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Concern over increased building levy

23 February, 2005

Registered Master Builders express concern over increased building levy

The Registered Master Builders Federation (RMBF) is greatly concerned at the lack of industry consultation and perceived lack of a coherent and coordinated approach to increases in central and local government building taxes that are resulting from the new Building Act.

The RMBF has strongly criticised the latest increase -- the tripling of the building levy announced by government last week -- and warned that the increases, including those recently made and announced by local councils, would end up being passed directly onto the consumer.

"While registered master builders support many of the changes that are being brought in by the new Building Act, the tripling of the building levy is a cost that cannot be worn by builders in a very competitive market," said RMBF CEO Chris Preston. "This will become yet another cost borne by the consumer."

The Federation noted that when the Act was first announced it was expected to add approximately 3% to the cost of construction. However, the latest increase, coupled with new and potential territorial authority fees that are being imposed in a number of regions, building research fees, the yet to be confirmed cost of building licensing fees, plus the costs of materials and new construction methods was likely to greatly exceed that estimate.

"We will be expecting increased accountability and transparency from the Department of Building and Housing for the extra funding it will be receiving, as well as additional and enhanced services," said Mr Preston. "We expect this increase in funding to result in a faster and simplified system that works for builders and the public alike. There is a danger that increased levy funding will simply result in a larger and more cumbersome bureaucracy."

Mr Preston said there also should be recognition of those builders who belong to trade associations and have a track record of consistently building quality homes. "The current taxes tar every builder and their clients with the same brush," he said.


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