On 1 September 2022, Property Council submitted on the Ministry for Business Innovation and Employment’s (MBIE’s) Review of the Building Consent System: Issues discussion document and policy position statement.
Why this matters to our members
Our members shape New Zealand’s cities and regions. One of the biggest hurdles to development is the current building consenting system. As it stands, Councils/Building Consent Authorities (BCA’s) are liable for much of the risk associated with the design and construction of a building.
Understandably, this creates caution during the consenting process, slowing down the system and inhibiting innovation in design and product use.
We agree with the issues raised in the issues discussion document and support most of the desired outcomes outlined. However, in order to achieve efficiency in the building consent system, this cannot be done without reviewing current risk, liability and insurance settings.
We are disappointed to see that our verbal recommendations to widen the building consent scope have been rejected by way of the Government policy statement excluding any immediate review into risk and liability settings.
We agree that the current system does not deal well with new innovative practices or the design-and-build approach.
However, without changing the current risk, liability and insurance settings, the building consent system will continue to hinder innovation. We are extremely disappointed to see that the Government has overtly ruled out reviewing such settings. Current liability settings result in overcautious and slow decision making in issuing consents and limits innovation within the sector. Without changing the current system, BCAs will continue to favour tried and tested building products and methods over new and competing products/methods.
Over the past five or so years, we have strongly advocated that BCAs should not be the ‘last man standing’ and that capping their liability and placing more onus on the industry would be a more fair and equitable approach. We continue to recommend that Council liability be capped at 20 per cent and introduce a fairer allocation of risk and responsibility across the sector.
We are also disappointed to see that a publicly provided insurance scheme is currently not justified. Such a scheme will not only reduce consent timeframes but will also help encourage innovation within the sector.
Time and time again, the private sector has voiced their willingness to hold a fair and proportionate risk when manufacturing, designing, or developing their products and buildings. There are a number of ways in which this could be implemented, and many were looked at as part of MBIE’s Building System Legislative Reform Programme in 2019. There are also several international examples of how this works with insurance providers being involved and seeking compensation from at fault parties while capping local authorities’ liability to 20 per cent.
At a high level, we recommend that MBIE:
- Review current risk, liability and insurance settings in order to ease the burden placed on BCAs;
- Introduce a publicly provided insurance scheme;
- Create a National Building Consent Authority to alleviate pressure on Local Councils; and
- Establish an independent regulator to provide alternative appeal avenues for consent applicants.