Tempers flare in talks on leak crisis

A teleconference between mayors of areas blighted by leaky buildings and a Government minister ended badly yesterday, according to one participant.

North Shore Mayor Andrew Williams said Building and Construction Minister Maurice Williamson hung up when discussions got heated.

At issue is the Government's proposal to pay 10 per cent of the cost of the rotting home scandal, estimated to cost between $11.6 billion and $20 billion to fix.

Mr Williams, worried about the Shore's contribution, said he was shocked when discussions broke down after he accused the Government of setting up the scheme to fail.

He alleged the Government stood to make an actual profit from the disaster because of the 12 per cent GST which will be charged for goods and services in repairing homes.

That 12 per cent will outstrip the state's payment offer of 10 per cent.

The 10 per cent offer and expecting homeowners to pay more than 60 per cent and councils more than 20 per cent would lead to the state making on the deal, Mr Williams said.

"I couldn't believe the minister hung up because I said that if I was really stupid, I'd be wondering if the Government was setting this deal up to fail," Mr Williams said.

Negotiations came to a head after the mayors or their representatives of Manukau, Auckland, North Shore, Waitakere, Tauranga and Wellington discussed the Government's offer last week. They all agreed it was sorely lacking so decided to go back to Mr Williamson, seeking a 20 per cent state contribution at the least.

Mr Williamson has consistently refused to answer the Herald's questions and has blocked an Official Information Act request for a PricewaterhouseCoopers' report commissioned and completed a few months ago to assess the scale of the issue.

The previous Government refused throughout the present decade to make any direct contribution to the disaster which could affect up to 40,000 houses.

Crown Law successfully blocked claims against the state's Building Industry Authority which allowed certain materials to be used to build homes in the 1990s and early this decade.