Marama Davidson - Question to Minister of Housing and Urban Development

Why is the Minister looking to overseas companies to prefabricate KiwiBuild homes; and what is he doing to promote as much New Zealand-based manufacture as possible?



Hon PHIL TWYFORD (Minister of Housing and Urban Development): The announcement I made on Saturday was that KiwiBuild will look to support the expansion of off-site manufacturing to supply the affordable homes that New Zealanders need. I've met with New Zealand companies involved in off-site manufacturing and PrefabNZ to discuss possibilities, and I'm confident that we will see more housing factories opening in New Zealand. This is not about importing prefab components wholesale. It is the overseas technology and investment that we're interested in, and opportunities for companies here to partner with overseas firms to use that technology in factories here, as companies like Concision are already doing. We are going to use KiwiBuild to grow a more competitive and innovative construction industry.

Marama Davidson: What is the Minister doing to develop that technological capacity within New Zealand?

Hon PHIL TWYFORD: KiwiBuild offers a once-in-a-generation opportunity to aggregate the scale of housing orders that we've never, ever seen in New Zealand. It offers the potential for orders of several thousand homes per year, with multi-year contracts, so firms can then invest in the technology, the plant, and the workforce to do off-site manufacturing at scale.

Anahila Kanongata'a-Suisuiki: Supplementary? Tēnā koe, e Te Mana Whakawā.

Mr SPEAKER: I actually didn't call the member. When I call a member I use her name.

Marama Davidson: Will the Minister commit to prioritising local training and employment opportunities and supporting our own industry to deliver KiwiBuild homes in the future?

Hon PHIL TWYFORD: Yes, I'm happy to make that commitment. Apart from building large numbers of affordable, modest, starter homes for young families, one of the primary goals of the KiwiBuild policy is to actually build a more innovative and efficient construction industry. We want to grow the New Zealand construction industry and provide the jobs and opportunities that young Kiwis need, but we're not averse to working with overseas investors and companies to partner with New Zealand firms to do that.

Anahila Kanongata'a-Suisuiki: Tēnā koe. Will the use of off-site manufacturing reduce the cost of KiwiBuild homes?

Hon PHIL TWYFORD: Yes, it will. The international benchmark for off-site manufacturing at scale is $1,200 a square metre, which is approximately half the typical build cost in New Zealand. Build costs have gone up 30 percent in New Zealand in the last decade and are running at three times the rate of inflation. Increased use of off-site manufacturing will help us make KiwiBuild homes cheaper, at high quality, and build them more quickly.

Marama Davidson: Is he committed to supporting local initiatives like Kāinga Ora, who are ready and waiting for the opportunity to provide training and employment for prefab manufacture in places like Kaikohe, Whanganui, and the East Coast but are waiting for Government support?

Hon PHIL TWYFORD: Yes, I welcome the enthusiasm that organisation has. I've also had very positive conversations with PrefabNZ; with the New Zealand Superannuation Fund, who are interested in investing in large-scale off-site manufacturing; and local entrepreneurs such as 2degree founder Tex Edwards. Rotorua-based timber processor Red Stag Timber recently announced ambitious plans for a cross-laminated timber factory, and Fletcher Building only last week announced plans for a housing factory because, in their own words, they are keen to supply KiwiBuild. I am confident that this initiative will provide substantial opportunities for local firms.