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Home / Politics

<i>Brian Rudman</i>: Hey you two, here's a way to help

Brian Rudman
By Brian Rudman
Columnist·NZ Herald·
16 Oct, 2008 03:00 PM4 mins to read

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Brian Rudman
Opinion by Brian Rudman
Brian Rudman is a NZ Herald feature writer and columnist.
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KEY POINTS:

With both Labour and National scrambling for innovative ways of kick-starting the economy, why don't they listen to Auckland mayor John Banks's cries for help in the $2.3 billion leaky homes nightmare.

What better way of getting builders back to work, stock moving at the building suppliers -
to say nothing of a reduction in Pharmac's sleeping pills order - than the state coming to the rescue of the 80,000 affected New Zealanders.

This week, a report to Auckland City confirmed its ratepayers face a bill of $321.3 million over the next 12 years for its building inspectorate's short-comings.

As well, ratepayers will be liable for an unknown proportion of the $395.6 million estimated liability of the developers and builders, the actual amount dependent on how many of them manage to squirm out of their obligations by legal trickery.

In Auckland City, the total repair bill is about $1.231 billion, of which owners face paying $514.8 million. Nationwide, the total bill is about double Auckland's.

Mr Banks, who has paid $1 million to repair his leaky Paritai Drive home, and Wellington mayor Kerry Prendergast, have been trying to persuade the Government to adopt a rescue package endorsed by Local Government New Zealand.

Under this, homeowners and councils would each pay 25 per cent of costs and the Government the other half - less anything subsequently recouped from the builders and architects who caused the problem.

But the Government resolutely refuses to accept any liability. In 2005 after the Court of Appeal threw out a claim for damages against the government by 153 leaky home victims of the Sacramento complex in Botany Downs, the Government went after them for $80,000 in court costs.

As for the National Party, it has been increasingly less supportive of the victims as election day approaches.

In July, National's building spokesman, Nick Smith, said it wasn't "sustainable to say this is nothing to do with the government." He said "government is going to have to be part of the solution."

He said Prime Minister Helen Clark's comments that council inspectors had ticked off homes that didn't stand up to scrutiny and that it would be unfair for taxpayers to pick up the bill was "heartless."


A month later Mr Smith sympathised with local government saying "National does not think it is going to be sustainable for local government to be hit with a bill for $1 billion to $1.5 billion." But in the end, tea and sympathy is all he has offered.

Morally and politically, central government can't escape at least part of the blame. It was parliament, under National's Jim Bolger leadership, that passed the permissive 1991 Building Act which was naively based on the risible premise that developers could be trusted not to cut corners.

There's also the Commerce Act which allows the shonky builders to escape their responsibilities when things get sticky. For the central politicians to now sheet all the blame back to cash-strapped and over-stretched council inspectors, is not fair - nor will it get the homes repaired.

Neither will Auckland City's plan to name and shame the guilty developers, however much I like the concept.

A row of stocks in Aotea Square where victims could line up to toss rotten vegetables at the authors of their misery would be delightful entertainment - however Talebanish it might sound to my friends in the Howard League.

This year Justice Geoffrey Venning noted courts routinely, in leaky home type cases, allocate responsibility at between 10 and 25 per cent to councils.

But with "others more directly responsible for the defects, such as as developers, building companies and, in some instances, architects" becoming insolvent, "the burden of meeting the entire judgement is likely to fall on ... individual ratepayers."

He said "whether that is a fair result given the limited responsibility for the defects, and whether it is sustainable long term" was not for his court to address. But it was "an issue that deserves discussion and further consideration" elsewhere.

It certainly does. And an election campaign seems as good a forum as any to get that discussion going.

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