UPDATE: Icon the Opal Tower Builder has announced it won’t pay for food or accommodation beyond Sunday for residents of 74 apartments following the Body Corporate’s engineers Cardno declaring those units safe to occupy
What is the recommendation of the other independent engineers?
What role and responsibility does the developer Ecove have concerning reoccupation by residents?
And the cost of food and accommodation?
Opal Tower builder to stop paying for food and temporary accommodation
More residents are expected to start moving back into their apartments in Sydney’s damaged Opal Tower in coming days after the builder stopped paying for temporary accommodation and food.
Icon announced it won’t pay food or accommodation beyond breakfast on Sunday for residents of 74 apartments after the body corporate’s engineers Cardno declared those units safe to occupy.
“It is important to note that we are continuing to work with all the engineers to ensure all queries are thoroughly addressed and that the extent of apartments with actual remedial works is minimal,” Icon said in a letter to residents.
“Approximately 65 per cent of the apartments are ready to be re-occupied now.”
Other residents will be able to stay in hotel accommodation until at least Wednesday.
Design engineer WSP on Thursday said it had established a re-occupation schedule for apartments that are “physically remote” from repairs, strengthening works or propping.
It said stabilisation works had been undertaken on three walls in the building across 12 levels.
But it maintains the building is structurally sound overall – a verdict also made by the government’s independent engineering experts.
It follows weeks of uncertainty and inconvenience for Opal Tower apartment owners and lease-holders, after large cracks were found in the Sydney Olympic Park building on Christmas Eve.
The cracks initially sparked an emergency response and evacuation, but residents were ordered to stay out of the building until further investigations were carried out and the building declared safe.
An interim report released by the state government earlier this month stated that “significant rectification works are required” to repair the building.
While the building was declared structurally safe, independent experts investigating the cracked western Sydney building recommended all residents should delay moving back until further investigations have taken place by independent engineers.
With dam levels at 93.4 per cent, the plant has been placed into “water security” mode, a long-term shutdown which is likely to continue for some time.
“My best estimate is it will still be about four to five years before we turn the desalination plant on,” Sydney Water’s managing director Kevin Young told 7.30 New South Wales.
But the meter has not stopped ticking over for Sydney Water customers.
Every day they are paying more than $500,000 in what is known as an availability charge.
“We pay an availability charge whether we use water or not. That is equivalent to around $200 million a year,” Mr Young said.
That’s now a 50-year deal locked in, and at the end of that 50 years this facility gets given to the private operators for not a cent extra
Michael Daley, Opposition treasury spokesman
In May last year, just weeks before the plant was put on ice, it was sold to private investors.
The buyer was a consortium split 50-50 between Hastings Funds Management and the Ontario Teachers’ Pension Plan, based in Canada.
Between now and 2062 they are guaranteed inflation-linked payments of about $10 billion from Sydney Water.
The NSW Minister for Finance and Services, Andrew Constance, said the deal delivered value for money.
“We took a very deliberate decision to refinance the desalination plant, to convert it to a 50-year lease because by having that capital available, we can better utilise that capital across the community for hospitals, schools and roads,” he said.
Owners will be paid a $5.5 million restart fee
It was a Labor government that built the Kurnell plant, but Opposition treasury spokesman Michael Daley says the O’Farrell Government has turned it from a public asset to a cash cow for a private company.
“That’s now a 50-year deal locked in, and at the end of that 50 years this facility gets given to the private operators for not a cent extra,” he said.
“That’s not a good deal for the people of New South Wales.”
FOREIGN ownership of Australian farmland has increased by four per cent, according to the Australian Taxation Office.
In its report on foreign investment of Australian agricultural land, as at June 30, 2018, more than two million hectares (mha) have been acquired by overseas buyers.
The level of foreign ownership has remained relatively constant over the past three years with a slight increase.
The report found that WA had the third highest percentage of foreign-held land at 16.4pc, followed by the Northern Territory (26.8pc) and Tasmania (24.5pc).
Putting this into perspective, WA is just above the national average of 13.4pc.
From the 2015-16 to 2017-18 financial year period, WA had seen the most uptake of land by foreign buyers, with an increase of 35.5pc.
This is much higher than the national average (and other States) with just 0.9pc of agricultural land taken up by overseas interests.
Victoria followed WA is an 8.4pc growth in foreign-held farmland and then New South Wales/The Australian Capital Territory at 7pc.
South Australia and Queensland experienced a divestment of international ownership of 31.1pc and 10.8pc respectively.
In terms of land size, Queensland topped the list with 15.758mha being owned by international investors.
Again, WA was third on the chart, after the NT (14.637mha), with 13.699ha of foreign-owned farmland.
The majority of the country’s land that is under foreign ownership is leasehold (81.3pc).
Of foreign-held land in WA, 92.1pc is leasehold.
States with higher rates of land owned by international investors were Victoria (87.7pc) Tasmania (86.5pc) and NSW/ACT (77.2pc).
As might be expected, most (85.9pc) of foreign-held farmland is used for livestock enterprises comprising 45.192mha, followed far behind by 1.675mha for crops (3.2pc) and 1.383mha for forestry (2.6pc).
While livestock makes up a major portion of foreign-held farmland, the use of such land for livestock operations decreased by 1.2pc over the three years, which although is only a small percentage, is significant given the proportion of land that it reflects.
It is a similar situation for other commodities which although only making up a small part of foreign agricultural investments, had large growth over three years.
Foreign-held land use for horticulture rose by 37.9mha, with ‘other farming’ at 26.7pc and cropping at 11.7pc following.
Shining the spotlight on WA, the foreign bodies’ use of the State’s land was similar that of the country with 11.935mha (87.1pc) being farmed for livestock and 558mha (4.1pc) for cropping.
In terms of establishing a grasp on ‘who owns what’ of Australian farmland, the United Kingdom remains to have the greatest presence with 10.239mha owned in 2017-18 (26.1pc of total foreign ownership), compared to 9.752mha in 2016-17.
Between 2016-17 and 2017-18, the UK had a 4.9pc growth in Australian farmland.
China is second when it comes to having its stakes in Australian farmland, owning 9.169mha and 23.4pc of foreign-held farmland.
Of Australia’s total farmland, the UK owns 2.6pc of land, followed by China with 2.3pc the US with .07pc.
More than 92pc of foreign-owned land is held by Australian incorporated entities.
Some of the sales that contributed to these results include Max’s Vineyard being bought by Chinese investors for $3 million and business man Harold Mitchell, who owns Crown Resorts sold his cattle portfolio to Hui Wing Mau, a dual Chinese-Australian citizen, for about $70m.
Brothers Neil and Ian Delroy sold the avocado property Jasper Farms, near Busselton, to Canadian company Ontario Teachers’ Pension for nearly $180m.
ASX-listed Costa Group, involving groups from China and North America, has been on a bid to become Australia’s biggest avocado producer, after purchasing three more farms across NSW and Queensland.
Large scale farming family, the Kahlbezters, sold their NSW properties to two foreign investment companies for more than $115m combined.
Included is the sale of Merrowie at Hillston and Jemalong Station and Jemalong Citrus, Forbes, NSW, which were held by the family’s Twynam Agricultural Group.
Mers Global Investments LLC, based in the US, bought Merrowie and Optifarm, a Netherlands-based group purchased the two Jemalong properties.
Foreign ownership of agricultural land went under the microscope last year when the Federal government announced tighter restrictions for overseas investors looking to purchase Australian farmland.
The rules required properties to be ‘marketed widely’ to Australian buyers for at least 30 days before being on the international market.
The idea behind this was to prevent properties being on the market without Australians realising, but there were criticisms it could impact vendors as they could miss out on getting the best price if they didn’t want to go to market.
One of the biggest winners from Australia’s property boom, Mirvac pays no tax because it is a “stapled security”, that is, a trust stapled to a company.
Trusts don’t pay tax, their“members” do so Mirvac will argue, with some merit, that it should not be on this Top 40 Tax Dodgers chart – and we invite Mirvac to respond – as its members are required to pay the tax.
However, most Mirvac shareholders would be either super funds (who pay at their 15 per cent rate) or self managed super funds (who pay at their marginal tax rate, which may be zero) so the country’s take is probably less than half what it would be if this were a company rather than a trust.
In other words, the point of trusts is to dodge tax.
Mirvac booked income of $7.6 billion over the past four years and, on the tiny $20 million in taxable income which it declared to the Tax Office, it still paid zero tax.
So Mirvac, at the height of the greatest property boom in Australia’s history pays no tax, even on its taxable income. Auditor, and (massive conflict of interest) tax advisor too, is PwC.
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We are counting down the Top 40 Tax Dodgers. There are now four years of tax transparency data published by the Tax Office and we have used this data to work out which large companies operating in Australia have paid the least tax, or no tax.
Notable new economy players such as Google, eBay, Booking.com, Expedia are not near the top of the ATO list. That’s because they don’t (yet) recognise all income earned here; instead, they book Australian revenue directly to their associates offshore. They will be ranked in due course.
For other large corporations, and in particular, multinationals, the main steps in avoiding tax are made by reducing their taxable as much as they can; usually by sending it offshore in interest on loans, “service” fees or other payments to foreign associates. So, we have set a threshold. We have included only those companies which managed to wipe out 99.5 per cent or more of their taxable income over four years.
Qantas, therefore, is not on this list, although it has enormous income and has paid no income tax in Australia for many years. It misses the cut-off due to it not eliminating more than 99.5 per cent of its total income.
The airline had made large losses which were offset against profits. Many large corporations which have paid zero tax in ATO data, have legitimately made losses and have therefore built up “tax-loss shelter”.
Further explanation of methodology can be found here.
Many others however, such as ExxonMobil and EnergyAustralia, are on the list as they managed to eliminate all or most of their taxable income by “debt-loading” or other means of aggressive tax avoidance.
In this, the second iteration of michaelwest.com.au corporate tax rankings, we have ranked companies purely on the Tax Office data. We will also publish a list of Australia’s better corporate taxpayers, those companies who contribute most to the country in which they operate.
The Tax Office data is not a perfect guide. It does not record refunds, only tax payable and is often at odds with disclosures made for accounting purposes. In some cases, there are multiple entities with the same ultimate offshore parent reporting. One entity may pay zero tax, another may pay at the statutory 30 per cent rate (even if on low taxable income). We endeavour to be fair in our reporting to recognise these issues.
The data also recognises trusts as well as companies. For trusts, it is the members (investors) rather than the trusts who are ordinarily required to pay the tax. In many cases however it is fair to recognise trust structures for what they are, as tax is often the main reason these vehicles have been structured as trusts.
Companies are welcome to debate their rankings or to touch base to clarify or defend their tax practices. We will append or link these submissions.
Hydrox has been taken off the list as it never made a profit.
Further explanation of methodology can be found here.
NSW cabinet minister Pru Goward is reportedly set to retire from politics.
Goulburn MP and NSW cabinet minister Pru Goward is set to retire from politics at the next state election.
Ms Goward, who was first elected to parliament in 2007, announced on Wednesday morning that she will not recontest her seat in March.
She said it was a difficult decision made “in the best interest of my family.
“I have decided to retire at the state election in March 2019. Until then I will continue to work hard for this great government and my wonderful constituents,” she said.
“I thank the people of Goulburn who I have served for almost 12 years. Our region has been transformed over the past eight years in government and I am very proud of that.”
Premier Gladys Berejiklian thanked Pru Goward for her service following the announcement, that she will not stand at the next election due to family reasons.
“I know how difficult this decision has been for Pru and completely appreciate her need to put family first at this difficult time,” Ms Berejiklian said.
“She will leave a legacy of achievement for which she can be enormously proud. Pru doesn’t do anything by halves and I know she will continue to work as hard as ever for the people of NSW and for her electorate until March 2019. I wish her and her family the best for the future.”
Ms Goward has been member for Goulburn for 12 years, serving in cabinet in a variety of portfolios including family and community services, social housing, planning, medical research, mental health, assistant health, women and was the state’s first prevention of domestic violence and sexual assault minister.
She iscurrently the minister for family and community services, social housing and for the prevention of domestic violence and sexual assault.
“My portfolios have involved complex social issues. They often do not get the media attention they deserve but are some of the most critical in government,” Ms Goward said.
“I thank my ministerial staff, I also thank my Goulburn staff. Together we have achieved so much good for the people of NSW. It has been quite a journey and we have done it as a strong team.”
In late May, ABC’s 7.30 Reportran a segment on the cheap combustible cladding that has covered potentially thousands of buildings across Australia, that last November sent a Docklands building into a towering inferno:
LEIGH SALES, PRESENTER: When a cigarette was left on a balcony table in Melbourne’s Docklands precinct last year, it took fewer than 15 minutes for 13 storeys to go up in flames. The problem was the cheap cladding that covered the entire apartment building. It didn’t meet Australian standards and should never have been used. But since that fire, it’s emerged that potentially thousands of buildings in Australia could be covered with the same material…
MICHAEL O’CONNOR, CONSTRUCTION, FORESTRY, MINING & ENERGY UNION: This product is rife. It’s used in buildings throughout Australia. All the information we’re receiving, Brisbane, Perth, Melbourne, every capital city, we believe this product is used in many buildings and particularly in high rise buildings…
Then in June, Engineers Australia released a report claiming that 85% of strata units built in New South Wales were defective on completion, and arguing that a major fire in a Sydney high-rise is inevitable.
And in September, ABC News noted a report from the University of New South Wales, which confirmed that 85% of apartment buildings built since 2000 in New South Wales were defective, with common problems including shifting foundations, water leaks, wall cracks and tiling faults.
Now Fairfax Media has run a story about a 3 year-old apartment block in Melbourne where flammable cladding has been been detected and owners now face possible eviction and expensive repair bills:
Owners of the 78 units also face hundreds of thousands of dollars in a repair bills after being issued with a show-cause notice asking them why they should be allowed to continue living in the eight-storey building.
The flammable cladding was detected at Harvest Apartments at 144-150 Clarendon Street in Southbank during a major audit of central city buildings by Victoria’s building regulator…
[Municipal building surveyor Steven Baxas] said there were “questions about the validity of the building permit issued for the construction of the building”…
Owners at Harvest Apartments are reportedly “very upset” about paying to fix defects in a building less than three-years old…
Australia’s new found fondness for apartments has been touted as not only a solution for housing affordability, but also as a way to save the environment by reducing sprawl, as well as saving the economy by filling the construction void as the mining investment boom unwinds.
Across the east coast capitals, in particular, apartments have sprung-up like wildfire, as illustrated in the next chart:
But rather than building world-class homes suitable for families, instead we have built are a bunch of ugly, expensive, and shoddily built apartment blocks, where $400,000-plus doesn’t just buy you a tiny shoebox, but also potentially your own private crematorium.
At least it will add to GDP, given the cost of repairing/rebuilding these blocks [/sarc].
WHAT’s changed? Certainly not yet legislation to protect the consumer!
The Towers of Trouble ..
MERITON: Regis Towers built in 1998 with building defects including cracked plasterwork, incomplete unit-separating walls screened by false ceilings, inoperable mechanical exhaust fans, unsafe fire door, defective external render,
alleged structural building cracks, defects in a smoke detection system and problems with fire insulation.
ALSO the following Towers among them …
The lauded Horizon apartment tower with its intermittently failing lifts
Wharf Terraces at Woolloomooloo with its acoustic problems
The Highgate, Kent Street with its alleged electrical and plumbing faults
The Woindakia at Waverton with alleged rust marks
The Observatory Tower, Kent Street, or as some residents dubbed it, “the clever building from hell”, where the lights and air-conditioners came on unexpectedly.
The developers all agreed to fix the problems
Hyde Park Towers, Elizabeth Street with a list of problems including sewage smells caused by faulty plumbing, poor internal finishes and $2.4 million worth of work they claim was needed to meet fire safety requirements. … and more
Multiplex: The Peninsula; defects included a ceiling collapse due to a faulty air-conditioning system; later black mould on bathroom ceiling due to upstairs toilets leaking sewage into the ceiling space
TAKEN TOGETHER THEY AMOUNT TO A CRISIS!
KEY POINTS …
-where there was one major body that handled building complaints; now a plethora of options including tribunals, courts and insurance claims
-suggested the rot began in 1994 with the abolition of the Building Services Corporation; its role was to handle consumer complaints about builders and to administer a fund gathered from selling home indemnity insurance; a safeguard to pay out consumers
-As the BSC merged with the Department of Fair Trading the Government privatised building insurance; its concept to force bad builders out of the industry; it proved quite different
-major insurers included FAI and HIH; builders were offered three months’ free cover regardless of their histories
-the shift began in 1993 when tradespeople began to certify their own work; these certificates began to be relied upon!
-in NSW the person who installs your fire door is the person who issues the certificate to say it has been installed correctly
-the person who says that your new building complies with the national building code can be a private contractor who is being paid by the developer
-this can be the same person who certifies that the building has been built correctly
-*1998 (?) the NSW Government introduced a scheme that offered developers an option to almost completely privatise the process
-under the change these “private certifiers” would report directly to the developerswho had contracted them to inspect the buildings
AND THIS WOULD APPEAR TO BE AT THE CRUX … Patricia Gilchrist, the executive director of the Urban Development Institute of Australia, which lobbied for the change, said the new system was working well and had cut down on the lengthy delays of the old system …..
Towers of Trouble
The unfortunate events at Regis Towers, one of Sydney’s newest and biggest apartment blocks started to unfold in January when Beryl Hardy Nisbett decided to sell. Things might have remained hidden for longer if the couple who wanted to buy her apartment hadn’t insisted on bringing along a building inspector. The inspector produced a 16-page report which concluded that “reasonable habitation of the unit would be extremely difficult”.
The apartment had cost $500,000 three years earlier, but the list of alleged building defects was long: cracked plasterwork, incomplete walls screened by false ceilings, mechanical exhaust fans that were inoperable and a fire door that was considered unsafe, according to the report.
Moreover the inspector, Dominic Ogburn, determined that the problems in the Meriton development were unlikely to be isolated. There were, after all, 554 other residential units in the three Castlereagh Street, Pitt Street and Campbell Street buildings that make up the block.
“We strongly recommend that a comprehensive building survey be undertaken on the common areas by the owners’ corporation, not least of which to identify similar incomplete unit-separating walls and defective external render,” he said.
Hardy Nisbett lost her sale but elements of the report found their way to Sydney City Council, which agreed to inspect a sample of 15 units.
The council inspectors found 14 to be in breach of the Building Code of Australia and notices under the Environmental Planning and Assessment Act began to rain down on the owners’ corporation.
Three council-issued notices in March dealt with alleged structural building cracks, defects in a smoke detection system and problems with fire insulation.
On April 24 a formal fire order was issued which stated: “The provisions for fire safety are not adequate to prevent fire, suppress fire or prevent the spread of fire or ensure or promote the safety of persons in the event of fire.”
Mark Longobardi found out about the fire order because it prevented the sale of his apartment, but others found out about the fire order only this week. Some residents are probably just finding out now.
So, because there is no suggestion that any laws were broken, what laws could allow this situation to occur?
And where does Regis Towers fit into the growing number of complaints about alleged building faults in multistorey units across NSW?
You might have heard the complaints.
There was Harry Seidler’s lauded Horizon apartment tower with its intermittently failing lifts, the prestigious Wharf Terraces at Woolloomooloo with its acoustic problems, the Highgate apartment in Kent Street with its alleged electrical and plumbing faults, the Wondakiah at Waverton with alleged rust marks and the Observatory Tower in Kent Street, or as some residents dubbed it, “the clever building from hell”, where the lights and air-conditioners came on unexpectedly.
In each case the developers have agreed to fix the problems.
Airing grievances in the Supreme Court earlier this year were residents of the exclusive Hyde Park Towers in Elizabeth Street, where penthouse apartments in the 34-storey block sold for prices of more than $1.5 million each.
There the residents made a $17 million statement of claim that alleged a list of problems including sewage smells caused by faulty plumbing, poor internal finishes and $2.4 million worth of work they claim was needed to meet fire safety requirements.
The case is still proceeding.
Even Premier Bob Carr’s so-called “pattern book” of the 10 best examples of residential blocks in the state has not escaped.
The Herald has learnt that two of Carr’s favourite blocks the Peninsula at Manly and Domain at Marrickville have been the subject of concern by residents over the quality of building work. They include alleged problems with plumbing and internal finishes.
You might have heard the complaints without realising where they fit into a bigger pattern. Because, taken in isolation, no single complaint would be enough to lead to calls for reform.
But taken together, according to some observers, they amount to a crisis. They say it is a crisis that is costing hundreds of millions of dollars in unnecessary inconvenience to thousands of consumers each year.
“I think the tragedy is already there,” said Jerry Tyrell, a private building inspector. “People are living in noisy buildings … defective buildings. A lot of people’s lives are being altered by it, both financially and emotionally.”
Councils just a ‘keeper of records’
To better understand the source of the discord, The Herald interviewed dozens of State Government and council officials, industry and insurance executives, property owners and private building inspectors.
We also reviewed hundreds of council documents, strata documents, court documents and previously undisclosed State Government documents.
The picture that emerges is not a happy sight for consumers.
Where once there was only one major body that handled building complaints, there is now a plethora of confusing, and sometimes very expensive, options. These can involve tribunals, courts and insurance claims.
*Responsibility for building standards is spread across two State Government departments and relies to a great extent on 151 private building surveyors who are accredited by an organisation based in Adelaide.
Local councils, it would appear, are often just the keepers of recordssupplied by private contractors. Councils don’t always check new residential buildings themselves and they often don’t hear about problems until well after people move in.
Some say the rot began in 1994 with the effective abolition of the Building Services Corporation (BSC), after its board was dismissed.
Established five years earlier, its role was to handle consumer complaints about builders and to administer a fund gathered from selling home indemnity insurance.
This fund, which was levied on builders, was designed as a safeguard to pay out consumers who had been wronged.
The popular perception of the BSC was that it didn’t work very well but, in hindsight, it seems it might have been judged too harshly and too early.
“The Building Services Corporation certainly had some problems in terms of quality of delivery and focus on consumers but at least it was a very specifically focused body,” said Norm Crothers, a spokesman for the Australian Consumers Association. “It might have been perceived to be close to the industry but it was better than what we have now.”
*In 1997 the BSC was merged with the Department of Fair Trading, which lumped complaints about substandard building work in with every other consumer complaint.
*”The Government removed the only body that was specifically designed to look after consumers,” said Allan Colquhoun, a former BSC board member.
“There was nothing seriously wrong or corrupt about the BSC. I am not saying it was perfect but it was in its infancy, for God’s sake. It was improving.”
On one level, the statistics do appear to indicate that things were better.
*In 1992 the BSC brought 1063 prosecutions for bad building practice before the local courts. Last year, (2000) the number of successful prosecutions was 32, according to figures obtained from the Department of Fair Trading.
*As part of the merger of the BSC with the Department of Fair Trading, the Government decided that it would privatise building insurance something builders used to have to get from the BSC before starting a new building.
The concept behind private insurance was that it would force bad builders out of the industry. But the reality appears to have proved quite different.
*Two of the three major private insurers turned out to be FAI and HIH companies which are now the subject of a royal commission.
*According to the Master Builders Association, private insurance proved so easy to get that builders were even being offered three months’ free cover. Regardless of their histories, even the bad builders were being reinsured.
Those events might have contributed to the decline in building standards, but some observers claim that the biggest single reason has been the growing incapacity of public authorities to act as a proper watchdog.
*Graham Jahn, the president of the Royal Australian Institute of Architects, said the shift began as early as 1993 when tradespeople began to certify their own work and these certificates began to be relied upon.
“There has been a general drift away by councils and other bodies from getting involved in the private building area,” he said.
“That general drift away has created a climate … where there is not much of a culture of having your work inspected pretty much by anybody, including architects or arms-length contractors or by local councils.”
*In today’s NSW, the person who installs your fire door is the person who issues the certificate to say that it has been installed correctly.
*The person who says that your new building complies with the national building code can be a private contractor who is being paid by the developer. And this can be the same person who certifies that the building has been built correctly.
Asked if there were issues flowing from that, Jahn replied: “Clearly there are some issues. How strongly they relate to the drift … I can’t answer that directly.”
**Three years ago, just as the reliance on so-called “self-certification” was growing, the State Government introduced a scheme that offered developers an option to almost completely privatise the process.
The change opened the way for private building surveyors to do much of the work of local councils by allowing them to issue construction certificates,to inspect various stages of construction and to issue certificates that stated buildings were fit for habitation.
Under the change these “private certifiers” would report directly to the developerswho had contracted them to inspect the buildings.
The Herald has learnt that private certifiers are used in up to 30 per cent of all new buildings in NSW. Significantly, the majority of those jobs are the bigger projects being undertaken by the larger developers.
**Patricia Gilchrist, the executive director of the Urban Development Institute of Australia, which lobbied for the change, said the new system was working well and had cut down on the lengthy delays of the old system.
“I know that sometimes people see it as something a little bit perhaps sinister, but it is really not the way we see private certifiers … [They are] a spur to better service,” she said.
*”Where councils held the monopoly, we felt we weren’t getting the service. It is particularly a timing issue, there were delays, and when developers have got borrowed money and when they have sold units, people are anxious to move in.”
*But Peter Woods, the president of the Local Government Association, which opposed the move, said he didn’t think the Government had thought the consequences through.
“Our view in local government is that it’s not just about maintaining bureaucratic control, it’s about representing people to protect their interests,” he said. “One of those interests is to ensure quality control.
“We saw enough bad practice before private certification came in … what happens when we open the floodgates and say all we want is a signature on a piece of paper?”
Some local councils claim to have been left confused by the change.
“[The process] has been done in the absence of the necessary level of detail as to who is going to be responsible for what when things start to go wrong,” said James Harrison, who until recently was the director of planning and building at South Sydney Council. “Under the new system it is a lot less clear as to who should or shouldn’t be investigating complaints.”
Harrison said 13 problem buildings passed by private certifiers had already been identified in South Sydney. In one case, a private certifier had signed off on 39 unauthorised additions, including 14 illegal rooms.
The Lord Mayor of Sydney, Frank Sartor, said his council had also identified a number of problem buildings. “Any fool should be able to see the enormous conflict of interest they [private certifiers] have got,” he said. “They should be able to see that this is a major problem.
“The simple fact is that if I am a certifier I will be loath to make trouble for a major developer who gives me a lot of work, so they have a major conflict of interest. I cannot believe that such bad legislation ever got enacted.”
The Herald has learnt that the main accreditation body for private building surveyors the Adelaide-based Building Surveyors and Allied Professions Accreditation Board (BSAP) is now under review by the State Government.
Of particular concern to the Government is whether BSAP is capable of investigating complaints against its members.
So far, 34 complaints about work carried out by private certifiers in NSW have been made to BSAP, yet none of the complaints has led to the withdrawal of accreditation for any of the surveyors complained about.
BSAP became involved in the process in NSW after the Government called for interested parties to apply for the right to accredit private certifiers.
One of those who answered the call was the Australian Institute of Building Surveyors the organisation behind BSAP.
Geoff Mitchell, the institute’s national president, said it set up a system whereby surveyors who had previously worked for local government but who now wanted to work for themselves could apply for recognition.
“Certainly the professional ethics of my members put a lot more accountability into the process than what was there before,” he said.
“A lot of complaints that have been received [about members] have been purely driven by a misunderstanding of issues rather than technical incompetence.”
But the Herald has learnt that the process to determine who a “suitably qualified” person was under the changes was left largely to BSAP because the laws did not stipulate what qualifications were needed.
Now, three years into the scheme’s operation, the Planning Minister, Dr Andrew Refshauge, is so concerned about the accreditation criteria being used he intends to introduce major reforms to the process early next year.
“There has been some suggestion that there has been some problems,” he said. “There are some significant changes occurring … Making sure the skills, the competences, are appropriate and that [certifiers] are assessed appropriately.”
IN RELATION to Regis Towers, it would seem that private building surveyors cannot be blamed, because the buildings were signed off by Sydney City Council.
*There does appear, however, to bean issue about the extent to which the council relied on the honesty of the various subcontractors used by the developer, Meriton.
The Herald was able to obtain access to thousands of documents in the council’s own files in relation to Regis Towers, and the picture that emerges is sobering.
The documents show that Sydney Council relied to a major extent on dozens of certificates issued by the numerous subcontractors who built the building and who checked its safety aspects. The subcontractors said the work had been completed and the council appeared to have believed them.
Ross Kocass, a Meriton spokesman, said: “It was done under the old system [where] we employ subcontractors, they certify to us that they have done the work as per the plans, and we then certify to council.
“What they [the council] inspect or what they look at is not up to us. And basically it can’t be, because it needs to be random.”
At least one other local authority was also involved.
The documents show that in January 1999 and again in September 1999 officers from the NSW Fire Brigades visited and inspected parts of the buildings on a random basis.
Three of the resultant reports carried the following paragraph: “Based on certification received and inspections of the building, it is considered that adequate provisions have been made for the preventing and extinguishing of fires, and the protection and saving of life and property in case of fire.”
And yet, in April 2001, the City of Sydney issued a fire safety order against the building an order that has yet to be lifted.
Sartor said that under the Local Government Act 1993 the council had no choice but to accept the certificates from people the act defines as “appropriately qualified” persons.
Again, the law does not define who an appropriately qualified person is.
“We relied on the certificates that were given to us,” Sartor said. “We were obliged under the act to accept these certificates.”
Meriton said that once the problems were brought to its attention by the council, the company immediately went back in and fixed them, even though there was no legal obligation do so.
“We were under the impression that everything done there complied with the Building Code of Australia and that, as you know, is one of the most stringent codes in the world,” Kocass said.
“At our own cost we went back there and we inspected every unit in the whole place, with the exception of 18 units. We didn’t inspect those 18 because we couldn’t get access.”
“It was basically a commercial decision [to go back in] because our name obviously helps us succeed in the market. Without that we have a lot of problems.”
Meriton said it had hired private certifiers to convince the council that the building now met the building code.
For its part, the council wrote to residents this week to say that it would be undertaking its own inspections, beginning on Monday.
The Herald understands the council will inspect only 10 per cent of the units.
The buying pitfalls
How do you avoid buying a unit in a badly built block?
There are three main avenues of inquiry a pre-purchase building inspection, a search of the minutes of the owners’ corporation and a call to the Department of Fair Trading.
The department advises buyers of old and brand-new units to obtain an inspection from a qualified and experienced building consultant. This will cost from $400 to $850.
The Herald has uncovered cases, however, where serious problems have been discovered after purchase despite an inspection. In some cases, the second building consultant recommends the resale of the unit because the defects are too extensive to fix.
Solicitors acting for buyers usually order a strata search an inspection of the minutes of the owners’ corporation. It should disclose any known building problems and whether the sinking and administrative funds are sufficient to rectify and/or maintain the building. Such searches cost about $180.
You can inspect the minutes yourself at the strata manager’s office for a fee of about $25. The Department of Fair Trading says the owners’ corporation must make these records available but strata managers insist on a written authority from the agent or unit owner and they can make it very difficult.
The department recommends good legal advice, particularly buying off the plan when there is no building to inspect. “Get the lawyer to check the purchaser’s right to rescind [the contract] or reduce the sale price if promised works vary considerably,” a spokesperson says. “Lawyers should also find out what provision there is if work is delayed and/or defective.”
If buying off the plan, it may pay to employ a building consultant or architect to monitor the progress of the building and the particular unit. And watch for any clause that transfers the buyer’s voting right for future management of the building to the developer or builder.
You can also telephone the department to ask about the complaints record of the builder or developer, including any failure to comply with orders.
Off to a soggy start
Robyn Gold and her husband Bruce always intended to retire in Manly, so when the opportunity came to buy an off-the-plan waterfront apartment they seized it.
“We thought we could rent it for 10 years or so and then move in, so we settled in October last year and prepared to move our first tenant in,” she said.
“But the morning the removalists arrived they opened the door to find water everywhere. The ceiling was on the floor and the place was just a total mess. It was like this whole ceiling was dripping down and the plaster was in chunks on the ground.”
The building in question, the Peninsula, was recently nominated by the Premier, Bob Carr, as one of the best 10 apartment blocks in NSW. And this was no cheap apartment it had cost $850,000.
“By the time I got there they had ripped up all the carpets because they wanted to minimise the damage,” she said.
“[The builders] were very good about it; they had huge commercial dryers in there in the first day but we still lost two weeks’ rent and we are still claiming for it.”
The problem was soon identified as being a faulty air-conditioning system, but worse was to follow.
“Three months later a new tenant was about to be moved in when the agent noticed the bathroom had black mould on the ceilings and it was really smelly,” she said.
“And lo and behold, all the upstairs toilets were faulty and they were leaking into our ceiling space. So we had sewage in the ceiling spacecoming into our apartment. I was fairly upset about this because of the first incident.”
Gold said her distress was heightened by the fact that the replacement toilets were end-of-line stock and could be found only in Queensland.
“The truck got lost bringing them down but they got there in the end and we kept our tenants. But it was literally the day our tenant moved in that they got this sorted out.
“I think there are a lot of good things about buying off the plan. You could make a lot of money on it because sometimes you get this great growth spurt in the market and you’ve cleaned up.
“I suppose not all apartments are like this. I’d never done it before, and I would never do it again.”
Brian Hood, a director of Multiplex, the builder, said yesterday: “Multiplex stands behind any product they deliver and as much as we try to get them 100 per cent right, when problems occur we will fix them.”
Chinese buyers helped drive the property boom in Sydney and Melbourne property that lasted about five years and fizzled out in late 2018.
But with tighter lending rules and global factors affecting foreign demand in Australian property, how will the market be impacted?
New data from Chinese property portal Juwai.com shows interest from buyers dropped 20 per cent last year. But the final three months of 2018 saw inquiries surge almost 60 per cent.
Juwai spokesperson Dave Platter joined Your Money Live to explain what’s going on with foreign buyers.
“This is a year on year quarter spike. It could just be a quarterly variation, a low quarter the year before and a high quarter that year,” Platter said, explaining the sudden surge of inquiries in late 2018.
“We think this year we are looking at flat demand from Chinese buyers for Australian property.”
Chinese buyers living in Australia are given more flexibility and can buy any property they want.
The rules are more stringent for offshore buyers.
The Foreign Investment Review Board requires foreign buyers only to buy new developments.
“That’s why you see a lot of Chinese buyingnew apartments, new townhouses, new houses and land packages. Chinese buyers are very interested in new property as a rule, and then these rules just push them further in that direction,” Platter said.
Despite the rules, Chinese spent US$180 billion on global real estate in 2018.
“We think of Chinese demand as being huge, but the actual deal flow isn’t as great. that’s because there are these artificial barriers keeping buyers from actually making these deals.”
One of those barriers is capital controls, which makes it harder for Chinese people to move money out of the country. These rules have tightened since 2016, which is why “we think there has been a big decline in Chinese transactions here in Australia.”
Australia is still very much on the map for Chinese buyers. In 2018, Chinese buyers spent $32 billion on Australian real estate.
“It went down in the most recent year, but (Australia is) still 20 per cent of all foreign buying, the biggest share by far.”
Why is Australia such an attractive place for Chinese property buyers?
Platter says Chinese people have a reputation for saving and generally save 50 per cent of their income on a national average, but have limited options for investment.
“In the banks, you get a very low interest rate because they are kept artificially low by the government.
“If you put it in stocks you get a very bad return because it was the worst performing stock market in 2018 in China.
“If you put it in real estate it’s very hard to invest because the government is squeezing the real estate market to keep investors out.”
“And if you put it in equity or some alternate investment, you get into trouble because the government is investigating these funds.
“Australian real estate looks like the best investment in comparison,” Platter said.
What does this mean for the Australian property market?
2019 will likely see the same amount of buyers and money flowing in as last year, Platter said.
Juwai.com predicts Melbourne to continue to be the top destination for Chinese property buyers.
“Melbourne gets about $4 [for] every $3 that Sydney gets of Chinese investment.
“A developer I was speaking with today in Melbourne is building townhouses 25 minutes from CBD.
“They start in mid $600,000. Whereas in Sydney you pay $1 million for a two bedroom apartment.”
The US-China trade war is “scaring some investors” and could drive more Chinese buyers on our shores.
“We are seeing some Chinese investors saying ‘I’m not going to invest in the US, I’ll go to a similar market where I can get a similar return but with a safer profile.’”
Students, workers and entrepreneurs who are finding it difficult to gain entry into the US because of President Trump’s visa policies could shift to Australian universities and jobs, Platter says, which would drive up demand.
“More Chinese buyers could mean higher prices in certain segments, fewer could mean lower prices in certain segments,” Platter said.
“For 40 years, no one’s thought about the river,” he says. “And even in the basin plan, the Darling River doesn’t rate a mention.” Alan Whyte, Sunraysia Citrus Grower …
The death of hundreds of thousands of fish in the Murray-Darling Basin was unprecedented, but it was not without warning. By Karen Middleton.
Photo: The Guardian
Fish kill: What led to the Murray disaster
From the witness box at South Australia’s Murray-Darling Basin Royal Commission last year, Alan Whyte predicted the coming summer would have a terrible impact on the Lower Darling, just below the Menindee Lakes.
“Once the weather warms up … it’s going to stink like a septic tank,” the Sunraysia citrus grower said of the river system, in evidence to the commission in Adelaide on July 17, 2018.
“We have already had red alert warnings for blue-green algae outbreaks and as soon as we get into the warm weather, that is what’s going to happen. I refer to it as ‘muck’, and that’s the simplest description I can come up with. I don’t think you would let your dog swim in it.”
Photo: The Guardian algal bloom, Darling River
Whyte’s farm, Jamesville, is 65 kilometres north of the town of Wentworth on the stretch of the Darling River just below where only six months later hundreds of thousands of fish – locals say possibly a million – died suddenly on January 7.
This week,Whyte told The Saturday Paper he based his prediction on the volume of water left in Lake Menindee.
“We knew we were headed for trouble,” he says of his fellow farmers. “We were getting ready for trouble that we thought would be coming in December.”
That trouble came with sluggish flows and high temperatures. Then an algal bloom and a fish kill in December in the Lower Darling and another, bigger one in the same area in January.
A preliminary New South Wales government investigation identified several immediate causes of massive loss of fish in the Murray, publishing its findings on Thursday.
According to investigators, low water flows, including less-than-anticipated amounts of water being released from a lake upstream, encouraged the growth of blue-green algae.
Then a cool snap between January 4 and 5, combined with high winds, caused usually separate layers of cold and warm water to mix.
The cold water carried less oxygen than the warm, lowering oxygen levels overall. The cold water also killed parts of the algal bloom, further robbing the water of oxygen. The fish that died were mostly golden and silver perch, Murray cod – some decades old and under threat – and bony herring.
NSW Water Minister Niall Blair told The Saturday Paper: “You could prevent fish kills – if you had more water.”
But he and Alan Whyte believe a number of broader factors played a role, including how water was released from Menindee over the preceding two years to boost the environment further downstream – leaving too little for the dry period.
Whyte says temporary weirs known as block banks, built to help conserve water, were also constructed too late.
“We wanted the banks in place, so we could shift the water into deeper columns in cooler weather,” he says. “Shifting low flows of shallow water in warmer weather will end in tears.”
By tears, he means evaporation, stagnation, toxic algae and dead fish.
Niall Blair says the block banks required regulatory approval and were installed as quickly as possible.
But the farmer’s warning, six months ago, couldn’t have surprised officials trying to manage the distribution of water up and down the massive river system.
Their own maps of likely algal hotspots were dotted with red markers identifying sites at high risk.
The question now being asked is whether more could have been done to prevent what happened in the Darling River and whether the damage done by decades of jurisdictional squabbling and overuse of a mighty river system can ever be repaired.
In the wake of the January incident, the NSW government installed aerators in the river to provide oxygen refuges for fish, each one only about the size of a tennis court.
The NSW minister defends not having installed them sooner. “We certainly didn’t have any indication that we would see something as big as the one that we saw in January,” says Blair.
At a media briefing eight days after the January kill, Phillip Glyde and other officials from the Murray-Darling Basin Authority (MDBA), the Commonwealth Environmental Water Holder and the federal Department of Agriculture and Water Resources denied it was unprecedented, citing 40 such events across NSW every year.
But they then conceded that in terms of the number of fish affected – and in repeat events – “unprecedented” was a fair description.
While federal ministers attributed the deaths primarily to the drought, Glyde identified the major underlying problem.
“This is a river that has been overused over the last 100 years,” he said.
Greens senator Sarah Hanson-Young insists it’s still overused, accusing the cotton industry of running the river dry – something the industry strenuously denies.
Alan Whyte says another factor was the timing of releasing water out of the Menindee Lakes.
The release was designed to aid the Murray River further downstream – without which, the MDBA insists, things could have been worse.
Whyte argues the authority ended up helping areas that are home to a clutch of marginal SA seats – but hurting the Lower Darling.
“They’re doing it at times when they wouldn’t normally have done it and that’s one of the reasons – I stress only one of the reasons – there’s a fish kill.”
Under the Murray-Darling Basin Agreement, Lake Menindee is under the control of federal authorities – who can take water allocated to the environment and release it – until its total water storage falls to 480 gigalitres.
When it drops to that level, NSW takes over, prioritising the water to supply Broken Hill and communities and industries nearby instead. It remains under state control until the level rises once again to 640 gigalitres.
Niall Blair also attributes blame to the timing of water releases. “How much has been taken by the MDBA?” he asks. “How much has been sent to South Australia and how much is being released for the environment?”
He says after a 2016 deluge, the agencies released too much water too soon.
“They are operating under the rules, but those rules were also drawn up on assumptions that water would come back into the system,” he says.
But because evaporation claims hundreds more gigalitres, Phillip Glyde insists that “if you don’t use it, you lose it”.
Blair criticises the federal agencies – the MDBA and the Commonwealth Environmental Water Holder – and his own government’s Office of Environment and Heritage over their handling of the releases.
“I don’t want any more water coming out of NSW to flow through to SA, whether it’s [from] the Murrumbidgee, the Lower Darling or the Murray, unless it has a socio-economic benefit to the source area,” he says.
Asked if the outcome would have been better if the water had been held back, Glyde said: “We really can’t tell. We would say we did as good a job as we can, under those uncertain circumstances.”
Alan Whyte says the MDBA was operating legally.
“All Phil Glyde and his mob have done is follow the rules,” Whyte says.“Trouble is, they’re not thinking about the consequences in the real world. And the consequences two weeks ago were a million dead fish.”
Investigators estimate the number was closer to 300,000.
Basin plan critics fear changes that passed through federal parliament in May last year could increase the risk of repeats.
Resulting from a northern basin review, the changes the MDBA recommended will reduce the amount of water recovered from users in favour of the environment by 70 gigalitres.
In the senate last February, Labor sided with the Greens and the then Nick Xenophon Team, now the Centre Alliance, to disallow the regulation introducing the change, after bipartisan talks collapsed.
Agriculture Minister David Littleproud approached Labor’s shadow minister, Tony Burke, again and a deal was struck.
In May, when legislation was introduced to recover 605 gigalitres more for the environment in the southern basin – not through reducing irrigators’ allocations but through what are called “efficiency” measures that some scientists question – Labor agreed to back both the legislation and the northern basin changes.
The Greens and the Centre Alliance call that capitulation. Niall Blair calls it collaboration and praises the parties involved for achieving it. He says the meeting of state, territory and federal water ministers in Melbourne in December that finalised negotiations on a way forward in the Murray-Darling Basin proves co-operation is possible.
But the interstate politicking may resume.
“I think the harder stuff is to implement: no doubt,” Blair says.
He accuses the former SA Labor government of playing politics in establishing its own Murray–Darling royal commission last year – an inquiry with which other states and the federal government refused to co-operate fully.
South Australian royal commissioner Bret Walker is due to hand his report to the state governor next week.
The now South Australian Liberal government has promised to release it but won’t say when.
Centre Alliance senator Rex Patrick, who made several trips up the Murray–Darling Basin in recent months, believes the only way to address the issues long term is to scrutinise water entitlements.
“We have to go back to the allocations of water – how much water they’re diverting from the river,” Patrick says. He points to the fact that irrigators and other water users can save or bring forward their allocations over a three-year period.
“That’s not something the environment gets to do. It just misses out.”
He blames internal federal Coalition politics, at least in part.
“There’s nothing the Coalition can do because the National Party won’t let them.”
Despite the compromise reached between government and opposition, partisan politics is also re-emerging.
Opposition Leader Bill Shorten wrote to Prime Minister Scott Morrison on January 13, calling for an urgent inquiry into what he called “an ecological disaster and unfolding emergency”.
Morrison replied, sharing his concern but without an initial commitment to an inquiry– something minister David Littleproud later made.
Duelling scientific reports are now being prepared – one commissioned by Labor through the Australian Academy of Science and the other a government-appointed taskforce.
Both are due next month.
Hydrologist Professor John Williams, of the Australian National University, agreed to join the academy taskforce before the second one was established. He says water management – and climate change policy – are key.
“You can’t have a water management plan that allows you to kill fish every time we have a dry period,” Williams says. “We mustn’t avoid dealing with the fundamentals and that is: how do you manage the river system through climate change and keep the ecological system functioning?”
Meanwhile, the MDBA can’t promise there won’t be more fish deaths.
“We’d like to think not of that size, but there’s certainly going to be a risk,” Glyde concedes.
Alan Whyte remains cynical about both the promises and priorities.
“For 40 years, no one’s thought about the river,” he says. “And even in the basin plan, the Darling River doesn’t rate a mention.”
This article was first published in the print edition of The Saturday Paper on Jan 26, 2019 as “Fish kill: What led to the Murray disaster “. Subscribe here.
A COMMONWEALTH INTEGRITY COMMISSION … CIC … has been slammed as a diversion to shield in particular politicians and their staff from proper scrutiny and accountability
-no public hearings for corruption involving public servants or politicians
-no ability to make public findings
-the judges submitted that public sector corruption is more insidious, more pervasive and more difficult to detect
-that only serious criminal conduct could be investigated under the government’s proposed model
-corruption included nepotism and favouritism in appointments,the granting of contracts, andmisuse of confidential information
-donationsor financial favours to a political party or a politician, followed by a favourable decision to the donor …
Government’s proposed federal ICAC ‘a sham’, says former senior judges
An independent group of retired judges has slammed the government’s proposed Commonwealth Integrity Commission, describing it as a “deliberate political diversion designed to shield the public sector, and in particular politicians and their staff, from proper scrutiny and accountability.”
The committee of former senior judges, Anthony Whealy, David Ipp, David Harper, Stephen Charles and Paul Stein submitted a paper as part of a consultation process which said: “The government model falls disastrously short of providing an effective body to counter and expose corruption at a Federal level.”
One of the members, former Victorian Court of Appeal judge Stephen Charles, slammed the proposal to the Herald as a “sham commission”.
Mr Charles also criticised the government’s “desperate attempt” to push through legislation for its proposed federal anti-corruption commission as soon as Parliament resumes on February 11.
On Thursday, the Attorney-General’s department organised a consultation process in Melbourne about the proposed CIC. During the meeting two senior bureaucrats stated that he government planned to have the CIC bill before Parliament in the first sitting week of the year and that Attorney-General Christian Porter was unlikely to change the government’s previously stated position.
For instance, there would be no public hearings for corruption involving public servants or politicians due to concerns about “show trials” and smeared reputations.
There would also be no ability to make public findings.
In their written submission, the National Integrity Committee, an independent group of retired judges, several of them former anti-corruption commissioners, expressed their frustration at the government’s proposed model.
It was also a “massive failing” not to hold public hearings. There was also no justification for refusing to investigate complaints from members of the public or whistleblowers about ministers, members of Parliament or their staff.
“This restriction is totally unacceptable and will be so regarded by the Australian public,” submitted the former judges.
“The government model falls disastrously short of providing an effective body to counter and expose corruption at a Federal level.
“It is better to have no anti-corruption agency than one that is designed to be ineffective.”
Independent member for Wentworth Kerryn Phelps said the government’s proposed model “will meet resistance in the lower house if presented in its current form as it has a narrow focus and inadequate powers“.
“I think a National Integrity Commission needs to be able to properly investigate the role of lobbyists, donors and big business and their intersection with politicians and departmental officials,” Dr Phelps said.
“The public is outraged by the so-called management of the Murray-Darling Basin where it is estimated that one million native fish up to 100-years-old died earlier this month near Menindee.
“This could be covered by a National Integrity Commission or a stand-alone royal commission and needs to be properly investigated.”
She said a model proposed by fellow independent MP Cathy McGowan “would be a good starting point for the government to adopt”.