Builders' co-op calls for major reform as industry struggles

A builders' co-operative is calling for major reform as building activity falls to its lowest point in more than a decade.

By Claire Taylor for Local Democracy Reporting

With the election approaching, Combined Building Supplies Cooperative NZ (CBS) is pushing for improvements to the building system, including changes for consenting, liability, and building warranties.

CBS chief executive Carl Taylor said the organisation was formed nine years ago amid frustrations that smaller tradespeople were not being supported under current legislation.

Builders were operating under an uncertain system that no longer worked, he said.

“Our members operate inside the system every day. They fund delays, manage client risk, and carry personal liability when the system fails,” it said.

“They want to build. But they are carrying risk the system was never designed to allocate properly.”

Total construction activity had fallen to its lowest level since 2015, with residential activity down 3.9% on a year earlier and non-residential activity down 13%, the largest annual decline since 2010, according to a BDO NZ Construction Sector Report 2026.

The report found two-thirds of construction companies had projects cancelled or put on hold, nearly two-thirds reported losses of up to $100,000, and one in four had seen a customer, supplier or counterpart go into liquidation.

CBS has called for enforceable statutory timeframes, financial accountability for delays, risk-based consenting, national consistency in interpretation, and faster consenting and inspection processes.

Last month, Mackenzie District councillor Phillipa Guerin raised concerns about the council’s high failure rate of building inspections in June, and asked what could be done to improve it.

That prompted a response from Building Officials Institute of New Zealand president Karel Boakes who said the country’s building inspection failure rate sat between 45% and 55%.

“In New Zealand, we have a bit of a problem,” Boakes said, at the time.

However, she said it was not due to a lack of building skills, but pointed to issues around planning, supervision, control of job sites, and developer interference.

CBS supported the Government’s decision last year to replace joint and several liability with proportionate liability, but said the changes needed to be carefully implemented.

Under the new system, each party will only liable for the share of work they carry out.

Local Government New Zealand also supported the reform, with Infrastructure Reference Group chairperson Andy Watson saying councils often carried a disproportionate share of the burden when building issues arose.

"We’ve long advocated for an end to joint and several liability for councils, and for the introduction of proportionate liability. Councils often carried a disproportionate share of the burden ... even when others were more responsible.”

Watson said existing liability rules had made councils more cautious when issuing building consents and was racking up costs for ratepayers.

“It cost[s] ratepayers significant amounts of money through legal action from building owners chasing compensation from councils for defects,” he said.

The Government also proposed a one-year warranty on new residential buildings of up to three storeys and for renovations costing more than $100,000, and a 10-year structural warranty period.

But Taylor said the Government’s proposed mandatory scheme for warranties would not work for smaller tradespeople and companies.

CBS instead called for a proven warranty model, pointing to the Queensland Building and Construction Commission in Australia.

CBS said the model worked because it was universal, accessible and realistic, government-backed, and simple to deliver.

Taylor said legislation also made it harder for smaller companies to access warranties and the security they provided.

“If you’re a young apprentice ... and you’ve got aspirations to start your own business, the way it currently is at the moment, there’s no pathway for you to be able to even access this warranty product,” he said.

“So you end up having to work for someone else forever.”

Minister for Building and Construction Simon Watts has been approached for comment.

– LDR is local body journalism co-funded by RNZ and NZ on Air