Victorian Premier Daniel Andrews and the state’s minister for planning, Richard Wynne, trumpeted that $600 million would tackle Victoria’s high-rise cladding crisis. It was paraded as a safety solution for owners of affected buildings but the “fix” was a contemptible confidence trick.
For years, the Andrews government was seemingly unruffled by the public’s outrage over its perceived inaction on flammable cladding. Some may have assumed this latest move was a belated response to the cries for action. Not so. Secretly, officialdom had been fiddling tirelessly, fine-tuning laws to further favour business, and had discreetly put a plan into action in early 2015.
In June, stage-managed leaks puffed forthcoming news. Andrews’ trickled the tip-off that taxes would bankroll rectification works and a draft website surfaced signalling that a new government agency, Cladding Safety Victoria (CSV), would direct funding. For both, taxpayers were tapped to be the benefactors.
Then to diminish these disturbing dispatches, the website flashed the flimflam that CSV would “get buildings fixed and made safe, quickly” and provide “free services and assistance to apartment owners faced with removing combustible cladding”.
It was a theatrical campaign made up, simultaneously, of the leaks of bad tidings for taxpayers and the rumour that help would be offered to distraught owners to quickly fix their buildings.
Peddling “safety package”
Then came the July media release from Andrews and Wynne, which was really little more than the clumsy fusion of cladding action and compassion.
Andrews told the media the “safety package” was “a world-first program” that included:
- A $600 million cladding rectification fund, made up of $300 million from the state government and $300 million from new building levies
- A new agency, Cladding Safety Victoria, with $15 million in initial funds
- Rectification work for about 500 of the most dangerous buildings
A very nervous Andrews knew it was a difficult gig, but despite his simple task of delivering a short, snugly scripted speech, he could not carry off the “community safety” charade. No amount of spurious spin could negate the facts or inspire conviction.
Wynne was interviewed by 3AW radio presenter Tom Elliott, with Wynne introduced as the “man at the top of this rather messy pie”.
Elliott focused on the unfairness of taxpayers being forced to fork out for the rectification of privately-owned buildings. Wynne’s response was that the Victorian Cladding Taskforce, which is overseeing an audit of buildings to identify dangerous cladding, recommended the government address the rectification of buildings. Astoundingly, this was nearly five years after the cladding on the high-rise Lacrosse building in Melbourne’s Docklands caught fire, igniting Victoria’s cladding crisis and alerting the public to the fact that tens of thousands of people living in buildings covered in lethal cladding were at risk.
When Elliott suggested corruption was the root cause of the crisis – building surveyors being paid by builders – Wynne had to agree. Could this be changed, asked Elliott? Wynne stammered, saying only that the government would look at it when it reformed the Building Act.
Wynne failed to mention “reforms” enacted four years earlier to shore up the status quo by protecting recalcitrant certifiers. In relation to non-compliant cladding, shamefully, the laws were designed to deprive the Victorian Building Authority (VBA) of its powers to order rectification works once owners had taken possession of a building. After handover, all involved in defective and unsafe construction, including certifiers who approved such works, were off the hook. Nominated as “consumer protection” laws, the statutes actually ensured consumers remained unprotected.
As Wynne must know, without any punishment or penalties, there is no incentive for the industry to change and the VBA is, in truth, the industry’s best friend.
Follow the money trail
Where the money will come from for the Premier’s promised $600 million package remains, predictably, unclear. Last July’s media release mentioned “grants” and possible “contributions” from the federal government.
At the press conference, Andrews gulped as he faked this could “fully fund” the 500+ buildings, knowing few would swallow this hogwash. Then rashly Andrews said: “No building can ever be completely risk free.” More oddly, he said that rectification would “get to an acceptable level of risk”.
Victorians were told they have paid $15 million for the initial creation of Cladding Safety Victoria, but the cladding catastrophe would soon cost them much more than that.
Andrews said that rectification of the most dangerous 15 buildings would be funded with money earmarked in the last budget. This misappropriation of taxpayers’ money is so large a sum that it was not divulged. If we assume that the average cost of rectification of a large building is $15 million, then for 15 buildings the total would be in the vicinity of $225 million.
Lastly, Andrews dropped another bombshell. Taxpayers would foot the bill for $165 million to rectify public buildings. The system, designed to fail owners and taxpayers, has compelled both to pay repeatedly whilst those responsible for constructing these dangerously, deadly buildings remain protected and at large. Builders aren’t punished or penalised and will contribute not a cent towards the enormous bill.
Andrews claimed flammable cladding was “beyond politics” and proposed that the federal government contribute $300 million to the package, a suggestion the Commonwealth has rejected.
During his 3AW interview, Wynne said the current modest planning levy of $350 (called a Building Permit levy) would be increased, and applied to buildings worth over $800,000, raising the $300 million. He failed to mention how any rectification of problems faced by future owners would be funded.
It will take five years to raise $300 million in levies, so no “fast fix” is on the way.
The real cost
As analytical research reveals, the likely damage bill for rectifying the combustible-clad buildings will be huge. Conservative industry estimates for Victoria alone suggest the aggregate bill is estimated to range between $28.75 billion and $115 billion, compared with the paltry $1 billion estimate made by the Victorian government.
Labor has governed for 16 of the past 20 years in Victoria and continued systematically to entrench a failed system. For hundreds of thousands of consumers caught in the chaos, for future owners, and for taxpayers, the costs will continue to soar.
This subterfuge was sculpted to marry three incompatible objectives. First, it was contrived to quell criticism. Second, it aimed to rescue the government’s construction business partners by restoring reputational damage to the industry. Third, by covertly fuelling “systemic failure” underpinned by conflict of interest, this duplicitous “fix” would shore up cartel profiteering.
Anne Paten cared and has been concerned about the failure of our regulators in the Victorian building sector with 13 years as a consumer advocate and dedicated worker on building and construction issues.