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Capital disaster with asbestos contaminated houses

By Brendan O'Reilly - posted Wednesday, 5 November 2014


There is a marked and unexplained disparity in relevant policies across jurisdictions.  The ACT Government seems to be adopting a "gold-plated" approach to solving the problem of asbestos contaminated dwellings, paying all the costs involved in a very expensive demolition process.  By contrast NSW is totally "hands-off" and "caveat emptor" in its approach to date.  The Commonwealth's continuing involvement (compared to its previous generous position) now seems only token and reluctant. 

It is already apparent that the $92 million (about $90,000 per affected ACT house) spent by Government in the early 1990s on this same problem was substantially a waste of public money.  At that time $90,000 would buy a modest ex-government house in a cheaper ACT suburb.  The ACT Government is now proposing to spend a further $400,000 per property on demolition and safe disposal of waste, putting virtually the entire $300 million to $500 million net cost onto ACT taxpayers.

I venture to suggest that householders, who allowed loose asbestos to be pumped into their ceiling cavities (and their successors in title) should bear at least some responsibility.  (The only reason for Government to bear all the costs would be if the earlier asbestos programme made the problem a lot worse, and there is no evidence that this is the case.)  The ACT taxpayer is owed some explanation as to why its Government is bearing all these costs and why at least part is not being paid by the Mr Fluffy home-owners.   I would speculate that, in the absence of government (over?) regulation and the ACT Government picking up the tab, most Mr Fluffy home owners would not choose to demolish their homes or, if they did, they would manage to do so for a lot less than $400,000.

We are told that asbestos levels in affected houses were found to vary from "higher than background to extreme levels".   So why is there a need to demolish the lot?   The approach of demolishing every asbestos-affected house and scraping every affected site smacks of overkill and bureaucratic "backside protection".

Overall, we appear to be experiencing a lot of "buck-passing".  In NSW the State government has done little monitoring of asbestos affected homes and to date has opted out of any financial responsibility.  In the ACT, the Commonwealth is now ducking responsibility for fixing Mr Fluffy homes, while the ACT government has put its hand up to accept virtually the entire financial burden.  This is a frightening prospect for the ACT taxpayer during a time of austerity, a diminishing Territory revenue base, and major cuts by its dominant employer, the Commonwealth Government. 

The ACT at last count had only 145,229 households, who will now be up for an average $2,754 per household to end the Mr Fluffy fiasco.  This is on top of the $800 million plus ($5509 per household) the ACT taxpayer is expected to foot for the (also recently announced) Gungahlin to Civic tramway, which is opposed by a majority of ACT residents and expected to lose money. 

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The people of the ACT should brace themselves for some hefty future tax increases.

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About the Author

Brendan O’Reilly is a retired commonwealth public servant with a background in economics and accounting. He is currently pursuing private business interests.

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