Let’s break build­ing bar­ri­ers

An­other View

Whanganui Chronicle - - Nation -

If there is one in­dus­try New Zealand should have in abun­dance it is house build­ing. We can grow forests for tim­ber, we pride our­selves on DIY, we have thou­sands of young peo­ple who are not in work or train­ing for em­ploy­ment, and we have a des­per­ate hous­ing short­age.

The new Govern­ment has em­barked on an am­bi­tious Ki­wiBuild pro­gramme to pro­vide 100,000 af­ford­able houses within 10 years but it faces se­vere lim­its on the ca­pac­ity of the build­ing in­dus­try to sup­ply enough houses at any price.

One of the con­trib­u­tors to the high cost of houses here is the cost of build­ing ma­te­ri­als, largely im­ported. The rea­sons for those costs were ex­am­ined in our Prop­erty Re­port yes­ter­day and they sound highly ques­tion­able.

The main ex­cuse is our pop­u­la­tion size and dis­tance from for­eign sup­pli­ers. It is strange that these things do not seem to add to the costs of home ap­pli­ances and many other im­ports that sell at in­ter­na­tion­ally com­pet­i­tive prices here.

We also hear that a mar­ket of our size is eas­ily dom­i­nated by two big sup­pli­ers who can set prices and use trade dis­counts to dis­cour­age builders from im­port­ing ma­te­ri­als more cheaply. And it seems very few build­ing firms have the ca­pac­ity to do their own im­port­ing or even hold their own in­ven­tory of tim­ber and other ma­te­ri­als. Build­ing In­dus­try Fed­er­a­tion chief ex­ec­u­tive Bruce Kohn points out that mer­chants dou­ble as a stor­age depot for all our self­em­ployed builders “op­er­at­ing with a dog and a ute”.

It ap­pears to of­fer a yawn­ing op­por­tu­nity for com­peti­tors to come into the mar­ket.

What is to stop an en­tre­pre­neur from chal­leng­ing the ex­ist­ing du­op­oly of Fletch­ers and Carter Holt Har­vey by em­ploy­ing enough builders and other trades­peo­ple to take on projects of the scale the Govern­ment is plan­ning and im­port­ing the ma­te­ri­als in­de­pen­dently? The Govern­ment’s for­est plant­ing and re­gional de­vel­op­ment plans also of­fer more scope for the man­u­fac­ture of ma­te­ri­als here.

Per­haps the Govern­ment should also be putting more in­vest­ment into train­ing of builders and re­lated trades, ideally through ap­pren­tice­ships rather than purely poly­tech cour­ses. Ap­pren­tice­ships earn in­comes sooner, and sub­sidise the rapid ex­pan­sion of smallscale build­ing firms.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.