The Government needs to unleash the construction sector’s ability to create thousands of jobs, National’s Building and Construction spokesperson Andrew Bayly says.
“The building and construction industry offers one of the best opportunities for rejuvenating our economy because it employs a large number of New Zealanders, and many of its products are sourced locally.
“Spending money wisely on projects that deliver good value and employ more people is vital, but we risk not achieving those objectives in the rush to deliver shovel-ready projects.
“One of the biggest issues confronting the sector is consenting. Kāinga Ora has the ability to fast-track its own build programme with little or no involvement from councils but the Government has done little to address consenting delays across the rest of the sector.
“The Government must deal with the wider issues across our construction sector rather than just providing bespoke solutions for its own government agencies.
To maximise the construction sector’s potential, National would also like to see:
- Greater use of technology, such as the Artisan app developed by BRANZ, to reduce the number of physical inspections during building work as it occurs
- Advance spending on government projects, particularly in provincial areas
- Greater support and innovative funding for new building projects, such as providing some form of underwriting of material costs for new developments
“It’s vital the Government places sufficient weight on the domestic building and construction sector rather than engaging overseas firms for projects that employ few New Zealanders and see revenues head overseas.”
The Government must urgently clarify what Level 3 means for the construction sector to ensure builders can return to work quickly, National’s Building and Construction spokesperson Andrew Bayly says.
“The construction sector is a huge part of the economy, employing about 250,000 people. It will be a key driver of economic activity as we come out of the Covid-19 downturn so it’s imperative the Government removes any barriers in its way.
“Construction firms are still not exactly sure how Level 3 restrictions will apply to them. Does a building firm need to be certified to operate? Does a building site that’s been sitting empty for five weeks now need to be inspected?
“For firms to be able to hit the ground running at 7am on Tuesday they need absolute clarity on what the rules are for operating safely, and they need it now.
“It’s time for decisive action from MBIE. They must be very clear about the rules for the construction sector and be ready to support building firms as they rebuild our economy.”
Further support for New Zealand’s small and medium businesses is welcome news but today’s Government package won’t substantially move the dial, National’s Finance spokesperson Paul Goldsmith and Revenue spokesperson Andrew Bayly say.
“The tax loss carry back scheme is a good idea but rather than just two years, it should be aligned with the same three-year timeframe used for farmers experiencing difficulty,” Mr Bayly says.
“Extending the timeframe for landlords to cancel or extend leases will help at the margins but the reality is landlords will be acting cautiously given the fact that few businesses are out looking for office space,” Mr Goldsmith says.
“We need rental changes but we would have liked to see a more substantial Business Rental Support Package,” Mr Goldsmith says.
“The Government has also missed an opportunity to deliver any medium to longer term measures,” Mr Goldsmith says.
“We need to start thinking of ways to support businesses to invest when we come out of lock down,” Mr Bayly says.
“This could include substantially higher thresholds for expensing capital investment,” Mr Bayly says.
“The critical thing to help businesses remains getting out of lockdown as soon as we safely can,” Mr Goldsmith says.
National has today launched a petition so that people can continue to pay Inland Revenue and other Government departments by cheque, National’s Revenue spokesperson Andrew Bayly says.
“Inland Revenue will stop accepting cheques this Sunday. Since it has announced this, I’ve been inundated by complaints from people who have no other way to make payments.
“Many older New Zealanders don’t know how to use internet banking, or don’t want to because they’re concerned about scams. People in rural New Zealand don’t necessarily have access to good internet and some people simply don’t own a computer.
“I’ve had one man approach me who is dyslexic. He won’t use internet banking in case he enters the wrong amount and feels safer writing a cheque where he has more control.
“Revenue Minister Stuart Nash needs step up and help these people. His office has told me that in the past financial year Inland Revenue received more than 400,000 payments by cheque. That’s 6.8 per cent of all payments made in the last financial year.
“This issue might seem trivial to Mr Nash but it’s causing distress to many New Zealanders, some of them are our most vulnerable citizens.
“I’m calling on Inland Revenue and Stuart Nash to take a common sense approach this and put the needs of New Zealanders ahead of what’s convenient for them.”
Here is a link to our petition: https://andrewbayly.national.org.nz/cheque_petition
New Zealand is losing millions of dollars of taxes to the ‘hidden economy’ because Revenue Minister Stuart Nash has taken his eye off the ball, National’s Revenue spokesperson Andrew Bayly says.
“In the hidden economy, work, services and business transactions occur under the radar – undeclared activity for which taxes should be paid but are not. No one knows just how much it is actually worth but experts have estimated it’s between $9 billion and $26 billion.
“Inland Revenue (IR) collected $77.9 billion worth of tax in 2019 but experts estimate that in respect of the country’s self-employed alone, it is losing at least $1 billion in tax on unreported income.
“IR has been so focused on dealing with problems created after it introduced the third stage of its business transformation computer upgrade in April that it’s actually costing the country money now.
“The third stage of the upgrade rolled out in April has led to a huge number of enquiries as people have sought to clarify their personal tax affairs. As a result staff have been diverted from other areas IR should be policing, including the hidden economy.
“The number of IR staff working on investigations of undeclared income fell from 200 in 2015-16 to 143 this year. Tax recouped from investigations from $152 million to $108 million.
“Mr Nash should be making sure the Government gets the full amount due in any given tax year. If we’re losing revenue the Government has to either generate more income or it has to put up taxes. No one wants that.
“Our tax system is based on everyone paying their fair share but the amount of money being recovered from the hidden economy is small. A good Minister would be ensuring this is sorted out immediately.”
Punishing call wait times at Inland Revenue are seeing hundreds of thousands of Kiwis either disconnected or hanging up in frustration, National’s Revenue spokesperson Andrew Bayly says.
“Inadequate staffing meant almost 700,000 calls to IR call centres were disconnected before they even entered the queue to have their call answered.
“An additional 181,000 callers hung up before speaking with an operator because it was taking too long.
“Usually the Inland Revenue website gives an approximate waiting time, this morning demand is so high the website simply says ‘We are currently restricting the amount of calls we are accepting due to high demand.’
“Revenue Minister Stuart Nash needs to recognise the stress his department is under and the frustration being caused to thousands of New Zealanders and step in to fix the problem.
“Mr Nash claims people should just go online. This isn’t an option for everyone. There are plenty of reasons who people prefer to discuss tax matters with a person over the phone rather than sort it online, where the information isn’t always easy to follow.
“Given recent changes to the tax system, numbers should have been beefed up to deal with the influx of callers.
“It’s important that Inland Revenue is easy for New Zealanders to access. Mr Nash needs to take charge of his department and fix this problem.”
National will deliver stability to the construction sector, making it more resilient to peaks and troughs, Building and Construction spokesperson Andrew Bayly says.
“Developers and builders face continual problems with consenting and a lack of site inspectors. Many councils are slow to process consents and issue codes of compliance.
“The rising cost of consents and delays associated with getting inspectors on site are major problems. National wants to standardise the consent process across all councils.
“National will reduce the time it takes to issue certification. One solution we are looking at is allowing approved third-party operators to prepare building consent applications, and significantly limiting the time for those consents to be processed.
“National is interested in whether the processing of more complicated building consents should be handled by specialist regional consenting organisations, removing the requirement that every council has access to these skills in-house.
“To reduce the risk being taken on by building and construction firms, National wants government procurement processes to adhere to Construction Contracts NZS 3910:2013 and 3915:2005 as a basis for contract negotiations, and ensure risk is allocated fairly.
National is also considering:
- A building warranty scheme that covers structural defects
- Updating the Building Act to reflect modern building practices
- Further refining retention arrangements to better protect sub-contractors
“National will support a strong and stable building and constructions sector.”
Our Discussion Documents can be found HERE
National has come up with a solution so taxpayers can keep their own money after Revenue Minister Stuart Nash tried to short change them, National’s Revenue spokesperson Andrew Bayly says.
“In 2018 the Government was warned default KiwiSaver account holders had already overpaid tax to the tune of $70 million on their investment (PIE) income.
“New Zealanders shouldn’t pay any more tax than necessary. This especially impacts those New Zealanders on low incomes, the Kiwis that just cannot afford to be paying more tax than they should be. We want to ensure they get their refund.
“Historically refunds were not made because the system couldn’t cope with them, however the new Inland Revenue IT system doesn’t have this restriction.
“Under the PIE arrangement, tax is deducted at a maximum of 28 per cent. Some taxpayers have been paying much less than they should have while others have paid much more.
“For those who’ve underpaid, the Minister has chosen to go back to the year from 1 April 2018 and ask them to stump up tax to the tune of almost $50 million. A similar amount will be paid in the 2019/20 financial year.
“Some couples will be in the situation where one half may have to pay back money to Inland Revenue but the other half isn’t entitled to their refund. How is that fair?
“The Minister knows a change of legislation is needed so taxpayers can be refunded what they’re owed. When I asked him repeatedly about it, he claimed it was an operational matter for Inland Revenue and then said it required a legislative change.
“National believes New Zealanders shouldn’t have to pay more tax than necessary. That’s why I’ve drafted a Supplementary Order Paper (SOP) which will allow Mr Nash to make these changes in Parliament.
“I intend to table this as soon as the House resumes and I encourage Mr Nash to do the right thing so that New Zealanders can be paid back the money that belongs to them.
“There’s a principle with tax that you pay your fair share. Inland Revenue is also duty bound to refund any overpayment of tax.
“This is a tight-fisted Tax Minister who wants to take with one hand but not give back with the other. I’ve done all of the work for him, he now needs to do the right thing.”
Andrew Bayly's SOP can be found HERE.
The Government is blocking a law change that would better protect builders and construction firms from losing money on Government projects, National’s Building and Construction spokesperson Andrew Bayly says.
Mr Bayly introduced an amendment to the New Zealand Infrastructure Commission/Te Waihanga Bill into Parliament on Wednesday, which Labour, NZ First and the Green Party all voted against.
The amendment would have required the new Infrastructure Commission to review selected tender processes of government agencies and councils to ensure they met best practice.
The commission would have been tasked with looking at risk allocation. Its results would also have been made public so that any learnings would be available to other parties.
“Government agencies are still seeking to impose inappropriate contracts on building and construction firms, which mean contracting parties are exposed to most of the risks associated with the project,” Mr Bayly says.
“The burden this is placing on the industry was a recurring complaint at last week’s Constructive Forum, organised by the NZ Registered Master Builders Association.
“Under current legislation, all risks associated with government contracts are meant to be identified and allocated to those parties best able to manage them. Unfortunately, this does not happen in reality with most of the risk ending up with the builder or construction firm.
“In the event of failure, this can adversely impact sub-contractors – the most vulnerable people in the construction industry.
“My proposed amendment would have delivered a practical response to this undesirable practice but the Government, regrettably, voted it down on Wednesday night.
“The construction industry is crying out for solutions to this problem, not the petty politics it’s getting from the Government. Urban Development Minister Phil Twyford and Building and Construction Minister Jenny Salesa have both been missing in action on this issue.
“National, meanwhile, is being proactive and supporting the 250,000 people employed in this important industry, which is being let down by the Government’s inaction.”
The Government needs to show more support for pre-fab home manufacturers to help undo KiwiBuild’s damage, National’s Building and Construction spokesperson Andrew Bayly says.
“The news that Canterbury-based Welhaus Limited and its sister company Welstruct have been placed into liquidation does not auger well for the pre-engineered, panelised homes market in New Zealand.
“Also known as offsite manufacture (OSM) or modular construction, this method of house building has been tipped as a solution to deliver on the Government’s KiwiBuild promises.
“Although there have been soothing words of encouragement from both the Minister of Housing and Minister of Building & Construction, little tangible support has eventuated.
“What is required – and quickly – is the development of a National Standard to get around councils applying different ways of consenting this form of modern modular manufacture.
“If the Government is serious about supporting a New Zealand-based home modular industry then it should also be placing some orders.
“Many companies have spent hundreds of hours applying to become an accredited OSM contractor to KiwiBuild and, as yet, it does not appear anyone has been awarded a contract.
“Surely with all the delays plaguing KiwiBuild, the Government would be showing some urgency.
“Offsite manufacturing is an increasingly viable option, but these types of factories require committed manufacturing volumes to help cover the expensive capital cost of establishing these highly-mechanised manufacturing processes.
“It’s time for the Government to stop procrastinating and get on with it.”