Q+A’s Paul Holmes Interviews Building & Construction Minister, Maurice Williamson

Points of interest:

- Neither government nor councils could afford to pay the full cost of leaky homes: “it's not possible, the government could not meet this sum of money, it's too big”

- Leaky home owners not half to blame despite government expecting them to pay half the costs; “you couldn’t ever go back to a complete proportionality of blame”

- Passing of the 1991 Building Act not to blame for leaky homes: “No cabinet made any decision on the issue of treated and untreated timber”

- Minister says governments and councils not slack in handling leaky homes; “I think it's been a systemic failure across history”

- Williamson says Bill English has made it hard for him to get money for leaky home repairs: “…even this was really hard to get. I promise you if this had been easy I'd have done it a year ago.”

- Government contributing to fixing leaky homes out of “social obligation”: “the home somebody lives in is something different” from someone losing their money in a finance company collapse.

The interview has been transcribed below. The full length video interviews and panel discussions from this morning’s Q+A can also be seen on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news

Q+A is repeated on TVNZ 7 at 9.10pm on Sunday nights and 10.10am and 2.10pm on Mondays.

MAURICE WILLIAMSON interviewed by PAUL HOLMES

PAUL Leaky homes, or to give them their more correct title, rotting homes, they are a festering, depressing, unhealthy, ongoing sore for thousands of New Zealanders, their woes have gone on for years. These thousands of home owners were told this week what the government will do to fix the problem once and for all. The government will stump for 25% of the cost of repairs, local councils will put in another 25% and the home owners themselves will pay the remaining 50% of the repairs. Now some people say well it doesn’t go far enough at all for those stuck with leaky homes through no fault of their home. Others say and someone has said it, written a piece about it this week, on the other hand, the proposal is unfair to people who don’t have the leaky home syndrome.

So big, difficult and expensive issue, good morning to you Minister of Building, Maurice Williamson, and thank you for coming on the programme. Who's to blame Minister?

MAURICE WILLIAMSON – Building & Construction Minister
I think the blame game's been played for too long and it's a systemic failure, there isn't any one factor, there has been some shoddy workmanship, there's been some shoddy materials, there's been some shoddy consenting as your piece said. If we spend our entire life trying to go back trying to go back in history we would find it was a systemic failure across the board. We've really gotta move on from there.

PAUL Are the homeowners half to blame, because you're gonna charge them half of the repair bill, so you're thinking they are half to blame is that right?

MAURICE No they're not half to blame, you couldn’t ever go back to a complete proportionality of blame, because in some cases the people that were to blame have gone and folded. This is an attempt by the government to try and get...

PAUL Yeah but the victims, the homeowners sitting in these rotting houses are the victims of as you say a systemic failure. Councils are only gonna have to stump up with a quarter, why not make them pay the half?

MAURICE No no, it's not possible, the government could not meet this sum of money, it's too big, nor could the councils, ratepayers just couldn’t stump up with that sum. This is an attempt to try and get a balance, that the actual home owner gets some equity restored in their property and actually gets back on with their lives, 50% of it has been covered automatically and the bank loan will be a government guaranteed loan. I think it's a fair balanced package which let's people move on.

PAUL Let us speak about the government's role in this disaster, I'm not talking necessarily Labour government or National government, central government's role in this disaster. Now you’ve said this week the government has no particular responsibility or obligation.

MAURICE Well the courts have said that actually.

PAUL The Court of Appeal said it's too big for the courts to decide, but anyway let's move on from that. But you say the government is not required by law to do anything particularly for the leaky homeowners.

MAURICE Correct.

PAUL But it was the Bolger government that passed the Building Act of 1991, and that allowed untreated timber, monolithic cladding, to be used on homes. Doesn’t government because of the Building Act of 1991, which is the single effective cause of the environment we have now, doesn’t government therefore have full responsibility?

MAURICE Well as I said, it's time to stop playing the blame game, but that’s not actually true, no no, it's not true. No cabinet made any decision on the issue of treated and untreated timber, it was decided by a separate agency under the New Zealand Standards Authority, they are statutorily independent, no decision came before a cabinet or any ministers either by way of regulation or legislation.

PAUL Yeah but that regulation that was planned or whatever, the monitoring system – the first originating Act in this disgrace that we've got is the Building Act Reform of 1991. Can I quote you John Green who's a senior adjudicator at the Building Disputes Tribunal. He says the leaky building crisis is “a major social and economic problem for the community of unparalleled proportion, penetration and destructive effect, that arose in the wake of the government's building control reforms of the early 90s. Quite simply the outcomes and safeguards anticipated by the Building Act of 1991 did not materialise”. This, Minister, is government responsibility, it's not a natural disaster, it's not systemic, it's a government responsibility,

MAURICE I disagree with you totally, and actually Mr Green's organisation is not a formal organisation, it's a private group that gives itself a title of being something more than it is.

PAUL Well he writes very well.

MAURICE Well let me repeat again Paul, that it was not a decision taken by any minister or any cabinet. The Standards Authority in New Zealand is an independent statutorily independent. If I was to ever direct them on anything I'd be in breach of my warrant as a Minister. They made these determinations in 1995, it was mainly to do with borer treatment they were concerned about. That’s why they went with kiln dried timber, it was a mistake, but it's a bit rich coming and trying to blame a government who were not allowed to have a say in the setting of standards.

PAUL` So the Building Act of 1991 had no effect, is that what you're saying.

MAURICE The Building Act of 1991 had no effect on the Standards Authority making the determination about whether, and it wasn’t a mandatory declaration, it was whether kiln dried timber would be an acceptable option.

PAUL Well I'm gonna stay on the blame game a little bit because there were early warnings which were ignored right through the Bolger government, and I suppose you could accuse the Labour government of setting up some kind of a paralysed constipated system whereby people could seek redress. In 1994 experts were talking about an epidemic of rotting houses, we were hearing in 94 phrases like potential time bomb. The government didn’t listen, went okay and okayed the use of untreated kiln dried timber, further evidence of government responsibility.

MAURICE I find ‘94 a bit interesting cos the actual change to the NZS3602 standard occurred in ‘95, so how they could have pre-empted leaky buildings before the change occurred? I think your researcher might have got his numbers wrong.

PAUL Front page of the Royal New Zealand Herald as a matter of fact, a warning in 1994 about a “potential time bomb”, that’s where I got that okay.

MAURICE Well I've got front page of the Herald here from 2002 where Helen Clark says the rotting building crisis just a beat up by the media and she tells somebody called Newstalk ZB host Paul Holmes, might have been you I think, that this was just the media banging on about an issue of no substance. That’s in 2002.

PAUL Yes I know, but let me go to 98, go back to 98. There's a report done on the problem by the Master Builders Association, and in there he says I have little doubt that we're being confronted with a large proportion of modern buildings that leak. Again the government did not really get into action, again government responsibility Maurice.

MAURICE You know what we're doing, we're wasting a huge amount of time this morning trying to go back a decade or more, to try and find out who was responsible. That won't actually fix a single leaky home. The package we announced this week was focused on fixing the houses, getting people back into safe dry houses that have got some equity. I'm really pleased we did it, the previous government when it had surpluses of 11½ billion in some years, said it's not our role. This government has decided we're gonna do something.

PAUL Do you admit that governments have been slack?

MAURICE I think it's been a systemic failure across history.

PAUL Have governments been slack.

MAURICE I think it's been a systemic failure across history of all sorts, local government, central government and all sorts of other agencies, including the Standards Authority allowing for kiln dried timber.

PAUL The thing is we've been discussing in our budget discussion, this is a low wage economy, we've talked about this a lot on the programme. And here we are saying to people well you know you might have a repair bill of 150, $200,000 but we want you to pay half. It is not their fault, the homeowners' fault they’ve got a leaky building. I mean governments have failed in a moral responsibility to look after this very important part of the people's lives, the integrity of their home.

MAURICE Paul, I accept and I've said all along, it's both a national and a natural disaster of a magnitude we've never seen in this country before.

PAUL Did you say natural disaster?

MAURICE A natural disaster.

PAUL It is not a natural disaster, that’s a tsunami, an earthquake – it is not a natural....

MAURICE A rotting of timber that no one knew about, because if they'd known about it would not have done this.

PAUL It is a complete failure of the regulatory structure Minister, and you're now gonna hit people up for 50% of the repairs.

MAURICE No we're not, we're not hitting people up. We're actually restoring equity in their property and asking them to play a part in doing so. I think it's a really good package and I've seen already good feedback from a lot of homeowners which says finally a government's put a package on the table which will pay 50% of my costs straight up right, give me a guaranteed bank loan to do the other half that over time I can service.

PAUL Do we still get the disputing about how much the repair's gonna cost, or do you go in get it fixed, and then tally up who owes what?

MAURICE Part of the process will – the Department of Building and Housing will have a process to go in and make a proper evaluation. We cannot afford for this to be gained either way, we do not want it to be over spec with all sorts of betterment, and the poor old taxpayer and ratepayer paying for things they shouldn’t.

PAUL We're gonna take the money off the lawyers I spose.

MAURICE There'll be no money for lawyers in this and that’s what I'm really pleased about. A fortune has gone to lawyers in this process and we've actually not been getting the houses fixed. I want to get it to the carpenters and the gib stoppers, and actually we'll only be paying this money on receipt of work done, so this won't be a payment to the homeowner who can then take the cash and say but I still won't fix my house

PAUL Take it to Ellerslie. Can you do better than 25%?

MAURICE No, Paul we've been in a go-round of a go-round. Remember I've got a Finance Minister who's just basically saying to me, we're borrowing 240 million a week, it's a billion a month, I haven't got the wherewithal, in fact even this was really hard to get. I promise you if this had been easy I'd have done it a year ago.

PAUL 25% will cost you I think initially over several years a billion. If you were to go to 50% that’s only two billion over a period of time.

MAURICE Remember the one billion is estimating a percentage of those eligible taking it up, because we do not know some of these numbers. Some people may choose to stay with litigation. Remember this package is voluntary, you don’t have to take it. So if there's a homeowner sitting out there saying as I saw Mr Grimshaw the lawyer the other day saying, don’t take this package, go for litigation, then I saw a lovely letter to the editor the next day which says we got less than 30% of our claim by going through Mr Grimshaw's litigation, but it cost us $250,000 in legal fees. So people can make that choice.

PAUL Let me ask you this, cos this has come up this week as well. Why do leaky homeowners get this billion dollar government help and not those who got shafted by the finance companies?

MAURICE Well because we, and I think the Prime Minister's made this clear, we see that the home somebody lives in is something different. This is their families, this is creating a huge unbelievable breakdown in the family structure, the depression and everything else, plus the stachybotrys mould and in many cases creating huge costs to the health system. It's way more than whether people went into an investment that was good or bad.

PAUL Yeah, but why do people who don’t have leaky homes have to pay for this?

MAURICE It's the same thing we do in everything in our society. If you were diagnosed God forbid with a brain tumour today, you'd be into the public health system and everybody else on this panel would be paying taxes to look after that thing that happened to you. That’s what a social obligation of a government always is about.

PAUL How many of possibly 89,000 leaky homes will be fixed if people opt for this scheme?

MAURICE The problem is we don’t even know how robust the 89 is because we're told in the Price Waterhouse Report that there are many houses in dryer parts of this country that are yet to manifest themselves, and it could be more. The second thing we don’t know how many will say ‘I'm gonna stick with the litigation’. The third thing we don’t know is how many are falling outside of the ten year timeframe. So the real message I've got to viewers this morning is if you’ve got an issue, get into the weather tight service and register yourself straight away, because once you're registered the clock stops on the ten year liability.

PAUL And you can still do the voluntary scheme?

MAURICE Absolutely and you can choose it any time later to switch back.

PAUL` Minister thank you very much indeed for your time.

ENDS

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