Why does it cost money?

The building industry sector has been specifically underfunded for 20 years. Therefore the transition from where you are currently at and where the Building act says you are is wide.

 The dream of my organisation is to make that transition as painless and cost effective as possible.

As an organisation I have tried to balance my personal needs with the companies need to provide quality, cost effective outcomes.

In the perfect world education should be borne by the taxpayer or at least the homeowner. Currently that is impossible. As you are aware over the last 31 years I have been in this industry I have begged cajoled and encouraged the rightful owners of this huge impending issue.

An example of owners: building companies, master builders federation, certified builders association, local government and wealthy individuals who made their wealth of the de-regulated building  industry, DBH, Ministry of science and innovation. So on and so forth………..

All this without response or at the least: …..”It is not our problem it is this or that organisations problem”!!!!!!!!

This problem is now your problem and your loved ones problem.

 Your support and membership in conjunction with your continued support either negative and critical or positive is I believe the only answer to your business being more profitable.

Nothing is free, but we all have a free choice on how we approach the future of the building industry with this organisation or other similar ones.

A vision for the industry as if people mattered

“See a weed, pull a weed”

Question:

Are our systems, laws and regulations controlling us or are we in control of them and does this control come from wise visionary governance/leadership?

As an active participant of all things to do with the building industry for the last 32 years I have seen some common themes developing. I would like to give you my perception about our current status. I would also like to invite you on  my idea in a journey for better tomorrow.

My mum’s side of the family have been in New Zealand since 1865, whereas my Dads side 1920’s. I absolutely love the environment in New Zealand. I am so thankful that my parents and grandparents settled here.

My Great Grandfather was an MP twice in the house. Once in the hokitikia electorate and again in the 1893 parliament representing Auckland in the house during the +Richard Seddon term.

My Great-Grandfather +Charles Edward Button I believe was a man before his time. I have the fortunate ability to read his conversations and opinions via Hansard in +Parliament. Also being a strong local government representative, Birkenhead mayor for 11 years, West land mayor and editor of the Auckland District law society and finally a Supreme Court judge.

With this lineage in my thinking and my building industry leanings I find myself questioning sometimes the lack of strong leadership and vision in our local and national governance organisations. This of course makes me ache with concern about this nation that is slowly but increasingly burdened with greater and greater negligence and debt.

My great concern as a father is for my son and daughters children.

I have always enjoyed the building process. I was turned on to this industry as a young guy of 14 years of age. This happened in my woodwork class at Howick college. I am not the sporty type. I am a  very single focussed individual. This has its good points but it also has its bad points. Mr Woods at Howick college set his project for us in 1980. It was the building of a shelf in pine.  I loved that little bookcase.  Newly stained and proudly taken home on completion. My Mum and Dad were very proud. As you can appreciate so was I. On reflection that was the beginning of my  self-belief changing and believing I had something to offer the world.

From that day on I wanted to be a carpenter. At 15 years of age during my school certificate year I started a new job at Marbeck Building Supplies. My goal was to get an apprenticeship and achieve my goal of becoming a carpenter.

 This sentence does not do justice to the years of failure I felt searching for someone who will employ me to achieve my goal.  7 years in total before I actually started my adult apprenticeship.

I was so fortunate that +Hank Van Lieshout from +Pukekohe Builders took a risk at employing me.  He never employed labourers and he always had a new apprentice every year.  He had his own subdivision which enabled him to control the construction process. I learnt to dig the footings by hand, lay the blocks, pour the floor, frame the houses, hang the doors and do our own gib-board.

That environment over the 4 year apprenticeship taught me to be a man. My work mates were very kind and taught me about life as well as technique. That is a very, very important aspect of what some of our young men are missing out on.

It was during this time after achieving all the theoretical components of the Carpentry apprenticeship that I started getting restless as I was not challenged. It was during this time in 1990 that I read about an organisation that I was having a growing affinity for. +Habitat for Humanity International. So I promised myself that I would give my skills back to Habitat and be an international partner. I would use my building skills to build for families anywhere in the world. This gave me goal to achieve. So in June 1992 I travelled around America with Habitat as one of the destinations.

I eventually worked with +Michael Powell, +Ian Hay and +Tony Lanigan and many others to establish +HabitatNZ.  As spoken earlier a few lines do not do justice to the time spent learning life’s lessons. I was been self-employed up till 2008. It is then that I moved to Auckland City Council as a central building inspector for residential houses. I have been able to consolidate a lot of the past information quickly into a proper process. This for me has been very satisfying.

“See a weed, pull a weed”

I live my life based on this mantra. Weeds are ever present. When I look at my house I do get overwhelmed sometimes by the growing weeds that choke the good foliage and flowers. Obviously the concept of pull a weed is based around "if you see a problem investigate it and help resolve the issue".

 The building industry has been a part of the fabric of who I am for 32 years. So if I recognise and see rot in the system I am duty bound to mention it.

 Michael and +Martha Pennock from +Harvard University back in the 80s were approached by the Bhutan government to help them develop a concept called the Gross Domestic Happiness (GNP).  Essentially a measurement tool to measure the satisfaction in life the people feel about living in +Bhutan.  The concept of GNP is the polar opposite of the western democracies measurement tool of Gross Domestic Product (GDP). Michael says that the western measurement system and the whole design of its development acts very similar to the spread of cancer. Cancer starts small and eats more and more of its host till the point that the host is controlled by the cancer. The ultimate outcome of this of course, it achieves its intentional end death.  The western dream and the systems that support it are acting in the same way.

 In the building industry in New Zealand we are still facing a crisis this has grown into every sector of our society. 

Is our building industry sick like it has Cancer?

Do we have a further looming weather tightness problem acting like an elephant in the room?

What is the ultimate outcome of this disease?

See a weed, pull a weed.

+Joseph Stiglitz the nobel laureate for economics in his book “Globalisation and its discontents” Makes a very fundamental point.  He mentions that Globalization although hated by western democracies. They perpetuated this issue due to their constant and on-going need to achieve more profitability. He notes every country needs a vibrant construction industry,a vibrant education and health industry. We all need to live in housing we all need to have bridges, hospitals so on and so forth.

I see that the powers that be that drive the policy and strategy behind the Building industry see this issue as well. There is not that many organisations doing the rebuild of Christchurch, upgrading our national roading network and providing the entire manufactured products to the markets. Their dream is that all the cash, taxpayers and ratepayers funds lead to their organisations to subsidise their share price.

I want to promote another vision for the New Zealand building industry!

http://geert-hofstede.com/new-zealand.html
+Geert hofstede created a cultural measurement tool for many countries. He uses 5 references against each country:   

• Power Distribution.

We believe we can run the country or any system if we really wanted to. 

•     Individualism

As a country we rate very high on individualism. This denotes our strengths in Fonterra, Zespri, Foodstuffs the franchise business model. All things that promote wealth creation for one’s immediate family

•  Masculinity / Femininity

when we sift through the sector of the building industry. As building industry members we do not like the stigma that we are at fault when it came to the weather tightness issue. We have all collectively been tarred with the same brush.  We also like to be recognised as winners.

•   Uncertainty avoidance  

Emotions are not shown much. As a small economy that in its past 2 generations we have been very wealthy. We do have good life here, but because we have a she will be right attitude a broader controlling attitude pervades our boardrooms which takes advantage of this weak position. That position tends to be no need for excellence; we can just cruise because we will never go without food in our belly.

•     Long-term Orientation

Again sifting through the building industry as alluded to earlier we need to be profitable this financial year. Due to the disintegration of +Roger Douglas’s adopted economic theories in the 1980s and a myriad of other governments perpetuating the problem by reducing the pool of organisations and trained staff members to help develop into the future. In addition to this the main organisations do not have a strategy of training. This is due to gains coming only from the long term investments. The short term gains come from importation of labour and materials. Maybe the shareholder thinks as long as the CEO brings the required returns P/A my ownership and shareholding cannot be held accountable for the broad infrastructural problems my short term planning has created.

My current concerns:

Part of the background of Auckland city and now of course +Auckland Council is their adoption of a “code of practice” for the role of inspector. As an organisation they had been teaching it up to 2011. I enjoyed this process because it pulled apart all the risk components in the building job. It provides independent auditing of those sites. This is aligned with the Building act 2004 legislation up to March 13^th, 2012. Please read the wording below:

90 (3) In this section, inspection means the taking of all reasonable steps to ensure that building work is being carried out in accordance with a building consent.

 As mentioned above my real core driver has been to help SME organisations advance in their profitability and therefore with some of this investment spend it back into trade training.

The above section has been altered  as follows:

 28 Inspections by building consent authorities

• Section 90 is amended by repealing subsection (3) and substituting the following subsections:
•  “(4) Nothing in this section may be taken to impose an obligation on a building consent authority to make an inspection.”

This simply means that council will not be required to check that all the reasonable steps have been taken to make sure the Building complies too the consented drawings. This will be on the shoulders of the LBP. The record of work will prove to the BCA that all issues have been resolved.

If and when within the ten year liability there happens to be fault the +Licensed Building Practictioner will need to go to court to justify the failure and prove who was at fault: please refer to the BA 2004 extract

  88  Licensed building practitioner to provide record of work in respect of restricted building work

 (4) A record of work given under subsection (1) does not, of itself,—

(a) create any liability in relation to any matter to which the record of work relates; or

The concern I have is the issue that the Record of Work “Of Itself” does not impose an issue of liability. The issue is upon investigation if the LBP has not documented to the same level of reasonable care that the past inspector used to do. The LBP may be held accountable for the failure purely on the basis that the LBP acted dumb in court therefore the individual must be therefore be deemed unsuitable for the role as an LBP.

This of course opens up a broader conversation has the minister in conjunction with the local government set up an environment where all our LBPs could possibly fail at some time in the future.  This will help of course the major manufacturers and companies who have used taxpayers and ratepayers funds to set up their internal Quality Assurance Systems.

These systems are at the heart of the way they can win contracts from the weak and disenfranchised builders who have never ever had a strong advocate in their corner of the rugby field.

In conclusion my vision for the NZ building industry is closer in tune to the reality. I would prefer a vibrant wealthy building community taking ownership over there communities’ issues. They can employ young men and women and provide them a career path in this vital cog in our community. I do not see any long term future in working for one or two major infrastructure companies. We do not have the monies at the moment to invest in taxpayer funded training to the quality that is required. The investment will need to come from internal efficiencies created  every building industry participant with those advantages shared in co-operative environment.

I encourage you to contact me if you want to join in this dream.

Let’s provide a better tomorrow for our children’s children.

cityguildsbuild@gmail.com

Dear +Raymond Huo,

There is a high probability that the +Labour party will be taking office at the next election. With the support of the +Conservative party, +Greens party and the +Maori party.

As a building inspector with the +Auckland Council, I am fully aware of the ramifications of the changes in the (Building amendment act of 2012) this will of course be imposed on the  licensed building practitioners. Maybe within the next 18 months.

I would like to boldly offer you my ideas on how you can provide a future.

This will be when you sit around the cabinet table and discuss policy and how to lead the building and construction sector:

As I mentioned I am an inspector and a qualified carpenter for 31 years. 

 I have sadly watched with dismay the weakening of the industry by the application of : 

+Adam Smith’s theory of +Laissez-faire +economic model which includes the division of labour. 

 It is well documented that he did not have a healthy respect for the Guilds. All which respected the role of the tradesman and his craft. I acknowledge that the guild system had a monopoly over the traditions and as such abused their control by manipulating the market price and restricted access.

From my small world at Auckland Council the opposite has now happened.

As each grassroots contractor knows +Fletchers, +James Hardies, +Carters. Look after the shareholder return first. There is a myriad of other material and major commercial construction companies who ride on their coat tails. Their collective drive is orientated to the betterment of the main manufacturers only.

The continual weakness of the supposed representative associations only strengthens any comprehensive challenge to the Government and local council changes.

At the moment the +Construction Industry Council and their member organisations propose to be a representative of and speak on behalf of the industry.   http://www.nzcic.co.nz/

28 Inspections by building consent authorities
Section 90 is amended by repealing subsection (3) and substituting the following subsections:
“(3)In this section, inspection includes—
“(a)the taking of all reasonable steps to ensure that building work is being carried out in accordance with a building consent:
“(b)in the case of work carried out under a commercial building consent, the taking of all reasonable steps to determine whether the approved quality assurance system is being complied with.
“(4)Nothing in this section may be taken to impose an obligation on a building consent authority to make an inspection.”

The builders are not ready for this transition, how would I resolve this problem?

Firstly, the local building consent authorities should be obligated/regulated to provide support  technical support (as building industry advisors) this role is transitional from where they are at today towards where they should be technically in the future  with obviously a constraint on the b.ca and T/A to not charge for this service.  {31/03/2011 speech +Maurice Williamson}

I want to assure you that the risk-based consenting system will be introduced only when we have confidence in the quality of our building work.  One of the pre-conditions includes having a sound base of competent licensed building practitioners, who know how to comply with the Building Code. 

Secondly, this service needs to be funded via the +Building Research Levy. This means the +BRANZ funding mechanism its purposes/existence  needs to be adjusted.

1.    The minister in charge of the levy needs to be changed to economic development or the building and construction sector minister.

2.      No longer does, nor should the minister talk with the MBA as in reality they represent a small proportion of the whole industry. 12,900 members relative to upwards of 120,000 participants in the industry {+DBH 2009 Productivity report}

4 Minister may prescribe rates of levy

·        (1)Subject to the provisions of this Act, the Minister may from time to time, after consulting with the association and the New Zealand +Master Builders' Federation Incorporated

3.    The T/A, s should have no right to take a fee from the transaction costs.

4.    The fee should be externally audited and managed by each districts localised Licensed Building Practitioners. Each district creating a “Building Industry Education Fund scholarship”.

5.    Each district employees the transitional “Building Industry Advisors”.

6.    Each district contracts the appropriate ITO,s for the trade training and the district will create K.P.I.s for the I.T.O s to achieve.

7.    Each district has the right to hire and fire the groupings of government departments and associations.  Each department will have to meet K.P.I,s. If they do not achieve it the district can employ outside organisations to resolve the localised building industry problems we all have.

8.    We would develop a inspection online system like +Telarc-SAi  www.envirostep.co.nz  to help educate and address compliance issues.

9.    The software self-auditing program would be jointly owned by government and LBP district areas. It would be used to influence the insurance council’s investment. Income received would be returned to the localised communities.

4 Minister may prescribe rates of levy

·        (1)Subject to the provisions of this Act, the +Minister may from time to time, after consulting with the association and the New Zealand Master Builders' Federation Incorporated

The minister says that we as an industry have been the poor cousin in the economic room. Please note  quotes from his speech to the Construction Clients Group: 28/03/2012

• But be assured, there is no slowing down or direction change, this is about taking what has been a poorer cousin of other parts of economic development and bringing it into the main stream. This government sees the Building and Construction sector as a vital cog in its economic growth agenda.

• And recognising that there is no “one size fits all” for building work, risk-based consenting aligns the amount of checking and inspection required by a building consent authority with the complexity and risk of the work, and with the skills and capability of the people carrying out that work.

Vision for the sector

• Productivity sounds as if it’s all about profits and nothing else. Profitability is definitely an important part of it, but there are also many social benefits which will flow from lifting GDP by 2% and driving an additional $3 billion of economic activity.

• For example, many of those who work in the sector are often in the lower socio-economic group. By driving up skills you drive up wages. By streamlining the construction procurement pipeline you help mend the boom-bust cycle which currently plagues the industry. Not only does this cycle send our skilled tradesmen overseas or into other sectors, but during the bust stage it pushes many people back onto the welfare spiral. This could be addressed by providing secure, attractive career pathways

Whilst we are on the subject of reform, I believe for the protection of homeowners and the licensed building practitioners that every T/A should demand a personal guarantee for products used on building sites. This is if the manufacturers who are refusing to sign up to the criminally liable code mark material appraisal system, but continue to go down the locally endorsed Branz  system.

This is not unduly a problem for the T/A, but it is an absolutely a huge problem for every LBP in NZ who will need to insure against it.

Raymond, the vision of the minister is admirable. The constraints on him and any future ministers is that the government has lost any real controls over the industry.

My proposal for vision aligns our industry with helping mainland +China in joint building industry education also the importation of quality reasonably priced building materials.  China has a real need of educating un-skilled farm workers that move from the country to the city.  

With all our faults we also have some real potential positive attributes. We can help.

 The industry needs to be profitable. The guys in the SME sector are not as yet able to develop due to many issues.  Some of them are a lack of efficiency, productivity, low numeracy and the most obvious low profitability.

The above locally owned business model takes back the ownership of the build process to the +LBP and homeowner on site.

An additional component that you can align with is the possible broader vision for us as a country.

Your alliance and endorsement of this vision has at its core,  a price reduction in the supply of quality materials being introduced into the building supply chain.  The undue influence by the main material suppliers will stop. They will be required to support and address customer first policies in their processes to win favour.

Currently their dominance creates intimidation on the associations, government, local government, retail outlets. e.t.c Their power is also felt in the media in print, television, online and the public relations marketplace.   

As has been evidenced by your peer +Clare Curran in parliament before 05/04/2012. In relation to the undue pressure from +TVNZ executive on the +Fair Go team.

I would plead with you to help see the woods for the trees.

 Have a broader more progressive vision beyond your three year term.   I would also ask you to consider the real future the +Chinese, +Indian participants    have in our country. We need your contacts your relationships to help us increase our competitiveness internationally.

I wish you the best of luck with the future and the next election.

I would love to discuss this further if you were inclined.