Brian Rudman: State needs to plug leaks scandal

Some of the blame for leaky homes lies with the lax building standards of the 1990s. Photo / Richard Robinson

Building and Construction Minister Maurice Williamson slammed the phone down when the going got tough during a teleconference with six big city mayors, but refusing to listen to the embarrassing facts is not going to make the leaky homes scandal go away.

Nor will it reduce the Government's responsibility to accept a significant share of blame and liability for the multibillion-dollar scandal affecting up to 55,000 homes.

North Shore Mayor Andrew Williams says the talks broke down after he said the miserly 10 per cent of repair costs the Government was offering to contribute was less than the 12.5 per cent it would get back in goods and services tax.

In other words, the state would make a profit from homeowners' misery.

The minister's offer was the Government would pay 10 per cent of repair costs, home owners 64 per cent and local authorities 26 per cent. To qualify for the 10 per cent, homeowners would have to be poor and over 65, and agree to sign away any legal claim to more.

In an article that appeared in this paper last week, Mr Williams called this "take or leave it" offer "derisory" - and he's dead right.

Even when you add in additional extras that were apparently part of the Government offer, such as interest bill subsidies for those on annual incomes under $76,000 and a universal loan guarantee scheme to help victims access bank finance, this is derisory.

As a result of the recent teleconference bust-up, the mayoral negotiating team has been pared down to just Auckland Mayor John Banks and Wellington's Kerry Prendergast.

The mayors are reportedly holding out for at least a 20 per cent contribution from the government, double Mr Williamson's offer but still a far cry from the initial rescue package put together by the bigger affected cities and endorsed by Local Government New Zealand a year ago.

The proposal then was that homeowners and local councils would each pay 25 per cent of costs, and the Government the other 50 per cent - less anything recouped from the builders and architects who caused the problem.

While in Opposition, National badgered the Labour government to assist the affected property owners financially.

Then building spokesman Nick Smith called Prime Minister Helen Clark "heartless" for blaming council building inspectors for not doing their jobs properly, and saying it would therefore be unfair for taxpayers to have to pick up the bill.

In power, though, National has been no better, even though it has a moral and political responsibility dating back to the permissive Building Act 1991, passed during the Jim Bolger-led National government.

This act was naively based on the premise that developers could be trusted not to cut corners. The government is also responsible for the failings of the inept Commerce Act, which allows shonky builders to slide out of their responsibilities when things turn nasty.

In March last year, National's assistant building spokesman, Bob "The Builder" Clarkson, stood up in Parliament and summed the situation up clearly: "The main cause of the problem was the Department of Housing and Building telling builders what to do, which turned out to be wrong. How can we blame tradesman carpenters for using kiln-dried timber, overlaid with Harditex cladding that had a moisture leakage of 7 per cent, when the department said it was OK to do it that way?"

Seven weeks ago, Mr Clarkson told the Bay of Plenty Times that government must accept its share of blame.

He said 40 per cent of the problem could be blamed on poor workmanship, but 60 per cent of the responsibility lay with the government's Building Industry Authority, which set the building controls.

He said: "The use of kiln-dried timber, which soaked up water, and windows installed without sill trays or flashings - approved by BIA - created the problem."

Builders could nail the exterior cladding to the untreated timber studs, and "when the moisture migrates though the cladding and hits the kiln-dried timber, you are in deep trouble".

He says that before he retired from Parliament last year, he left a proposal in which the government and councils paid 25 per cent of the cost of leaky home repairs.

Homeowners would qualify for a 10-year interest free, government-backed loan for the remaining 50 per cent of costs.

The Clarkson formula is different to the local government-advanced proposal in that it halves the government responsibility, but at least it fronts up to the fact that central government was wrong to introduce the lax building standards of the early 1990s.

Auckland Mayor John Banks is perfectly placed to make this point as a negotiator.

He was a member of the National Cabinet that introduced the flawed Building Act. And he is also a victim of its flaws. A year or so ago, he had to pay $1 million for repairs to the leaky home he then owned in exclusive Paritai Drive.

Fortunately, he was wealthy enough to cope with this financial bombshell. Many of the other 80,000 victims of this national disaster are not.

Mr Williams says he spoke to Mr Key on Friday, and claims the Government has now backed away from its miserly 10 per cent offer.

If upsetting Maurice Williamson over the phone achieved this breakthrough, then congratulations are due to the North Shore mayor.