web analytics

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.

Recent Comments

Recent Posts

  • New tools to make nature more accessible
    People planning to head outdoors now have a resource that lets them know how accessible an area is for people with varying levels of mobility, Minister of Conservation Eugenie Sage announced today. The Halberg Foundation, Sensibel, and the Department of Conservation (DOC) have launched Accessibel, a new tool which helps ...
    BeehiveBy beehive.govt.nz
    4 hours ago
  • PGF makes Māori history more accessible
    One of the most significant battle sites of the 1860s Land Wars will receive $2.96 million from the Provincial Growth Fund to improve the site and help tell the New Zealand story to visitors, Māori Development Minister Nanaia Mahuta and Regional Economic Development Minister Shane Jones have announced. Nanaia Mahuta ...
    BeehiveBy beehive.govt.nz
    8 hours ago
  • Making it official: The journey of te reo Māori | Kia whakapūmautia: Ngā piki me ngā heke o te r...
    The journey towards recognising Māori as an official language and taonga has been captured as a web series and launched today during Te Wiki o te Reo Māori, announced Associate Arts, Culture and Heritage Minister Carmel Sepuloni. “Te reo Māori is a living language, and understanding its significance, and pathways to ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Better-than-forecast GDP reflects decision to protect New Zealand
    Today’s better-than-forecast GDP figures show the expected impact of the decision to act quickly to protect New Zealanders from the global COVID-19 pandemic. GDP fell 12.2% in the June quarter from March, reflecting decisions to close New Zealand’s borders and enter Alert Level 4. “This result was better than the ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Boost for COVID-19 related Pacific education needs
    The Government is investing $39.7 Million over four years to support the educational needs of Pacific learners and families in the regions hardest hit by COVID-19, with Auckland getting an immediate boost, Associate Minister of Education Jenny Salesa says.   “Like all New Zealanders Pacific families want learners to do well ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • More resources for kiwi conservation
    New Zealand’s goal of 100,000 kiwi by 2030 is being helped by an extra $19.7 million in funding to accelerate iwi and community efforts to protect kiwi, Minister of Conservation Eugenie Sage announced. “$19.7 million of Jobs for Nature funding is being invested in kiwi conservation activities including increased predator ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Improving access to affordable electricity
    Ensuring New Zealanders can get the best deal on their electricity takes a step in the right direction today with the South Island launch of the EnergyMate pilot run by the Electricity Retailers’ Association, says Minister of Energy and Resources, Dr Megan Woods. EnergyMate is an industry-led programme providing coaching ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government achieves 50 percent women on state boards
    Minister for Women Julie Anne Genter announced today that the Government has reached its target of 50 percent on women on state sector board and committees – setting a new record level of women on state sector boards. “This Government is committed to having more women in leadership roles - ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Record transport investment to help economic recovery and save lives
    Transport Minister Phil Twyford released today the final Government Policy Statement on land transport (GPS) 2021 which outlines the planned $48 billion investment in services and infrastructure over the next decade. “The final GPS supports our Government’s five-point plan for economic recovery by confirming our record investments in transport infrastructure ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Advancing clean energy technology
    Three ambitious and cutting-edge research programmes that will lift New Zealand’s advanced energy technology research capability over seven years, have been supported by Government today, says Research, Science and Innovation Minister Megan Woods. The projects will each receive a share of $40.7 million investment from the Strategic Science Investment Fund. ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Major milestone reached in Pike River Re-entry
    The critical area for forensic examination known as Pit Bottom in Stone has been reached in what is a major milestone for the Pike River re-entry project, Minister Responsible for Pike River Re-entry Andrew Little announced. “The infrastructure located in Pit Bottom in Stone is of very significant interest in ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Economic recovery guides Govt response to retirement income policy review
    The Government is working on how New Zealand’s retirement income policies and settings can best support Kiwis in light of the COVID-19 economic recovery, with the help of the Retirement Commissioner’s latest review, Commerce and Consumer Affairs Minister Kris Faafoi said. “The Retirement Commissioner’s three-yearly review into New Zealand’s retirement ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Iwi community hub opens in Murupara
    A new digital hub and development centre in Murupara will be instrumental in growing the region’s productivity, said Under-Secretary for Regional Economic Development Fletcher Tabuteau at the official opening of two community initiatives today. “I’m pleased to be here celebrating a significant milestone for two projects set to make a ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • PREFU shows economy doing better than forecast
    PREFU shows economy doing better than forecast Unemployment to peak at 7.8%, down from 9.8% forecast in the Budget Year-to-June accounts show tax revenue, debt and OBEGAL better than forecast Global forecast downgraded as COVID-19 second waves and uncertainty grows Balanced plan to support critical public services, manage debt and ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Spruce-up for Ōtaki community facilities
    The Kāpiti Coast town of Ōtaki will receive $1.4 million in Government funding for two projects providing scores of jobs for locals while improving community facilities, Regional Economic Development Minister Shane Jones has announced. The Māoriland Charitable Trust will receive a $900,000 Provincial Growth Fund (PGF) grant to upgrade the ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • PGF funding for Jobs for Nature programme
    The Provincial Growth Fund will provide $11.88 million to fund fencing and waterway projects nationwide that will improve the environment and create jobs in their communities, Regional Economic Development Minister Shane Jones has announced. “These projects will create more than 100 jobs nationwide with work starting within the next couple ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Procurement to promote jobs, Māori and Pasifika businesses and sustainability
    As part of the COVID-19 recovery, the Government has strengthened its procurement rules to ensure its annual $42 billion spend creates more jobs, uses more sustainable construction practices and results in better outcomes for Māori and Pasifika, Government Ministers announced today.   Economic Development Minister Phil Twyford says the $42 ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Timaru’s Theatre Royal to be upgraded and new heritage facility built
    The Government is supporting a major upgrade of Timaru’s iconic Theatre Royal and the construction of a new connected Heritage Facility museum and exhibition space with $11.6 million from the Government’s Infrastructure Fund, Jacinda Ardern announced today. “We heard the call from the community and the council. The Theatre Royal ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • District Court judge appointed
    Chrissy Montague (formerly Armstrong), barrister of Auckland has been appointed as a District Court Judge with Family Court jurisdiction to be based in Wellington, Attorney-General David Parker announced today. Ms Montague commenced practice in Auckland in 1987 and went into general practice dealing with Wills, Estates, Trusts, Conveyancing, Relationship Property ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Approval given to Commercial Film and Video Production Proposal
      A Proposal to provide for the development and operation of commercial film and video production facilities in areas of Christchurch has been given the go ahead. Hon Poto Williams, Associate Minister for Greater Christchurch Regeneration, has approved the Proposal, which was prepared and submitted by Regenerate Christchurch. Minister Williams ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Supporting a thriving wānanga sector to benefit Māori learners
    As part of the Government’s focus on building closer partnerships with Māori and enhancing the quality of, and access to, Māori medium education, a payment of $8 million will be made to Te Wānanga o Raukawa in partial recognition of its Waitangi Tribunal claim (WAI 2698), Associate Education Minister Kelvin ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Jobs for Nature boosts efforts to restore Kaimai-Mamaku
    The Minister of Conservation Eugenie Sage has announced a $19 million investment over four years in an important forest restoration project involving a partnership between the Department of Conservation, iwi/hapū, the Bay of Plenty and Waikato Regional Councils, community conservation groups and organisations such as Forest and Bird across the ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • New Zealand first in the world to require climate risk reporting
    New Zealand will be the first country in the world to require the financial sector to report on climate risks, the Minister for Climate Change James Shaw announced today. The changes build on the huge progress this Government has made to tackle the climate crisis. “Today is another step on ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Economic data highlights impact of Auckland moving out of Level 3
    Economic activity across the Auckland region and the country bounced back to levels experienced under Alert Level 1 following Auckland’s move out of Alert Level 3, analysis in the Treasury’s latest Weekly Economic Update shows. The analysis of economic data since Auckland’s move out of Level 3 shows: Auckland card ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • PM statement on Cabinet COVID-19 Alert Level review
    Takiri mai te ata, ka ao, ka ao, ka awatea, tihei mauriora! Tātou katoa ngā iwi o Aotearoa, tēnā koutou! Tēnā tātou e whakanuia ana i te wiki nei, te wiki o te reo Māori Greeting to you all from Otepoti, Dunedin.  This week is the Māori Language week and ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • More mental wellbeing services for young people in regions
    More mental health and addiction services are available for young New Zealanders in Rotorua and Taupō, Wairarapa, South Canterbury, Dunedin and Southland from next month, Health Minister Chris Hipkins and Associate Health Minister Julie Anne Genter say. “The Government is serious about making sure New Zealanders struggling with mental health ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government joins forces with Central Otago communities to clean up waterways
    The Manuherekia catchment in Central Otago is the third exemplar catchment to be targeted as part of the Government’s plan to clean up waterways by supporting community-led programmes.   Environment Minister David Parker said the Manuherekia catchment is vitally important to the people of Central Otago.  “The Manuherekia rises in the ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government confirms new Dunedin Hospital design
    The Government has agreed on a preferred design for the new Dunedin Hospital featuring two separate buildings, and has provided funding for the next stages of work.   Minister of Health Chris Hipkins says Cabinet has approved in principle the detailed business case for the new hospital, giving people in ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Join the one in a million reo Māori moment
    New Zealanders across the country are set to mark history as part of the Māori Language Week commemorations led by Te Taura Whiri i te reo Māori this year.  Māori Development Minister, Nanaia Mahuta says the initiative will mark history for all the right reasons including making te reo Māori ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Education initiatives add to momentum of Te Wiki o te Reo Māori 2020
    More than 1000 teachers, support staff and school leaders have graduated from a programme designed to grow their capability to use te reo Māori in their teaching practice, as part of the Government’s plan to integrate te reo Māori into education, Associate Education Minister Kelvin Davis announced today. Being trialled ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • The Toloa Tertiary Scholarships for 2021 aims to increase Pacific participation in STEM
    The Minister for Pacific Peoples, Aupito William Sio, says the Toloa Tertiary Scholarships which aims to encourage more Pacific student numbers participating and pursuing STEM-related studies in 2021, are now open. “These tertiary scholarships are administrated by the Ministry for Pacific Peoples (MPP), and are part of MPP’s overall Toloa ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Financial support for timber industry
    Four Bay of Plenty timber businesses will receive investments totalling nearly $22 million through the Provincial Growth Fund to boost the local economy and create jobs, Regional Economic Development Minister Shane Jones has announced. Rotorua-based sawmill Red Stag Wood Solutions will receive a $15 million loan to develop an engineered ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New Zealand seeks answers to the Gulf Livestock 1 tragedy
    Foreign Affairs Minister Winston Peters has announced that New Zealand is exploring the viability of working with partners to conduct a search for the black box on the Gulf Livestock 1. “We know how much it would mean to the families of those on the ship to understand more about ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Government backs East Coast marine infrastructure
    Infrastructure Minister Shane Jones has today announced the Government is supporting the creation of new marine infrastructure in northern Te Tairāwhiti on the North Island’s East Coast. The Government has approved in principle an allocation of up to $45 million to support the construction of a marine transport facility at ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Government mourns the passing of Epineha Ratapu
    E Epineha. Ka tangi te iwi, ki a koe e ngaro nei i te kitenga kanohi. Kua mokemoke to whānau, to iwi, te motu whanui. Haere ki o matua, tipuna. Haere ki te okiokinga tuturu mo te tangata. Haere i runga i te aroha o ngā reanga kei muri i ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • October round of fisheries decisions
    Catch limits will be increased for 26 fisheries and reduced for three fisheries as part of a regular round of reviews designed to ensure ongoing sustainability of fisheries resources. Fisheries Minister Stuart Nash has announced decisions following a review of catch limits and management controls for 29 fish stocks. The ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand to host Bledisloe Cup in October and ready to attract other international sporting event...
    The Sport and Recreation Minister Grant Robertson says while it is disappointing the Rugby Championship will not be held in New Zealand, the country will host two Bledisloe Cup games in October and has the capacity in managed isolation facilities to host other international sporting events. “We offered flexible quarantine ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Hundreds more regional apprenticeships
    Up to 350 more people in regional New Zealand will gain a pathway to trades training through a $14 million government investment in apprenticeships, Regional Economic Development Minister Shane Jones announced today. The apprenticeships are part of the $40 million Regional Apprenticeship Initiative (RAI) announced in June. The funding comes ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New parking solution for Christchurch hospital
    A Government brokered solution to the parking woes at Christchurch Hospital will deliver more than 1000 new car parks near the Hospital for staff and visitors while also ensuring the completion of the Metro Sports Facility, say Minister for Christchurch Regeneration, Dr Megan Woods. The new parking package is made ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Changes to critical workers border exception category
    The Minister of Immigration has announced adjustments to immigration instructions to provide more clarity to the assessment criteria for employers wanting to request a border exception for their workers under the ‘other critical worker’ category. “As New Zealand continues on the path to recovery from COVID-19, it is important that ...
    BeehiveBy beehive.govt.nz
    1 week ago