Building authority overcharging says MP

By FRANCESCA MOLD political reporter

The Building Industry Authority has accumulated some of its $12 million reserve fund by overcharging people for building consents, says Act MP Deborah Coddington.

Treasury papers, released under the Official Information Act, showed the authority had been "overcharging through its cost-recovery fees", she said.

The Treasury had advised the Government that "the appropriateness of this money's origin needs to be confirmed" before any of the authority reserves were returned to the Crown.

The authority, which oversees building controls, is funded through levies on building construction.

Territorial authorities collect the levy, set at 65c per $1000, when building consents are issued. The levy is payable on consents with an estimated value of over $20,000.

The Government sets a spending limit for the authority each year and any money collected over this accumulates in the reserves fund.

A parliamentary review of the authority's finances, released last month, found there was evidence of over-charging and under-paying.

The select committee report expressed concern that the level of accumulated funds was high in proportion to the authority's annual spending.

It has previously been suggested that the Government should have allowed it to use some of the reserve fund in the past.

Commerce Minister Lianne Dalziel said the levy had been reduced over the years from $1 to 65c. The $12.2 million reserves had built up over 10 years.

At the end of last year, the Government allowed the authority to take $1.3 million from the fund so that it could speed the development of building standards.

Ms Coddington said it appeared the reserves had been gathered "improperly".

The Government should pay it back to people who had paid too much for their building consents, she said.

Local authorities, who were facing lawsuits from homeowners with leaky buildings, should also demand a payout from the Government's "slush fund".

But Ms Dalziel said the levy was only ever used for the reason it was collected, to promote building controls and standards. She said the levy would be reviewed this year.