Annual Report 2008/2009
Chief Executive's overview
The Department delivered successfully during a year that proved very challenging for us, as it was for the building and housing sector and the economy as a whole.
Our focus on delivering value for money and lifting productivity was sharpened by tough economic conditions. We also needed to respond to changed Government expectations and strategic priorities.
After a period of sustained growth from 2002 to 2007, the building and housing sector was immediately affected by the economic downturn. The number of new residential building consents fell to their lowest level since records began in 1965, while 8,800 fewer people were employed in the construction industry by the end of June 2009 compared with the peak in December 2006.
These changes added urgency to our work to support the sector's long-term development and to our focus on delivering value. The Department's budget, which is two-thirds funded by third-party revenue from the investment of residential tenancy bonds and from building and licensing fees and levies, was also significantly affected.
At the same time, the incoming Government brought an increased emphasis on delivering value for money, streamlining legislation and reducing compliance costs.
Key achievements for the 2008/09 year included work on the Building Amendment Act, which was passed in August 2009. The Act includes several measures to simplify the building consent process, particularly for building designs that are being replicated in different locations. The changes will benefit the industry and consumers by saving costs and time.
A comprehensive review of the Building Act 2004 is now under way as part of the Government's regulatory reform programme and we are also implementing changes to simplify and clarify the Building Code. The focus is on continuing to lift the quality of building in New Zealand while ensuring the regulatory system works well and doesn't impose unnecessary costs or delays.
Further work on the Licensed Building Practitioner Scheme during the year has resulted in Government decisions on the types of critical building work that will be restricted to licensed practitioners from March 2012. These decisions give building practitioners a strong reason to become licensed, which will contribute to skills development in the sector and increased consumer confidence. The Department is now working with the sector to further streamline the scheme and give greater recognition to existing trade qualifications, further reducing costs.
The new Government requested a review of the approach to leaky homes, to focus more on getting homes repaired than on attributing fault or litigation. A full evaluation of the present approach has been used to underpin new policy options for Government consideration.
A Building and Construction Sector Forum held in August 2008 established two sector-led taskforces which delivered practical recommendations on ways to improve the sector's skills and productivity, and to facilitate better quality urban development.
Changes made to our tenancy services operations during the year achieved worthwhile savings despite increased demand, and without compromising the quality of service to clients. Our current review of the operating model for the delivery of our services should result in further improvements.
Overall, the Department's focus on value for money identified savings of $3.171 million for the 2008/09 year. Our Value for Money Programme has included identifying ways to improve the efficiency and effectiveness of our services, activities and programmes, as well as discontinuing any that are not delivering value for money.
At the same time, we have continued to emphasise research and evaluation to ensure high quality decisions and robust policy advice. For example, our innovative study of land supply in the Auckland region will underpin future policy development and is already being used by local councils to inform their planning decisions.
We have continued our investment in developing leaders across the Department and in improving our core business systems. These investments will increase productivity and deliver long-term value.
I'd like to thank the many individuals and organisations who work closely with us in this important sector. Homes and buildings affect the lives of all of us, and the building and construction sector is a significant player in the New Zealand economy - in June 2009 the sector generated one dollar in every 23 and employed one in 12 workers.
The year ahead will be just as challenging as this one has been. We will continue to find ways to deliver more with less, as we work hard to achieve a building and housing market that delivers good quality homes and buildings for New Zealanders that contribute to strong communities and a prosperous economy.
I am pleased to present the Annual Report of the Department of Building and Housing for the year ended 30 June 2009.
Katrina Bach
Chief Executive
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