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Sheraton Hotel
Auckland
Friday 11 October 2002.


Good morning.


Thank you for the opportunity to speak to what I sincerely hope history will view as an important event in New Zealand’s building industry.

Looking out from here, it looks like anyone who’s anyone in the building sector is here, and that’s heartening.

Heartening because there’s no doubt that the construction industry is a major driver in New Zealand’s economy.

Anyone who doubts that need only look to the Statistics New Zealand figures for the June 2002 quarter.

These put the value of residential building work put in place at over $1.1 billion for that quarter alone.

But I don’t want to give the appearance that I’m happy that any of us should be needing to meet here today.

I am mindful that we’re here to find ways to deal with problems outlined in the report from the Overview Group on the Weathertightness of Buildings.

In doing so, it’s useful to outline two key themes that I want us all to take on board.

The first is that it is entirely reasonable for homeowners to expect their new houses will not rot.

We need to be cognizant of the issues facing homeowners whose houses are affected by rot and work with them to find solutions.

This remains a key theme – one of co-operation and joint action and I will discuss this further shortly.

The other theme is the opportunity to think carefully about the regulatory environment and what is appropriate for the future.

It’s probably a good time therefore, to look back before we get onto that part of the equation.

It’s now approximately a month since the Hunn Report landed on my desk.

Back on Tuesday 17th September, it amounted to a pretty damming indictment of systemic failure within the industry. In fact the words ‘systemic failure’ were prominent in the Report.

Despite the considerable media hype, it’s as well to take a minute also to get some perspective on the situation so far.

Firstly, it has to be remembered we still have no idea how many houses are affected.

We don’t know where these affected houses are located , nor to what extent.

What is certain, is that there are people affected, and in some cases very badly.

In one Wellington apartment block I saw, it was apparent every apartment had problems. The body corporate group told me they had collated 60 ring-binders of problems.

All of the homeowners, who range from elderly single people to solo parents with pre-schoolers, face the crisis on a daily basis. None is immune.

They would be among the worst affected group that I have seen, and they need a way forward.

The Hunn report details the problems of failure in all parts of the building industry that may have contributed to examples such as this.

It stops short of blaming any one person or group, instead it places the burden of eliminating the failures that result in the construction of leaky buildings on everyone’s shoulders.

The Government has begun to play what part it can.

First up, we’re making sure affected parties have a practical and inexpensive way of seeking solutions.

And secondly, we’re looking ahead to what needs to be done to ensure that these problems do not continue.

In the days immediately following delivery of the Hunn report, the Government moved to set up a select committee to hear people’s submissions.

The select committee process will both provide a forum for all parties to provide advice and provide information for government about the way forward.

To assist affected parties reach effective solutions, we are setting up an assessment and dispute resolution service. An expert advisory group will design and assist in the establishment of this service, and they are working on that right now...

Finding a way that consumers can get redress remains a key focus.

Our second focus is fixing this for the future.

The Government is working on various fronts to ensure we don’t end up with another generation of homes with the same issues

We’ve called together this summit to give you an opportunity to be part of that solution.

A key place to start is the careful consideration of the findings of the Hunn Report in the context of the regulatory environment.

I am aware that many here will have participated in extensive consultations surrounding the Building Act review.

But I am also aware that the Building Act review does not deal specifically with this issue. Today would seem to be a good day to discuss this and seek solutions.

This includes considering some fundamental issues related to the performance-based code and the balance between prescription and flexibility which the industry has enjoyed over the past 10 years.

Ultimately, if the Government needs to change the regulatory environment, we will do so.

I’m pleased that already various groups have taken significant steps in response to the Hunn Report.

But while I commend these moves, I want every individual, group and organisation here today to be as ready to play its part.

I want everyone here to look at the Hunn Report and enact an action plan to correct the mistakes that have led to the construction of leaky buildings.

I want agreement in place to eliminate deficiencies and restore consumer confidence in homes built in this country.

If today’s summit is not sufficient, it is my intention to meet again and find workable solutions.

I want to also state my expectation – on behalf of the government – that problems facing this industry get resolved.

I expect all industry leaders to endorse the reforms necessary to restore consumer confidence.
occur, and the role of the industry itself in bringing about reform.

Finally, it needs to be acknowledged we today have to address the hard asks.

But I believe we have the goodwill to do that.

This meeting is an opportunity to respond to the needs of consumers in a way and that will maintain confidence in New Zealand’s building industry.

Thank you for showing your commitment by being here today.

Thank you.

 

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