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18-08-2008

National has sympathy for owners but no promises

NZHERALD

National is making noises about Government help to the owners of leaky buildings, but is unlikely to meet local government demands to pay a big share of the repair bills.

Building and construction spokesman Nick Smith said National was sympathetic to a local government proposal to help bail out owners of leaky buildings.

"National does not think it is going to be sustainable for local government to be hit with a bill of $1 billion to $1.5 billion," he said.

Auckland City Mayor John Banks and Wellington Mayor Kerry Prendergast have lobbied Labour and National with a three-pronged plan to reduce bureaucratic and legal costs, put more money directly into repairs and limit the growing costs on ratepayers.

Under the plan, homeowners would be asked to pay no more than 25 per cent of the repair costs, and the Government and councils would split the difference.

Prime Minister Helen Clark has said the Government does not have $1 billion to spend on covering councils' liabilities in relation to leaky building claims.

Mr Smith said National was still working on a policy for leaky homes. He said the Weathertightness Resolution Service set up by the Government had been a debacle.

More than $100 million had been poured into the service, which had settled only 16 per cent of claims at an average cost of $109,000. The average settlement was $78,000, he said.

Mr Smith said National was looking at some ways of dealing with the problem that would be less litigious and lead to more of the $100 million going to repair houses.

But he would not say if National would put up more money to help homeowners.

In the 172 claims settled between 2002 and last year, repair costs were $107 million and "process costs" $65 million.

Claims in the pipeline had repairs costs of $336 million and process costs of $243 million and claims to be lodged had estimated repairs costs of $1.136 billion and process costs of $821 million.

Separate figures for Auckland City show that the council has spent $6.67 million on legal and expert costs resolving 206 claims to the end of January this year.

The council had paid $25.3 million to the claimants - about 25 per cent of the $106.5 million claimed.

Mr Banks acknowledged there was a potential downside in the Government becoming involved, which was more people seeking financial help.

"I clearly understand the dilemma of the present Government and future governments over the liability and the sheer magnitude of this uncalculated cost," said Mr Banks, a former National cabinet minister.

"But in terms of philosophy and principal, I am pleased that the National Party has engaged sympathetically. I'm very surprised the present Government with the sight of the ballot box haven't at least engaged sympathetically."

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