What is wrong with our building industry?

Back in the 90's and early 2000's, the building industry was building leaky homes which should never have been granted consent. Now it turns out they've been building dodgy office blocks as well:

New imaging technology has revealed hundreds of major buildings nationwide have defective or missing concrete or reinforcing steel.

Concrete investigators say their scanning shows many buildings have not been constructed according to the plans.

They were "astounded" and "appalled", Jane Roach-Gray of Wellington company Concrete Structure Investigations said.

[...]

Critical structural parts were defective or missing in 1100 of the 1200 buildings they had scanned since 2016, Ms Roach-Gray said.

"The divide occurs between what's in the plans and what ends up in the structure," she said.

They can't name any of the buildings "for legal reasons" (meaning: fear of being sued if they told the truth about what's wrong with them), but the implication is clear: pretty much anything that has been built in the last 40 years has these problems. And some may be structurally unsound or outright unsafe as a result.

So how did this happen? One part is almost certainly the building industry's culture of lowballing contracts, which then encourages them to cut corners to turn a profit. But in theory, buildings are meant to be inspected, to ensure that that doesn't happen and that everything is built according to the plans. So there have obviously been some terrible failures there. Who's responsible for inspections? Those same territorial authorities who granted consents to leaky homes, and who are under relentless pressure from Boomers to Keep Rates Low. Except that skimping on this is a fool's strategy, because councils are legally liable for their failure to inspect, and in the case of leaky homes, that adds up to billions. They could now be on the hook for billions more.

National wants to deregulate banks

The Reserve Bank is currently planning tighter banking regulation, requiring banks to hold enough local capital to survive a 1-in-200 year financial crisis in order to protect consumers. The big Aussies banks, those foreign leeches who suck $5 billion in profit out of our economy every year, don't like that, because it means they might have to suck a little less for a little bit. And so suddenly, coincidentally, their pawns in the National Party are no longer fans of independent banking regulation:

National Party Finance Spokesperson Paul Goldsmith wants to shake-up banking, by ripping a scab that hasn't been touched for 30 years.

Goldsmith has called into question the independence of the Reserve Bank, responsible for setting interest rates and regulating banking.

He thinks the Government should have a say in how much risk banks are allowed to take, weighing up the cost to consumers of having a faster, looser and cheaper banking system with the need for stability.

You know, the same way they "weighed up the cost" of having faster, looser and cheaper building standards, faster, looser and cheaper regulation of finance companies, or faster, looser and cheaper mine safety. Which tells you how much of a terrible idea this is. It was just over a decade ago that banks crashed the global economy by (in part) not having sufficient capital reserves to cover their gambles. National may have forgotten that. But I doubt voters have.

"No-one to blame"

Last night, Parliament unanimously passed the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill, establishing a rescue package for owners of leaky homes. During the debate, Building and Housing Minister Maurice Williamson was clear in trying to avoid blaming anyone for this multi-billion dollar debacle:

The leaky home problem emerged in the 1990s and Mr Williamson said no one thing was to blame.

"This was a systemic failure across the entire industry," he said.

"This was designers, this was builders, this was materials, this was construction methods, this was consenting, this was inspections, this was homeowners not doing relevant maintenance...monolithic cladding used with no cavities in the building design and non-treated timber was a recipe for disaster."

Notice who is missing from that list: the party most to blame, the government. It was the government - a National government - who deregulated the building industry allowing substandard materials and construction methods to be used and consenting and inspections to be weakened. And it was the government who at the same time cut funding to trades training, ensuring that the market would be full of unskilled "builders" who took shortcuts when building houses. Williamson was a member of that government, a Minister even, so he shares collective responsibility for those decisions. It would have been nice if he had admitted that, rather than once again attempting to avoid responsibility for the crisis he helped create.

National's new leaky home crisis

Back in the 90's, the loony free market ideologues in the National Party downgraded building standards in the name of "cutting red tape ". According to them, the market would ensure quality, so there was no need to regulate. The result was the leaky homes crisis: unliveable buildings, people losing their primary assets, and an $11 billion (or maybe twice that) public liability hanging over our heads.

You would think that after that the government would have learned its lesson about the dangers of deregulation. But you'd be wrong. The ideologues are back at it, proposing to weaken building standards again, all in the name of cost-cutting and deregulation of course.

The consultation document is here. The core proposal is to reduce the standard of treatment required for internal timber framing in houses. According to my engineering friends, it is a Very Bad Idea. But hey, the building industry wants to make some quick profits by building substandard buildings. And their purpose-created development companies will have long since been wound up before the bill comes due.