David Shearer – 
I watched a remarkable investigative story on the TV3 programme ‘3D’ recently.
Journalist Michael Morrah focused the spotlight on the way our building hardware market works – and the picture wasn’t good.
New Zealanders have a history and culture of renovating, improving and sometimes even building their own homes.
Prohibitive venture
But every indication seems to show that we are paying too much for building materials. The cost of ‘Do It Yourself’ projects is now prohibitive for many families.
Morrah had figures to show that building a medium-sized family home in New Zealand costs between $280,000 to $315,000. You would be paying much less to build the same home in Australia, between $260,000 and $280,000.
A can of popular white house-paint that costs $84 in New Zealand is $20.79 cheaper across the Tasman.
The real picture
Why? Hardware stores blame our geographic distance. But scratch a little deeper and the real picture emerges.
It looks like murky deals are being struck between building product manufacturers and hardware stores.
For example, if you want to buy plasterboard from Mitre 10, GIB brand plasterboard may be your only option because it is alleged that they have an exclusive supplier deal. This takes away your ability to choose a cheaper product, and keeps prices high.
To make matters worse, suppliers and retailers have been securing the loyalty of Kiwi builders through kick-backs. A major supplier recently sent 150 builders for four days in Sydney for the Bledisloe Cup, staying in luxury at the Sheraton Hotel.
Biased purchase
This means if you hire a builder to work on your home, they may be incentivised not to seek the best prices on your behalf.
In a round-about way, New Zealand consumers are paying for those luxury trips with the mark-ups on their building products.
These and other aggressive market tactics are curtailing competition. Without competition, we are likely to be paying higher prices.
Openness needed
Should these benefits be allowed? If allowed, should they be disclosed? At the moment, it’s all done in secret.
The government knows all about it, but seems to be avoiding the issue rather than confronting it on behalf of Kiwi consumers.
As Labour’s spokesperson for Consumer Affairs, I am taking up the challenge of investigating these practices further.
The more I discover, the less I like what is going on. If you have had experience in this area, please let me know.
New Zealand has always had a proudly independent DIY culture. We love to make improvements to our homes –it is one of the ways in which we show care to our families. We should be able to do it in the way we always have – within a reasonable family budget.
David Shearer is Member of Parliament elected from Mt Albert Constituency in Auckland and is Labour Party’s Spokesperson for Foreign Affairs and Consumer Affairs.
