States told flammable cladding is their problem to fix

The federal government is adamant that the states should bear the full financial cost of remediation work on buildings that have structural defects or use combustible cladding. Industry Minister Karen Andrews says the states should not “shirk their responsibilities”, given the revenue they have gained from the construction boom over the last decade. Meanwhile, Victoria’s shadow planning minister Tim Smith notes that RMIT has estimated that removing combustible cladding from buildings in the state would cost around $2.6 billion. The state government has allocated $600m for this work, and has begged the federal government to contribute half of this amount. From The Australian:

“States have been big beneficiaries of the building and construction boom over the past decade,” Ms Andrews told The Australian. “Now is not the time for them to shirk their responsibilities.”

But Labor’s industry spokesman Brendan O’Connor turned the accusation against the Mor­rison government, saying it had been “shirking responsibility” by refusing to provide funding for rectification works and failing to address the inability of building surveyors to obtain insurance.

“Each day the Morrison government fails to take leadership and respond to the building industry crisis, businesses are closing down, the safety and lives of Australians are put at risk,” Mr O’Connor said. “The regulatory and enforcement regime is broken, and leadership on this issue is needed to improve compliance with the national construction code and toughen up penalties”…

“I will again offer to fund a taskforce that will work with the states and territories so they can implement the recommendations of the Building Confidence ­report,” Ms Andrews said.

I agree somewhat with Karen Andrews’ sentiments. The Victorian Government has been a vocal champion of mass immigration and the inevitable rapid high-rise construction boom that followed.

That said, there is a lot of blame to go around, including:

  • Australian standards relating to flammable cladding, and whether these were adhered to by importers and builders
  • were mandatory tests carried out on cladding and fixing materials (including Fire Rating tests) – especially on cheap imported rubbish?
  • What teaching and examination programs were all importers and installers required to complete and qualify before being approved and licenced?
  • Whether assessors turned a blind eye
  • The list goes on…

The only way to sift though these issues in a comprehensive and methodical way is for the federal government to call a royal commission into building regulations, standards and processes.

Rather than a knee-jerk response, a royal commission should be the number one priority of the federal government in dealing with this debacle.

Unconventional Economist
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  1. Also on the front page of the Australian:

    Michael Sukkar says you’d be a, er, sukkar for not buying a property now! Property is headed to the moon says this elected rep.

    (I’m not making this up)

    I would that Mr Sukkar beef up security at home in advance of all those people taking his advice ending up financially ruined and coming round to pay their respects.

    • He meant proper properties, free-standing houses, not dog boxes for the poor and mentally infirm. These will boom.

      • There’s probably a good game to play with your mates – collapse or burn, which will happen first?

      • Very very expensive dogboxes that working dogsbodies cannot afford eithe way. $600k starting point for a mini flat then mega body corporate and rip off service fees (added to council rates) that in some cases are nearly as much as it is to rent a small flat in the outburbs.

      • They WERE very expensive but are getting cheaper by the day. It’s a pity asbestos wasn’t used to give some fire protection. Hang on, maybe it was…

      • Strictly speaking, I would say it is.

        Maurice Blackburn (and others) have already retrieved this clipping for future class actions against the Govt when things inevitably go pear-shaped. The taxpayer will wear this like it is going to wear the cladding and structural faults claims

      • Real estate is not a financial product so its not financial advice.

        The Real Estate industry lobbied extensively to exclude advice on property being subject to AFSL.

        Its only if they organise finance or advise to use a SMSF that they get into hot water

  2. Bear in mind that the cladding might have been legal, flammable cladding complied with most state’s regulations.

    However, it is hard to tell – since Standards Australia was privatized, one cannot see these regulations, without paying in the order of $10,000 with SAI Global being the exclusive distributor of all Standards Australia standards since 2003.

    Whoever thought privatizing the fire standards was a good idea?

    • I think New Zealand has a better system. I am told that any standard prescribed by law is freely available. Need to check that.

  3. It is worrisome that public discussion on holding parties to account is fading. Builders, developers, certifiers, importers and installers who knew products were not what they claimed to be still need to be examined and face consequences for any laws they may have broken. That issues are widespread and companies can phoenix should not be a get out of jail free card.
    There is also the very uncomfortable discussion of if consumers went with cheap developers (?) is it fair they they should face the costs similar to if a cheap car that fails just outside its warranty period. How many questions should consumers be expected to ask?

  4. bolstroodMEMBER

    The lack of insurance is the killer.
    Insurance, the white mans burden, is breaking the health Industry, the building industry, and stoppng much of what used to be our social lives.
    In the regions , country halls are gone, a thing of the past ,as the committee members were personally liable for patrons injuries.
    I reckon music festivals will be next .
    With the onset of Climate Catastrophe property owners will in many locations, be unable to insure for fire, or flood or tempest or encroaching seas.

  5. Jolly Trollop 5

    The recently completed 28 storey RISE apartment tower completed a couple of years ago in Parramatta has been confirmed as being cladded in Napalm same as Genfell Tower in London. Residents have to cough up to replace it all …

  6. Jumping jack flash

    Look for the silver lining – we need stimulus spending, this could be just the ticket.

    Fork out billions to an army of (new) private contractors fix the problems, property market recovers, values recover, debt starts flowing, everything is awesome again!

    It’d be just like the pink batts. That worked so well. Added thousands to the values of homes, probably billions overall.

  7. You are right UE; there should be a royal commission; but don’t waste too much of your time dwelling on it, because it will never happen. Just like the negative gearing changes never happened. This country is controlled by vested interest groups, aided and abetted by the politicians of all major parties, and there is little we can do about it.