Government to gain from leaky homes repairs

Friday 26 March 2010, 1:18PM
By North Shore City Council


An independent report undertaken for the North Shore City Council confirms the government will benefit to the tune of over $2 billion from the repair of leaky homes, North Shore Mayor Andrew Williams said today.

“The report shows that for every dollar spent on repairing a leaky home, the government will gain a windfall of 25 cents in increased revenue from GST and tax on other transactions directly involved in the repair,” Mayor Williams said.

“This is a conservative estimate, and does not include the benefit to government of reduced unemployment benefits from this increased building activity, or the savings in public health costs associated with leaky homes victims,” Mayor Williams said.

Mayor Williams said the research was carried out in order to put some more robust numbers around the ‘back of the envelope’ figures used late last year during negotiations between the six most affected cities and the government over a rescue package for leaky homes victims, subsequently dropped by the government.

“Any future government rescue package needs to be analysed in the context of this report, which now allows city councils and the public to judge the level of contribution from central government against the revenue they will derive from the repairs,” Mayor Williams said.

“The idea that the government contribution could turn out to be fiscally neutral, or worse profitable for them, would be a significant insult to long-suffering leaky homes victims, and to ratepayers who are carrying a disproportionate share of the burden from their councils often ending up as the ‘last man standing’ in leaky homes settlements.”

“The crystal clear message from the Court of Appeal decision on Monday is that litigation is not the best way forward and that the government needs to get serious about arriving at a rescue package, working with affected councils and the building industry, to finally put this “man-made” national disaster behind us.”

“It was the central government in the 1990s that inflicted deregulation of the building industry on home owners and the public, the root cause of the leaky homes disaster, and despite escaping legal liability on a legal technicality, their moral and political obligation to these victims is overwhelming.”

“At the end of the day, a rescue package that is fair to ratepayers and taxpayers that allows leaky home owners to repair their homes and get on with life is the only commonsense way forward,” Mayor Williams said.

Mayor Williams said the research and the report “Contribution to Government Revenue of Leaky Buildings Repairs” was carried out by COVEC Limited, a well respected independent economic, research, forecasting and public policy company.