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Building on Shaky Ground

The Government's announcement today of the Kiwibuild “reset” has again proven that intervention and control does not deliver positive outcomes for hardworking New Zealanders. [1]

Housing Minister, Dr Megan Woods, has announced today that there will be changes to the government underwrite values offered to developers, and that they are abandoning targets.

In her interview with NBR’s Grant Walker, Dr Woods stated that the targets were driving “perverse outcomes.” With this statement the minister has confirmed the damage that Government intervention and control delivers.

She further explained that the programme had delivered the construction of houses where the market was not attracted to buy.

“Perverse outcomes are being seen across the construction industry as the government has continued to ignore the key drivers that are impacting the market. They have not boosted the construction of houses, and those that are built are in locations where they are not wanted,” says New Conservative Leader Leighton Baker.

Leighton Baker, a builder with over 30 years in the construction industry, speaks with first hand knowledge regarding the lack of confidence that is evident.

“Failure to address the core issue of regulatory compliance has been the biggest failure of this government in addressing housing issues. They have been too slow to bring the RMA into the discussion framework, and New Zealand will not see any changes before the next election,” explains Mr Baker.

Also announced today were the results of the survey by Registered Master Builders. This survey confirmed 97% of respondents want to see greater focus on reforming central and local government regulation and policies. [2]

The number of consents issued has frequently been referred to as an indication of success, however Leighton Baker is finding more builders and developers around the country electing not to build homes until confidence in the market improves.

Construction turnover is another success indicator used by the Government, but it has been shown with the financial failures occurring with construction companies, even those in pre-fabrication building, that profitability does not exist.

“There is a lack of confidence and a distrust which those of us at the coalface are seeing everyday,” says Mr Baker. “Experienced builders are not prepared to carry the risk for the returns that are generated in building homes.”

New Conservative is focused on reducing government controls and interventions, restoring confidence in the construction industry and respect for the tradespeople on which the industry relies.

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