SSKB Welcomes the News from the Victorian State Government Overnight

SSKB Welcomes the News from the Victorian State Government Overnight

Cladding Victoria Update

The Victorian State Government last night announced that in Victoria the rectification for buildings that are classified as having combustible cladding will be funded, at least in part, by the state government. The state government will then seek damages from responsible parties. Initially, it was communicated that apartment owners who had combustible cladding on their building would be responsible for covering the costs of the rectification. The news has been welcomed by those concerned about the high cost of the rectification.

It is predicted that this will cost the state government more than the predicted $600 million up to $1.6 Billion. To assist in covering the rectification costs, Premier Daniel Andrews has written to Prime Minister Scott Morrison to ask the Commonwealth for $300 million towards the rectification costs.

Victoria is the first state in Australia to assist in paying a large percentage of the rectification costs for combustible cladding on private apartments.

If the Morrison government does not agree to contribute (as their current position), the Victorian state government will consider introducing new charges over a 5 year period on building permits to assist in raising the remaining $300 million.

“Combustible cladding is a national problem and we want the federal government to be part of the solution here in Victoria,” Mr Andrews said.

Following Victoria’s move, it is suggested that other states should eventually follow in paying for the combustible cladding rectification.

A meeting will be held tomorrow between the Victorian government, the federal government and the state and territory governments to discuss how the rectification costs will be handled.

SSKB CEO Daniel Herbert stated that “It is unfair that apartment owners should be responsible for funding the cladding rectification work. These owners bought into apartment buildings that passed the regulations and were deemed to be compliant. We now know the aluminum composite panels used on some of these buildings is not safe. The consequences from the regulators and those who made the decisions should not fall on apartment owners for their oversight. If they do not follow Victoria’s lead it will create severe and undue financial stress for the innocent parties affected. The Victorian Government has done the right thing and moved to cover the costs associated with the rectification.  Other state governments should follow suit and protect the apartment owners.  The state governments have benefited substantially from the creation of these apartments through both stamp duty and land tax.  They should now compensate owners and fund the cost of rectification.”

SSKB is a leading Australian Strata company. SSKB manages more then 650 buildings and more than 35,000 apartments across the Australian eastern seaboard.

Contact Number: (07) 3010 5555

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Recent Comments


Lesley Gelson On July 31, 2019 | Reply

I believe Queensland will have to follow Victoria. If not then a there will be a big question over the whole of the tower/unit market,even if they have no cladding. Parts of Queensland are full of tower blocks/units so as a state we must support this area during this difficult period. Plus of course ensuring all future buildings are built to the highest standard.

Gezz On July 31, 2019 | Reply

It is up to the builder of the premises to ensure that all materials used and all types of construction are inherently safe and fit for purpose. The Fed govt has building regs as do the state and local goats and the various councils and shires themselves have paid engineers who are expected to meticulously review each and every application and check fire ratings and suitability of construction with local laws. Home owners cannot be expected to carry the further burden of rectification of mistakes that were made by highly paid decision makers and amongst processes that they have no direct input to.
If we have to put a hold on foreign aid for six months in order to fund the fix, then so be it.

John On July 31, 2019 | Reply

Yes, Queensland should follow Victoria, but this century not next !

Genevieve On July 31, 2019 | Reply

SSKB CEO Daniel Herbert makes valid, succinct points on this issue. We rely on the elected Government to enact and enforce the laws. Individual “mum and dad” investors do not have the wherewithal to successfully call the builders to account. Regulators must fund rectifying the situation and look to claiming funds from those at fault.

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