Govt's building supplies policy failed - Labour

Nick Smith
Nick Smith

The Government is being forced to defend a promise made as part of its annual Budget two years ago, following claims from Labour the policy has severely backfired.

In 2014 the Government removed tariffs and anti-dumping duties on some imported building products in a bid to increase competition and make building a home more affordable.

Housing Minister Nick Smith claimed the changes would save $3500 for the construction of a standard New Zealand home.

But fast-forward two years and a majority of the products have either stayed the same price or increased, some by more than what Dr Smith claimed would be saved.

The Ministry of Business, Innovation, and Employment monitored around 57 different building products since the announcement.

Plasterboard products alone have seen a rise of more than $3500 -- the original projected saving across all materials per housing build.

Labour's Housing spokesman Phil Twyford says the Government has broken its promise.

"This policy has utterly failed to stem the rise in building costs," he says.

"It's done nothing to make home ownership more affordable for desperate young Kiwi families. Under Nick Smith, this policy has actually made housing more expensive."

Dr Smith has rejected the criticism and says the lift in tariffs and anti-dumping duties has increased competition amongst suppliers.

"I think it is very artificial to take a single figure around plasterboard and to say well, that is what's occurred in that particular market," Dr Smith says.

"For instance we put tougher standards on plasterboard to make it more earthquake resistance, so you need to ensure that you're comparing like with like."

Dr Smith puts the rise in costs down to the "building boom", which he claims inevitably results in higher pricing.

"The right thing for Kiwi families to be able to get affordable homes requires they've got access to affordable building materials, and removing those tariffs was the right thing to do," he says.

"The Government based its advice around what cost advantages there was from that of officials at the time -- [we] stand by it."