The construction industry may be booming, but builders know there will eventually be a bust. On the eve of the election, they’re asking parties to look at smoothing out the bumps – and have raised other issues from inside the industry too.
Those issues include shortcomings in the Licensed Building Practitioner Scheme, getting some progress on the findings of the Rules Reduction Taskforce, making sure there’s a pipeline of apprenticeships, and movement on consumer protection in residential building work.
New Zealand Certified Builders, one of two major building trade associations (Registered Master Builders is the other), says we may be on top of the cycle now, but that’s exactly the time to have a conversation about low demand – not when the bubble bursts. The current situation, where it’s nigh-on impossible to get a tradesman, is the result of a low demand period in 2009 and 2011, when fewer apprentices were taken on and skilled workers exited the industry for greener pastures. NZCB chief executive Grant Florence says that means there is a lot of catch-up to do when the industry is on an upswing, which creates a mismatch between supply and demand for some years when the sector is booming.
“As a major spender on construction, the Government can play an active role in smoothing the boom/bust cycle by staggering its programme of public infrastructure development and/or actively planning for counter-cyclical spend on major construction projects,” he says.
Maintaining a “pipeline” of apprenticeships through good times and bad is also seen by the industry as important for the sector’s long-term sustainability. But because builders don’t hire newbies during a downturn, the sector is asking for government help to create financial incentives for hiring when times are tough.
“Even an awareness campaign to stimulate interest in a career in the trades would help,” says Florence. “New Zealand will need over 65,000 construction workers over the next five years, yet people leaving school are often unaware of the career opportunities in this sector.”
Builders may not be your traditional lobby group but it was a political decision in the 1980s to abolish old-style apprenticeship schemes that is still having repercussions now. There was a shortage of young people entering the industry and becoming formally qualified from that time and “we’re still suffering today”, says NZCB board chair Brent Chatterton. He would like to see the industry get to a stage where the Government is prepared to change the rules over building inspections. At the moment, and in the wake of a Rules Reduction Taskforce Report, it has refused to allow the sector to certify its own work, saying a great deal more work needs to take place before that can happen.
Chatterton admits the industry is caught in a Catch-22 here. At the moment there is a system of licences for builders, starting with carpentry and moving onto different site levels depending on the complexity of the work done. Broadly, site one might cover residential building; site two more complex architectural work and site three would cover high rise commercial work. But there is a cost to obtaining those licences and no incentives for doing so … “It’s a kudos thing. Why would you go to that cost when all you need is carpentry?” You could use Licensed Building Practitioners to speed up consenting – but LBPs don’t actually have to have a qualification. Being a licensed practitioner means your customer has some protections, but two-thirds of them don’t have the paperwork to say they’re competent. The Government could require all LBPs to have a trade qualification, but “you would potentially lose 66 percent of your industry, which we can’t afford to do” says Chatterton. “That’s why the Government is not going to go down that track.”
“There are a lot of good builders out there who never got a qualification,” he says – many of them the result of that political decision in the 80s. One-third of builders aren’t aligned to any association.
Florence says the LBP scheme has major shortcomings that need to be addressed, both in the interests of consumers and builders.
“We have been advocating for some time for the Government to develop more robust minimum standards for training and skills, create a formal standardised training pathway linked to the licensing regime …. and to introduce tougher penalties for those who do not comply with the requirements,” he says. “Part of the answer in finding the political will to advance these initiatives is in strengthening the LBP regime – with a more rigorous licensing framework in place, there can be greater confidence in reducing the need for local authority oversight of certain types of work.”
NZCB would also like more light shone on Building Act reforms that came into effect more than two years ago that require a written contract for residential building work over $30,000, saying there is a lack of awareness about that change.
