Speech to Lockwood Group Ltd Annual Conference

Hon Rodney Hide - Minister of Local Government; Minister for Regulatory Reform; Associate Minister of Commerce.
Speech to Lockwood Group Ltd Annual Conference
Duxton Hotel, Okawa Bay, Rotorua

Monday 15 June 2009

Good morning and thank you for the invitation to join you today.
I’ve been a Minister for six months now and I’ve got to say that I’m enjoying every minute of it. It’s great to be in a position to be able to get things done, and to be able to help people run their businesses by addressing the over regulation that hampers so many aspects of living in New Zealand, and especially in doing business here.
Regulation in the residential construction industry crosses both my Regulatory Reform and Local Government portfolios. Most of the regulation is made by central government, and its simply thrown at local government to implement.
A great example is the Resource Management Act (RMA). This Act is a very pervasive piece of regulation, as you will all be very aware. As it plays such an important part in the allocation of natural resources, I have no doubt that it impacts on Lockwood franchises on a daily basis.
You will have heard about the first phase of RMA reforms, being led by Hon Dr Nick Smith, aimed at addressing the excessive bureaucracy, costs and delays of the RMA.
Significant changes are being made to:
- remove frivolous, vexatious and anti-competitive objections
- streamline processes for projects of national significance
- improve plan development and plan change processes
- improve resource consent processes
- streamline decision making by councils and the Environment Court, and
- improve the flexibility and usefulness of national environmental standards and national policy statements.
This is a good start, but there is a lot more that needs to be done. This is why Dr Smith recently announced the second phase of RMA reforms. This second stage covers:
- barriers to sustainable and cost-effective aquaculture development
- alignment of RMA consenting processes with those in the Building Act, Conservation Act, Forests Act, Historic Places Act
- developing further the scope, functions and structure of the proposed Environmental Protection Agency
- improving infrastructure provisions, including the application of the Public Works Act 1981
- exploring better approaches to urban planning, and
- establishing a fairer and more efficient water management system.
I am excited about the potential of these proposed changes to unshackle businesses to do what they do best - create opportunities, wealth, and jobs.
Another piece of regulation that you will be well acquainted with is the Building Act 2004.
Like the RMA, this piece of regulation also needs streamlining and simplification.
I am working with Hon Maurice Williamson and Hon John Carter to explore if legal responsibility, and liability, can be taken away from councils and placed back where it should be - on the industry and individual contractors or suppliers. Contractors and suppliers have the expertise and incentives to manage it properly.
The reason councils are so incredibly demanding is that they are now paranoid about the possibility of being considered negligent, or found negligent, some time in the future over decisions they make on both minor and major building projects.
It is appropriate that they are stringent and demanding in many areas involving safety and reliability of structures. Preventing leaky buildings is a good example. But it’s gone too far and it’s got to stop. We can’t have councils extending ridiculous controls into micro areas of a project.
Costs, charges, and fees keep being raised way beyond what is reasonable or justifiable.
Three thousand dollars for a consent to build a ten thousand dollar Skyline garage is absurd. The paperwork’s gone crazy too. Up to fifty pages of paperwork is needed for councils to approve a garage - whereas two or three pages used to be enough.
Reform of the building regulations will, I am sure, make a big difference to your sector. And hopefully help you to ride through these turbulent times and survive as flourishing businesses.
In addition to the RMA and the Building Act, we are now reviewing 9 other major regulations including:
- electricity institutional arrangements
- Employment Relations Act
- Foreshore and Seabed Act
- Holidays Act
- Overseas Investment Act
- Telecommunications Act
- Weathertight Homes Resolution Services Act
- Climate Change Response Act, and
- Dairy Restructuring (Raw Milk) Regulations.
Given the importance of this legislation, the Minister of Finance and I have an oversight of these reviews to ensure that they deliver the outcomes we are after.
As well as these reviews of major legislation we have what I call the "low-hanging fruit".
These are the infuriating laws that people have been writing to me about in droves - like pool fencing laws, and shop trading hours regulation.
The fixes to these laws are usually quite straightforward - it is just a case of getting a commitment to make regular changes. Although many of these types of changes may seem small compared to the major reviews, I think that together they will make a real difference.
I want them to impose an important discipline on regulators and drive continual regulatory improvement.
The Local Government Act is also long overdue for review, and in my role as Minister of Local Government I’m enjoying getting stuck into that.
The Local Government Act is responsible for a lot of the foolishness and waste by councils.
Far too many new obligations, with associated costs, have been passed on to local government - which in turn passes them on to ratepayers, or anyone applying for a building or resource consent.
While it is clear that these pieces of legislation are responsible for many of the absurdities, councils themselves must bear part of the blame. Councils have become very risk-averse and over zealous. They have also moved into areas that I believe should be the preserve of business - such as running lotto shops and hotels. And they have moved into areas that should be the preserve of central government, such as social services and housing.
Don’t get me wrong - I accept councils do a lot of good work. But they have become a block on growth in this country.
We are in a very tough situation economically and we must do everything we can to help businesses flourish and grow. This is not going to occur until we get both local council rates and red tape under control.
Perhaps the greatest gain that can be made is to change the culture of government. The culture that says politicians and bureaucrats have a better idea of individual self-interest than individuals do. The culture that overlooks the regulatory burden born by households and firms. I want to impose an important discipline on regulators and drive continual regulatory improvement.
It is for these reasons that I have established a Regulatory Responsibility Task Force to recommend changes to the Regulatory Responsibility Bill that aimed at increasing accountability and transparency around law making.
This bill can make a real difference in the same way that the Fiscal Responsibility Bill has improved the transparency and accountability around fiscal decisions.
I believe that we produce some of the best business people in the world and I consider it my responsibility to help deliver a regulatory environment that encourages business rather than hinders it.
But you too have an important role to play in improving the regulatory environment.
I need to know what problems business face with regulations and regulators, and how we can make things easier for business to operate.
In the Regulatory Reform Bill, there will be an annual opportunity to make positive changes to regulation - there will be no excuses for any of us if this opportunity is missed.
Reform is needed, and I promise you change is going to come.
That’s enough from me - I’m happy to take your questions and hear your thoughts on what I’ve been talking about. Thank you.