Newsroom Pro's 8 things at 8 am: Smith eyes building warranty scheme

The Government is eyeing the creation of building warranty and insurance schemes in exchange for removing the 'last man standing' liability that currently rests on Councils. Photo: Lynn Grieveson

In today's email we look at possible changes that Government hopes would result in a "more dynamic" council sector when it comes to consenting.

1. Building warranty scheme

Building and Construction Minister Nick Smith has revealed he will soon issue a discussion paper looking at creating building warranty and insurance schemes in exchange for removing the 'last man standing' liability that currently rests on Councils.

Smith confirmed to me on the fringes of the National Party conference in Wellington that MBIE would issue a discussion paper by the end of next month that looks at the issue of liability in the building and construction sector.

Currently, the rules around joint and several liability mean that effectively councils are the 'last man standing' in the event of a leaky building or a failure in a building. The Auckland Council has paid out over $605 million in weather tightness claims, with more to come.

The Auckland Mayoral Taskforce on Housing (pages 39/40) recommended earlier this month that the Government investigate creating building and warranty schemes backed by insurers that would allow the removal of the ultimate liability for councils.

The 'joint and several' liability risk is cited as one reasons councils are very cautious about issuing building consents and approvals for new building materials and techniques, which some argue has slowed new building in recent years, particularly since the leaky building crisis.

Smith said he wanted to create a more competitive environment for building consenting, but that the current issues around the final liability for failures resting with councils was the problem.

"If we're going to get a more dynamic council sector then we need to look at that," he said.

Britain's National House-Building Council insures around 80 percent of new buildings and undertakes its own inspections throughout the building process. The builder is responsible for fixing defects in the first two years of the 10-year warranty, while the council is responsible for years three to ten.

New South Wales created the NSW Self Insurance Corporation in 2010 as the sole home warranty insurer in the state. It has outsourced the collection of premiums to two private companies and maintains a central fund that claims are paid from. Builders there have to provide home warranty insurance before receiving money from a home owner.

Queensland created the state-owned Queensland Building and Construction Commission, with private insurers helping with premium collection and policy wording. Around 70 percent of policies are re-insured with the private insurers. The Commission checks the suitability of contractors for both licensing and insurance.

2. More building plans

Social Housing Minister Amy Adams has asked Housing NZ Corp and the Ministry of Social Development to work up house building plans for other parts of the country that are similar to Auckland's Crown Building Project.

Adams told me on the fringes of the National Party conference that the plans would not be as detailed as the Crown Building Project, which is for 34,000 new houses on government land over ten years. She said that had taken two years for the development of the business case, but the new plans would give some indication of the scale of new house building.

"We're very conscious that 's not just all about Auckland," she said of the demand for social and affordable housing.

"We'll be looking at certain parts of the country. You'll be hearing about that quite quickly as well," she said.

Smith and Adams spoke at a session for delegates on housing and were pressed by delegates about answers for constituents who had asked during door-knocking campaigns about the housing crisis.

3. Aussie gang patch imports

Newsroom's National Affairs Editor Shane Cowlishaw has been digging around in some OIA documents from Police on the issue of gangs and has found a few issues around the arrival of a whole new set of Australian gang members.

New Zealand citizens deported from Australia are flooding the country with new gang patches, and the law designed to ban them may not be able to keep up, Shane reports on Newsroom Pro.

The Prohibition of Gang Insignia Act bars people from wearing gang patches or insignia on all government premises, with breaches punishable by a fine of up to $2000.

For the law to be enforced, the gang in question must be listed in the Act. Currently there are 34 gangs specified in the Act including more obscure organisations such as the Aotearoa Natives and the Greasy Dogs alongside more well-known gangs including the Mongrel Mob and the Tribesmen.

But this long list appears to now be insufficient, as new gangs from overseas arrive in New Zealand. A briefing from police to Minister Paula Bennett, released under the Official Information Act, raises concerns about the increase in New Zealand citizens being deported from Australia who are members of non-listed gangs.

It says amending the primary Act every time a new gang emerged was a resource intensive process and during this time non-listed gangs were not covered by the Act.

“This includes the Comanchero, Lone Wolf, Finks, Mongols, Notorious and Descendants motorcycle clubs.”

Shane provides more detail, including on the issue of meth, in his full report.

4. Charitable plastic bags?

Newsroom's Lynn Grieveson covered the environment session at the National Party conference over the weekend and picked up that moves are afoot to deal with the issue of free plastic shopping bags creating pollution.

Lynn reports new Associate Environment Minister Scott Simpson looks likely to opt for a levy on single use bags rather than a ban - and that could be good news for local charities.

Simpson has set up a working group looking at ways to reduce plastic bag consumption, and he is about to receive an open letter signed by (at last count) nearly half the country's mayors asking central government to either impose a national levy on single-use plastic bags, or give local authorities the right to do so themselves.

The mayors hope that money raised by a levy would be returned to councils to be spent on waste minimisation and local environmental measures.

But Simpson told a break-out meeting of delegates at this weekend's National Party conference that he likes the UK model where retailers charge shoppers a small fee for plastic bags and keep the money themselves to distribute to charities of their choice.

Find out more in Lynn's full story published yesterday on Newsroom Pro.

5. 'I have nothing to add'

Finally, Prime Minister Bill English decided yesterday afternoon to stop talking about the Todd Barclay.

After a couple of bruising morning interviews with Susie Ferguson on RNZ and Duncan Garner on TV3, English shut up shop in his post-cabinet news conference.

When the questioning did eventually turn to Barclay at the news conference, English and his media team had clearly formulated a new strategy.

He said about a dozen times that he had “nothing to add” to his previous comments on the matter, before refusing to take any more Barclay questions.

"I've just said I've got nothing to add - are there questions on anything else?"

With police expected to make a decision this week on whether or not to reopen their investigation, the Prime Minister may have a few more questions to deal with yet.

6. While you were sleeping

A spoiler alert for those who may have just woken up: Emirates Team New Zealand won the America's Cup in Bermuda early this morning.

English has already told NewstalkZB this morning that the Government would discuss giving financial support for Team New Zealand to host the defence in Auckland.

"I'm sure we'll be hearing from him (team boss Grant Dalton) at some stage," English said, adding discussions were already underway with Auckland Mayor Phil Goff for a ticker tape parade.

However, he was being a lot more cautious yesterday afternoon when questioned about the prospects at his post-cabinet news conference.

Despite some internet wags suggesting the line of questioning was a trap, English gratefully accepted the chance to talk about something other than the Clutha-Southland MP.

“We don’t want to presume we’ve won until we’ve actually won," he said.

That could also be said about the election on September 23.

7. Coming up...

Parliament resumes today for the second week of a three week session.

The Point England Development Enabling Bill is expected to pass its final reading this week, with Labour and New Zealand First opposed, and the Greens abstaining.

The Reserve Bank is due to report new residential mortgage lending figures for May at 3 pm.

8. Two fun things

Tweet of the morning after the America's Cup win came from an old favourite, GCSB Intercepts:

"Getting reports that Donald Trump is furious with Malcolm Trimble that it was America Second."

Although this is also good, in which GCSB Intercepts channels Bill English:

"The worst thing about the Todd Barclay recording is the recording of my comments about the Todd Barclay recording."