Penalties could be on the cards for careless builders as the Government looks to strengthen professional requirements. 

It's eyeing key changes to the registration and licensing regimes, with a focus on lifting competence and accountability requirements; as well as improving Building Act consumer protections.

Building and Construction Minister Chris Penk confirms it's also looking into a new offence for deliberately hiding non-compliant building work in remote inspections. 

That would mean a $50,000 fine for individuals or $150,000 for businesses, should it become law. 

Kerre Woodham is joined by Master Builders Chief Executive Ankit Sharma to discuss further. 

LISTEN ABOVE

Penalties could be on the cards for careless builders as the Government looks to strengthen professional requirements.&nbsp;
It's eyeing key changes to the registration and licensing regimes, with a focus on lifting competence and accountability requirements; as well as improving Building Act consumer protections.
Building and Construction Minister Chris Penk confirms it's also looking into a new offence for deliberately hiding non-compliant building work in remote inspections.&nbsp;
That would mean a $50,000 fine for individuals or $150,000 for businesses, should it become law.&nbsp;
Kerre Woodham is joined by Master Builders Chief Executive Ankit Sharma to discuss further.&nbsp;
LISTEN ABOVE

Join Kerre Woodham one of New Zealand’s best loved personalities as she dishes up a bold, sharp and energetic show Monday to Friday 9am-12md on Newstalk ZB. News, opinion, analysis, lifestyle and entertainment – we’ve got your morning listening covered.

Kerre Woodham Mornings Podcast

Ankit Sharma: Higher penalties for careless builders

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/bee676da-c29e-46a8-b0f3-b20400057980/transcript

How’s that miserly $20-a-week tax cut looking now that we know the country’s budget deficit is $1.8 billion worse than expected?  

You might be one of the few people who are actually better-off by more than 20 bucks a week, but you’re in the minority.  

And there’s no doubt that there is egg all over the Government’s face on this one. But I told you so. And it wasn’t just me who told you so, but I’ll get to that.  

There will, no doubt, be people hitting back on this one —pointing out that ‘they’re not tax cuts, it’s tax “relief”— and that all the Government has done is shift the tax brackets.  

But yeah yeah. Either way, same diff, most of us have an extra $20 in the pocket and the country has a $12.9 billion deficit —$1.8 billion worse than expected— the largest annual deficit since the pandemic in 2020.  

Not quite as bad though as the deficits after the Global Financial Crisis in 2007 and 2008 and the Canterbury earthquakes in 2010 and 2011. The deficit blew-out to $18.4 after the quakes.  

Not that that’s saying much because we’ve still got a $12.9 billion deficit and, yet the big brains in Wellington are still defending their tax cuts to the hilt.  

Now, to be fair, the Government’s books show that while the deficit’s gone pear-shaped, the amount of money the government got in through the door was actually higher-than-expected in the past year.  

But that doesn’t alter the fact that the deficit’s got worse and the Government has thrown caution to the wind and has voluntarily reduced its income.  

Which I find weird for a government that says it’s bringing some business nous to the Beehive. Because in business —aside from containing costs— the number one thing when you’re in business is to try and increase revenue.      

As soon as National started talking about tax cuts —or tax relief— before last year’s election, I could see then it was something the country couldn’t afford. And there was no shortage of experts lining up, saying the same.  

There was the farcical idea of taxing foreign home buyers. But, even then, as soon as that idea was put to bed, National and its subsequent coalition partners still signed-up to the dream.  

If I was being generous, I’d say that it was just politics. You know, it’s just the way it’s always been. Politicians promising to put more money in people's pockets. And, as people always have, they blindly swallow all the cheap talk without asking how it’s going to be paid for.  

But I’m not feeling generous, and, anyway, that wasn’t the case. When all this tax cut talk started there was no shortage of people lining up to shoot it down. Even after the government was formed, the experts were still shooting it down.  

Let me take you back to April this year when Gareth Kiernan from Infometrics wrote about it in the firm’s regular newsletter. Gareth is Informetrics’ chief forecaster, and he wrote back in April: "The Government’s plans to fully deliver its promised tax cuts must be in doubt, as the economy falters and the fiscal position continues to get squeezed."  

He went on to say: “Forgoing another couple of billion dollars in revenue and increasing the deficit further might seem irresponsible. That conclusion becomes even more valid when one considers that National’s broader pre-election fiscal programme has led to change through the coalition negotiation process, with some estimates suggesting an additional shortfall in net revenue of about $1.5 billion.”  

He was right then, and his view is even more spot-on now – now that we know that the deficit is $1.8 billion worse than expected.  

The tax cuts were unaffordable and shouldn’t have happened, and the state of the Government’s books proves it. 

How’s that miserly $20-a-week tax cut looking now that we know the country’s budget deficit is $1.8 billion worse than expected? &nbsp;
You might be one of the few people who are actually better-off by more than 20 bucks a week, but you’re in the minority. &nbsp;
And there’s no doubt that there is egg all over the Government’s face on this one. But I told you so. And it wasn’t just me who told you so, but I’ll get to that. &nbsp;
There will, no doubt, be people hitting back on this one —pointing out that ‘they’re not tax cuts, it’s tax “relief”— and that all the Government has done is shift the tax brackets. &nbsp;
But yeah yeah. Either way, same diff, most of us have an extra $20 in the pocket and the country has a $12.9 billion deficit —$1.8 billion worse than expected— the largest annual deficit since the pandemic in 2020. &nbsp;
Not quite as bad though as the deficits after the Global Financial Crisis in 2007 and 2008 and the Canterbury earthquakes in 2010 and 2011. The deficit blew-out to $18.4 after the quakes. &nbsp;
Not that that’s saying much because we’ve still got a $12.9 billion deficit and, yet the big brains in Wellington are still defending their tax cuts to the hilt. &nbsp;
Now, to be fair, the Government’s books show that while the deficit’s gone pear-shaped, the amount of money the government got in through the door was actually higher-than-expected in the past year. &nbsp;
But that doesn’t alter the fact that the deficit’s got worse and the Government has thrown caution to the wind and has voluntarily reduced its income. &nbsp;
Which I find weird for a government that says it’s bringing some business nous to the Beehive. Because in business —aside from containing costs— the number one thing when you’re in business is to try and increase revenue. &nbsp; &nbsp; &nbsp;
As soon as National started talking about tax cuts —or tax relief— before last year’s election, I could see then it was something the country couldn’t afford. And there was no shortage of experts lining up, saying the same. &nbsp;
There was the farcical idea of taxing foreign home buyers. But, even then, as soon as that idea was put to bed, National and its subsequent coalition partners still signed-up to the dream. &nbsp;
If I was being generous, I’d say that it was just politics. You know, it’s just the way it’s always been. Politicians promising to put more money in people's pockets. And, as people always have, they blindly swallow all the cheap talk without asking how it’s going to be paid for. &nbsp;
But I’m not feeling generous, and, anyway, that wasn’t the case. When all this tax cut talk started there was no shortage of people lining up to shoot it down. Even after the government was formed, the experts were still shooting it down. &nbsp;
Let me take you back to April this year when Gareth Kiernan from Infometrics wrote about it in the firm’s regular newsletter. Gareth is Informetrics’ chief forecaster, and he wrote back in April: "The Government’s plans to fully deliver its promised tax cuts must be in doubt, as the economy falters and the fiscal position continues to get squeezed." &nbsp;
He went on to say: “Forgoing another couple of billion dollars in revenue and increasing the deficit further might seem irresponsible. That conclusion becomes even more valid when one considers that National’s broader pre-election fiscal programme has led to change through the coalition negotiation process, with some estimates suggesting an additional shortfall in net revenue of about $1.5 billion.” &nbsp;
He was right then, and his view is even more spot-on now – now that we know that the deficit is $1.8 billion worse than expected. &nbsp;
The tax cuts were unaffordable and shouldn’t have happened, and the state of the Government’s books proves it.&nbsp;

John MacDonald: How’s that $20-a-week tax cut looking now?

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/0919d363-969a-449e-b835-b206000c42ac/transcript

How many reviews and reports do we need before we accept that we are nowhere near as good at emergency and disaster management as we think we are here in New Zealand?  

I reckon we’ll never admit it. But we should.  

In fact, we shouldn’t just admit that we’re not as good as we think - we should also be looking at some major structural change. Not just more of the tinkering around the edges that the Government is talking about today.  

We need to accept we’re pretty average; we need to accept that we’re a tiny country; we need to accept that, when it comes down to it, the military is the best outfit to be running our disaster response and we should be merging our civil defence and military defence functions.  

The Government has announced a big overhaul of emergency and disaster management after recent reports showed just how woeful things are in this department. Particularly after what happened during and after Cyclone Gabrielle last year.  

You might remember back in March this year when Mike Bush —who used to be the Police Commissioner— released his report on his review of the Civil Defence response to the cyclone.  

I remember being astounded when he came out and said that Civil Defence wasn’t prepared; it hadn’t planned for worst case scenarios; and that the national emergency management system was setting people up to fail.  

It was setting people up to fail.  

I was astounded because it seemed the country had learned nothing from the experiences during the 2010 and 2011 earthquakes in Canterbury. It was no better prepared in 2023 than it was 12 years earlier.  

So the Government’s taken all that on board and is talking about changing things.  

As you’d expect, what the Government’s talking about is all high-level, strategic stuff. It’s saying things like: “We want to build an emergency management system that can continuously improve and become stronger over time”.  

Which is all great stuff, but the Government’s also warning that it might have the money to do it.  

So here’s what I reckon we should be doing: 

You know how after a disaster the army either turns up to help or people call for the army to be sent in? I think the army or our defence force (even though it’s way under-resourced in a lot of areas itself) should be doing the planning and the leading during times of disaster.  

I heard Emergency Management Minister Mark Mitchell on Newstalk ZB listing all the people involved in emergency management in this country. Which tells me there are just too many cooks in the kitchen.  

And that’s the nub of why we seem to be getting no better at disaster planning, disaster response, and disaster management.  

From my experience, there are a lot of moustaches involved. A lot of testosterone, and a lot of egos.  

You don’t get that in the military. There are hierarchies that people operate under in the defence force. In normal times and during times of disaster. The military has communication functions and capabilities that no local council is ever going to have.  

It does plan for worst case scenarios. It does all the things our disaster and emergency management people haven’t been doing and have been called-out for not doing it. Not just in Mike Bush’s report, but others as well.  

And that’s why I’m more convinced than ever that, instead of pouring more time and money into a standalone civil defence system —one the Government itself is saying today needs to improve, but is also saying that there might not be the money to do it— that’s why I think we should be merging our civil defence and military defence functions.  

Or, to put it another way: I think we should be bringing the army in well before disaster strikes. 

How many reviews and reports do we need before we accept that we are nowhere near as good at emergency and disaster management as we think we are here in New Zealand? &nbsp;
I reckon we’ll never admit it. But we should. &nbsp;
In fact, we shouldn’t just admit that we’re not as good as we think - we should also be looking at some major structural change. Not just more of the tinkering around the edges that the Government is talking about today. &nbsp;
We need to accept we’re pretty average; we need to accept that we’re a tiny country; we need to accept that, when it comes down to it, the military is the best outfit to be running our disaster response and we should be merging our civil defence and military defence functions. &nbsp;
The Government has announced a big overhaul of emergency and disaster management after recent reports showed just how woeful things are in this department. Particularly after what happened during and after Cyclone Gabrielle last year. &nbsp;
You might remember back in March this year when Mike Bush —who used to be the Police Commissioner— released his report on his review of the Civil Defence response to the cyclone. &nbsp;
I remember being astounded when he came out and said that Civil Defence wasn’t prepared; it hadn’t planned for worst case scenarios; and that the national emergency management system was setting people up to fail. &nbsp;
It was setting people up to fail. &nbsp;
I was astounded because it seemed the country had learned nothing from the experiences during the 2010 and 2011 earthquakes in Canterbury. It was no better prepared in 2023 than it was 12 years earlier. &nbsp;
So the Government’s taken all that on board and is talking about changing things. &nbsp;
As you’d expect, what the Government’s talking about is all high-level, strategic stuff. It’s saying things like: “We want to build an emergency management system that can continuously improve and become stronger over time”. &nbsp;
Which is all great stuff, but the Government’s also warning that it might have the money to do it. &nbsp;
So here’s what I reckon we should be doing:&nbsp;
You know how after a disaster the army either turns up to help or people call for the army to be sent in? I think the army or our defence force (even though it’s way under-resourced in a lot of areas itself) should be doing the planning and the leading during times of disaster. &nbsp;
I heard Emergency Management Minister Mark Mitchell on Newstalk ZB listing all the people involved in emergency management in this country. Which tells me there are just too many cooks in the kitchen. &nbsp;
And that’s the nub of why we seem to be getting no better at disaster planning, disaster response, and disaster management. &nbsp;
From my experience, there are a lot of moustaches involved. A lot of testosterone, and a lot of egos. &nbsp;
You don’t get that in the military. There are hierarchies that people operate under in the defence force. In normal times and during times of disaster. The military has communication functions and capabilities that no local council is ever going to have. &nbsp;
It does plan for worst case scenarios. It does all the things our disaster and emergency management people haven’t been doing and have been called-out for not doing it. Not just in Mike Bush’s report, but others as well. &nbsp;
And that’s why I’m more convinced than ever that, instead of pouring more time and money into a standalone civil defence system —one the Government itself is saying today needs to improve, but is also saying that there might not be the money to do it— that’s why I think we should be merging our civil defence and military defence functions. &nbsp;
Or, to put it another way: I think we should be bringing the army in well before disaster strikes.&nbsp;

John MacDonald: Call in the army for our civil defence future

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/775616db-6a38-4fb1-bb38-b205000594ab/transcript

There's been a lot of good news on the home building front, you know, just for your average homeowner.  

The Government's plans to reform the building consent system to make it more affordable to build a new home – or a home. Jolly good news. The review of the building code to bring in a streamlined, risk-based consenting regime, as well as increasing the availability of construction materials, all good.  

There is no doubt we're paying through the nose to build homes here. The cost of building work consented per square metre for a standalone home in New Zealand in 2022 was $2591. In Australia it was $1743. So expensive. The total number of homes consented was in decline too. In the year to December 2023, 37,239 dwellings were consented, down from 49,538 the previous year. The government's proposed law changes, which will remove the need for building consents on homes under 60 square metres in certain areas —your granny flats— those changes have been welcomed by housing providers and also the opposition, so this is all good news, very good news.  

The Coalition government pitched the changes as a way to make it easier to build granny flats, tiny homes, and increase the supply of affordable housing. All well and good. My only concern when I heard the news was where are the checks and balances in terms of the quality of build? As Chris Penk put it, reforms around consenting homes and removing barriers to overseas building products will only succeed if we have qualified tradespeople doing the work, standing by it and being accountable if things go wrong. We've needed that for many, many years.  

When you look at the buck-passing around the leaky homes debacle that devastated the lives of so many New Zealanders, nobody was willing to take the blame, and I'm not saying the builders were at fault, but nobody was.  Nobody was held accountable. Ratepayers ended up having to fork out huge sums of money to try and remediate the worst disaster that they could possibly have. Sinking every cent they had and future funds that they were going to generate into a home that was unliveable. How do we ensure that the work done is done right, especially when you hear tales of undercutting and people coming in and doing a job for next to nothing because they've got friends and family and relatives, and they're all living together in one big house?  

This is the complaint made by your professional builders who pay the going rate, don't undercut, know what a job is worth, and charge accordingly. How do you protect consumers from that? In the first instance, I'd say buyer beware. Don't just go for the cheapest price. If something sounds too good to be true, then it is. But most of us know very little about structures and engineering and building. When you go into a home, you expect that it has been built to last, as many homes have. And in more recent times, many homes have not. How on earth do you check that a building has been done properly, that in an addition, an add-on has been done properly? The unconsented tat that I had to pick my way through when I was trying to find a house at the height of the market, was just horrific. Even though I don't know anything about building, you know that when something's dangling off the edge of a Cliff held together with a piece of four by two, chances are it hasn't been consented. Some of the building inspections showed that it hadn't been consented. Things had popped up on the floor plan out of the blue. And it all went so far back that there was no ability to be held accountable. You just had to buy it aware that you could be buying into a whole load of problems, and these were houses that were going for millions in Auckland.  

The Government says that it's going to crack down on dodgy builders. That, as Chris Penk says, all of these improvements will only work, will only benefit consumers ultimately if the building is of a professional quality. So the crackdown looks to lift the competence and accountability requirements for building professionals, improving consumer protection measures in the Building Act and ensuring regulators have the right powers to hold people to account. It really counts for nothing. All very well and good to have a potential fine of $50,000 for an individual builder and $150,000 for businesses to deter bad behaviour, but since when has it?  Some of these shonky builders that people employ, they haven't got $50K. You can whistle for your $50K. $150,000 for businesses to deter bad behaviour. Can I show you the Du Val group who have lost hundreds of millions and are now applying for legal aid? You're not going to get $150K out of them.  

So all well and good to lift the accountability requirements and the competency of building professionals but ultimately, we are all still going to be left just hoping and trusting that we've employed the right guys or girls. I've been very, very lucky with the renos I've done, amazing builders, but then they weren't the cheapest. They had integrity. They were jolly good at what they did. I presume they still are. The work lasted. They had absolute confidence, I had absolute confidence in them. That's what we need.  

Is that the norm? Or are there too many cowboys getting away with it? I'd really love to hear from the industry on this because only you will know a) if these reforms are going to improve things, and b) if these fines, this move to improve accountability and professionalism is going to actually work. I cannot see fines working in any way shape or form. The only way I can see this working is by having a barrier to entry into the profession. You know, having people who know what they're doing, who are proud of what they do, who stand by what they do. There are plenty of those in the building profession, we just need more of them. 

There's been a lot of good news on the home building front, you know, just for your average homeowner. &nbsp;
The Government's plans to reform the building consent system to make it more affordable to build a new home – or a home. Jolly good news. The review of the building code to bring in a streamlined, risk-based consenting regime, as well as increasing the availability of construction materials, all good. &nbsp;
There is no doubt we're paying through the nose to build homes here. The cost of building work consented per square metre for a standalone home in New Zealand in 2022 was $2591. In Australia it was $1743. So expensive. The total number of homes consented was in decline too. In the year to December 2023, 37,239 dwellings were consented, down from 49,538 the previous year. The government's proposed law changes, which will remove the need for building consents on homes under 60 square metres in certain areas —your granny flats— those changes have been welcomed by housing providers and also the opposition, so this is all good news, very good news. &nbsp;
The Coalition government pitched the changes as a way to make it easier to build granny flats, tiny homes, and increase the supply of affordable housing. All well and good. My only concern when I heard the news was where are the checks and balances in terms of the quality of build? As Chris Penk put it, reforms around consenting homes and removing barriers to overseas building products will only succeed if we have qualified tradespeople doing the work, standing by it and being accountable if things go wrong. We've needed that for many, many years. &nbsp;
When you look at the buck-passing around the leaky homes debacle that devastated the lives of so many New Zealanders, nobody was willing to take the blame, and I'm not saying the builders were at fault, but nobody was. &nbsp;Nobody was held accountable. Ratepayers ended up having to fork out huge sums of money to try and remediate the worst disaster that they could possibly have. Sinking every cent they had and future funds that they were going to generate into a home that was unliveable. How do we ensure that the work done is done right, especially when you hear tales of undercutting and people coming in and doing a job for next to nothing because they've got friends and family and relatives, and they're all living together in one big house? &nbsp;
This is the complaint made by your professional builders who pay the going rate, don't undercut, know what a job is worth, and charge accordingly. How do you protect consumers from that? In the first instance, I'd say buyer beware. Don't just go for the cheapest price. If something sounds too good to be true, then it is. But most of us know very little about structures and engineering and building. When you go into a home, you expect that it has been built to last, as many homes have. And in more recent times, many homes have not. How on earth do you check that a building has been done properly, that in an addition, an add-on has been done properly? The unconsented tat that I had to pick my way through when I was trying to find a house at the height of the market, was just horrific. Even though I don't know anything about building, you know that when something's dangling off the edge of a Cliff held together with a piece of four by two, chances are it hasn't been consented. Some of the building inspections showed that it hadn't been consented. Things had popped up on the floor plan out of the blue. And it all went so far back that there was no ability to be held accountable. You just had to buy it aware that you could be buying into a whole load of problems, and these were houses that were going for millions in Auckland. &nbsp;
The Government says that it's going to crack down on dodgy builders. That, as Chris Penk says, all of these improvements will only work, will only benefit consumers ultimately if the building is of a professional quality. So the crackdown looks to lift the competence and accountability requirements for building professionals, improving consumer protection measures in the Building Act and ensuring regulators have the right powers to hold people to account. It really counts for nothing. All very well and good to have a potential fine of $50,000 for an individual builder and $150,000 for businesses to deter bad behaviour, but since when has it? &nbsp;Some of these shonky builders that people employ, they haven't got $50K. You can whistle for your $50K. $150,000 for businesses to deter bad behaviour. Can I show you the Du Val group who have lost hundreds of millions and are now applying for legal aid? You're not going to get $150K out of them. &nbsp;
So all well and good to lift the accountability requirements and the competency of building professionals but ultimately, we are all still going to be left just hoping and trusting that we've employed the right guys or girls. I've been very, very lucky with the renos I've done, amazing builders, but then they weren't the cheapest. They had integrity. They were jolly good at what they did. I presume they still are. The work lasted. They had absolute confidence, I had absolute confidence in them. That's what we need. &nbsp;
Is that the norm? Or are there too many cowboys getting away with it? I'd really love to hear from the industry on this because only you will know a) if these reforms are going to improve things, and b) if these fines, this move to improve accountability and professionalism is going to actually work. I cannot see fines working in any way shape or form. The only way I can see this working is by having a barrier to entry into the profession. You know, having people who know what they're doing, who are proud of what they do, who stand by what they do. There are plenty of those in the building profession, we just need more of them.&nbsp;

Kerre Woodham: Will a fine solve our dodgy building problems?

https://api.omny.fm/orgs/7784f840-c291-422a-924b-ad9000bbad71/clips/64becbb4-b4be-4933-ad8f-b20400051079/transcript

Ankit Sharma: Higher penalties for careless builders

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