Brian Rudman: Government must plug those leaks

In the run-up to last year's election, the National Party's building spokesman, Nick Smith, said the government "is going to have to be part of the solution" to the leaky home crisis.

He said it wasn't "sustainable to say this is nothing to do with government," and called Prime Minister Helen Clark heartless for saying the blame lay with the council inspectors who had approived the faulty buildings, therefore it would be unfair for taxpayers to pick up the bill.

A few weeks later Dr Smith added that "National does not think it is going to be sustainable for local government to be hit with a bill for $1 billion to $1.5 billion".

Last month, the Herald revealed that a secret PricewaterhouseCoopers report to the Government put the total leaky houses bill at around $11.5 billion.

The report also said the Government was baulking at a proposal by big city mayors for a bail-out settlement package for owners, which calculated the Government's share as between $2 billion to $4 billion.

Part of this would be in the form of interest-free loans, to be paid back when the property was sold, or the owner died.

The new Auckland Super City, which has the biggest concentration of the failed buildings, would face a bill of at least $1 billion.

The rest would come from owners and ratepayers from around the country, based on where the buildings are situated.

To no one's surprise, the Government is running for cover, the excuse this time is that such a large payout could threaten the country's credit rating. To me, that reasoning sounds just as "heartless" as that of Helen Clark a year ago.

To give credit where it's due, this Government, unlike its predecessor, seems to acknowledge the Crown has to share responsibility for this crisis.

As Auckland Mayor John Banks says, "It was a previous Government that put in the legislation that allowed for untreated timber, cavity-less walls, chicken wire and plaster. So they should at the least accept an equal liability with local government."

Mr Banks should know. He was a member of the Jim Bolger-led National Cabinet that passed the permissive 1991 Building Act which was naively based on the premise that National's developer mates could be trusted not to cut corners.

The Government must also accept blame for tolerating a Commerce Act which allowed shonky builders to cut and run when the going got tough - then pop up somewhere else under a different name and do it all again.

Many of the guilty developers, builders and architects have long fled the scene, so the building owners have no recourse there.

As for the Building Industry Authority which was responsible for the disastrous decision to approve the use of untreated framing timber, the Court of Appeal let it off the hook by ruling it did not have sufficient proximity to the problem to have a legal duty of care.

That left only the ratepayers of cities and towns up and down the country for the lawyers to home in on. Local council officers were supposed to police the new building regulations, and failed to spot the disaster waiting to happen.

Because local councils can't run away, the law allows aggrieved building owners to sue the council, not only for the cost of its shortcomings, but for those of the long-gone developers and builders as well.

The Mayors of Auckland, Waitakere, Tauranga, Wellington and Christchurch are now trying to negotiate a deal with the Government which shares responsibility for repairing 5845 leaky homes three ways - splitting the burden between ratepayers, taxpayers and owners.

Even if this compromise is agreed to, the bill for the new Auckland Super City will be at least $1 billion and force a 5 per cent rate increase across the region. But the alternative is years of lawyers enriching themselves at everyone else's expense, while people suffer, and needed housing stock rots away.

As Dr Smith said in the run-up to the election, the Government has to be part of the solution to this drawn-out scandal. To procrastinate any longer because of possible downstream effects on the country's credit rating is just as "heartless" as the Clark Government's delay tactics.

The political responsibility for this whole debacle, as Mr Banks points out, has its roots in the National Government of 1991, of which he was a part. He is offering his successors in government a very generous deal. They should do the honourable thing and grab it.