New Zealanders are a nation of gullible suckers. When it comes to matters of commerce they are far too trusting. We believe the most influential cause of this malaise is our ever-growing reliance upon government. Successive governments, at the insistence of the populace, have established codes, rules, regulation, protections ad nauseam for almost all commercial exchanges and contracts. We love our government to nanny us and cocoon us. In New Zealand, government is our idol god.
An unfortunate upshot is that we become far too trusting because we believe in the power and efficacy of government as our protector and provider. The casual "she'll be right" attitude betrays a carelessness burgeoned by a totally misplaced faith in the government's ability and power to take care of us. Most have never heard of the adage caveat emptor; those who have do not know what it means or regard it as obsolete or redundant.
Nine times out of ten the government's nannying intrusions perversely increase the risks. Take the matter of leaky homes--a financial disaster for thousands of New Zealanders. During the nineties and noughties, New Zealanders insouciantly bought leaky homes with reckless abandon. Basically they trusted the builders, and the certifying local councils, and the Building Code. The latter two were institutions of government nannying.
The government had allowed changes to the Building Code for a variety of reasons. Some of them arose from Greenist pressure groups who pushed successfully for the elimination of arsenic treated framing timber. A "green" alternative was mandated--which unfortunately rotted. Other changes were the result of building pressure groups pushing for more trendy fashions in housing, allowing rain to be driven up under eaves and gutters into walls. The great problem with governments is that nannying is shaped by vested interests pressuring politicians who, in turn, always have an eye upon electoral popularity.
Then there were the local body building inspections which allowed corners to be cut. More residential development means more taxation income to fund the ceaseless voracity of local body spending commitments and lusts.
The punters bought shonky houses without for a moment doubting the weather-tightness of their new houses. After all, they were the proud possessors of a local body certificate of fitness.
When it all turned to custard the officials and government agencies all denied any wrongdoing or responsibility. The builders had long gone, or were quickly going to escape liability. Because the calamity was dispersed throughout the country, rather than a focused location of destruction, government was not moved to do much about it.Yet the costs are estimated to be far greater than restoring quake smitten Christchurch.
But the faith of our countrymen in the omni-competence of the state and its nannying is not easily shaken. As a result of the leaky homes disaster, a new layer of government protections, provisions, rules, and controls were promulgated.
Does the government have a role in such matters? Of course. But only as it touches the interests of justice. Breach of contract is a form of theft. The government has a duty to require that commercial obligations and responsibilities are met. But the obligations and responsibilities are those mutually agreed between the contracting parties, not those imposed by state nannying.
Were the government to restrict its policing and adjudication to contract enforcement one immediate outcome would be that New Zealanders would become a whole lot less gullible very quickly. Buyers would be far more prone to asking much harder questions and would get more substantial answers.
In recent days we may have seen a small step in a better direction--although you would not think so, given the media's squawking headlines. Under the heading "Home-owners protection plan axed", the NZ Herald documented an apparent decision (later denied) by the government to drop a compulsory builder's guarantee on homes.
Plans for a compulsory builders' guarantee for quality of work have been ditched from legislation drawn up after the multi-billion dollar leaky building scandal. The warranty was among new consumer support measures proposed in a review of the Building Act last year and expected to be considered by Parliament this year.
But there is no sign of it in the Building Amendment No 3 Bill, which is now before a parliamentary select committee.
The Master Builder's Federation has it right, we believe:
But the Registered Master Builders Federation is pushing an alternative to a mandatory guarantee. Federation chief executive Warwick Quinn said insurance companies in a compulsory scheme in New South Wales collapsed, resulting in the state government being forced to manage and underwrite it.
The federation said that instead of being forced to offer a guarantee, a builder should be required to disclose whether he had the financial backing to offer a guarantee, and on what terms and conditions. "This lets the consumer choose whether to take up a home warranty or not.
"Many home owners do not want a warranty because it is not a high-risk project and they are not interested in paying for it."
Mandatory disclosure is in principle a much better regime than mandated nannying protections. It is consistent with the buyer having a duty and responsibility to do his homework, and respects his rights to be a risk-taker.
The most unregulated market in New Zealand is the on-line TradeMe auction house. Yet quickly it has developed its own conventions for protecting the interests of both buyers and sellers. It illustrates how, when left to their own devices and resources, people quickly become savvy grown-ups. But when the state becomes nanny at our behest, we quickly revert to being children.
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