Building recommendations don’t go far enough

The Commerce Commission’s draft report on the building supply market defined the problems, but doesn’t go far enough with their recommendations, National’s Building and Construction spokesperson Andrew Bayly says.

“We are surprised that the Commerce Commission’s report failed to deal with the competitiveness of the industry or suggest urgent enough recommendations that will result in lower building costs.

“The report concluded that ‘vertical integration does not appear to be a factor affecting competition over the longer term’, when the Commission itself raised the issue of quantity-based rebates and potential land covenant restrictions.

“The Commission should have better defined where operators are able to exercise market power, in the respective components that the study focused on – foundations, flooring, roof, walls (structural and non-structural interior and exterior) and insulation.

“They also should have worked out whether these entities may be extracting excess profits. By not doing this, the Commission may have missed the opportunity to recommend more meaningful changes.

“The test is: can New Zealanders access a range of proven products at competitive prices?

“Right now, it is too difficult for offshore manufacturers and suppliers to gain approval to introduce new products into the New Zealand market – it takes too long and is too costly. This is a major barrier to entry.

“National wants to see meaningful reform that brings in new innovation and ultimately to see a reduction in costs that Kiwi homeowners face when building a home.”