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Free Market Failure

Written By: - Date published: 9:38 am, February 27th, 2010 - 56 comments
Categories: business, capitalism, housing - Tags:

It’s time for the National Party to issue an abject apology to the nation… for the 1992 Building Regulations that directly led to the astounding public crisis we now face.

Building and Construction Minister Maurice Williamson told the Weekend Herald the official $11 billion figure – which experts believe is half the true cost – was about what the Government spent each year on health or education.

“It’s simply ginormous. A Government who’s running very large surpluses would still struggle to find the money to help with this.

“But a Government who’s running deficits – and has a forecast track of deficits for many years out – has to just sit there with its head in its hands, saying, ‘Well, I just don’t how to do this’.”

Herald

Further down the article we find that the $11b number bandied about over the last few months was a lie; an independent PWC report commissioned by the govt put the cost at $23b, stating that 90% of homes built between 1992 and 2005 would fail badly. They determined that this affected some 89,000 homes at an average cost of $300,000. And that does not include all the commercial, industrial and public buildings that will also fail. Of course the Nats baulked at this and more or less halved the number they put out to the public at the time.

The vast majority – between 80 and 100 per cent – of homes built with monolithic claddings (seamless-looking sheets finished with paint or plaster) would fail within 15 years.

That style of building accounted for the majority of the 150,000 odd buildings erected in the 17 year period concerned… and most of them will fail, if not already, then very soon. Spending $300,000 on each to remediate/demolish and rebuild is a potential total cost in the range of $30-40b. Given that the acknowledged number attached to this crisis keeps on doubling every year or so, this projection is not unreasonable.

The govt cannot and will not be able to afford this. It will have to come out of ratepayers pockets, or the losses born directly by those ratepayers unfortunate enough to have been conned into buying one of these timebombs. $40b spread over roughly 1m urban ratepayers, over 20 years, is an average increase of $2,000 pa … on top of existing rates. So much for tax cuts.

The Minister in a rare moment of candour admits this:

If they have to face the true liability of what’s working its way through the system now, you will see rate increases in some of those areas of proportions that would make your eyes water.”

As I recall the changes to the Building Regs were controversial at the time, National was clearly warned that what they were proposing was a recipe for disaster, and that disaster has arrived with bells on. What I want is an apology from National, an admission that their incompetence created this mess.. and an open repudiation of the failed ideology that underpinned it.

56 comments on “Free Market Failure”

  1. Descendant Of Smith 1

    I’d like to see an apology from all those crap developers and builders who built the rubbish. Private enterprise at it’s worst.

    Of course some people were stupid enough to buy these homes as well.

    • RedLogix 1.1

      Of course some people were stupid enough to buy these homes as well.

      Tempting to say that, after all personally I was always aware of the issue (all the units I have built were in permanent materials and my favourite by far is Timbercrete)… but then most people don’t have my level of technical education and experience.

      Labelling them ‘stupid’ is really just ‘blaming the victim’.

      • Herodotus 1.1.1

        I am aware of good builders who also broght what has turned out to be crap developemnts in Takapuna, Orewa, Manukau. So if sound builders were buying them what could be expected from the average Joe Mugg?
        I have heard comments over the last 10+ years of boring Brick & Tiled ‘burbs at least the buildings accepted that water will get in and have a system that allows for it to also get out naturally.
        And to JD I agree yet the JH and CHH and the likes have got away with it, also CVHH for selling under spec timber for trusses, and for $250m sales they get slapped with a $1m fine. Greatto see Karma working as Tui would say NOT !!

    • DeeDub 1.2

      You really can’t blame developers for sticking to the letter of the new laws at the time, can you? Isn’t that what regulations are there to control? Or slacken control in this case?

      As for the buyers, surely they had a right to trust and expect that the government wouldn’t do anything that would allow the erosion of building standards just to make cheap get-rich-quick developments easier for shonky developers? ie. “Everyone is building ‘em this way and the government says that’s fine so………..”

      captcha: collapse

    • prism 1.3

      Smith
      “Of course some people were stupid enough to buy these homes as well.”

      Smith is a surname that implied a competent tradesperson. You are bringing the name into disrepute with your own stupid remark. Of course people had no concept that they were buying shoddy gimcrack housing and that they couldn’t trust so-called experienced builders and entrepreneurs to build to what has been an expected standard.
      They also did not comprehend that government could be so lax, irresponsible, short-sighted and ideologically driven that they would introduce laws that would encourage such shit to happen.

    • Draco T Bastard 1.4

      Of course some people were stupid enough to buy these homes as well.

      Can’t blame the buyers. As I’ve repeatedly said, the free-market requires one of either two things: Everyone to be omnipotent or to be highly regulated. The first is impossible so that leaves us with the second. The regulations are there to ensure that everybody is working with the same, and correct as known at the time, information so that people can trust what they’re buying without having to do a degree at university and a full research thesis on what they want to buy. A legislated decrease in standards is what lead to the leaky homes syndrome.

      National shouldn’t just be apologising for it, they should be paying the bill – all $40b.

  2. And like that’s going to happen.
    What still disgusts me is that the real problem has still not been addressed. We’ve had it’s the untreated timber, it’s the builder , it’s the style, it’s the councils, it’s the everyone else stupid but not the real reason. Cladding, cladding, cladding. It’s the cladding stupid.

  3. Having just arrived from the UK and bought a ’50s house for renovation and extension I couldn’t believe what my builder was telling me about untreated timber. It was so patently stupid that I said, “no way”, and made sure ever stick of timber he used was treated despite the relatively small extra cost.

    Perhaps while they are about it National will also apologise for the 1999 power industry reforms which have led to nice fat capital gains and dividends to the holders of power co. shares (disclosure: I made sure I grabbed all that I could afford at the time, thanks Max) ever escalating power prices and regular power shortages.

  4. Anthony Karinski 4

    Fat chance.

    Btw Labour should apologise for starting the whole mess back in 84. Without that, NZ wouldnt be where it is today. Saw Goff was unrepentant for the whole thing in an interview a while back claiming that even during the ravages of Douglas Labour always had the working class in mind. Tosser.

    • >>Anthony Btw Labour should apologise for starting the whole mess back in 84

      But this was the response to Muldoons admin.

    • prism 4.2

      Anthony K Can’t blame Labour for a law brought in by National who were very pleased to take over from Labour who were left by Muldoon with a collapsing economy while he refused to hand over the reins like the little dictator he was. When National got in they drove the changes further and harder.

    • Anthony Karinski 4.3

      I’m not saying National is not to blame for this particular crisis. But Labour is implicit as they got the ball rolling and prepared the ground for National to take things along further. In all honesty the same Labourites (among them Goff) would in all likelihood have implemented a similar policy had they stayed in power, as it fitted their ideological mantra.

      What gets me is that Goff can be so caught up in his own ego that he still claims he did it for the good of middle NZ. If that’s typical of the insight and humility he’s capable of he’s certainly not fit to run the country. Why not own up to his mistakes and on the back of that ‘profound’ insight stick it to JK and the nats. “I did this, this and this wrong and it stuffed up our country like this, this and this. I’ve learned from my mistakes and would do this, this and this instead of JK who is still repeating my mistakes” Instead he just wobbles along. Opposed to the super shitty, opposed to the gst hike etc. Will he do anything to change it if he ever forms government? Shifty, shifty and no definite answer. Fail.

      He could have offered an opposing outline of how he sees the new super city, how he would have structured and implemented it if Labour was the government – consultation, referendum? and used the media to drive a clear and definitive wedge between the nats and labour. “70% of aucklanders prefer labours alternative super city plan versus nats etc”. And make some god damn commitment as to what he will do to change the super city if he gets to govern. All quiet and uncertain on the left front.

  5. Stacktwo 5

    Great post, Redlogix. Another crack in National’s teflon, which will fail completely in much less than the life of a leaky building.

    But, Smith’s Descendant, I wouldn’t blame the buyers. Not everyone has studied building technology, and Mr and Mrs Average should have been entitled to trust the “experts” – they couldn’t even google their decision making as we can now.

  6. vto 6

    Treated timber? I hate the stuff. Anyone remember the formaldehyde (sp?) or whatever it was a couple decades ago in flooring? Seeping out and poisoning the inhabitants?

    Think it wont happen with the timber in the walls of your childrens bedrooms? All that heinous poison no going anywhere? The people that handle the stuff have to dress like spacemen to avoid poisoning.

    Avoid treated timber. It is a future poisoning hazard…

  7. Adrian 7

    Formaldehyde is a naturaly occuring component of timber, thats the “keroseny” smell you get in some wood, the problem with it was that monoclad hermetically sealed houses didn’t let it disperse into the atmosphere as it has done since the first tree fell over. Nothing to do with treatment, boron (ironicly) treatment is needed to stop borer eating your house down. Or you could use rimu.

  8. Bill 8

    I know!

    Why not retrofit all the leaky buildings with impermeable plastic and then the moisture won’t get in and…oh

  9. Adrian 9

    Boron( gasp, chemicals again) by the way, is a naturally occuring component of earth. If you want to avoid chemicals for Gods sake don’t go gardening or grow anything in it.

    [Arsenic is also a naturally occuring element. Feel free to consume liberally. Lay off the dumbass threadjack. RL]

    • RedLogix 9.1

      is a naturally occuring component of earth

      So is arsenic. Feel free to consume liberally.

      Lay off the dumbass threadjack.

  10. randal 10

    hey rdlgx.
    they need to apologise for everything.
    when national was in power in the nineties they buggered everything they touched as they blundered about in a fever pitch or irrationality that somehow meant money for all their mates.
    they buggered the : schools, the airforce, the police, the universities, everything.
    congratulations to the people who held off settling their leaky houses because now they can grill the perpertrators who cooked the whole thing up in the first place.

  11. r0b 11

    I was planning to do a post on this – but glad you beat me to it – yours is much better! “What I want is an apology from National, an admission that their incompetence created this mess.. and an open repudiation of the failed ideology that underpinned it.” Damn right.

  12. Herodotus 12

    There is no mess and accroding to Helen in 2002 this issue has ben overplayed and is not that grea, this was followed up in the remainder of the last govt by their action or more pertinently their lack of action. I see that some what to point the blame at Nat yet where was the motive to change anything from Lab, as according to est 1/10 up to 1/3 of all houses built within the Lab time in govt will not stand the test of time. This is a sorry state whereby yet again NZ is the loser from very poor politicians on all sides and govt agencies e.g. Branz NZ. The issue has grown so great that there is no real solution to remedy the issue for those trapped within the system.
    Where were the authorities re CHH and the timber , I would think on a risk-reward basis to con the market for $250m and incur a $1m fine just shows how govt agencies work for us !!

    • RedLogix 12.1

      There is no mess and accroding to Helen in 2002 this issue has ben overplayed

      And at the time pretty much in line with the official information available. HC would have been unwise to have strayed too far from that advice, especially in a matter in which she had no direct expertise. More broadly speaking I was dissapointed that the Labour Cabinet, Ministry Officials and the industry as a whole chose the very conservative line they did in the face of contradicting evidence … for so very long.

      • Herodotus 12.1.1

        No at the time many within the industry were extrememly aware of the issue and that it was far greater than initial reports. Many including govt would have been aware of this but did not want to acknowlege the fact just hoping above all hope. Sure building standards were changed (perhaps not for the best) but where is the comeback on Branz and the manufacturers and their claims on their product. There is a rumour that certain asuie coys that their records displayed flashing sales did not marry up with metres of cladding sold.
        With section sizes reducing there is a compulsion for houses to be built 2 levels to comply with site coverage rules. Most houses the 2nd level is plastered as the cost to build in brick is prohibitative. Sure many that dont leak will have weaknesses but these will be managed by the likes of having eaves, and the ground floor being brick and cavities.
        NZ runs despite what Wellington does, unfortunelty “NZ” will work away around this inspite of the many obstacles that are put in place. Perhaps this is another reason for a true version of self rule !!!
        If a house leaks treated timber does not solve the issue, it just prolongs the time before the effect of water is noticed. How is ot that pre 60’s wooden houses still survive outside the widow frames rotting away, many cases in central Ak before timber was conditioned, admittwly they did use some great native timber to build not this soft Rad Pine.

        • RedLogix 12.1.1.1

          No at the time many within the industry were extrememly aware of the issue and that it was far greater than initial reports.

          These things take time and for every expert pointing out the potential magnitude of the problem, there were several others covering their self-interest by minimising it. By 2004/5 Labour of course DID recognise the problem and the 2005 Building Act introduced substantial changes in a direct response to the problem.

          Now of course everyone in the industry is moaning about ‘compliance costs”.

          The simple fact is that our building industry is economically locked into pinus radiata, which in the long run is entirely unsuitable for anything other than non-load bearing internal partitions and trimmings.

          Personally I’m very scathing of much of NZ’s building industry….competency, integrity and value for money are in short supply… but ultimately it was the 90’s National govt that was responsible for the 1992 Building Act. It was that govt which failed at the helm.

          While the individual Ministers and officials responsible for this debacle are long gone, the bankrupt ..gimcrack… thinking which lead directly to it, is back in power.

          • Herodotus 12.1.1.1.1

            I still remember when this story broke Tim Manning appearing on Holmes TV1, pity this is still not available it was great viewing of the issues and how the industry was to be fixed, funny thing is that all the parties are still there except Branz and the likes of Mr Manning

  13. Frank Macskasy 13

    Over thirty years ago…

    Electricity, telephones, and rail were all state-owned.

    We built huge hydro power stations and lines to carry electricity
    around the country. We didn’t have massive power blackouts.

    We built phone lines from Stewart Islnd to Cape Reinga; the system was
    run by the post office – and it worked! (And no, I can’t recall the
    Post Office taking a month to set up a new phone. I wonder where that
    story came from? Telecom?)

    Our power and phone bills were bi-monthly and did not cripple our bank accounts.

    Our railway system ran on time and didn’t break down with monotonous
    regularity. We employed tradespeople to service the lines, carriages,
    and stations. There were actually SIGNS at each station, so passengers
    knew where to dis-embark.

    Then, in the late ’80s and ’90s, we sold the whole lot off to private
    enterprise (or turned them into several SOEs) – because “competition”
    was good. Prices would drop. Service would be more efficient.

    What we got was;

    * rising prices

    * breakdowns

    * less service

    * and automated machines telling us, “Press 27 if you want your arse scratched”.

    Once upon a time, we built all this infrastructure.

    Today, we can’t even build “Party Central” on Queen’s Wharf in Auckland.

    In other words, we can’t even organise a piss up anymore…

    • Ag 13.1

      It’s not as if we cannot afford it. People would rather spend the money on things like cars and plasma screens, and, across the English speaking world, have voted against parties that propose to restore the tax rate to a sane level.

      In the end the blame lies with the voters, who have had several opportunities to signal a return to sane policy, but who wished to have their cake and eat it too. Now we’ll get another few years of the electorate living in denial and refusing to sanction the increases in taxation required to get out of this mess. We need a proper government and proper public services. These things are necessary and cost money. Anderton was one of the few politicians honest enough to point this out in public.

    • Every word you have said is true Frank I well remember when my State advanced morgage was allowed our house was built to a very high standard.
      The building inspector was dreaded by even the best builder. Our builder called him “Your Friend ” and indeed after nearly fifty years our inexpensive “Working Class” house is the envy of many. Still in good condition . Now the houses I see are expensive ,way beyond the average wage earner and sheer crap.The next Labour government would do well to bring back some form of State Loans again with the same stringent building conditions.

      • A Nonny Moose 13.2.1

        “The next Labour government would do well to bring back some form of State Loans again”

        With the same 20% interest rate, while you’re getting all reminiscent for the “good old days”?

        • D14 13.2.1.1

          >With the same 20% interest rate, while you’re getting all reminiscent for the “good old days’?
          Nope, we had a 3% state loan and 14% second mort. in about 1983

  14. Descendant Of Smith 14

    When I said some people were stupid I actually meant “some people”. I didn’t mean to imply all people or even a majority of people. I know quite a few people who against all prevailing advice went for the lower cost cheaper option when other good builders gave them good quality advice and in some cases told them directly the houses they were looking to buy would have problems of this sort..

    I fully accept their were other people who were not given advice and who were reliant solely on their builders.

    I also have family who were in the building trade during the time that these buildings were built and have never built a leaky building in this way and actually refused to do work in many of these developments because of the lack of expertise and skill and the way the subcontracting was being carried out.

    They continued to maintain high standards regardless of any government regulation.

    I don’t see however that those who purchased these properties should take no responsibility either. Buying a house isn’t like buying a DVD player from a video shop and some care needs to be taken.

    It would be nice if the people who actually built them were held to account and were made to fix their shoddy workmanship.

    • RedLogix 14.1

      It would be nice if the people who actually built them were held to account and were made to fix their shoddy workmanship.

      Which flies in the face of how modern buildings are built. These days the ‘builder’ hardly ever actual lifts so much as a hammer. It’s almost all done by others from the site works, the foundations, the framing, the roofing, the windows, the cladding, the fitout and painting… all subcontracted.

      Usually these subbies are poorly paid and are total strawmen when it comes to attempting to sue them or hold them to account for their specific failings in workmanship. How do hold someone accountable for a $300k failure when they were only paid something like $5-20k for their portion of it?

      Worse still because the building process is deeply inter-dependent on the performance of many systems and other people, the whole exercise degenerates into a round of endless fingerpointing.

      • Descendant Of Smith 14.1.1

        I’m seeing I have to be very particular with my language today – obviously the smithing comment also refers to word smithing.

        I did think it was self evident that by people who built them I meant the actual firms/builders paid by the owner to build their house rather than the individual workers. I don’t think it is usual practice to have the workers of a firm personally liable.

        • RedLogix 14.1.1.1

          I don’t think it is usual practice to have the workers of a firm personally liable.

          You miss the point; these tasks are not done by the builder’s employees, rather they are independent sub-contractors.

          Attempting to sue even the builder, who may have made only $15-30k on the build, is not likely to yield a satisfactory outcome… assuming the company still exists or he hasn’t shot through to Aussie. If was a case a few dozen buildings going wrong in the ordinary way, you would have a case to hold individual builders responsible, but with a crisis of this scale it’s very hard to pin down any one party in the chain, designer, builder, specifiers, sub-contractors, inspectors…who could realistically make things right. No-one standing has pockets deep enough.

          In my mind the most directly culpable parties by far were the big building suppliers like Hardies who aggressively marketed these faulty systems despite abundant evidence from Canada that they would not be satisfactory. As usual with capitalism, they’ve privatised the profits and socialised the losses.

          But overarching this still remains the fact that it was a National govt, blinded by an ideology that ‘the market would sort it all out’… who set in place the regime under which this took place.

    • RedLogix 15.1

      Yes… that’s an aspect I left out in the interests of brevity.

      The problems with these building methods were well known from Canadian experience, especially in Vancouver, well before 1992.

      National could never have used the ‘no-one knew’ excuse.

    • RedLogix 16.1

      Peter Cresswell clearly knows a lot about the industry, but his conclusions are pre-formed by his libertarian viewpoint. His argument is demolished by two of his commenters, but in essence Cresswell’s argument that the crisis was caused because of regulation and by implication would not have happened if there had been no regulation at all… is just so much drivelling tosh.

      The average person has no inkling of modern building materials and science. In all complex societies we rely on specialists and we cannot enter into contracts on symmetrically informed basis. We rely on specialists telling us the truth.

      By 1990 it was apparent that the Building Codes and Regs needed updating to cope with the rapidly changing materials and methods being pushed by various big industry players, Hardies, CHH and Fletchers being the main culprits. It was argued that the ‘free market’ knew best and that the old prescriptive NZ3604 Code that mandated a limited palette of methods and materials was too ‘bureaucratic’ and restrictive.

      In its place a whole new regime that ‘described’ the desired outcomes was put in it’s place. Fundamentally this was a good idea; but as with all National govts the implemetation was a fuck up. It relied on the average Joe Public being able to trust what the information being given to them by specialists, and the gatekeeper was meant to be BRANZ.

      Unfortunately BRANZ was always an underfunded little outfit, stuck out in the backwaters of rural Porirua, with modest testing resources and less regulatory clout. Although dedicated staff did a lot of good work in many areas of research; fundamentally the big industry players seemed to have bulldozed rings around them. In particular it is very hard to understand how some Approvals were issued for systems that even at the time the was good evidence to suggest were suspect.

      This disaster occured on National’s watch. It rates even bigger than the sale of NZR and Telecom in terms of it’s deleterious effect on this nation. Only Muldoon’s raping of Labour’s first Superannuation scheme ranks higher in terms of it’s impact.

      Time they got to wear it.

      • Quoth the Raven 16.1.1

        And your conclusions are not pre-formed by your bias. What I get from your comment just been and PC’s arugment and his personal experience was that this issue is far more complex than the simple story people have put forth about ‘deregulation’. I would hope that is the image most people would get if they read around with an open mind.

    • Draco T Bastard 16.2

      Ok, so, after reading that the problem was cronyism, the wrong regulations caused by that cronyism, materials passed that shouldn’t have been also due to the cronyism and, finally, the break down of the apprentice system which stopped people learning how to build houses.

      Want to build a balustrade? The new Building Code told you (and still does) how you’re allowed to do it, right down to the size of bolts and the spacing of balusters.

      So anyone who can read can build a balustrade without going to an architect and/or a civil engineer? This guy, if he was actually supportive of a free-market, should be cheering this on.

      Want to specify the timber you’re going to build your house with? The standards specified under the new Building Code told you (and still do) what timber you’re allowed to use where. Want to install a cladding system? The new Building Code told you (and still does) what hoops you have to jump through before you’re allowed to.

      Use of Carter’s and Fletcher’s dry-frame timber in wall framing was allowed because a committee of the New Zealand Standards Authority decided that it should be (and sitting on that committee were representatives of, you guessed it, Carters and Fletchers) and because the boys from BRANZ issued an “appraisal’ declaring it to be fit for that purpose.

      This is where the regulations broke down and that was due to the above mentioned cronyism. The big commercial guys had representatives on the board of BRANZ and so sub-standard materials got passed. What a surprise.

      Now, what would have happened if the people who were supposed to be doing the research were actually doing the research and not taking the research by the producers at face value?

  15. reddy 17

    what I want to know is how has this not stuck with the Nats politically. and how has it not completely failed the ideology of deregulation and hands off?

    We still haven’t paid off the fuck ups from last time we had these pricks in. How long is it going to take (if ever) to fix up mined National Parks, ACC, primary schools, superannuation, kiwisaver etc etc…

    why are the councils getting pinged with it and not the Nats? it should be linked with the doing away of apprenticeships etc etc etc…as their unwanted legacy, that after 9 years and a affable smile has been forgotten.

    • Well you may ask Reddy , It has baffled me for years . Of course people have short memories and many do not have, and do not want, a grasp of politics. Having said that the reason this bloody awful lot get away with so much is the brilliance of Textor -Crosby . The excellent continuous positive publicity T/C manage for the Nats is mind-boggling . Even at electorate level. This combined with the Right Wing media give the Nats a big advantage.
      The problem looming up is that they will be working for the Political Right (if they are not already ) in the up coming Super City elections.
      Im hoping that our people are aware of this and are taking action.

  16. Chris 18

    RedLogix – are you reading my FB posts?

    • Chris 18.1

      RedLogix – are you reading my FB posts? I posted about this very issue at about 8.30am this morning, and one hour later you are writing about it. Glad to know that someone is reading my posts!

      • RedLogix 18.1.1

        No I posted independently, but I’ve commented on the thread. Interesting to see the indefatigable McShane still defending the indefensible.

        • Chris 18.1.1.1

          Well I’m pleased that someone else other than me can see what the real issue is; the nat’s by their blinkered ideology caused this 11 billion dollar problem – they should pay it all.

  17. JMK 19

    The leaky building issue is the best argument I’ve heard against unfettered free markets.

    But, fun as it is to watch politicians pass the blame to the other parties, as a leaky home owner all I’m really interested in is who has the best plan to fix the situation. I don’t see Labour coming up with anything on this at all – when they come up with a realistic plan, they will be a credible government in waiting. Until then, I’m not too unhappy with National’s approach to the problem – they have at least tried to quantify it!

  18. yep. I was just pretty much starting to learn to analyse politics for myself at the time, and I distinctly recall the contention at the time that ‘the market will sort it out’. Specifically, that builders and developers who built shoddy buildings would be punished by the market and that the invisible hand would take care of things.

    Invisible hand all right; Jesus H, they must be tired of laughing by now…

  19. handle 21

    RB, when you say “from Canadian experience” you are assuming the numpties believe in evidence. No sign of that in other areas like climate change, public transport, education and ACC is there? Leaky buildings are a classic example of the small government bollocks we were subjected to for 15 years in a very expensive experiment (and I agree with your other examples).

    Post-1999 Labour governments also knew about this and did worse than nothing. Disbanding BRANZ so there was no government agency left to sue was downright cowardly. Maybe allowing an unsustainable property boom was out of guilt?

  20. handle 22

    Meanwhile, the invisible hand was too busy pleasuring dodgy developers and captains of industry.

  21. SPC 23

    I suppose in the end Phil Heatley found his inability to keep within the ministerial spending rules had one good point, it allowed him to escape this issue – and perhaps they needed someone really really right wing on this anyway.

    And has anyone wondered about the relationship between the super city in Auckland and leaky homes.

    One thing the super city does is bring in more ratepayers to share the cost of the local government expense.

    Another thing it does is bring in an easier course to offering these ratepayers a choice – a huge increase in their rates bill or slashing jobs – privatising services and selling assets to pay for their share of the leaky homes bill.

    With this precedent in place more of the cost of leaky homes can be offloaded onto councils nationwide – a super city in Wellington and generally slashing jobs and privatising services as the chosen (Auckland) model for affordability.

    If they are successful in that, it would be an easier course to affording a slashing of the top rate of tax for a certain few nationwide.

    Thus the link between the super city in Auckland, leaky homes and the May budget.

  22. Thomas 24

    Hi
    While I agree about free market ideals causing the problem 300K per house is a ridiculous overstatement. You could bowl and rebuild the overwhelming majority of houses built in the 90’s for much less than that. CHH and others should be made liable and the people trying to make their fortune out of “fixing” leaky homes should also be reined in. Customers are not totally blameless either. Many times we quoted on a building or renovation or said to customers do not do it this way it will need repairs or replacement within ten years. In most cases they would knowingly engage a cheaper builder who was prepared to cut corners. A comment was often made that “we will have sold the house within ten years” Don;t even get me started on botchups by owners or other builders we eventually repaired. Many good tradesmen have left for Australia because the “market” in NZ is rigged so real tradesmen cannot get payment commensurate with the skills required. Big companies with dodgy half trained employees get the contracts. They should be required to have a ratio of qualified to unqualified builders on site.

    • Draco T Bastard 24.1

      Many good tradesmen have left for Australia because the “market’ in NZ is rigged so real tradesmen cannot get payment commensurate with the skills required. Big companies with dodgy half trained employees get the contracts.

      Apparently, the going rate for a qualified carpenter ATM is ~$15+GST. If the companies can’t hire carpenters at that rate, which they can’t, they hire hammer hands and say that they’re carpenters. Quality isn’t any more a part of today’s buildings than it was in 1990s. The big companies are still selling dodgy materials (materials that are banned in other parts of the world), they still take no responsibility for those materials being worthless and no one in government is doing a damned thing about it.

      They should be required to have a ratio of qualified to unqualified builders on site.

      That would be a good start.

  23. RedLogix 25

    You could bowl and rebuild the overwhelming majority of houses built in the 90’s for much less than that.

    Agreed. There are a lot of questions to be asked around this process. Of course re-cladding in permanent materials is not always as simple as it appears. For a start there may well be a lot of structural remedial work to be done, then all the details around doors, windows, decks etc will need major re-work. The reality is that repairs are always far less efficient than building new; labour costs are probably 2-3 times higher.

    At the same time $300k is a very big number and if the govt actually pulled finger and put in place an organisation capable of training people, sourcing materials and generally facilitating the process I’d agree that it could be done for less.

    Trouble is, this bunch of shiny-arses in govt can’t build a cycleway and are even on track for a fail at the RWC piss-up.

  24. Armchair Critic 26

    Great post RL, very thought-provoking.
    “Trouble is, this bunch of shiny-arses in govt can’t build a cycleway and are even on track for a fail at the RWC piss-up”
    Not to mention acknowledging they made a mistake.
    The thing that has me absolutley stumped is the litigious approach to the issue. The whole thing seems to revolve around determing who, or which ideology, is to blame, as if knowing will fix the problem. It won’t.
    Looking for multiple parties to resolve the issue is, IMO, pointless. The developers are mostly long gone, councils do not have the ability to fund this, it’s really down to whichever government has the moral courage to do the right thing, and make up for this horrible combination of mistakes National foisted upon us. Otherwise the houses will rot around their owners, losing everything except their land value and ruining their owner’s health.
    I’m guessing the $23b is an estimate of the direct costs and does not include indirect costs.

  25. Free Market never worked and only allowed monopoly by huge corporations whereby huge bonuses were given CEO’s as a reward to those who came up with the scams that made the most.

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    The Daily Blog | 27-09
  • Cunliffe vs Robertson – Round 2
    Much to the disappointment of the NZ Herald and other right wing pundits who have decided they would like to appoint the next Labour leader, Cunliffe has surprised by deciding to damn the Caucus and appeal directly to the members...
    The Daily Blog | 27-09
  • The tasks before the left and labour movement
    Anyone on the left would have been disappointed at the result of the election. There was an opportunity to win, but that got lost through a combination of factors. There were tactical decisions made by Labour, the Greens and Internet-Mana...
    The Daily Blog | 27-09
  • From Fiji’s dictatorship to ‘democracy’ – the AUT student team on t...
    Mads Anneberg’s profile on Ricardo Morris and Repúblika. David Robie also blogs at Café Pacific. THREE STUDENTS from AUT University covered Fiji’s historic “from dictatorship to democracy” general election this month. While the election arguably legitimised Voreqe Bainimarama’s so-called 2006...
    The Daily Blog | 27-09
  • David Cunliffe Resigns As Labour Leader – Forces Robertson Out of the Bel...
    David Cunliffe has made a smart move, resigning as the leader of the Labour Party so as to force a leadership primary campaign. The move draws rival Grant Robertson out of the beltway to parts of the country where he...
    The Daily Blog | 27-09
  • Deep thought vs Deep prejudice
    . . This letter to the editor appeared in The Listener, on 27 September, and caught my attention; . . Mr Dawson wrote in response to one of those typically unthinking comments which  condemned the poor for their “unbridled, reckless...
    The Daily Blog | 27-09
  • The NZ National voters elected
    The NZ National voters elected...
    The Daily Blog | 26-09
  • GUEST BLOG: Kate Davis – The post election postmortem is giving me post p...
    I feel the need to contribute to the discourse. This is a new experience for me. Not having an opinion, but expressing it on a popular forum in a public sphere. That’s why I have waited till now and put...
    The Daily Blog | 26-09
  • A dictionary of education terms and definitions, brought to you by the let...
    Free to all TDB readers, please enjoy your very own cut-out-and-keep handy primer of terms that I predict you will need to know over the next three years… Achievement Gap (noun) Synonym for wealth gap. ACT (abstract noun) Intangible. Reported to exist in...
    The Daily Blog | 26-09
  • A Mines Rescue brigadesman’s perspective on the Pike River Mine
    My husband and I lived in Greymouth in 2010, we were a coal mining family.  The day Pike River Mine blew up and the days following changed us profoundly, as it did for so many.  This is a Mines Rescue...
    The Daily Blog | 26-09
  • The Left Triumphant! A Counterfactual History of the Last Twelve Months.
    DID IT REALLY HAVE TO END LIKE THIS? Reading through the commentary threads of the left-wing blogs it is impossible to not feel the anger; the sense of betrayal; the impression of having had something vital ripped from their grasp;...
    The Daily Blog | 26-09
  • GUEST BLOG – Myles Thomas: The media won it!
    Make no mistake, John Key is a clever communicator – reasonable, authoritative and relaxed – but without the media he wouldn’t be PM. Depending on your viewpoint, New Zealand’s news media are either a bunch of Grey Lynn lefties or...
    The Daily Blog | 25-09
  • Not Learning Lessons Past: the West’s Response to IS
    In an earlier posting Ukraine, United Kingdom, Ireland, Scotland, I noted that the first lesson of conflict learned by Robert McNamara was “understand your adversary”. If we have honourable objectives, our first and most important weapon is empathy. In the Vietnam War,...
    The Daily Blog | 25-09
  • GUEST BLOG: Dr Jarrod Gilbert – Proof of David Farrar’s deception: my ...
    In the lead up to the election the Minister of Corrections Anne Tolley launched a gang policy. In order to justify the government’s approach she used gang figures that overstated the gang problem. Not by a little bit, but a...
    The Daily Blog | 25-09
  • SPECIAL FEATURE: Stuart Nash – Red To The Rescue?
    SPECIAL FEATURE by Selwyn Manning. IF THE ELECTION RESULT which was dished out to Labour was not enough to incite an immediate leadership primary, then the caucus’ refusal to recognise David Cunliffe as the leader should cement it. Now is...
    The Daily Blog | 25-09
  • Has the one party state crackdown begun already? Left wing NZ activist grou...
    Well known left wing activist social media group, ‘John Key Has Left Down NZ’ has been shut down on Facebook. At 11.40pm last night, Facebook, without any warning shut the group down siting a breach of terms of service as...
    The Daily Blog | 24-09
  • Why Cunliffe should probably just let Nash & Robertson win
    We have to face some very unpalatable home truths. If you are a left wing political person, best you put your vote now to the Green Party, although you’ll have to do that all the while the Greens frantically tell you...
    The Daily Blog | 24-09
  • The graceless win of Kelvin Davis
    The graceless win of Cameron Slater’s mate in the North, Kelvin Davis is difficult to swallow. Here Cameron Slater’s mate in the North is shitting on Hone Harawira by calling Hone all steam, no hangi as Kelvin rubs his ganged up win into...
    The Daily Blog | 24-09
  • So Labour shifted too far to the left?
    So Labour shifted too far to the left?   Here’s the ill-judged view of Josie Pagani in the Pundit “Labour must change”: “At the last election I made myself a heretic when I wrote a column mentioning how unpopular the...
    The Daily Blog | 24-09
  • Uncomplicated Loyalties: Why Cunliffe and the Labour Left Cannot Win
    THE STORY of David Cunliffe’s leadership of the Labour Party has been one of missed opportunities and unforced errors. That he was the only choice available to those who wanted to rid the Labour Party of its neoliberal cuckoos is...
    The Daily Blog | 24-09
  • So we can expect this now?
    So we can expect this now?...
    The Daily Blog | 23-09
  • Can Labour be saved? Why Whaleoil & National won and why we need a new ...
    As the shock of my optimism that NZers would recoil from the real John Key as exposed by Dirty Politics and mass surveillance duplicities wears off, I am surprised to find that the right in NZ are not content with...
    The Daily Blog | 23-09
  • Three more years (up shit creek and paddling hard)
    “If the future is not green, there is no future. If the future is not you, there is no future”. Emma Thompson’s stirring words to the climate marchers in London last Sunday are worth considering in the aftermath of the...
    The Daily Blog | 23-09
  • One Party State
    In years to come this election will be seen as a historic turning point towards one party rule. I don`t mean this literally, absolute single party dictatorship is not in prospect. In the New Zealand context though, one party has...
    The Daily Blog | 23-09
  • No More. The Left Falls.
    . We cannot be beaten down Because we are down already. We can only rise up and if you should beat us down, We will rise again. And again. And again… And when you tire of beating us down, We...
    The Daily Blog | 23-09
  • Hang tight everyone – Marama Davidson campaign reflection
    To the many people who had expressed their overwhelming support for me to enter Parliament this election – thank you. That the Greens held steady in a big loss for progressive politics is an achievement. We are hopeful that after...
    The Daily Blog | 22-09
  • New flag for NZ once Key signs TPPA
    New flag for NZ once Key signs TPPA...
    The Daily Blog | 22-09
  • Reflecting on Elections Past
    There are a number of past elections that can give the left in New Zealand guidance and hope. Two major points though. Major parties require leaders who can bridge the political divide through strength of personality, vision of what it...
    The Daily Blog | 22-09
  • GUEST BLOG: Kelly Ellis – The Reptile Room
    I stress, at the outset, that I’ve got nothing against reptiles. Some of my best friends are reptiles. Some say I am one, but I’m not really. I just emulate that ability to sit, stationary for hours in court, eyes...
    The Daily Blog | 22-09
  • The success of right-wing counter messaging in the election
    One of the reasons National won the election was due to its success in counter messaging – and the way so many media commentators ran with th the right-wing spin. Here are some examples. Dirty Politics The original message was...
    The Daily Blog | 22-09
  • New Flag competition
    New Flag competition...
    The Daily Blog | 21-09
  • Prisons expert Ron Nikkel to speak in Auckland October 15
    Prison Fellowship NZ and JustSpeak have the privilege of hosting the former president of Prison Fellowship International, Ron Nikkel....
    Scoop politics | 30-09
  • Hundreds of educators protest IES in Rotorua
    Four hundred educators from around the country took their opposition to the Government's controversial Investing in Educational Success policy to the public today....
    Scoop politics | 30-09
  • Crime drops by 3.2 % in the 2013 / 2014 financial year
    Criminal offences dropped by 3.2 % in the last financial year according to figures released today through Statistics New Zealand....
    Scoop politics | 30-09
  • Narratives from the 2014 Election: what do we learn?
    I would like to invite you to a Fabians Reflection on "Dirty Politics, Dotcom and Labour’s worst result" with Colin James, Keith Ng, Stephanie Rodgers and Richard Harman. They will provide a debrief of analysis and lessons from the 2014...
    Scoop politics | 30-09
  • Oil Free Wellington drops banner from Statoil headquarters
    Today members of Oil Free Wellington have targeted the offices of Statoil, by attaching a banner reading 'Statoil out of Northland: Stop Deep Sea Oil' to the entrance of Vodafone on the Quay Midland Park, where Statoil's New Zealand office...
    Scoop politics | 30-09
  • Media Statement from Karen Price
    “After a period of intense media attention and scrutiny of our family, I set up and used an anonymous Twitter account over the weekend and made a number of comments that I deeply regret....
    Scoop politics | 30-09
  • Greenpeace disrupts Simon Bridges’ speech to oil industry
    Greenpeace activists have disrupted the opening speech by Energy and Resources Minister Simon Bridges at the Petroleum Summit in Auckland this morning....
    Scoop politics | 30-09
  • New Zealand Red Cross Responds to Drought in Tonga
    New Zealand Red Cross has sent an aid worker and two desalination units, to turn seawater into safe drinking water in the drought-hit Ha’apai islands of Tonga....
    Scoop politics | 30-09
  • Can you ever tell if an email is real or forged?
    Computer industry veteran Brian Eardley-Wilmot warns that we should never take claims about stolen emails at face value....
    Scoop politics | 30-09
  • NZ MPs to attend the ASPG Annual Conference in Sydney
    New Zealand MPs to attend the Australasian Study of Parliament Group Annual Conference in Sydney...
    Scoop politics | 30-09
  • Independent Maori seats still needed in Parliament
    “He’s got to be joking!” is the reaction of the president of the Maori Party, Rangimarie Naida Glavish to a call by a former Labour Minister of Maori Affairs, Dover Samuels, for debate by Maori on whether the Maori electorates...
    Scoop politics | 30-09
  • Support for Democratic Rights in Hong Kong
    Rallies supporting the rights for universal suffrage will take place all over New Zealand today and tomorrow...
    Scoop politics | 29-09
  • Trout Mass-Poisoned in New Zealand
    Trout Mass-Poisoned in New Zealand The Graf Boys New Zealand has some of the best trout fishing in the world! Every year thousands of international visitors wade pristine rivers in search of the freshwater game fish....
    Scoop politics | 29-09
  • New Zealand’s 2014 Hottest Vegetarians Crowned
    With winter gone things are heating up, and things just got even hotter with the crowning of New Zealand’s hottest vegetarians, says animal advocacy group SAFE. Marking World Vegetarian Day, 1st October, director James Napier Robertson and actor...
    Scoop politics | 29-09
  • A day to remember our duty to look after our senior citizens
    Human Rights Commissioner Dr Jackie Blue says International Day of the Older Person (1 October) is a United Nations day to celebrate our senior citizens, but also acknowledge the need to protect our kaumatua, or older people from abuse and...
    Scoop politics | 29-09
  • Clear data needed on impact of benefit sanctions on children
    A lack of data on benefit sanctions means there is no way of knowing whether welfare reform is helping or harming children, says Child Poverty Action Group....
    Scoop politics | 29-09
  • The socialist alternative to austerity and war
    Public meeting: After the New Zealand election—the socialist alternative to austerity and war By Tom Peters 29 September 2014...
    Scoop politics | 29-09
  • New recruits to boost border protection
    Twenty six new recruits began an intensive nine-week training course in Auckland today that will see them graduate as Customs officers in time for the busy summer season....
    Scoop politics | 29-09
  • Dwindling Mallard population shows up ‘pest’ myth
    The pro hunting organisation Fish & Game is researching the causes of the decline of the mallard duck population, upset at the prospect of fewer ducks to kill....
    Scoop politics | 29-09
  • Support for Democratic Rights in Hong Kong
    New Zealanders in Auckland will gather on Wednesday to support the rights for universal suffrage in Hong Kong....
    Scoop politics | 29-09
  • Campbell Live Exclusive Interview with David Cunliffe
    David Cunliffe resigned as leader of the Labour party on Saturday; but he still wants the top job....
    Scoop politics | 29-09
  • Action needed on cycling safety
    “Clearly we aren't doing enough to protect the 1.5 million New Zealanders who ride bikes,” said Mr Morgan....
    Scoop politics | 29-09
  • World Rivers Day Passes Without A Whimper
    Sunday 28 September was World Rivers Day to celebrate clean, flowing rivers and caring about them. But a recreation-conservation advocacy the Council of Outdoor Recreation Associations of NZ (CORANZ) says the day seems to have slipped by without...
    Scoop politics | 29-09
  • The Kiwifruit Claim: Q&A
    1. Who is running The Kiwifruit Claim? The Kiwifruit Claim was founded by kiwifruit growers representing well in excess of 10% of the industry. 2. Why are you running this claim? The introduction of Psa into New Zealand had devastating...
    Scoop politics | 29-09
  • Fed Farmers Need to Be Weaned
    The Taxpayers’ Union is calling on Federated Farmers to make a firm commitment to reject any future Government funding, after it was revealed that the lobby group had received over $200,000 of payments in recent years....
    Scoop politics | 29-09
  • Children paying the price for charter school stitch up
    New Zealand children will be paying a high price for a one-seat deal between ACT and National, with an expansion of the beleaguered charter school system says education union NZEI Te Riu Roa....
    Scoop politics | 29-09
  • Hikoi From North Reaches Oil Conference Tomorrow
    Today: The Hikoi opposing Statoil plans for seismic testing and deep sea oil drilling has marched through Dargaville and later be welcomed to Piringatahi Marae, West Harbour,Tamaki Makaurau/Auckland....
    Scoop politics | 29-09
  • Communities Still Count
    The efforts of many organisations to influence the electorate and the political parties they voted for in the lead up to the 2014 Election is over. The voting public has spoken and provided a strong endorsement to the centre-right National...
    Scoop politics | 29-09
  • Eleven social enterprises get ready to take off
    Eleven teams from across the country will take part in the Launchpad, Ākina’s programme to get social enterprise ideas off the ground....
    Scoop politics | 29-09
  • An open letter to the Prime Minister
    in which Transparency International New Zealand asks the Prime Minister to ensure integrity underpins all work he leads "in the best interests of all New Zealanders"...
    Scoop politics | 29-09
  • Paula Bennett ‘great work’ acknowledged – McVicar
    “Paula Bennett, as Minister of Social Development, has contributed significantly in lowering our crime rate and preventing further victims.” - McVicar...
    Scoop politics | 29-09
  • Key’s Restraint in Propping up ACT Welcomed
    The Taxpayers’ Union is welcoming the announcement that ACT MP David Seymour will not be appointed as a Minister....
    Scoop politics | 29-09
  • Only Concession is from the Taxpayer
    Responding to the confidence and supply agreement reached between John Key and Peter Dunne’s United Future Party, Taxpayers’ Union Executive Director Jordan Williams says:...
    Scoop politics | 29-09
  • A Tent for Any Tenant
    AUT students and Salvation Army Manukau Community Ministries team up to raise awareness, as South Auckland’s housing situation moves from crisis to collapse...
    Scoop politics | 28-09
  • Cycle Safety Panel Draft Report Seeks Comments
    The Cycle Safety Panel Draft Report and Recommendations was published on 25th September 2014 and the panel are inviting comments. Lucinda Rees from NZ School Speeds, the organisation campaigning for consistent speed limits outside schools, is encouraged...
    Scoop politics | 28-09
  • Labour’s Review – Terms of Reference Agreed
    Labour's Review - Terms of Reference Agreed Following a meeting of its ruling New Zealand Council yesterday, Labour has released the terms of reference for the comprehensive review initiated following its 2014 election result. The review will comprise three...
    Scoop politics | 28-09
  • The final countdown for Kiwi smokers
    There are just two days left until many smokers stubb out their cigarettes for the last time and embark on Stoptober – New Zealand’s first national quit-smoking month....
    Scoop politics | 28-09
  • “In A Democracy People Win And People Lose”
    “In A Democracy People Win And People Lose” – Chris Hipkins Labour Senior Whip I would say to all of the caucus and all of the members let's actually hear the arguments from the people who want to be leader,...
    Scoop politics | 28-09
  • Campaign to make Murder of Unborn ”Safe and Legal”
    The IPPF have launched an international campaign through its 161 affiliates including the New Zealand Family Planning Association [NZFPA] to make the murder of the unborn safe and legal and accepted as a human right. This is an acceleration of...
    Scoop politics | 28-09
  • Grant Robertson Labour leader hopeful on TVNZ Q+A
    “Look I think what we need to be is relevant, clear and consistent with New Zealanders about the Labour Party's values,” said Labour leader hopeful Grant Robertson on TVNZ’s Q+A programme....
    Scoop politics | 28-09
  • Labour Needs to Get House in Order Before Deciding Leader
    Ex Labour party leader and possible repeat contender David Shearer says the Labour Party is going about the post-election period in the wrong way....
    Scoop politics | 28-09
  • Hate merchants at it again with smear tactics
    “It’s disappointing to see the hate merchants at it again with yet another attempt to smear and silence a health professional who’s doing research they disagree with,” says Ian Powell, Executive Director of the Association of Salaried Medical Specialists...
    Scoop politics | 28-09
  • Women’s group heartened by response to promo girls
    The National Council of Women of New Zealand is heartened by the strong response to the inappropriate use of bikini-clad girls at a technology expo....
    Scoop politics | 27-09
  • Owen interviews Jim Anderton, Helen Kelly and Selwyn Pellet
    Lisa Owen interviews Jim Anderton, Helen Kelly and Selwyn Pellet ___________________________________________ The Nation on TV3, 9.30am Saturdays and 10am Sundays. Check us out online , on Facebook or on Twitter . Tell us what you think at thenation@mediaworks.co.nz or text...
    Scoop politics | 27-09
  • Owen interviews Mark Boyd, Jonathan Milne and John Minto
    Lisa Owen interviews Mark Boyd, Jonathan Milne and John Minto ___________________________________________ The Nation on TV3, 9.30am Saturdays and 10am Sundays. Check us out online , on Facebook or on Twitter . Tell us what you think at thenation@mediaworks.co.nz or text...
    Scoop politics | 27-09
  • Prime Time on Labour
    Mike Smith - former General Secretary of the NZ Labour Party Jim McAloon, Assoc Prof, Victoria University of Wellington History Department (currently writing official history of the Labour Party) Rob Salmond, consultant to Labour Leader's office and...
    Scoop politics | 27-09
  • Korero Mai Ki Ahau – Saturday 27 & Sunday 28 September 2014
    Saturday 27 September 2014 | One million people voted for National in last week’s election. Another million didn’t vote at all. In Kia Korero Mai this week, Eru Morgan talks to political commentator Henare Kingi about the figures and what...
    Scoop politics | 26-09
  • On The Nation this weekend: Labour, National, The Media
    This weekend on The Nation… Labour’s had its worst election result in 92 years, so what happens next? We’ll talk to former Labour president Jim Anderton, CTU president Helen Kelly, and tech entrepreneur and past donor Selwyn Pellett about the...
    Scoop politics | 26-09
  • Red Cross, Pacific leaders prepare for cyclone season
    The New Zealand Red Cross Pacific Advisory Group, met for the first time this week, to develop a disaster response plan for the upcoming Pacific cyclone season, which is forecast to be severe....
    Scoop politics | 26-09
  • Teachers support PM’s call for solutions to child poverty
    NZEI Te Riu Roa is pleased to hear that the Prime Minister is calling for new ideas to address child poverty....
    Scoop politics | 26-09
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