Builders Told To Seek Repeal Of Restraints

Press, Volume CVI, Issue 31318, 14 March 1967, Page 13

Builders Told To Seek Repeal Of Restraints

"The Press" Special Service INVERCARGILL, March 13. Repeal of the regulations which set up building program* ming, examination of the Building Industry Advisory Council to ensure its functioning as a sound forward-planning body, and an examination of Government action on recommendations of the National Housing Council should be priority matters for the New Zealand Master Builders’ Federation in the year ahead.

This opinion was expressed to the annual conference of the Federation in Invercargill today by the president (Mr R. D. Baigent). He gave two more priorities: support for increased immigration and renewal of representations for a universitydegree course in building.

‘The subject which is undoubtedly of more serious concern to the industry than any other is the economic restraints which are so adversely affecting our industry at present and will in all probability do so to an even greater degree in the months ahead,” Mr Baigent said. “It is difficult to find anything very encouraging to say about the situation because I believe that our circumstances are not as greatly affected by direct measune taken specifically against the industry as they are by the economic situation and its effect on all other forme of activity in the country as a whole. “Many would-be home builders, or buyers, hesitate to proceed at this time and many of those who do decide to proceed are unable to And adequate mortgage finance. Vnfavourable Climate - “Commeniat and industrial interests whose activities have been retarded sot their ex-

pansion proposals and accordingly their building proposals aside. Property developers

are not attracted to proceed in such a climate or are frustrated by unavailability of finance, and the Government, of course, finds it necessary to cut back on capital expenditure. “I think that the hackneyed phrase *whenever there is an economic problem the building industry is the first to be attacked* is used rather excessively. The effect of the situation on our Industry, extensive as it is, is to a large degree incidental and we should remember that the situation is as unsatisfactory to those who find it necessary

to delay their building proposals as it is to us. "While I am advocating that we should recognise the true situation I am not suggesting that we should accept an anomalous one. Since the introduction of the Economic Stabilisation (Building Construction) Regulations, 1965, and the Building Programmer, the Government has repeatedly assured us that there was no intention to do more than hold the level of building activity down to a growth rate consistent with that of the gross national product This meant that under programming we could expect a steady expansion of approximately 8 per cent a year. Tn tile light of the further deterioration in the economic situation we must expect a reduction in this rate of expansion. On the other hand we should take such steps as are necessary to ensure that during this troublesome period, existing levels of turnover are maintained and our present establishments fully employed so that fixed overheads continue to be absorbed. House Building “If full implementation of the National Housing Council’s recommendations is not compatible with the economic situation we should seek to ensure that sufficient of the recommendations are implemented so that the number of houses to be built during the next year does not fall below previous years. Similarly we should endeavour to ensure that the volume of commercial and industrial work released by the programmer, together with government work, is sufficient to maintain existing levels of turn-over. “While present conditions do not provide scope for expansion and progress, they do provide an opportunity for stabilisation, for taking stock of our management and achieving improvement in labour efficiencies during a period of better balance of employment “It is to be hoped when construction volumes begin to increase again we shall retain and apply any such improvements achieved. The Introduction of the Building Programmer in June, 1965, was not without some justification. Construction turnover in 196445 had Increased by 20 per cent over the previous year and since this wu not accompanied by a similar Increase in the gross national product on one hand and in the Industry labour force on the other, we must concede that Government had grounds for concern. “We do not like controls of any sort but we must be realistic. If the demand for building works exceeds the capacity at the industry and the available resources, or is incompatible with sound national economics, then clearly some procedure must be applied to determine priorities. In the present circumstances, however, when the industry is so severely retarded by economic conditions, the present form of control is superfluous. In my view continued representations should be made to the Government accordingly. “The Building Industry Advisory Council has existed for approximately 18 months, but has not as yet produced an effect in the industry. We should make every endeavour to ensure that its principal function is to plan ahead, in terms of a number of years, the required work volume for the industry in an endeavour to minimise the fluctuations to which we are constantly subjected. The council is intended to fulfil this object, but its effective functioning is frustrated by excessive government departmental representation.”