Book Review — Peter Dyer’s Rottenomics: The Story of New Zealand’s Leaky Buildings Disaster

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Building Today columnist Mike Fox

Building Today columnist Mike Fox runs his eye over an enlightening book he says clearly explains the unfolding catastrophe of New Zealand’s leaky building disaster.

I managed to read this book over the Christmas break and found it thoroughly enlightening.

It is a must read for anyone aligned to the industry as it clearly explains what went wrong and who caused it — and, not surprisingly, most roads lead to the Beehive.

Few New Zealanders and those within the industry have remained untouched by the unfolding catastrophe of the leaky building disaster.

Getting drawn into a claim, getting sick through mould-infested homes, losing one’s life savings trying to fix them or in defending yourself, or simply through having to pay the astronomical national bill for this avoidable crisis — none of us have come out unscathed, and it’s not over yet.

Dyer describes it as our biggest human-made disaster and, in financial terms, he’s probably right. He puts the cost, based on an unpublished government report he dug out, at more than $49 billion, with more to come.

All of us are paying higher rates because our local councils have ended up footing the bill for the careless incompetence of our national politicians and those who advised them, who took a functioning building regulatory system and wrecked it.

Every politician should be made to read this insightful book. The lessons exposed in this must not be lost in the transition of time.

This is a perfect example of the catastrophic consequences of shoddy law making and then the subsequent cover-ups and duck shoving that ensues.

In reality, the industry and consumer have been hung out to dry by the politicians. The first and only comprehensive investigation into the disaster, it is meticulous, painstakingly researched, well-sourced and referenced.

New Zealanders and, in particular, our industry, owe Dyer a huge thank you for exposing the hard-fought truth of the situation. We can return that favour by purchasing his book as it was a labour of love.

What went wrong? Dyer, a self-taught American and now a proudly Kiwi investigative journalist, has done an outstanding job in getting literally to the roots of the issue — namely our reliance on Pinus Radiata.

Promoted post-war as a solution to a timber shortage, it was also prone to rot. Fortunately, far-sighted research by the Department of Scientific and Industrial Research (DSIR) and sensible regulation literally found a solution, in the form of boric treatment.

Unfortunately, by the 1980s, although this carefully regulated treatment regime ensured buildings were rot and insect-proof, there were calls — no doubt genuine by timber suppliers — to remove treatment.

In addition to this, there were calls to reduce red tape to meet a demand for more buildings, more quickly and more affordably.

The solution two misguided Treasury officials suggested was a “performance-based” system — essentially one which replaced inspectors and regulation with the idea that the market would somehow police itself.

So key industry regulators were either scrapped or made toothless, and their budgets slashed.

The above combined with what Dyer calls a perfect storm of new building materials — such as monolithic cladding and sealants — architects, designers and builders who did not know how to use them properly, and the deliberate destruction of a local and national regulation and inspection system, in the name of freeing up a system which, admittedly, needed reform.

Not to mention hollowing out the training system for apprentices, so that when they were most needed, skilled tradespeople were thinner on the ground.

It is an allegory for our post-war trajectory — a brilliant home-grown solution to a timber shortage, provided it was treated and used properly, which was thrown away in haste.

If there is a lesson, it is the pitifully bad state of policy advice and political leadership of this industry.

Some of the most chilling lines in the book are the self-congratulatory quotes from MPs in 1991 as they passed the Building Act which unleashed the demise of the industry.

Perhaps the most telling statistic in the book is buried near the end. In 1988, we were spending 11% of our income on housing. By 2015, that had risen to 28% and the process was taking longer.

Dyer fails to mention that, without a doubt, rising land values account for some of this worsening, but his point is still valid. The “reforms” failed even at the one thing they set out to do — reduce costs.

Read this book, and you will find yourself nodding your head in agreement, and getting a feeling of some satisfaction when the blame for this fiasco is removed from the so-called shonky builder, and is delivered factually right back to where it all began — with the politicians.

• This article is based on a review on Stuff in October 2019 by James Hollings, and altered with permission.