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Hon Margaret Wilson: "A Brave New World"

Registered Master Builders Federation/New Zealand Institute of Building Conference 2004 - "A Brave New World"

Thank you for the invitation to speak to you this afternoon.

As you know, I recently took on responsibility for the building industry as Minister of Commerce.

But while new to the portfolio - and I must admit to finding it something of a learning curve -, the issues confronting us in building are not totally new to me.

Rather appropriately I was involved from the start . as a member of the Ministerial group set up in 2002 to oversee the government response to "leaky buildings". That issue was the catalyst that triggered the review and overhaul of the building regulatory framework.

On a visit of Canada in October 2002 I heard first hand of the Canadian experience with the weathertightness issue. I met with both the head of Canada's Homeowner Protection Office and Robyn Allan, the report advisor to the commission of inquiry into the quality of Canada's residential construction led by former Premier Dave Barrett.

From these meetings, the Hunn and Select Committee Inquiry reports, and the Ministry of Economic Development review of the Building Act, I soon became aware the problems associated with the weathertightness issue are multi-faceted and systemic, with all parts of the industry and building control framework coming in for criticism.

And I have taken a keen interest in the progress of the Building Bill that is now before Select Committee.

While much in the Bill is not new, there are also some quite significant changes - the "Brave New World" reflected in your conference theme. There are changes not only in the law, but most significantly in how the regulators perform their functions.

By the regulators I mean the Building Industry Authority (BIA), Building Consent Authorities (which include territorial authorities and private certifiers) and the Building Practitioners Licensing Board.

The Bill gives the BIA more powers and more resources, and makes it part of a government department.

The territorial authorities will be given more powers and will be required to be accredited as Building Consent Authorities (BCAs).

There will be a new requirement that critical building work be undertaken or supervised by licensed building practitioners or LBPs. There will be a five-year transition period before this requirement comes into force.

For each of the regulators - and those who they regulate - there will be a need to learn new rules and new ways of doing things.

That will result in some costs, tangible and intangible. There may be a need for retraining. Change also inevitably creates uncertainty. But we want to keep the costs as low as possible.

While there will be increased obligations on the building industry and regulators, there will also be much more support by way of information, guidelines and training.

We are trying to provide realistic timeframes for implementation. All the way through the process we have worked closely with the industry to create commonsense rules consistent with good industry and regulatory practice, and this process will continue.

Are the changes radical? Not really, many other countries have similar requirements.

Will they require the industry to grow and change to meet the new requirements and standards? Yes, otherwise there would not be any point in them and the changes most people think necessary would never happen.

Do we have to ensure the necessary 'stretch' is achievable for the industry, and that the industry is not 'stretched' so much that it breaks?

Absolutely - we need very good implementation - and there are two key elements to achieving that.

First, implementation must be designed and undertaken in close consultation with the industry.

Second, all parts of the industry must work together as well as responding individually to the changes. Today's conference is an example of this happening already with the Master Builders and the New Zealand Institute of Building working together to organise this event for the second time.

The Bill proposes a comprehensive package of reforms across the regulatory framework, which together aim to ensure buildings are designed and built right first time.

The reforms are interconnected - each part impacts and depends on other parts.

Take for instance, the licensing building practitioner scheme.

The scheme has close links with the work of BCAs because BCAs will issue building consents including details of the work that must be done by LBPs.

So LBPs will need to work closely with, and understand the role of BCAs. BCAs, in turn, will need to fully understand the LBP scheme and their part in making it work.

There are many other linkages. The Bill provides for the setting up of a product certification accreditation agency that will be available for manufacturers. The certificate will set out when a product should and should not be used, how it should be installed, and in some cases, who should install it. The BIA will be able to require the use of certified products in certain instances.

As builders, surveyors, quantity surveyors, architects and designers, and project and construction managers - or basically industry professionals, you will also need to keep up to date with information coming out of this agency and the regulators - and these bodies will make that information easily available to you.

These linkages are set out in the Bill as part of the broad framework of reforms.

To date, attention has focused on that broad framework.

Now, however, it is time to look beyond the words of the Bill to how we can make these reforms work in practice.

This may sound a little premature. As you know the Bill is currently before Select Committee which is considering nearly 300 submissions on the legislation.

We will not know the final shape of the legislation until the Select Committee has reported back to the House with recommended changes and there is, of course, no guarantee the Bill will be passed.

But assuming it is, enactment is only the beginning of the process of reform and this is why we must start looking/planning for the future now.

Much important detail of how the reforms will work in practice is to be done by regulation. This is particularly so in terms of establishment of the building practitioners' licensing regime.

We worked closely with industry groups in developing the legislation. We want to continue to work closely with you on developing the regulations, because it is the regulations that will to a large extent govern the operational aspects.

One of the things I want to keep checking is whether we have got the balance of regulatory controls right. I want only to regulate where it is needed. I intend to keep a close eye on the regulations as they develop using this touchstone.

The regulations will cover a number of key elements of the licensing regime.

The purpose of the regime is to ensure that critical building work is done or supervised by suitably qualified people, thus improving the quality of building work as a whole.

The important question is in getting the balance right in what is critical work.

Critical building work is work with the potential to cause significant harm to the building envelope or structural damage. Regulations made under the Bill will list the types of critical building work covered by the licensing regime and that therefore must be done and supervised by a licensed practitioner.

We want the DIY builder to still be able to do minor repairs and renovations. But we want the professional to be involved when it really does matter.

The various categories of building practitioner will also be set by regulation.

As a first step in developing these regulations, officials in the Ministry of Economic Development have been working with an industry group, which includes representatives from Master Builders and NZIOB. These discussions have, I gather, been robust and frank, but constructive and positive.

The aim was not that the industry group come up with draft categories; that is the government's role. Rather it was to ensure we are aware of the potential implications of licensing and its impact on the industry so any proposals we develop take account of this and are sensible, practical, efficient and effective. The next step in the process will be a discussion document outlining draft categories that will be circulated to the industry and form the basis for consultation. That document will also outline the proposed governance model for licensing and invite submissions on the types of skills and expertise required by members of the Building Practitioners Board.

That discussion document will be distributed once the Bill has been reported back to the House by the Select Committee, which is currently scheduled for the end of May. The committee is undertaking a thorough examination of the Bill and I understand may need to seek a six-week time extension. [NB: may have been announced by the 23rd]

Another key piece of work is the development of the "competencies" or minimum standards that building practitioners will be required to demonstrate if they want to be licensed.

This is, as I am sure you are well aware, a complex piece of work with major implications for training and education in the industry.

We must make sure there are robust unit standards or comparable measures of competency; that there are enough quality training programmes for any who need to upskill to reach that level of competency, and that these are delivered by appropriate training providers.

Again we will be asking for input from industry groups and, in particular, those involved in industry training.

We hope to have these "competencies", or minimum standards, finalised within 18 months to two years of the Bill being enacted.

This will allow time for those who need to upskill to do so before licensing becomes mandatory in 2009.

It will also allow time to make sure training programmes and support are in place.

The government is well aware that the licensing regime will lead to increased demand for training and education in the building industry.

I am sure you would all agree that an increased investment in training across the board is highly desirable.

Not only will higher skill levels result in higher quality buildings and fewer building failures. It will also mean increased recognition from the rest of society of the skills involved in building work. That in turn will bring greater consumer confidence and credibility.

I am encouraged to hear that record numbers of trainees have been signing up for Building and Construction Industry Organisation training programmes - both younger new entrants to the industry and older existing workers, with one of the drivers being the prospect of licensing.

That is a very positive sign. It shows people are seeing the opportunities licensing offers and the growing demand for skilled practitioners.

As I said at the start, there is much work still to be done. But if we can continue to work together constructively we will get there and the result, I think, will be better all round for all of us - industry and consumers.

ENDS

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