Latest / Best of Business / Carl Taylor: Combined Building Supplies CEO on the impacts of the new home warranty rules

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Carl Taylor: Combined Building Supplies CEO on the impacts of the new home warranty rules · Best of Business

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  Speaker 2: We're talking about new regulations coming through on warranties for
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  Speaker 2: home defects that will affect most builders and operators out
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  Speaker 2: there very soon. To chat further about this, we're joined
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  Speaker 2: by Carl Taylor. He is the chief executive of the
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  Speaker 2: Combined Building Suppliers Cooperative. Carl, Very good afternoon to you.
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  Speaker 3: Yeah, good afternoon, guys. How are we very good?
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  Speaker 4: How is this different from what we have now with
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  Speaker 4: people being part of the Registered Mastered Builders Association, Carl.
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  Speaker 3: It's almost quite a different scheme, to be honest with you.
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  Speaker 3: There's three current providers out there at the moment. Obviously
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  Speaker 3: you've got Master certified in the Stanford, which are three
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  Speaker 3: very good products when you look at them. The problem
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  Speaker 3: we've got in the market is that there's not enough competition,
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  Speaker 3: and so what I mean by that is that there's
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  Speaker 3: not enough overseason Surer is wanting to come to New
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  Speaker 3: Zealand just because we're too small to be able to
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  Speaker 3: offer what the government requires to meet mb guidelines to
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  Speaker 3: offer this product, so potentially it will lock out a
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  Speaker 3: lot of good operators in the market, and that's where
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  Speaker 3: our concern comes from.
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  Speaker 4: Right, So is this proposed warranty system Is it likely
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  Speaker 4: to protect homeowners or mainly increase compliance costs?
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  Speaker 3: Carl, Look, we've needed this for years. I think this
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  Speaker 3: has been a long time coming, and consumers absolutely need protection,
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  Speaker 3: there's no doubt about that. But if we're going to
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  Speaker 3: roll something out as large as this is, this is
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  Speaker 3: going to be the biggest fundamental change this construction sector
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  Speaker 3: has ever seen. It needs to be designed in such
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  Speaker 3: a way that it not only looks after the big guys,
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  Speaker 3: but also looks after the small guys as well, and
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  Speaker 3: that's where our concerns are.
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  Speaker 2: So just running back to master Builders, CBS and Stanford,
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  Speaker 2: you mentioned there, why wouldn't the builders sign up to
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  Speaker 2: those warranties in the first place? What are the hurdles
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  Speaker 2: there that because as I understand, only forty six percent
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  Speaker 2: of builders do that. I can't understand why every builder
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  Speaker 2: wouldn't sign up to something like that.
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  Speaker 3: So across the three and that's a great question. Across
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  Speaker 3: the three providers. You know, there's various entry criteria that
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  Speaker 3: you've got to have, so you've got Master Builders good product,
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  Speaker 3: Certified Builders good product, and they're a membership driven product.
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  Speaker 3: And then you've got Stanford, which is backed by a
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  Speaker 3: private insurer. So two very different models. And not all
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  Speaker 3: operators or builders will be able to join the other organizations.
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  Speaker 3: They may not be able to because they may not meet,
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  Speaker 3: you know, the financial requirements to do so. So therefore
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  Speaker 3: they are left out in the cold. And I was
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  Speaker 3: listened to one of your callers just prior and he
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  Speaker 3: talked about the costs. The cost isn't the issue here
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  Speaker 3: at all. The cost is just going to have to
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  Speaker 3: be There's no doubt about that. Consumers need protection and
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  Speaker 3: it's going to cost them, that's just the way it is.
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  Speaker 3: But it's going to lock a lot of guys out
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  Speaker 3: and they'll just close shop and not bother.
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  Speaker 2: Right.
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  Speaker 4: So so part of the rationality is to is to
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  Speaker 4: speed up consents. Right, will this change you know, council
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  Speaker 4: delays and consenting or will it just move the bottle
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  Speaker 4: next somewhere else?
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  Speaker 3: Probably a couple of topics going on here. I think
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  Speaker 3: changing their proportionate liability is a great thing. Obviously, when
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  Speaker 3: there's a dispute, normally the last man standing as the
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  Speaker 3: council because the builder might have folded up and gone
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  Speaker 3: into liquidation, so he's gone. So what they're doing is
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  Speaker 3: they're shifting that and saying, you know, the builder might
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  Speaker 3: be liable for X amount, the council will be liable
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  Speaker 3: for another amount, and another subcontractor for another. It's making
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  Speaker 3: it more fear in that regard and that, you know,
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  Speaker 3: that's only a good thing. I think just.
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  Speaker 2: On the one hundred thousand dollars cap for renovations, I mean,
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  Speaker 2: do you see some problems with having that cap?
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  Speaker 4: Karl?
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  Speaker 2: Is there a potential that some of these builders that
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  Speaker 2: they can't afford to get this warranty under the scheme
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  Speaker 2: as it's written, well, you know, have some shortcuts there,
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  Speaker 2: or try and do whatever they can to get it
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  Speaker 2: under that hundred thousand cam.
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  Speaker 3: I think the devil will definitely be in the detail,
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  Speaker 3: and we yet to see that. You know, one hundred
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  Speaker 3: thousand dollars doesn't go far. Does a bathroom and a
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  Speaker 3: bedroom extension? It won't go far. Whether or not people
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  Speaker 3: take shortcuts, I don't know. I suspect people will find
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  Speaker 3: gray areas in order to keep operating. I don't know
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  Speaker 3: if they will or not, But they probably won't.
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  Speaker 4: Yet we're speaking to Carl Taylor Combined Building Suppliers Cooperative CE.
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  Speaker 4: Now a lot of people are texting in what a
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  Speaker 4: government backed warranty model like Queensland's work better in New Zealand?
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  Speaker 4: Why hasn't that been considered.
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  Speaker 3: The government from fras can I understand, did go to
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  Speaker 3: Queensland have a discussion. You know, if you do look
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  Speaker 3: at a Cousins over there. They've had that model going
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  Speaker 3: for over thirty five years and it works really well.
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  Speaker 3: It's backed by the Queensland State Building Commission, so it's
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  Speaker 3: got a decent bank balance so when something goes wrong.
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  Speaker 3: But more importantly, it's an administered by an insurance company
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  Speaker 3: and I think that's where we would like to see
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  Speaker 3: it again. We support the intent, but if we're going
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  Speaker 3: to roll this out, it needs to be done over
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  Speaker 3: several years, not twelve months like they're proposing. And we
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  Speaker 3: need to keep talking to Australia and I think just
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  Speaker 3: copy what they've done because it works, so why would
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  Speaker 3: you not?
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  Speaker 4: And what should happen to apprentices and new builders who
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  Speaker 4: want to enter the residential market but cannot meet these
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  Speaker 4: insurance thresholds As this comes through.
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  Speaker 3: Yeah, that's the pathway for a young apprentice. Apprentice wanting
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  Speaker 3: to come through is obviously quite concerning as well. And
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  Speaker 3: you know when you look at these young guys, they
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  Speaker 3: invest a lot of time in their own money and
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  Speaker 3: they're live to want to become a builder. And if
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  Speaker 3: we make it too hard for these young guys to
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  Speaker 3: come through, then they just don't think they'll bother Again,
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  Speaker 3: the intent is correct, we've just got to get it right.
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  Speaker 3: And the reason why we're speaking up now is that
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  Speaker 3: we're better off to argue it and debate it now
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  Speaker 3: than whether it's after it's been put into legislation, because
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  Speaker 3: there's no one how it will change it once it
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  Speaker 3: comes through.
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  Speaker 2: Carl, really great to get your expertise and thoughts on
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  Speaker 2: this one. Thank you very much for your time.
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  Speaker 3: Thank you very much.
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  Speaker 2: That is Carl Taylor. The Combined Building Supply is Cooperative
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  Speaker 2: ce THO were the guys that ran that survey that
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  Speaker 2: said thirty percent of small builders. We're very concerned about
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  Speaker 2: this new warranty scheme.
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