Opening Address for Association of Wall & Ceiling Industries Conference

Lianne Dalziel  

It is a great pleasure to open your conference today on behalf of our spokesperson on Building & Construction, Raymond Huo, who was unable to be here today.

As Labour’s spokesperson on Canterbury Earthquake Recovery, Civil Defence & Consumer Rights & Standards and as the former Minister of Commerce at the time we were re-writing the Building Act, I hope that my attendance today signals the importance we place on the building industry.

Can I congratulate you for including a Work Skills Challenge within your conference agenda and those who have backed their own apprentices by entering them. I am a passionate supporter of apprenticeships.  I remember talking to tradesmen on a range of worksites after the Apprenticeship Act was repealed and replaced by the Industry Training Act. With the downturn in the economy in the late 80s, early 90s and the closure of large industries that could provide the full apprenticeship experience, many companies stopped training apprentices.  The tradesmen I spoke to actually missed passing on their skills to the next generation. There is a cycle of reciprocity about apprenticeships.  You learn your skills from qualified tradesmen and you pass them on to the apprentices coming through after you are qualified. And I’m not just talking about passing on the skills of the trade – I’m taking about life-skills as well.

I am acutely aware that your conference coincides with probably one of the busiest times in your history, being involved in discussions around the impact of the Licensed Building Practitioner Scheme with the Department of Building & Housing (now merged within a super-Ministry, the Ministry of Business, Innovation & Employment); involvement in the skills shortage reviews with the now also merged former Department of Labour, providing feedback on important issues like working at heights and apprenticeship training schemes, not to mention the need to develop guidelines for seismic compliance arising out of our experience in Christchurch.

And all of this as we prepare to rebuild our country’s second-largest city.

And it is that which should excite everyone in the building industry about the possibilities that this will bring – to be part of building one of the safest, most sustainable and liveable cities in the world.

But what I keep hearing from many parts of the industry is uncertainty around insurability, inconsistent workflows, contractor accommodation, and rates paid to contractors.  The enormous amount of work now controlled through the government’s single Project Management Office has raised concerns and the phrase ‘clipping the ticket’ is one I hear regularly.

No-one is under-stating the scale of the challenge we face in the rebuild, but there has to be much more transparency and there needs to be a much more co-ordinated approach so that the range of industries can plan their involvement in an intelligent way.

Personally I would have liked the past year to have been used training or retraining people in the trades.  The irony is that the money and the places are there, but the gap is the industry, that cannot take on apprentices until they know the workflow will be reliable and steady.

A reorientation of the unemployment benefit to subsidise an employer during that period of uncertainty could have seen people well down the track.  It’s not rocket science, but it does require the will to intervene in the so-called market.

In terms of transparency, the sheer scale of the work requires that there are proper checks and balances in place.  There is always scope for potential conflicts of interest to remain undisclosed when major decisions are being made behind closed doors.  Trust is vital and that is undermined when there is damaging speculation about motives. And this is the case when companies are seen to be on both sides of a transaction – for example advising CERA on a contract that they are subsequently contracted to perform through a tender.

CERA itself can be on more than one side of the transaction – with the residential red-zone they can be the acquirer, the insurer and the insured.

The point I am making is that it is difficult for anyone to make their own plans when there doesn’t seem to be an overarching planning process to lock into.

Without a timeline and a mechanism for co-ordinating the different components of the repair and rebuild work in the suburbs, it is hard to know when to plan to do what.

And again how do you make those plans without knowing when the insurability issues will be addressed, how the TC3 issues will be resolved, when there will be reliability around timeframes and workflows and how out-of-town accommodation will be addressed for temporary, semi-permanent and potentially permanent workers – especially when people are required to leave their homes during repairs as well.

And does all the work need to be done in Christchurch anyway.  What about pre-fabrication?  Pre-fabricated houses could be built in other parts of New Zealand, particularly the South Island, Ashburton, Timaru, Oamaru, Dunedin, Invercargill, Nelson, and areas where there have been job losses like the West Coast.  Instead of defaulting to offering opportunities in Christchurch, why can’t we share the work around and help the whole economy benefit from the work that needs to be done.

The 100 days it took to build a temporary stadium for the rugby inspired the Minister to use 100 days as the timeframe to develop a blueprint for the central city.  This has naturally raised questions about why the urgency; there is much to be done and people do want to have a look at what is being proposed.  Why not some international design competitions for aspects of the rebuild?

And then of course there are the inevitable questions as to why the same sense of urgency is not being applied to planning a co-ordinated approach to the rebuild/repair of the residential sector.  Where is the 100 day plan for the people?

This is the leading cause of the frustration that people are expressing. And the frustration does not just apply to the affected communities – it applies to companies like many of your own that simply cannot plan.

I do want to mention standards because they are important.

Just over two years ago, liquefaction and lateral spread meant nothing to me, but it didn’t take me long to understand what they did to unreinforced concrete slab foundations on the new subdivisions around Christchurch’s wetlands.

As a former Minister of Commerce I was aware of how standards were formed and how the Building Code operated.  The damage I saw in September 2010 was extraordinary - the unreinforced foundations were cracked as the land was pulled towards the wetlands, allowing massive amounts of liquefied silts to burst through into the houses.

This made me reminded me of the role of knowledge, experience and most importantly professional judgment that I had learned during the leaky building scandal.

Not every builder of these houses by the wetlands thought compliance with the minimum was good enough for the environment they were building in and their foundations were not ripped apart in the same way.

No-one died in either event in these places.  As a structural engineer said to me, the walls did what they were supposed to do; they kept the ceilings and the floors apart.

However the reality is that thousands of homes will be completely demolished, and that represents a significant cost to the environment on top of the loss it represents to the individual homeowners.

It has also represented a major cost to the insurance industry and of course our own Earthquake Commission.  We are already seeing the effects of this in increased premium rates, considerably higher deductibles and reduced cover.  It is the last of these which will change the economics of repairing buildings in the future, but the first two which will have an impact on the commercial sector in particular.  Again the uncertainty this is generating is affecting people’s ability to make plans.

Of course your work is not limited to the residential sector and there will be considerable work generated by the anchor projects and the developments both within the Frame, as the defining block between the future CBD and the rest of the city is called, and outside.

Although the acquisition of all the properties within the Frame and the land for the Stadium which is just outside the Frame has commenced, there is still considerable uncertainty arising from the legality of moving to compulsory acquisition, as is the government’s stated intention.

However in this case the private property rights are required to be permanently relinquished as a condition of the voluntary sale.  Under normal circumstances a compulsory acquisition would see the Crown obliged to offer property back to the original owners if it were no longer required for the purpose.

In this case it is clear that private property rights are extinguished not for the purposes of recovery, but to restore value to the compact CBD.  This means that the compulsory acquisition is likely to end up in court and the decision will be appealed by the side that doesn’t win.

I make this point simply to say that even in areas of perceived certainty there is uncertainty.

Meanwhile you will have your own challenges with the Restricted Building Work where the plasterboard that is being installed forms part of the primary structure of a residential property.  These are the wall bracing elements and ceiling diaphragms.  This of course means nothing to me as I am not an expert in this field.

I mention it because I am aware that there is no Licensed Building Practitioner category for a plasterboard installer and this will mean that unless you’ve had recent experience as a carpenter, this will have to be supervised.  I am very keen for feedback on this, because I believe it is vital that we don’t go overboard when we regulate in response to a failure as we did with leaky buildings.

As a former Minister of Commerce I believe that quality regulatory frameworks are imperative and this requires a robust regulatory impact analysis to ensure that we get it right.

I describe Regulatory Impact Analysis as a deliberative process that requires engagement with stakeholders from one end of the process to the other. Together we identify the problem and what needs to be achieved (it’s amazing the number of times this step is overlooked in the rush to be seen to do something), what options could achieve the desired result, what risks and opportunities might exist; what the cost-benefit ratios look like and always asking whether the response is a proportionate one – recognising that the answer to that question may be different depending on the size of a business or some other differentiating factor.

Feedback loops are an important part of that process as well, which is why I would be pleased to hear from you on this subject.

So thank you for allowing me to address you today.

Your conference agenda looks incredibly interesting.

Please enjoy it and celebrate the successes that your industry awards represent both for yourselves as an industry and for your apprentices who represent our future.