Navigating The Latest Government Reforms For A Stronger Sector
As we head into the final stretch of 2024, it’s worth reflecting on a significant wave of changes for the building and construction industry.
We are pleased to see the Government focusing on reforms aimed at improving productivity, streamlining the building consent process and holding the sector to higher standards of accountability. We welcome these efforts, but we also want to ensure that changes are balanced and workable for members and the sector.
Self-Certification – will it help the sector to get on and build?
Most recently, you will have seen the Prime Minister and the Minister for Building and Construction announce they would streamline the consenting system by progressing a self-certification scheme for accredited builders and tradespeople building low-risk homes, backed by a building guarantee. They made this announcement at an impressive Jennian Homes site located at Paerata Rise, in South Auckland. Master Builders attended the announcement, and we were delighted to see both the PM and Minister Penk in Master Builders High-Viz vests.
Consenting is a key focus for us, as we understand the impact it has on productivity. Applying the same standards to low-risk residential builds by well-established, proven builders, as to high-risk projects simply doesn’t make sense. While there are many builders who consistently deliver high-quality homes and sail through the current process, it still takes time. Unfortunately, as you, our members, will be aware it’s frustrating to know there are others in our sector who use consenting as a substitute for quality control. This is not efficient. Moving to a more streamlined approach for low-risk homes creates process efficiencies, freeing up resources for more complex builds.
In the lead-up to last year’s election, Master Builders called on the incoming government to resolve inefficiencies in the consenting system. Self-certification has been available to electricians and gasfitters for a while, so this extension is a step in the right direction.
We are strong advocates for a system where reliable, trusted builders are rewarded for their professionalism. The consultation process for this scheme will run over the latter months of this year, and the intention is that decisions will be taken in early 2025. Master Builders will work closely with the Government over this time to help ensure the policy settings are right.
The push for more efficient BCAs
The Building and Construction Minister is also looking for feedback on how it might iron out inefficiencies in the broader consenting system. It wants to do this by exploring a nationally aligned consenting system, which Master Builders has consistently been advocating for.
The current system is cumbersome, and inconsistent. The BCAs seems to have inconsistent processes and ways of interpreting regulatory standards. This not only delays projects but also increases costs. A nationally aligned consenting system will help address these inefficiencies and providing greater certainty.
As the Government consults on this, you can again be assured that Master Builders will be working closely to ensure the changes that come out of the review make it easier to get on and build.
These announcements follow the move towards remote inspections, which is another a sensible step in the right direction and again something we have been asking for.
Underwriting – a timely, time-limited scheme
The Government has also announced a new time-limited underwriting scheme to help encourage the development of more affordable housing.
Over the last couple of years, access to capital has been consistently raised as a critical challenge for the building and construction sector, with 83 percent of our members citing it as their top challenge.
Underwriting larger developments, which already have the required consents, will help to restore confidence in the sector, de-risking developments and ensuring developers can overcome financial hurdles to allow them to forge on with much-needed new builds. We expect this scheme to go some way towards speeding up key projects and improving affordable housing supply, especially in high population areas like Auckland, Hamilton, Tauranga, Wellington and Christchurch.
Lifting building standards
The Government is also looking to raise the barriers to entry for building and construction companies. The announcement focusses on strengthening registration and licensing regimes, with particular attention given to ensuring that unqualified or careless builders face appropriate consequences. The integrity of our profession is paramount, and those who cut corners or deliver substandard work should be held accountable.
Master Builders is also focused on lifting the professionalism of the sector. At Constructive 2025, we announced we are partnering with CreditWorks to launch an independent voluntary financial rating initiative. This initiative will provide those members who wish to apply with a financial rating that goes beyond credit history, to analyse financial metrics, offering a comprehensive picture of a company’s financial health. The new voluntary financial rating will recognise and acknowledge the focus on good business practice across our membership. It will enable a platform to demonstrate strong financial health to partners, clients, merchants, lenders and credit insurers. This initiative is in development and will be rolled out in 2025.
Our advocacy work continues
We are pleased to see the Government taking an active role in our sector. There have been promising announcements, but the devil is in the detail. We will continue to work closely with Ministers and Officials to ensure changes will improve efficiencies and productivity. We will keep you posted on the developments.
As always, we’re available if you have any questions about the current reforms.
Ngā mihi nui,
Ankit Sharma
Chief Executive, Registered Master Builders