John Roughan 's Opinion

John Roughan is an editorial writer and columnist for the New Zealand Herald.

John Roughan: The regulators always win in the end

37 comments
From Thursday, he's not a builder, he's an LBP with a whole new set of rules to obey. Picture / Mark Mitchell
From Thursday, he's not a builder, he's an LBP with a whole new set of rules to obey. Picture / Mark Mitchell

A rush of acronyms ... and builders join those brought under control

It must be hard to write regulations that strike the right balance between protecting an industry's customers and distorting its economics.

An old friend tracked me down this week to tell me what is happening in the building industry. He is getting out of it after 30 years, and he says legions of builders like him are heading for the exit.

From next Thursday, they will have to become "LPBs" (licensed building practitioners). The dreadful bureaucratic acronym is just the beginning of it.

Many of the routine things they have been doing are going to be RBW (restricted building work). When they apply for a consent to do any RBW, they will need to include a memorandum or CDW (certificate of design work) from a licensed designer, registered architect or chartered engineer.

Each LPB carrying out RBW will have to provide the customer and the consent authority with a Record of Work that they have done or supervised. They are advised to take photos of the work as they go.

They will be legally liable for the work of subcontractors and they will need to carry insurance against that.

He says they will be so swamped in paperwork, red tape and extra liabilities that building will cease to be an industry of self-employed tradesmen and will become the preserve of companies with accountants, lawyers and clerks on the payroll.

All this, he didn't need to tell me, is attributable to two words: leaky homes.

Listening to him, I was torn. As a house owner, I told him, I'd quite like to have a better assurance about what has been done inside the linings of my most valuable asset.

"How much do you want to pay for that?" he replied. Fair point. We both have grown-up children and none of them has bought a house yet. The prices they face and the shortage of houses in Auckland is not going to be helped by these regulations.

He said building consent numbers this summer were already at the lowest level he had seen.

That day was the anniversary of the Christchurch earthquake. I wondered what the supply of builders will be like now for the reconstruction needed there.

But then, I said to him, if these regulations mean the industry becomes the preserve of Fletcher Construction and a few other firms, the Productivity Commission will be content. It recently lamented that house building has mostly been done by self-employed characters who lacked the inclination to expand.

He shrugged. Industry studies seldom impress people who know their market.

It must be hard to write regulations that strike the right balance between protecting an industry's customers and distorting its economics.

"Leaky homes" has been a national disaster, comparable to the Christchurch earthquakes in its cost. But it was a disaster caused by a particular error introduced to the building code in the last quarter of the 20th century. It is not an indictment of that whole era of deregulation.

A great deal of needless restriction was stripped out of the economy in those years. "Deregulation" was a bit of a misnomer. The rules removed were those limiting competition, those that set reasonable standards of safety and performance were supposed to remain.

Safety, in fact, became a much greater source of regulation than it had ever been. The late 1980s and 1990s brought the rise of 'OSH' (occupational safety and health) and public health campaigns against smoking, drinking, gambling and "obesity".

The tension of the times was particularly spectacular in gambling. Previously, the only betting permitted in New Zealand was on horses but by the late 1980s no industry could make a case for that sort of protection any more.

In 1990, casinos were permitted under strict licensing. The SkyCity casino opened in 1996, which turned out to be not a moment too soon.

The following year Parliament started legislating to prevent more casino licences being issued and since 2003 there has been a moratorium on the industry.

The "problem gambling" campaign had gained the upper hand. It probably still has it.

This year, SkyCity has been negotiating with the Government to give Auckland a convention centre of the capacity the city needs to attract a lucrative conference trade. In return, the casino wants the moratorium relaxed so it can put in more gaming tables and machines, and it wants an assurance that its 25-year licence will be extended when it expires in 2021.

Opposition parties in Parliament can hardly wait to attack any deal done on those terms. The regulatory itch is back with a vengeance.

Lamenting the new building regulations, neither of us were drinking, smoking or even eating. They get you in the end.

- NZ Herald

John Roughan

John Roughan is an editorial writer and columnist for the New Zealand Herald.

John Roughan is an editorial writer and columnist for the New Zealand Herald. A graduate of Canterbury University with a degree in history and a diploma in journalism, he started his career on the Auckland Star, travelled and worked on newspapers in Japan and Britain before returning to New Zealand where he joined the Herald in 1981. He was posted to the Parliamentary Press Gallery in 1983, took a keen interest in the economic reform programme and has been a full time commentator for the Herald since 1986. He became the paper's senior editorial writer in 1988 and has been writing a weekly column under his own name since 1996. His interests range from the economy, public policy and politics to the more serious issues of life.

Read more by John Roughan

Have your say

We aim to have healthy debate. But we won't publish comments that abuse others. View commenting guidelines.

1200 characters left

Sort by
  • Oldest

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n4 at 24 Jul 2014 07:25:20 Processing Time: 525ms