Is gutting a 56-year research fund really worth $65 per home?

A tiny saving with an outsized risk

The Building Amendment Bill has passed its first reading, and with it a plan to repeal the Building Research Levy Act 1969 and move research funding decisions for BRANZ into the hands of MBIE. The headline benefit for homeowners is small: roughly $65 per consent, out of a total $500 levy. The potential downside, according to a strikingly unified industry, is anything but.

Building and Construction Minister Chris Penk announced the reform in September 2025, arguing the 1969 Act is outdated (the levy rate has not changed since 1977), the dual-levy system duplicates paperwork for consent authorities, and a contestable funding model would improve transparency. An MBIE update in July 2026 reaffirmed the changes would “improve oversight of spending and ensure research funding aligns with sector needs and Government priorities.”

On paper, none of that is unreasonable. The problem is what the design actually does.

Modernisation is not the same as repeal

The distinction matters. Building Industry Federation chief executive Julien Leys told RNZ the change would “fundamentally change how the science works, particularly in longitudinal studies” and warned it risks “breaking the chain of trust of research that builders put in the products they’ve tested.” His sharpest line cut to the core of the objection: “Modernisation is different to repeal.”

The concern is structural, not defensive. MBIE already collects the building levy and handles regulation, policy, education and compliance. Under the proposal it would also decide what research gets funded. As Leys put it, “all those investment decisions are then under one government agency and we lose that degree of independent research that really has built up the foundation of science around our product information.”

Infrastructure New Zealand chief executive Nick Leggett, who calls BRANZ a “hidden treasure”, framed the governance flaw bluntly: “How independent can a research agenda be if the funder is also the regulator whose settings and assumptions and policy direction may themselves need to be tested and challenged from time to time?” The risk, he added, is “not about bad faith, but about governance design, and whether uncomfortable questions can be asked, and whether uncomfortable findings can survive.”

Tellingly, when BRANZ interviewed more than 20 industry leaders across insurance, engineering, architecture, building supplies and iwi, not one could identify the problem the change is meant to solve. A construction leader quoted by BusinessDesk in August 2026 summed it up as “a couple of good ideas conflated into a bad one.”

The insurance bill nobody is pricing in

For businesses, the liability angle is where this gets expensive. Insurance Council of New Zealand chief executive Kris Faafoi warned in June 2026 that if materials are “more hazardous or not appropriately tested for NZ conditions… then we could have a Grenfell Towers-type situation on our hands.” Poor building standards drive higher claims, which in turn push reinsurers to reprice or withdraw. In a country that has already lived through the Canterbury earthquakes and the leaky homes crisis, that is not theoretical.

The Grenfell parallel is deliberate. The 2017 London fire killed 72 people using flammable cladding certified by the UK’s Building Research Establishment, the British equivalent of BRANZ. The public inquiry found that privatisation had eroded the BRE’s independence from commercial clients. Critics are not claiming New Zealand is about to repeat it, but that the same structural conditions, funder-regulator capture and loss of independent testing, are what this reform could create.

What is actually at stake

BRANZ is not a lightweight talking shop. Its $40 million fire lab opened in 2025, funded entirely by the levy, and is one of the most advanced in the Southern Hemisphere. It employs 120 staff, 66 of them scientists, engineers and technicians, and has run outdoor exposure sites since the 1990s that track how materials fare in New Zealand’s specific climate. Some datasets now stretch 30-plus years and cannot be recreated cheaply if funding is disrupted. Between 2014 and 2025 the levy delivered $263.26 million in research funding.

The New Zealand Construction Industry Council warned Penk in May 2026 that New Zealand is “one of the most hazard-exposed countries in the world” and that independent building science is “a core risk-management function that protects homeowners, councils, insurers and ultimately taxpayers.”

The government’s diagnosis has merit. Its cure does not match it. Even MBIE’s own regulatory impact statement frames BRANZ’s “almost complete autonomy” as a problem to fix, while offering no answer to the conflict of putting the regulator in charge of research that may need to test its own rules. Submissions on the Bill close 15 November 2026. Industry has a narrow window to demand a model that modernises a 1969 Act without handing MBIE the keys to the science that keeps buildings standing.

Sources

• Decades of building industry research at risk (2026-09-15)
• Building levy repeal sparks fears of another Grenfell (2026-09-15)
• NZ building sector opposes axing of levy for Building Research Association (Branz) (2026-08-10)
• The silent majority speaks – Why industry leaders are questioning the Building Research Levy Act repeal (2026-06-17)
• Industry Warns Against Hasty Dismantling Of New Zealand’s Building Science Foundations (2026-05-26)
• Modernising building research funding (2025-09-14)
• Driving innovation and accountability in building research funding (2026-07-02)