Builders have a clear message for the Government: Hands off our industry.
By Susan Edmunds
Housing Minister Nick Smith and Commerce Minister Craig Foss revealed an options paper this week that is the second stage of a proposal to bring down the cost of house building materials.
Smith said: "Building materials costs are too high and can be as much as 30 per cent more in New Zealand than in Australia according to the Productivity Commission. The industry needs a shake-up through increased competition and greater transparency to ensure kiwi families can get access to more fairly priced building materials and homes.”
He said he was also concerned about a lack of transparency for consumers about what benefits builders got from using certain products.
"Bringing down the cost of building materials is an important component of the Government’s major work programme to improve housing affordability. We are taking action on a range of fronts including freeing up land supply, reforming the RMA, reigning in council development charges, keeping interest rates lower for longer, investing in skills and productivity, and support.”
Certified Builders Association spokesman Dave Brown said the action was totally misdirected. “It’s going to do a lot of damage.”
He said labour rates had been artificially suppressed for a long time because of competitive pressure and materials margins were not nearly as much as people thought. “If you take that away, there would be guys leaving in droves. We might make 5% or 10%, but we’re in business to make a profit. People expect us to do it for nothing and then guarantee our work for 10 years.”
His organisation and Master Builders would be joining forces to convince the Government to give up the idea, he said. If the Government was serious about wanting to reduce the cost of construction, it should look to make it easier to subdivide.
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