Tim Dower: Real construction issues come down to incompetence from those in Wellington

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Recorded04 Aug 2022

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Sighs of relief in some quarters after the Commerce Commission report on building supplies came out.ComCom says competition isn't working as well as it could in the sector and a lot of people in the industry said…er...tell us something we didn't know.ComCom also raised the issue of rebates; big volume buyers get a better discount, but is there anything too surprising about that?If you were a big buyer, you'd expect a better price too wouldn't you?There are some comments about restrictive land covenants and exclusive leases, these sound a lot like what we heard in the supermarket report.But overall, the message from this lengthy probe seems to be, you know what, there's nothing much to see here.So has the ComCom missed the glaringly obvious, or are there reasons we pay so much more for building stuff than the Aussies do?People often take pot shots at the bigger companies, with the supermarkets it seems justified as some of their conduct has been appalling.But is it the same in construction?If so, this report hasn't found it.And surely the very nature of a business is that it wants to grow, either by expanding into new markets, or exporting, or coming up with new products, or buying smaller competitors.Funnily enough, it was only last week that ComCom OK'd Fletcher buying up another half a dozen building products stores, and a frame and truss manufacturing plant.So it's obviously not concerned about a large company getting larger.Perhaps the real problems in construction have more to do with incompetent government departments and unwieldy regulations.We've seen it with the Gib crisis; it's not the fault of the few giants dominating that market.It's more about the regulators making it nearly impossible for new competitors to get a foothold.Regulators who, of course, have a monopoly on rule-making.Perhaps ComCom could achieve more if it looked at the competence, or lack of it, in some of those office towers in Wellington.See omnystudio.com/listener for privacy information.

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