We all know that journalism is short of cash and under pressure from the speed, brevity and clickbait pressures of the 24/7 news cycle… but hey, given the right subject and a sufficiently stubborn journalist, it can still surpass most of the works of the academic historians. Rebecca MacFie’s book on Pike River was a case in point, and Peter Dyer’s new book Rottenomics about the ‘leaky buildings’ saga (“the single largest market failure in New Zealand history”) deserves to rank right alongside it. Both books, and both disasters, share a common origin in the ideological excesses of New Zealand’s free market reforms of the 1980s.
Dyer began his work on New Zealand’s ‘leaky buildings’ fiasco back in 2012, with an article for North and South magazine. His research led him back to the devastation of New Zealand’s native forests in the 19th century, which set the scene for the timber industry’s subsequent love affair with pinus radiata. Alas, when the de-regulatory zeal of the mid 1980s/early 1990s allowed for radiata that had been untreated for fungicides or insecticides to be widely used as a building material, the inevitable happened: the buildings rotted, and leaked.
It happened fast, too. The key piece of legislation was passed in 1991, and the first reports of rotting buildings appeared only two and half years later, in October 1994. So… what had happened to the safety nets that had kept New Zealand buildings relatively rot-and leak free for so long ? As Dyer shows in detail, most of those protections were systematically demolished amid the de-regulatory mania unleashed by the fourth Labour government, and which continued apace under the Bolger government.
Those reforms not only permitted the use of untreated timber, but enabled only a very “limited” (read: virtually non-existent) liability to which developers could be held accountable, under the Wild West version of company law that came to be embedded in the 1993 Companies Act. That Act allowed for shonky developers to evade liability by shutting up shop and declaring bankruptcy in one company and then continuing business-as-usual by quickly opening another one. Dyer cites an example of nineteen limited companies with numbered versions of the same name being registered with the Companies Office between March 1994 and March 2002 !
In addition, the neo-liberal reformers gutted the inspection system and certification process that had formerly offered protection (and a storehouse of expertise) at local government level. The new Building Industry Authority oversight body was then (deliberately?)given insufficient powers and inadequate funds to do its job properly.
Political fads, Architectural fashions
The real value of Dyer’s book lies in how thoroughly he has unpicked all the various factors that came together to turn this entirely preventable disaster into an inevitability. In 2019, it may be hard to realise just how completely this country’s business and political elites surrendered to the neo-liberal dogmas of 30 years ago. These mullahs of the free market were hostile to all forms of government regulation – let market forces prevail! – and in their zeal, they stripped away the checks and balances at central and local government levels, with predictably dire results.
For example: under the Building Act 1991, the process of certifying buildings was thrown open to market competition.
Who on earth thought it would be a good idea for self-declared private certifiers to be legally enabled to compete with local authority inspectors for “customers”? In effect, as Dyer explains, business was being made the regulator and the regulator was being turned into a business, and both were being expected to compete in issuing compliance assessments to the same people who were paying for their services. What could possibly go wrong?
To compound the evident dangers, this private certification system was bedded in during a 1990s building boom marked by an architectural fad for “ Mediterranean” stylings using stucco and faux stucco claddings (and related sealants) that proved to be the perfect breeding ground for rot, once untreated radiata had been given the greenlight to be used as a building material option.
As Dyer says (p12) “…This [1990s] building boom nurtured a toxic combination: poorly skilled, poorly supervised recent industry entrants under tremendous time pressure to build in new, unfamiliar designs – often with new, unfamiliar, untested and unregulated materials.” The extent of the ensuing disaster is staggering to contemplate. Those initial 1994 reports of a possible problem with rotting buildings snowballed into an epidemic, although it took until the Hunn Report in 2002 before the issue finally became widely recognised as a national catastrophe. “Well over 100,000 leaking and rotting buildings – not only homes, but a broad array of structures – have since appeared,” Dyer soberly reports.
According to a credible (and conservative) estimate contained in the book, and based upon a report commissioned by the Key government, the economic cost of the leaky buildings saga has been around $47 billion(!).
Unfortunately, Labour and National share a common record of dutiful service to the tenets of neo-liberalism, and to the policies and laws that brought them to fruition. It is no real surprise then to learn from Dyer that back when the regulatory safety nets were being stripped away by the Building Act 1991, this crucial bit of the leaky homes puzzle was passed by the Bolger government in a rare atmosphere of bi-partisan conviviality.
After all, the original Bill had been the brainchild of Labour MP Margaret Austin, and as Dyer reports, Labour MP Peter Tapsell said during the second reading debate that “The [Labour] Opposition might with some justification, claim that is its own Bill.”
Once the really bad news began to emerge though, the Building Act 1991 suddenly became a political orphan. Once the 2002 Hunn Report revealed the full extent of the leaky buildings disaster, Labour’s Leader of the House Michael Cullen, was quick to heap the lion’s share of the blame on National’s 1991 legislation, and on the Building Industry Authority (BIA) chaired by the National Party mandarin, Sir George Chapman. In politics, this kind of retrospective blame-shifting is par for the course. The more disturbing conclusion of Dyer’s book is that we still may have no publicly agreed measurement of the extent of the problem, which would be the first step towards putting effective safeguards in place. As the Hunn Report noted:
“It would seem most of these [leaky buildings] cases are settled out of court, many of the settlements subject to confidentiality agreements, so that there is no public record of them and therefore a barrier to accruing the very information needed for preventative action.”
Moreover, as Dyer reports, the Key government had twice commissioned two independent estimates of the extent of the problem. It doctored the first report by halving the original number of building failures and the subsequent cost, and then shelved the second report entirely – until Dyer obtained it with the help of the Ombudsman, after making an OIA request. This second report estimated that 174, 394 buildings were constructed between 1995-2014 that are “very likely to leak” at a total cost of $47.709 billion.
Lessons, Partly Learned
It would be nice to think all of this is history, that the requisite lessons have been learned, and that effective regulation has been put back in place – on everything from closing the liability loopholes to ensuring that a more robust and independent inspection and certification process now exists. Indeed, as Dyer reports in his final chapter, some improvements have been made. Yet legislating for liability reform still remains a work in progress. And while private building certifiers are a thing of the past, some territorial authorities (Dyer cites Auckland Council and Wellington Council) retain KPIs in the certification process, thus perpetuating the pressure to pursue quantity at the expense of quality.
Overall, New Zealand owes a debt of gratitude to Dyer for his determination to stick with the leaky homes story, and to tease out all of its contributing causes and implications. This year, the government has announced its intention to make New Zealand history a compulsory part of the school syllabus. Dyer’s book is a reminder that our untold (and under-told) history is not simply with respect to the Treaty partnership, crucial though that obviously is.
In addition, New Zealand needs to learn how to acknowledge and to measure the impacts of the 1980s economic reforms as well. Some of our communities are still suffering from the downstream effects, as manifested in the incidence of job losses, poor health outcomes, reduced life expectancy, high drug use, crime and unmet mental health needs. With Pike River, the de-regulation process and the scrapping of an effective inspectorate resulted in lives being lost. In the wake of the leaky buildings crisis, lives have been ruined.
Yet despite the glaring failures, the neo-liberal dogmas are still widely held as gospel by our business and political elites, mainly because they (and their families) have always been so well insulated from the fallout from their actions. This is not simply a failure of centre-right ideology. The same economic dogmas have been enshrined in the Budget Responsibility Rules signed onto by Labour and the Greens in 2017.
Plainly, we need solid, corrective accountings of the social outcomes that these policies continue to inflict on New Zealand. Dyer’s work is invaluable in that respect. His book not only sheds light on a poorly understood part of our recent history but – if it finds the audience that it deserves – Rottenomics will help to ensure that New Zealand doesn’t blithely go ahead, and make the same mistakes all over again.
Footnote: Rottenomics by Peter Dyer, is published by Bateman.
Do You Have A Comrade?
For many people, the late 1990s TV series Cowboy Bebop was their entry point to Japanese anime. Over the course of 26 short episodes (all available on Youtube) Cowboy Bebop offered a wildly imaginative, funny and poignant mashup of film noir, Western, science fiction, martial arts and action movie conventions. At times, it could also be very beautiful to look at, especially once the series really kicked into high gear – which for my money began with the languorous Cathedral window-splintering finale to episode five’s “Ballad of Fallen Angels.”
While not madly successful in Japan at the time, the series did always have its admirers. It is hard to imagine for instance, that Joss Whedon’s Firefly series would even exist without Cowboy Bebop (and its misfit crew of interplanetary bounty hunters) providing Whedon with the template. (Cowboy Bebop virtually invented the whole ‘Westerns in space’ subgenre.)
Aa you’d also expect from a series with be-bop in its title, the stories of Spike, Jet, Faye Valentine, Ein the Data Dog and Edward were inseparable from a music soundtrack that adroitly made hard bop, blues, heavy metal and rock music an essential part of the proceedings. Separate episodes were named after works by Queen, the Rolling Stones and Aerosmith, and the “Toys In the Attic” episode doubled down as a reasonably scary tribute to Ridley Scott’s original Alien movie.
Much of the soundtrack was written expressly for the series by Yoko Kanno and performed by a 12-piece jazz ensemble that she assembled, called the Seatbelts. There’s a story about Kanno and her contribution available here.
Finally, one good reason for waving the flag for the classic anime version of Cowboy Bebop is that a live action reboot is currently being filmed in Auckland. You should definitely watch the anime first. Even if the reboot exceeds expectations and is done well (think Blade Runner 2049) the chances are that, as with Blade Runner, the audience for the original was surprisingly small given its deceptively high cultural profile, and half of that small but zealous fan base were always going to hate a reboot whatever, on principle. The live action version of Cowboy Bebop is likely to run into the same marketing problem.
Anyways, here’s “Tank” – which provided the musical backdrop for the title sequence in each episode:
Also … from part one of the “Jupiter Jazz” episode, here’s the scene on Callisto where Faye is hanging out in a bar, intercut with a fight that Spike is losing, just as he’d formerly lost the “Julia” referred to in the title:
Finally, here’s the outro to the finale of Part Two of “Jupiter Jazz”, as Gren (a saxophone-playing ex-soldier of no fixed gender) sets off on a doomed journey towards Titan, where he/she had formerly found love, but with someone who was definitely the wrong person. The “Do you have a comrade?” postscript to this episode is a key line in a series that circles constantly around feelings of nostalgia and regret, and the substitutes we find to keep them at bay. Stick around for the shift in tone that kicks in around the three minute mark.