Gib crisis shows urgent need to rethink act

When the Building Act was introduced in 1991 it was internationally recognised as an innovative shift towards a performance-based construction industry that would enable greater competition.

The current Gib shortage in New Zealand is the failure of that experiment, which needs to be rethought from the bottom up. The act was the result of 1980s Rogernomics, embracing competition as a means of staying internationally relevant. It enabled new ways of building by replacing prescriptive methods of construction with performance standards, opening up the industry to new and innovative materials, and methods of construction.

The leaky-homes crisis has been its most visible failure. The industry, as it turned out, was unable to transition quickly enough and apply the code in a way that met its objectives – safe and healthy buildings.

There are other, less visible failures that continue to change the way the industry operates. Three decades later we’re still learning the lessons the act is teaching us.

The cost of these failures, and the environment they have created within the industry, has manifested itself in a number of ways. The inability of builders to source plasterboard is the latest. Those costs contribute to one of the most litigious, high-cost construction industries in the world, with stagnant productivity.

Councils bore the brunt of the leakyhomes problem. Auckland Council carried the high cost of repair.

After the 2004 revision of the act, the council’s response has been to carefully manage its ratepayers’ risk, applying the legislation in a way that raised the bar for building consent applications and narrowed the pathway to compliance. This rational and justified reaction to the risk associated with the legislation has stifled the act’s intent.

The result has been that known and trusted brands, like Gib Board, have found market dominance. The barriers to competition in our biggest city have become so high that suppliers (including, but not limited to, plasterboard manufacturers) have abandoned New Zealand – a tiny and geographically diverse market, a long way from anywhere.

There will be design meetings around the country where plasterboard alternatives are being considered. The fact of the matter is that they’re much less likely to be used in Auckland than other parts of New Zealand. In an industry which is being asked to respond quickly, a clear compliance pathway is vital.

In an attempt to achieve an internationally relevant, competitive and innovative industry, we have found ourselves with a regionally specific, prescriptive environment.

The Building Act has been tweaked in the past, and remains the focus of reform. If we want to see the sort of competition, innovation and accountability that creates a strong construction industry, then those reforms need to take a fresh look at how the market has responded to the influence of the Building Act over the past 30 years.

We’ve found ourselves in a position the legislation specifically set out to avoid, learning some harsh lessons along the way.

If we can return to the act’s intent with a clearer view of how the industry has responded in the past, we could do so in a way that sets the foundations for a country where buildings are safe, healthy and sustainable, and avoids the market failures we’re experiencing today.