Minister, Auckland Mayor John Banks, Wellington Mayor Kerry Prendergast and my officials at the Department of Building and Housing, I announced that financial assistance for owners of leaky homes was here.

The costs of the leaky homes disaster can be measured in both financial costs - the burden to local councils and homeowners - but more importantly in human suffering.

Families all over New Zealand have taken hits to their wallets, and hits to their health. The misery and heartbreak this problem has caused is astounding.

Now, a package is on the table that will allow people to get their homes fixed and get on with their lives.

It looks like this: a quarter of agreed repair costs from central government, a quarter from you guys, and the rest picked up by the homeowners themselves, backed up by government loan guarantees.

Local Government New Zealand advised government in June the eight most affected councils were on board, with the option for others to opt in at a later date. Some are still considering the implications the scheme has for them.

Retail banks have indicated a willingness to work with Government on developing further detail and the aim is to have everything up and running in early 2011.

Building Consent Authority Update

Efforts to streamline building control systems were noted by International Accreditation New Zealand during phase two accreditation assessments of 69 building consent authorities.

IANZ also reported that building consent authorities were saying there is more robust decision making, increased staff support, more openness to change and better working relationships across consent authorities.

This is essentially what accreditation set out to achieve, so although the road's been a bit bumpy at times we're extremely pleased with how we're tracking.

Perhaps, more importantly, a real change has been noted in authorities shifting their focus from basic compliance to quality.

It's great to hear feedback from building consent authorities who say the standards underpinning accreditation just make good business sense.

There is work ahead of us in this space, but I hope that what we got back was representative about how you are all feeling about accreditation.

Of course, major work will be done here as the SuperCity takes shape. Principles underpinning Auckland Council's building control design will be easy access for stakeholders, decisions made in a timely fashion, quality of those decisions and cost-effectiveness.

There'll be sharing of resources, some aggregation of core services and improvements wherever they can be made. I understand, perhaps most importantly, that building controls will be very customer-focused.

Through that alone I think improvements will follow.

Land Information

Now to things geospatial. It's great to have district and regional council representatives on the New Zealand Geospatial Steering Committee. They represent your views and vision around how geospatial information can be used to its true potential. This is critical for government's goal of lifting the long-term economic performance of the New Zealand economy.

The role of this committee is to coordinate the work programme for the New Zealand Geospatial Strategy, so this means you have a voice in driving the work to grow geospatial throughout New Zealand.

I'd like to briefly speak on three points today:

1. Working together saves money

2. Fundamental data

3. The challenge of consistent address information

1. Working together saves money

Local and regional councils collect a lot of high resolution data of their areas, including aerial imagery and LiDAR elevation data. This can be very expensive. To overcome this, councils operating within the Bay of Plenty region got together and created the BoP Local Authority Shared Services (or LASS). They use economies of scale to purchase data and have saved over $1 million by working together. By buying an enterprise licence for GIS software they have saved another $60,000. There are so many opportunities for this type of collaboration. How are you planning to work together with councils in your region to achieve similar benefits?

2. Fundamental data

The models used for collecting fundamental datasets vary because business models vary. It seems to me that local and regional government collect data on a project specific basis - and you need to recover your costs. Rightly so. But there is great value to the rest of New Zealand if you decide how you can share your information in such a way that it's easy to find, share and use. Perhaps it's as simple as adopting common standards and keeping good metadata. How best can you open your data? The New Zealand Geospatial Office is working on a national spatial data infrastructure. How can you contribute to this? The more people that take part and share data, the more benefits there are for everyone.

3. The challenge of consistent address information

Local government is responsible for address information but different councils collect and format it differently. This has flow on costs further down the line. There is a great opportunity to initiate reliability and strongly influence the process of consistently formatted address data. Land Information NZ is looking at this issue and is interested in working more closely with local government on all these matters. My challenge to you today is to look beyond local and regional boundaries and find a way to improve this process. You will have an impact on the whole geospatial sector - private, academic, public and not for profit.

Conclusion

You don't need me to tell you that central government is well aware of the valuable contribution local government plays in the building sector. You know your worth, as do we.

The work I have talked about today requires both local government support, but more importantly local government input in order to be fully successful.

Whether that input is always what my officials want to hear is another matter, but those debates are extremely important as we tackle what are quite major issues in the sector.

Productivity needs to lift - no mean feat. Confidence needs to be restored - not so easy either. Bringing prosperity back to a low performing sector right on the back of an intense period of economic change is a challenge.

But we have good lines of communication and everyone is listening and engaging well as we work to build our prosperous place.

Thank you.

ENDS

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