I A (L E B 2014–15 · INSULATION ERADICATION) BILL 2014–15 ... residents and homeowners entering the rental market, update its Affordable ... 10.22 The Committee recommends that

INQUIRY INTO THE PROPOSED APPROPRIATION (LOOSE-FILL

ASBESTOS INSULATION ERADICATION) BILL 2014–15

S T A N D I N G C O M M I T T E E O N P U B L I C A C C O U N T S

D E C E M B E R 2 0 1 4

V O L U M E 1 : R E P O R T

REPORT NUMBER 6

I N Q U I R Y I N T O T H E P R O P O S E D A P P R O P R I A T I O N ( L O O S E ‐ F I L L A S B E S T O S I N S U L A T I O N E R A D I C A T I O N ) B I L L 2 0 1 4 – 1 5

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COMMITTEE MEMBERSHIP

Mr Brendan Smyth MLA Chair from 6 June 2013

Member to 6 June 2013

Ms Mary Porter AM MLA Deputy Chair

Ms Nicole Lawder MLA Member from 8 August 2013

Ms Yvette Berry MLA Member from 5 August 2014

Dr Chris Bourke MLA Member to 5 August 2014

Mr Zed Seselja MLA Chair to 6 June 2013

Mr Alistair Coe MLA Member from 6 June to 8 August 2013

SECRETARIAT

Dr Andréa Cullen AGIA ACIS Secretary

Dr Brian Lloyd Assisting Secretary

Mr Greg Hall Senior Research Officer

CONTACT INFORMATION

Telephone 02 6205 0142 Facsimile 02 6205 0432 Post GPO Box 1020, CANBERRA ACT 2601 Email [email protected] Website www.parliament.act.gov.au

S T A N D I N G C OMM I T T E E O N P U B L I C A C C O U N T S

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RESOLUTION OF APPOINTMENT

The Legislative Assembly for the ACT appointed the Standing Committee on Public Accounts on

27 November 2012 to:

(i) examine:

(A) the accounts of the receipts and expenditure of the Australian Capital

Territory and its authorities; and

(B) all reports of the Auditor‐General which have been presented to the

Assembly;

(ii) report to the Assembly any items or matters in those accounts, statements

and reports, or any circumstances connected with them, to which the

Committee is of the opinion that the attention of the Assembly should be

directed;

(iii) inquire into any question in connection with the public accounts which is

referred to it by the Assembly and to report to the Assembly on that

question; and

(iv) examine matters relating to economic and business development, small

business, tourism, market and regulatory reform, public sector

management, taxation and revenue;1

TERMS OF REFERENCE

The terms of reference are the draft Bill together with its explanatory statement.

1 Legislative Assembly for the ACT, Minutes of Proceedings, No. 2, 27 November 2012, pp. 24–27.


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TABLE OF CONTENTS

Committee membership ................................................................................................ i

Secretariat ...................................................................................................................... i

Contact information ........................................................................................................ i

Resolution of appointment ............................................................................................ ii

Terms of reference ......................................................................................................... ii

R E C OMM E N D A T I O N S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V

1 I N T R O D U C T I O N A N D C O N D U C T O F I N Q U I R Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Inquiry adoption ............................................................................................................ 1

Terms of reference ......................................................................................................... 1

Conduct of the Inquiry ................................................................................................... 2

Questions ...................................................................................................................... 4

Structure of the Committee’s report .............................................................................. 5

Acknowledgements ....................................................................................................... 6

2 P R O P O S E D A P P R O P R I A T I O N B I L L C O N T E X T . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

The Supplementary Appropriation ................................................................................. 7

Expenditure proposal(s) ................................................................................................. 8

Why funding for the Scheme is required/necessary ..................................................... 10

3 T H E L O O S E ‐ F I L L A S B E S T O S I N S U L A T I O N E R A D I C A T I O N S C H EM E . . . . 1 3

4 T H E M I N I S T E R F O R T E R R I T O R Y A N D MUN I C I P A L S E R V I C E S . . . . . . . . . 1 7

5 T H E P L A N N I N G M I N I S T E R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3

6 T H E T R E A S U R E R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 9

7 T H E C H I E F M I N I S T E R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3

8 C OMMUN I T Y V I E W S / P E R S P E C T I V E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5

Key interest groups and organisations ......................................................................... 45

9 V I E W S O F A F F E C T E D H OM E OWN E R S A N D T H E C OMMUN I T Y . . . . . . . . . . 6 1

Introduction ................................................................................................................. 61

Liability ........................................................................................................................ 62


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Engagement and consultation ...................................................................................... 68

Uncertainties ............................................................................................................... 72

Effect on the housing market ....................................................................................... 75

Planning ....................................................................................................................... 78

Investments and improvements to properties ............................................................. 79

Equity of arrangements—“the fairness test” ................................................................ 87

Costs and budget implications ..................................................................................... 96

Flexibility ................................................................................................................... 104

Other options ............................................................................................................ 108

Knock‐down and rebuild ............................................................................................ 111

Homeowners wishing to continue in their homes ...................................................... 116

Contaminated contents of dwellings .......................................................................... 118

Health concerns ......................................................................................................... 121

Support issues ........................................................................................................... 122

1 0 C OMM I T T E E C OMM E N T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 9

1 1 C O N C L U S I O N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4 7

I N Q U I R Y I N T O T H E P R O P O S E D A P P R O P R I A T I O N ( L O O S E ‐ F I L L A S B E S T O S

I N S U L A T I O N E R A D I C A T I O N ) B I L L 2 0 1 4 – 1 5

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RECOMMENDATIONS

R E C OMM E N D A T I O N 1

1.24 The Committee recommends, to the extent possible, that all outstanding

responses to Questions Taken on Notice be provided to the Standing Committee

on Public Accounts prior to debate of the proposed Appropriation (Loose‐fill

Asbestos Insulation Eradication) Bill 2014–15.


1.25 The Committee recommends that where outstanding responses to Questions

Taken on Notice are not able to be provided prior to debate of the proposed

Appropriation (Loose‐fill Asbestos Insulation Eradication) Bill 2014–15—they still

be answered.


10.13 The Committee recommends (to the extent that work is not already taking place)

that the ACT Government establish mechanisms to monitor and support the

wellbeing—physical, mental and emotional—of affected Mr Fluffy families and

households in the short and long term.


10.14 The Committee recommends that the ACT Government prioritise the

implementation of long term support services via a structured recovery taskforce

model for Mr Fluffy affected families and households.


10.16 The Committee recommends that the ACT Government ensure that the

implementation of any long term support services for Mr Fluffy affected families

and households should not be withdrawn whilst still required.


10.19 The Committee recommends that the ACT Government should detail how it will

ameliorate any effects of the Scheme on the property market and affordable

housing by the last sitting day in September 2015.


10.20 The Committee recommends that the ACT Government, in light of Mr Fluffy

residents and homeowners entering the rental market, update its Affordable

Housing Strategy by the last sitting day in September 2015.


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10.22 The Committee recommends that the ACT Government investigate alternative

ways for land release in the ACT to address the time lag that currently exists

between purchasing land and it becoming build ready serviced land (with

utilities).


10.25 The Committee recommends that the ACT Government clarify whether the stamp

duty waiver is a refund of stamp duty or an actual waiver.

R E C OMM E N D A T I O N 1 0

10.26 The Committee recommends that the ACT Government discuss with the NSW the

feasibility of providing for reciprocal waivers of stamp duty arrangements for

eligible Mr Fluffy affected homeowners purchasing property in either ACT or

NSW.


10.28 The Committee recommends that the ACT Government investigate the

suggestion that some owners had prior knowledge of the Scheme before the

details were released on the 28 of October this year.


10.29 The Committee recommends that the ACT Government ensure that particular

attention and support is provided to elderly, vulnerable, marginalised and people

with a disability homeowners of Mr Fluffy affected homes.


10.36 The Committee recommends that, to enable affected individuals to make an

informed decision, the ACT Government prioritise the publication of the level of

regulatory infrastructure/restriction on normal use of the property that will be

required for those homeowners who elect to remain in their homes by no later

than 1 February 2015.


10.37 The Committee recommends that a Taskforce representative meets specifically

with individuals considering remaining in their home and fully brief them on that

decision.


10.38 The Committee recommends that the ACT Government clarify its position with

respect to section 51 of the Lands Acquisition Act 1994 by 1 February 2015.



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10.39 The Committee recommends that the ACT Government provide comprehensive

advice to the legal community as to consequences of: (1) accepting the offer as

currently made; and (2) not accepting the current offer.


10.40 The Committee recommends that the ACT Government reconsiders the size of

the grant being made to Mr Fluffy owners to cover the cost of legal costs.


10.43 The Committee recommends that individuals involved in the “Downer House”

forensic deconstruction of the property and who reported the levels of

contamination to the ACT Government be appropriately recognised for their

efforts.


10.44 The Committee recommends that the ACT Government amend the current

Scheme to offer homeowners affected by loose‐fill asbestos contamination so

that the offer includes a viable knock‐down and rebuild option and report to the

Legislative Assembly on the first sitting day in 2015.


10.45 That the ACT Government consider a “go it alone option” for Mr Fluffy home

owners, with appropriate compensation, a reissued lease, suitable timeframes

with safeguards and validation process for those who want to manage the

process themselves, and report to the Legislative Assembly on the first sitting day

in 2015 .


10.46 The Committee recommends that the ACT Government give affected

homeowners who have accepted the current proposal—to surrender their crown

lease and be compensated for the loss of the physical home—the opportunity to

choose the knock‐down and rebuild option.


10.47 The Committee recommends that the ACT Government confirm by the first sitting

day in 2015 as to whether the Government will override the provisions of Draft

Variation 306 to the Territory Plan to allow for the sub division or unit titling of

acquired Mr Fluffy blocks.


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10.48 The Committee recommends that the ACT Government release details as soon as

the Commonwealth Government informs them of outcomes concerning: (i)

capital gains; and (ii) pension payments and related matters.


10.49 The Committee recommends that as soon as arrangements have been agreed

with financial institutions that the details be made available.


10.50 The Committee recommends that the ACT Government reconsiders the size of

the assistance grant made to Mr Fluffy owners in the light of the evidence given

to the Committee.


10.51 The Committee recommends that the ACT Government consider some flexibility

in the way payments are made to Mr Fluffy owners to facilitate their new housing

arrangements.


10.52 The Committee recommends that the ACT Government publish indicative

timelines for the demolition, remediation and sale of surrendered blocks by no

later than the first sitting day of March 2015 to enable Mr Fluffy home owners to

make an informed decision.


10.53 The Committee recommends that the ACT Government amend its current

proposal to homeowners affected by loose‐fill asbestos contamination so that it

is capable of responding to the range of different circumstances for homeowners,

including those influenced by differences in age, physical ability or disability, and

financial circumstances.


10.54 The Committee recommends that the ACT Government and Asbestos Taskforce

establish and provide clear, authoritative advice, on contamination and cross‐

contamination of goods in affected households to avoid taking contaminated

items to another location.



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10.55 The Committee recommends that the ACT Government, as a matter of urgency,

provide advice on the potential future health consequences of exposure to loose‐

fill asbestos for affected homeowners and other parties who have been exposed.


10.56 The Committee recommends that the ACT Government make adequate provision

for, and ensure that, the Asbestos Taskforce maintain clear lines of

communication with affected homeowners, including the provision of consistent,

authoritative information and identified and reliable points of contact.


10.57 The Committee recommends that the ACT Government improves their

consultation practices and in particular makes better use of the circumstances

and resources of Canberra’s Community Councils to bring together and represent

their local areas.


10.58 The Committee recommends that the ACT Government publish any FORAG

submission provided to the ACT Asbestos Taskforce.


10.59 The Committee recommends that the ACT Government determine an appeal

mechanism to address concerns where agreement on the Scheme is unable to be

reached.


10.62 The Committee recommends that the ACT Government should consider

exempting certain homeowners from the Scheme. The Committee strongly

believes that the Government should show some flexibility for those in

extenuating circumstances on the provision that these homeowners agree to

make no renovations or alterations to their homes without government approval.


10.63 The Committee recommends the exemptions should only be made if these

homeowners have been informed in writing of the risk to themselves and others

and make no renovations or alterations to their homes.


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10.64 The Committee recommends that should the ACT Government create an

exemption for certain homeowners who wish to continue living in their property,

this only be allowed, subject to surrender of lease on fair terms when vacating

the block for: (i) downsizing; (ii) death; and (iii) contamination reasons.


10.67 The Committee recommends that the ACT Government give consideration to

having social workers, Asbestos Taskforce members and others with appropriate

training, who have been informed of the risks of visiting contaminated homes,

regularly check on the well‐being and safety of the exceptional circumstances

homeowners who may remain in their Mr Fluffy homes.


10.68 The Committee recommends that in the case cited in Submission No. 12, and

others so affected, that the ACT Government includes such families in the

Scheme.


10.69 The Committee recommends that in the cases of homes where no positive

asbestos results for the property were returned that the ACT Government retest

the properties and report back to the Assembly by the first sitting day of 2015.


10.70 The Committee recommends that the terminology ‘clear’ and ‘clean’ should not

be used when addressing the state of asbestos remediated homes.


10.71 The Committee recommends that the case cited in submission No. 26 and 26a,

and others affected by disability, as renovations to modify a home for living with

a disability are unlikely to be adequately accounted for in the valuation, the ACT

Government consider additional appropriate financial assistance.


10.72 The Committee recommends that in relation to properties where the owners also

conduct home businesses from the property that these blocks be considered for

priority remediation. Further, in the case of these families consideration should

be given an additional grant to assist in the relocation and re‐establishment of

the business.



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10.76 The Committee recommends that the ACT Government investigate alternative

sites for disposal of contaminated waste and report back to the Legislative

Assembly by the first sitting day in March 2015.


10.77 The Committee recommends that the ACT Government minimise, to the extent

possible, transportation of contaminated waste on residential routes from

affected homes to the disposal site.


10.78 The Committee recommends that the ACT Government, to the extent possible,

should ensure that transportation of contaminated waste from affected homes to

the disposal site is programmed for off‐peak time periods.


10.79 The Committee recommends that the ACT Government regularly monitor the

processes in place for treatment of the contaminated waste upon arrival at the

West Belconnen landfill weighbridge to ensure that compliance with mandatory

standards is being enforced.


10.80 The Committee recommends that the ACT Government regularly monitor the

state of access roads to the West Belconnen landfill precinct to minimise the

effect on those roads and the residents in the proximity of the site. Repairs to

roads in the landfill precinct should be a priority.


10.81 The Committee recommends that the ACT Government, where any marked

increase in volume of traffic on access roads to the landfill site including urban

linking roads in proximity of the landfill site become apparent these should be

addressed via the implementation of temporary traffic management plans for

the area and surrounding suburbs.


10.82 The Committee recommends that the ACT Government establish baseline testing

at the West Belconnen landfill dump site for asbestos fibre soil and water

contamination and test annually for the next twenty‐five years and that the

results be published.


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10.83 The Committee recommends that the ACT Government develop a factsheet

outlining the safety processes from ‘house to tip’ to ease fears concerning the

transport of loose‐fill asbestos waste and that it be distributed in all affected

suburbs and along transport routes to the West Belconnen landfill site.


10.84 The Committee recommends that with regard to the Palmerston/Crace asbestos

landfill site study that the ACT Government table the report in the ACT Legislative

Assembly within three sitting days of receipt by Government.


10.85 The Committee recommends that the ACT Government, where possible, should

conduct an analysis of the files documenting the 1988 Commonwealth

Government funded Loose Asbestos Removal program to determine any lessons

that can be learned.


10.89 That the ACT Government cost the proposal to allow Mr Fluffy homeowners to

retain their blocks, thereby necessitating a smaller drawdown on the

Commonwealth loan facility with a commensurate lower interest payments

against the current purchase and greater development rights proposal for the life

of each stage of the Scheme and report to the ACT Legislative Assembly on the

first sitting day in 2015.


10.90 The Committee recommends that the ACT Government detail to the ACT

Legislative Assembly: (i) how it will make the loan repayments over the 10 year

life of the loan; (ii) clarify which budget priorities will have to be reprioritised;

and (iii) what the likely impact (if any) on service delivery will be before the Bill is

passed.


10.91 The Committee recommends that the ACT Government considers the

establishment of a statutory authority/Territory‐owned Corporation/or suitable

entity to conduct the demolition, remediation, rezoning and sale of the

surrounded blocks, along private sector lines to ensure the best and most

suitable return to the budget.



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10.93 The Committee recommends that the ACT Government table in the ACT

Legislative Assembly quarterly progress reports on the implementation of the

Scheme.


10.98 The Committee recommends that an ACT Board of inquiry be constituted,

pursuant to the Inquiries Act, to investigate the full history of the Mr Fluffy

legacy. The Board of Inquiry should report by 1 March 2016.


10.99 The Committee recommends that when complete, the Board of Inquiry report

together with the report of the NSW Joint Select Committee on Loose Fill

Asbestos Insulation be forwarded to the Commonwealth with a view to a suitable

and robust inquiry being established to investigate the full history.


10.100 The Committee recommends that given the size and scale of the asbestos legacy

transferred to the Territory at the time of self‐government, that a suitable inquiry

mechanism be established to investigate the full history of various levels of

government in the matter—Commonwealth and the ACT.


10.101 The Committee recommends that the ACT Government establish a process

similar to the Sheep Dip remediation program to address the issue of Asbestos

dumpsites in suburban Canberra.


11.8 Notwithstanding the preceding recommendations, the Committee recommends

that the Assembly pass the Appropriation (Loose‐fill Asbestos Insulation

Eradication) Bill 2014‐15, so that monies can start being paid to homeowners who

have joined the Scheme.


1

1 INTRODUCTION AND CONDUCT OF INQUIRY

INQUIRY ADOPTION

1.1 The Chief Minister wrote to the Standing Committee on Public Accounts (the Committee) on

Friday 14 November 2014 asking it to consider the then proposed Appropriation (Loose‐fill

Asbestos Insulation Eradication) Bill 2014–15 (the Bill), in advance of the Bill’s formal

introduction in the November sitting of the Legislative Assembly, and report in sufficient time

to permit the Bill to be debated and passed by Legislative Assembly on 27 November 2014.2

1.2 Pursuant to Standing Order 216, the Committee resolved on Monday 17 November 2014 to

inquire into the Bill and report to the Legislative Assembly.

1.3 Whilst appreciating the overriding public interest in the proposed legislation and the need for

it to be passed to allow for the commencement of the Scheme—the Committee, however,

wanted to ensure that it provided an opportunity for those interested to submit their views for

consideration as part of the Inquiry. The Committee therefore determined to extend the

inquiry timeframe to assist with providing an opportunity for those interested to submit their

view but to also permit the Bill to be passed early in December. The Committee also

determined that it would seek to report out of session on 3 December 2014.

1.4 The objective of the proposed Bill is “to enable the use of funds from the Commonwealth

Government’s $1 billion concessional loan to the Territory to help pay for the buy back and

demolition scheme for more than 1,000 properties affected by the potentially deadly loose‐fill

asbestos—‘Mr Fluffy’”.3

TERMS OF REFERENCE

1.5 The Terms of Reference (T of R) for the Inquiry are to consider the proposed Bill and its

explanatory statement and report to the Legislative Assembly. The T of R can be accessed at

Appendix A.

2 Correspondence from the Chief Minister to the Standing Committee on Public Accounts (14 November 2014). 3 Standing Committee on Public Accounts, Media Release: ‘Announcement of Inquiry into Proposed Appropriation (Loose‐Fill Asbestos Insulation Eradication) Bill 2014–15’, 17 November 2014.

2 S T A N D I N G C OMM I T T E E O N P U B L I C A C C O U N T S

CONDUCT OF THE INQUIRY

HOW TH E COMMITTEE DETERMINED AND PR OGRESSED TH E INQ UIR Y

1.6 The Committee determined to progress its inquiry through a public call for written submissions

and direct invitations to key interest and stakeholder groups and organisations to provide an

opportunity for those interested to submit their views for consideration as part of the Inquiry.

1.7 The Committee invited public submissions for its inquiry from Tuesday 18 November 20144

requesting that written submissions be lodged by close of business (COB) Wednesday 26

November 2014. The Committee also directly invited key stakeholders, interest groups and

organisations, with an interest in the Inquiry, to make a written submission.5

1.8 The Committee acknowledged the short timeframe in which it had to complete this important

inquiry and has endeavoured to balance the Government’s request for its earliest possible

consideration of the Bill to enable the Scheme to commence in early December 2014 against

the need of the community to submit their views.

1.9 From the outset of the Inquiry, as part of its call for written submissions, the Committee

emphasised:

...that it has a broad public interest mandate and is not in a position to determine the

rights and wrongs of individual cases. Individual cases will only be considered to the

extent that they may assist the Committee with the general matters of principle, policy

or public administration relevant to the Inquiry’s terms of reference.6

1.10 In the amount of time available the Committee made every attempt to inform affected

homeowners and other interested parties that it was calling for submissions and the Inquiry

was underway. All submissions received up to COB of 27 November 2014 have been received

and published by the Committee. It is the Committee’s intention to officially receive and

authorise for publication all submissions received up to and including Friday 5 December 2014.

1.11 The Committee specifically advised that it would be confining its inquiry to the T of R—the

proposed Bill and its explanatory statement. Individual cases would only be considered to the

extent that may assist the Committee with the general matters of principle, policy or public

administration relevant to the T of R. The Committee also emphasised that the submitters

4 Via call for submissions from Inquiry homepage and placement of an advertisement in the Public Notices—Canberra Times, 19 November 2014.

5 Legislative Assembly for the Australian Capital Territory—Invitation for Public Submissions. Inquiry into proposed Appropriation (Loose‐Fill Asbestos Insulation Eradication) Bill 2014‐15, Canberra Times, 19 November 2014, p. 19.



3

needed to comply with providing information as part of submissions where it might relate to a

matter before the courts.7

1.12 In its invitation for public written submissions, submitters were also advised that it is

completely within the discretion of the Committee to decide whether or not a person who has

lodged a submission should be invited to appear as a witness. Submitters were further advised

that they may be invited at short notice to appear at the public hearing(s).8

SUBMISS IONS

1.13 The Committee received almost 60 submissions and 8 supplementary submissions. The

individuals and organisations who lodged written submissions are listed at Appendix B. Copies

of these submissions can be downloaded from the Inquiry homepage.9

1.14 Submissions published, where applicable, had residential and personal email/phone contact

details etc. redacted. Whilst it is routine practice for names of submitters to remain on

submissions—the Committee resolved to publish submissions with surnames only. In some

instances surnames were withheld to protect the privacy of submitters and to avoid

inadvertently publishing a small list of Mr Fluffy homes.

1.15 The Committee notes that those individuals accepting invitations to appear at its public

hearing on 1 December 2014—by agreeing to appear on the day—the full names of these

witnesses will be known in the context of their submissions.

PUBL IC HEARINGS

1.16 The Committee held public hearings on Friday 28 November 2014 and also Monday

1 December 2014.10

1.17 A full list of witnesses who appeared before the Committee is at Appendix C and the hearing

transcripts are available on the Committee’s homepage.11

7 Legislative Assembly for the Australian Capital Territory—Invitation for Public Submissions. Inquiry into proposed Appropriation (Loose‐Fill Asbestos Insulation Eradication) Bill 2014‐15, Canberra Times, 19 November 2014, p. 19; http://www.parliament.act.gov.au/in‐committees/standing_committees/Public‐Accounts/inquiry‐into‐the‐proposed‐appropriation‐loosefill‐asbestos‐insulation‐eradication‐bill‐201415?inquiry=662274


9 http://www.parliament.act.gov.au/in‐committees/standing_committees/Public‐Accounts/inquiry‐into‐the‐proposed‐appropriation‐loosefill‐asbestos‐insulation‐eradication‐bill‐201415?inquiry=662274

10 Standing Committee on Public Accounts, Media Release: ‘Announcement of Inquiry into Proposed Appropriation (Loose‐Fill Asbestos Insulation Eradication) Bill 2014‐15’, 17 November 2014.

11 http://www.parliament.act.gov.au/in‐committees/standing_committees/Public‐Accounts/inquiry‐into‐the‐proposed‐appropriation‐loosefill‐asbestos‐insulation‐eradication‐bill‐201415?inquiry=662274


TIMING

1.18 The Committee acknowledges the short timeframe in which it has had to complete this

important inquiry and the overriding public interest in the proposed legislation. The

Committee advises that it has endeavoured, within a tight timeframe, to balance the request

of the Government that the Bill be passed in early December, and to provide an opportunity

for those interested members of the community to submit their views.

1.19 Whilst the Committee will complete its inquiry with a report—the Committee emphasises that

the outcome of its inquiry is more than its report alone but is also the evidence on the record

from the two public hearings it has held and the diverse views of almost 60 of 1021 affected

families and interested members of the community as received in written submissions.

REPOR T AD OPTION

1.20 The Committee met on 3 December 2014 to consider the Chair’s draft report and the report,

as amended, was adopted by the Committee that day.

QUESTIONS

1.21 A number of witnesses took questions on notice at public hearings. The Committee

appreciates that not all questions can be answered at the time in entirety; taking questions on

notice means that a considered and accurate answer can be provided to the Committee.

1.22 The Committee acknowledges that the short timeframe in which it had to complete its inquiry

required prompt responses to these questions. The Committee thanks Ministers and

directorate and agency officers, and all other witnesses, for their assistance with the provision

of responses, prior to tabling its report.

1.23 The Committee recognises that given the short timeframe between public hearings and tabling

its report, many responses to questions were outstanding at the time of finalising its report.

For completeness of the matters/issues considered, to the extent possible, responses to these

questions should be provided to the Committee prior to debate of the proposed Bill.

Recommendation 1 1.24 The Committee recommends, to the extent possible, that all outstanding responses to

Questions Taken on Notice be provided to the Standing Committee on Public Accounts prior

to debate of the proposed Appropriation (Loose‐fill Asbestos Insulation Eradication) Bill

2014–15.


5

Recommendation 2 1.25 The Committee recommends that where outstanding responses to Questions Taken on

Notice are not able to be provided prior to debate of the proposed Appropriation (Loose‐fill

Asbestos Insulation Eradication) Bill 2014–15—they still be answered.

STRUCTURE OF THE COMMITTEE’S REPORT

1.26 The Committee’s reports is divided into four parts, comprising 11 chapters, covering the

following main topics:

Part 1—Context to the Inquiry

Chapter 1—Introduction and conduct of the Inquiry

Chapter 2—Context for the proposed Appropriation (Loose‐fill Asbestos Insulation

Eradication) Bill 2014–15

Chapter 3—The Loose‐fill Asbestos Insulation Eradication Scheme

Part 2—Views on the proposed Bill from ACT Government Ministers

Chapter 4—The Minister for Territory and Municipal Services

Chapter 5—The Minister for Planning

Chapter 6—The Treasurer

Chapter 7—The Chief Minister

Part 3—Views on the proposed Bill from the ACT community

Chapter 8—Community views/perspectives

Chapter 9—Mr Fluffy homeowners and residents’ views/perspectives

Part 4—Views on the proposed Bill from the Committee

Chapter 10—Committee comment

Chapter 11—Conclusion


ACKNOWLEDGEMENTS

1.27 The Committee thanks the Chief Minister—Ms Katy Gallagher MLA; the Treasurer—Mr Andrew

Barr MLA; the Minister for Planning—Mr Mick Gentleman MLA; the Minister for Territory and

Municipal Services—Mr Shane Rattenbury MLA and their respective directorate and agency

officials who assisted the Committee in the course of its inquiry by appearing before it and/or

providing additional information.

1.28 The Committee acknowledges and thanks key interest and stakeholder groups and

organisations which made written submissions and appeared as witnesses and provided

information at its public hearings.

1.29 The Committee also acknowledges and thanks all individuals who made written submissions

and those who appeared as witnesses and provided information at its public hearings.


7

2 PROPOSED APPROPRIAT ION BILL CONTEXT

2.1 Supplementary appropriation bills, such as the proposed Appropriation Bill, contain details of

funding items not included in the main appropriation bill, unanticipated or urgent funding

requirements, requirements for the transfer of funds within or between directorates or

agencies, and funds for temporary programs and other various funding needs.

2.2 The proposed Appropriation (Loose‐fill Asbestos Insulation Eradication) Bill 2014–15, as

provided to the Committee on 14 November 2014, was subsequently tabled in the Legislative

Assembly on 25 November 2014.12

2.3 According to the Explanatory Statement, as provided to the Committee, for the proposed Bill:

Under Section 58 of the Australian Capital Territory (Self‐Government) Act 1988, public

money may not be issued or spent except as authorised by law. Under Section 6 of the

Financial Management Act 1996 (FMA), no payment of public money may be made

unless it is in accordance with an appropriation. Section 8 of the FMA provides for

separate appropriations to be made under an Appropriation Act in respect of each

directorate. The FMA also provides for appropriation units, being a class of outputs, or

a group of output classes, for which an appropriation is made by an Appropriation Act.

The Bill satisfies the provisions of each of these Acts.

The Bill provides for appropriations for:

(a) the provision of net cost of outputs by agencies;

(b) any capital injection to be provided to agencies; and

(c) any payments to be made by agencies on behalf of the Territory.13

THE SUPPLEMENTARY APPROPRIATION

2.4 On 28 October 2014, the ACT Government announced the Loose‐fill Asbestos Insulation

Eradication Scheme, under which it has offered to buy all homes in the ACT affected by Loose‐

fill asbestos (Mr Fluffy) insulation. This bill is the mechanism for the appropriation of additional

monies for the Loose‐fill Insulation Eradication Scheme and related purposes for the financial

year that began on 1 July 2014.

12 ACT Legislative Assembly, Minutes of Proceedings, Tuesday 25 November 2014. 13 Consultation copy—proposed Appropriation (Loose‐fill Asbestos Insulation Eradication) Bill 2014–2015, Explanatory Statement, p. 2.


2.5 Proposed Appropriation (Loose‐fill Asbestos Insulation Eradication) Bill 2014–15 provides for

the appropriation of a total of $762 031 000 in 2014–15 to the Chief Minister, Treasury and

Economic Development Directorate (CMTEDD) for the Loose‐fill Asbestos Insulation

Eradication Scheme (the Scheme). Specifically, in the 2014–15 financial year, these funds

provide for:

$337 777 000 in additional net cost of outputs appropriation to CMTEDD;

$412 223 000 in additional capital injection appropriation to CMTEDD; and

$12 031 000 in additional expenses on behalf of the Territory appropriation to the

Territory Banking Account.14

2.6 Further detail on the additional funding provided for by the proposed Appropriation Bill is at

Appendix D.

2.7 The 2014–14 Supplementary Budget Papers that accompany the proposed Appropriation Bill

contain details of the above additional appropriations, and output classes, as well as

amendments to financial statements for the CMTEDD.

EXPENDITURE PROPOSAL(S)

2.8 The proposed Bill underpins the funding of the Loose‐fill (Mr Fluffy) Asbestos Insulation

Eradication Scheme. The aim of the ACT Government’s loose‐fill asbestos insulation

eradication scheme is:

...to eradicate the ongoing exposure risks from the continuing presence of loose fill

asbestos insulation in Canberra houses.15

2.9 The funding source for the Scheme is a $1 billion concessional loan from the Commonwealth

Government. The loan facility will allow the ACT Government to borrow up to $1 billion at the

Commonwealth’s interest rate for a period of 10 years. This will allow savings to the

Government of up to $32 million over the life of the loan.16

2.10 The ACT Government has offered to purchase all 1021 houses in the ACT that are affected by

loose‐fill asbestos insulation at market value as if dwellings did not contain asbestos as at

28 October 2014.

14 Consultation copy—proposed Appropriation (Loose‐fill Asbestos Insulation Eradication) Bill 2014–2015, Explanatory Statement and 2014–15 Supplementary Budget Papers.

15 ACT Asbestos Response Taskforce. (2014) The Loose Fill Asbestos Insulation Eradication Scheme—A Guide to the Voluntary Buyback Program, p. 1.

16 Senator the Hon. Eric Abetz—Media release: Commonwealth contribution to ACT ‘Mr Fluffy’ asbestos remediation programme’, 28 October 2014.


9

2.11 The purpose of the proposed Bill is:

...to give authority to spend the money. The loan will be recorded as effectively a

financing source in the same way it would be recorded if we went to the market

ourselves and borrowed the money. The difference will be the interest costs, which will

flow through. If we had borrowed it ourselves, it would have cost us around $30 million

more. That interest cost will still hit the bottom line, and that will need to be shown in

appropriations as well, but it is literally to get the authority to spend the money.17

2.12 According to the Explanatory Statement for the proposed Bill:

Under the Scheme, the ACT Government will acquire, demolish, and safely dispose of

all affected homes, remediate affected blocks and then resell them to defray overall

Scheme costs. The Scheme also provides for emergency financial assistance, asbestos

assessment and the hazard reduction program undertaken by the Asbestos Response

Taskforce since it was formed in July 2014, as well as the ongoing relocation assistance

grants payable when affected homes are vacated.18

2.13 The Government has stated that the ‘buyback program’ is voluntary.

2.14 The ACT Government told the Committee it is not pursuing the compulsory acquisition of

affected houses at this time. However, it does have the power under the Lands Acquisition Act

1994 to compulsorily acquire land and/or order the demolition of buildings and reserves the

right to exercise these powers.19 The Government has not ruled out that it will not exercise its

powers to compulsorily resume leases.20

2.15 Under the ‘buyback program’ affected houses will be independently valued by two valuers

selected by the Australian Property Institute (API). The proposed exchange price will be the

average of the two valuations.21

2.16 The ACT Government has negotiated with the Commonwealth Government about the

proposed buy back and has secured a $1 billion Commonwealth loan to be repaid at a

concessional rate over ten years for the buyback program to proceed.

2.17 Importantly the purpose of the Scheme is twofold—to fund the acquisition, demolition,

disposal and remediation of affected homes and blocks but also to provide a range of support

17 Mr Stephen Miners, Standing Committee on Public Accounts, Inquiry into 2013–14 Annual reports, Proof Transcript of evidence, 10 November 2014, p. 146.

18 Consultation copy—proposed Appropriation (Loose‐fill Asbestos Insulation Eradication) Bill 2014–2015, Explanatory Statement, p. 2.

19 ACT Asbestos Response Taskforce. (2014) The Loose Fill Asbestos Insulation Eradication Scheme. A Guide to the Voluntary Buyback Program, p. 1; 13.

20 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 53. 21 ACT Asbestos Response Taskforce. (2014) The Loose Fill Asbestos Insulation Eradication Scheme. A Guide to the Voluntary Buyback Program, p. 5.

1 0 S T A N D I N G C OMM I T T E E O N P U B L I C A C C O U N T S

to affected homeowners and residents—including emergency financial assistance, asbestos

assessment and the hazard reduction program undertaken by the Asbestos Response

Taskforce and the payment of relocation assistance grants when owners/residents leave

affected homes.

WHY FUNDING FOR THE SCHEME IS REQUIRED/NECESSARY

2.18 The Scheme has become necessary to ensure that the legacy of the potentially deadly loose‐fill

asbestos insulation (Mr Fluffy) that has plagued Canberra since the early 1960’s is

extinguished. A timeline of this legacy is set out in table 2.1.

Table 2.1—Timeline of the legacy of loose-fill asbestos insulation (Mr Fluffy) in the ACT22

At least 1968 to late 1978

D. Jansen and Co Pty Ltd operated his business of selling and depositing 100% pure amosite asbestos into roof cavities of ACT and NSW domestic homes and businesses.

20 December 1968 The ACT Health Services Branch, Department of Health, wrote to the Director, Department of Works advising: ‘It is considered desirable that D. Jansen and Company Pty Ltd should be dissuaded or even prevented, if possible, from using asbestos fluff as insulation material in houses. Not only are men being unnecessarily exposed to a harmful substance in the course of their work, which is against the best public health practices, but there is evidence that community exposure to asbestos dust is undesirable.’ (refer Appendix E).

1988 The ACT Building Ordinance 1972 was amended with a legislative code for the removal of loose asbestos. Section 9A and Part IVA granted powers to the Commonwealth to inspect buildings for the presence of loose asbestos and to enter buildings in which loose asbestos had been found without the owners’ permission.

10 October 1988 The Commonwealth announced that a government funded Loose Asbestos Insulation Removal Program (Removal Program) would be established to assist ACT residents to remove loose asbestos insulation from their domestic dwellings.

Late October 1988 The ACT Administration Asbestos Branch was established to oversee and coordinate the Removal Program. The Removal Program was mandatory for all residences built in the ACT before 1979.

October 1988 Inspection of all Canberra homes constructed before 1979 commenced.

December 1988 Sealing off roof spaces from the living environments of affected houses commenced.

Early 1989 Removal phase commenced.

11 May 1989 The ACT became self‐governing and it assumed responsibility for the Asbestos Branch and the administration of the Removal Program.

April 1990 The Removal Program commenced.

7 June 1991 A Memorandum of Understanding (MOU) relating to the Asbestos Removal program was signed by the Commonwealth and the ACT. The MOU included a funding formula that set out how the costs of the Program would be shared by the Commonwealth and ACT Government. Clause 10 provided that the MOU commenced on 10 May 1989 and would cease upon the completion of the Program or if the Program was extended under Clause 6.2 upon completion of the Additional Program (refer Appendix F).

22 NSW Parliamentary inquiry into loose‐fill asbestos insulation, Submission No. 34—Maurice Blackburn Lawyers, 31 October 2014;1968 Commonwealth advice on health effects of asbestos fluff; MOU—Asbestos removal program between the ACT and Commonwealth of Australia (7 June 1991).


1 1

Mid 1993 The Removal Program concluded. A copy of the completion of asbestos removal certificate is at Appendix I.

2005 Letter from ACT Government

2012–13 A house that had been missed in the original Removal Program came to light in the suburb of Downer.

February 2014 Letter from ACT Government

July 2014 The ACT Government established the Asbestos Response Taskforce. The Taskforce subsequently concluded that demolition of affected homes is the only enduring solution to the health risks posed by the presence of loose‐fill asbestos insulation in homes.

28 October 2014 The ACT Government announces the Voluntary Buyback Program—the Loose‐fill Asbestos Insulation Eradication Scheme.

2.19 Eradication of the loose‐fill asbestos insulation from affected homes is necessary because

there is no known safe level of exposure to asbestos and, in the case of residential dwellings,

there is no way to make homes contaminated with loose‐fill asbestos safe to live.


1 3

3 THE LOOSE-F ILL ASBESTOS INSULAT ION

ERADICAT ION SCHEME

3.1 The ACT Government, with financial assistance from the Australian Government, has decided

to conduct a “voluntary” buyback of all houses in the ACT affected by loose‐fill asbestos

insulation to enable government facilitated demolition and site remediation.

3.2 The guiding principles of the Scheme are detailed on page 3 of the ACT Government’s Preferred

Way Forward on Loose Fill Asbestos: Overview—:

eliminate, by demolishing all known affected houses, the ongoing risk of

exposure to loose fill asbestos insulation for homeowners, tenants,

tradespeople and the wider community

provide a fair outcome for owners of affected homes

provide, so far as is possible and reasonable, flexibility and options for

informed choices to be made by owners of affected homes

minimise overall net costs to the Canberra community and the ACT

Government (thereby minimising the flow‐on impact to other government

policy and program delivery areas).

3.3 The proposed Bill is the mechanism for the appropriation of additional monies for the Loose‐

fill Insulation Eradication Scheme and related purposes for the financial year that began on

1 July 2014.

3.4 The Government has decided to implement a buyback scheme to apply to owners of homes

affected by loose‐fill asbestos (eligible homeowners). Under the buyback scheme, the ACT

Government has offered to purchase all affected houses in order to enable the demolition of

houses and remediation of the sites. To this end, the Government has sent eligible

homeowners an offer to accept in exchange for the surrender of their crown lease. The

buyback offer will remain open and capable of acceptance until 30 June 2015.

3.5 The Loose‐fill Asbestos Insulation Eradication Scheme will comprise a ‘Buyback progam’ to

work towards this outcome. Under the Buyback program, on surrender of the Crown lease for

an affected block, an eligible homeowner will receive:

the value of the affected block (house and land) as at 28 October 2014 including

improvements;

an additional $1,000 (inclusive of GST) to cover or contribute to legal fees incurred in

attending to the surrender;

a right to a waiver of stamp duty on a residential property purchased in the ACT, up to the

value of the stamp duty calculated as if it was payable on the affected block (as valued);


a first right of refusal to purchase the affected block (at full market value, to be

determined at the time of purchase) after it is remediated; and

other benefits as detailed on the Asbestos Taskforce’s website from time to time (the

Taskforce is seeking assistance for eligible homeowners from local businesses, lending

institutions and service providers).23

3.6 In exchange for the package provided by the Territory to those signing up to the Buyback

program, homeowners will be required to:

surrender their interest in the affected block; and

waive their right to pursue legal action against the Territory and the Commonwealth in

relation to any financial loss as a result of purchasing, living in or any other interest in the

affected block. This waiver does not include any sickness or health claims that the

homeowner or any other party may have as a result of living in or being exposed to

contamination in the affected home.24

3.7 To participate in the Buyback program, an application must be lodged by 30 June 2015.

Applications received after that date will not be eligible to participate in the Program.25

3.8 Financial assistance toward demolition or future expenses is not available to homeowners who

decide not to participate in the Buyback program.26

VALUATION 27

3.9 In making an application under the Buyback program, a homeowner agrees to the Australian

Property Institute arranging for the affected block to be valued by two independent valuers.

The valuers will assess the house and land at market value at 28 October 2014 (the date the

Buyback program was announced) irrespective of when the valuations occur. In making an

assessment the valuer will ignore the presence of loose‐fill asbestos and minor maintenance or

presentation issues. The valuation will include fixtures and fittings that would normally pass

with the property. Once the valuation process has been completed, the Asbestos Taskforce

will formalise the buyback offer in a draft deed in which the surrender sum will be the average

of the two valuations.

23 ACT Government. (2014) The ACT Government’s Preferred Way Forward on Loose Fill Asbestos: Supporting Detail, 28 October; Asbestos Response Taskforce. (2014) The Loose Fill Asbestos Insulation Eradication Scheme—A Guide to the Voluntary Buyback Program, 28 October.

24 ACT Government. (2014) The ACT Government’s Preferred Way Forward on Loose Fill Asbestos: Supporting Detail, 28 October.





1 5

3.10 The valuation will not take into consideration any removable goods and personal belongings,

even if they are contaminated and are left behind on surrender. Apart from the Relocation

Assistance Grant, the ACT Government is not providing assistance to compensate or reimburse

for any household goods or possessions.

IS TH E BUYBACK PRO GR AM COMPULSORY?28

3.11 The Government has stated that the participation in the Buyback program is voluntary.

3.12 The Committee notes that the Buyback program is the only offer being made by the

Government.

3.13 Whilst the Government is not pursuing compulsory acquisition of affected houses at this stage,

the goal of the Scheme is to demolish all affected houses. Pursuant to the Lands Acquisition

Act 1994 the Government already has the ability to compulsorily acquire land and/or order the

demolition of buildings that pose a significant risk to health and safety. The Government has

indicated that it reserves the right to exercise powers to compulsorily acquire and/or condemn

affected homes in the future in accordance with the relevant statutory processes.29 The Head

of the Asbestos Response Taskforce explained:

The processes available for compulsory acquisition under the Lands Acquisition Act

permit the government to compulsorily acquire property for a public purpose, in effect

at market value. Market value in that context is the sum that an informed purchaser

would pay. That takes account of the presence of asbestos. Beyond the timing benefits

of the government’s offer, the significant difference between the buyback offer and

compulsory acquisition is the fact that the buyback offer is at market value, ignoring

the presence of asbestos.30

3.14 For those homeowners/families choosing to remain in an affected home in the medium term,

the Asbestos Taskforce will provide detailed advice in relation to necessary measures to

prevent the entry of asbestos fibres into the living areas. The detail was not available to the

community or the Committee at the time of presenting its report. These measures will have

a significant impact on the amenity of affected homes and will extend well beyond the short

term remediation of identified hazards currently being undertaken in response to asbestos

assessments.



30 Mr Andrew Kefford, Standing Committee on Public Accounts, Inquiry into 2013–14 Annual reports, Proof Transcript of evidence, 10 November 2014, p. 142.


3.15 In practical terms these measures involve the sealing of all possible entry points for fibres.

They are also likely to involve significant ongoing vigilance and testing. These ongoing

monitoring obligations will be made mandatory in 2015 under the Dangerous Substances Act

2004. The costs for undertaking such works on homes (whether part of the Buyback program

or otherwise) will not be reimbursed by the Taskforce.31 Further information on the required

measures to seal all possible fibre entry points for occupancy only in the medium term is at

Appendix G.

3.16 Remaining in an affected home is only possible in the medium term because of the

vulnerability of required sealing measures to a range of external forces. This vulnerability was

explained by the Head of the Asbestos Response Taskforce:

...we have already had reported to us cases where we have done that hazard reduction

sealing work, the house has moved and it has re‐cracked within weeks. So part of the

reason why long‐term habitation is not practical is the level of vigilance that is

necessary and the likelihood of places re‐cracking, be it through weather, climate or

just being old houses.... the overriding message is that the houses do need to be

demolished; they cannot be fixed.32

3.17 Importantly, homeowners choosing to remain in their home(s) in the medium term will require

building approval to undertake any kind of maintenance or renovation work. Works not

associated with minimisation of asbestos exposure risks will not be approved by the

Environment and Planning Directorate. Furthermore, owners of affected homes will be subject

to ongoing obligations under the Dangerous Substances Act 2004 and the Work Health and

Safety Act 2011 in relation to the safety of workers and other visitors to their homes.33


32 Mr Andrew Kefford, Standing Committee on Public Accounts, Inquiry into 2013–14 Annual reports, Proof Transcript of evidence, 10 November 2014, pp. 144–145.



1 7

4 THE MIN ISTER FOR TERRITORY AND

MUNIC IPA L SERVICES

INTRODUCTION

4.1 The Committee heard from the Minister for Territory and Municipal Services and Directorate

(TAMSD) officials on 28 November 2014 to examine matters relating to the disposal of

demolition waste at the West Belconnen Resource Management Facility.34

4.2 The Minister clarified that the primary responsibility of the TAMSD in the Scheme was

concerned with the role of ACT NoWaste which commences at the landfill weighbridge upon

arrival of the waste.35 The Committee was told that the Directorate had estimated the cost for

the disposal element of the Scheme for which it was responsible as being $13.9 million with

costs of capping further to that (in addition) and that the estimate factored in a contingency. A

Directorate official explained:

The cost estimate that we have provided is on a volume basis in aggregate at this stage,

with the cost of the capping on top of that of course. It is operation of the weighbridge,

operation of the contractors that do the disposal of the materials, then it is based on a

volume variant. There is a contingency in it, of course, because at this time we do not

have the contracts relating to when it will be delivered, whether there are efficiencies

to be gained or inefficiencies to be gained, because of other things that we have not

struck in the delivery of the materials to the site.36

4.3 In terms of the proposed Bill for the appropriation of additional monies, in the main, to the

CMTEDD—i.e., no appropriation to the TAMS—NoWaste will invoice the Asbestos Taskforce

(as the Government agency tasked with delivering the Project) directly.37

4.4 West Belconnen landfill has been identified as the site where the demolition waste from

Mr Fluffy homes will be taken.38

34 ACT Government. (2014) The ACT Government’s Preferred Way Forward on Loose Fill Asbestos: Supporting Detail, 28 October, p. 25; Proof Transcript of evidence, 28 November 2014, pp. 2–3.

35 Proof Transcript of evidence, 28 November 2014, p. 2. 36 Mr Phillip Perram, Proof Transcript of evidence, 28 November 2014, p. 11. 37 Proof Transcript of evidence, 28 November 2014, p. 12; 15. 38 Proof Transcript of evidence, 28 November 2014, pp. 2–3.


MATTERS CONSIDERED

4.5 At the hearing the Committee discussed a range of matters with the Minister as they relate to

the disposal of demolition waste from Mr Fluffy homes.

SELECTION OF WEST BELCONNEN LANDFILL S ITE

4.6 The Committee was interested to know the basis upon which the West Belconnen landfill site

was determined as the most appropriate site for the disposal of the contaminated waste. The

Minister explained:

The ACT has, as you know, the two waste landfill stations in the territory, Mugga Lane

and west Belconnen. While both are capable of taking Mr Fluffy waste, or the loose‐fill

asbestos waste as it might be better known, the west Belconnen site has the far

greater capacity and certainly has capacity to receive the thousand‐plus Mr Fluffy

houses. Therefore, we considered that the more suitable site.39

4.7 A Directorate official explained that whilst they understood the Asbestos Taskforce had

looked at other options—the TAMSD was asked to give its opinion:

...on how we could control it, how we could manage it safely and whether we had the

capacity to handle it at the west Belconnen site—and advised the task force we could

do that.40

PROCESSING OF CONTAMIN ATED WASTE UPON ARRIVAL

4.8 The Committee discussed with the Minister and officials how the contaminated waste will be

processed upon arrival at the landfill facility. A Directorate official explained:

The process at this stage is that it will be authorised on site through task force

processes. It will be authorised to come to the weighbridge. The material will be

weighed in—no different from the existing processes adopted at the site. It will go to a

designated site that is controlled and the protocols related to the disposal of asbestos,

including the workplace health and safety requirements, will be required and a cover

placed upon the material.41

4.9 The Committee queried how the contaminated waste would be secured at the dump site

during processing to avoid it contaminating the neighbouring area. The Minister commented:

There is clearly no intention for asbestos to be blowing around west Belconnen....

There are already established protocols for dealing with loose‐fill asbestos waste. The

39 Mr Shane Rattenbury, Proof Transcript of evidence, 28 November 2014, p. 2. 40 Mr Phillip Perram, Proof Transcript of evidence, 28 November 2014, p. 5. 41 Mr Phillip Perram, Proof Transcript of evidence, 28 November 2014, p. 3.


1 9

area where there is work to be done is obviously a scale issue. With the large number

of waste coming from properties, we need to do more work on those protocols, but

certainly the principles that already exist for disposing of this waste will continue.

There are a couple of different points: as each load arrives, then the protocol at this

stage is that 300 millimetres of cover will be put on the site at the end of each day, and

the ultimate capping of the area will be done in accordance with EPA requirements.

There are those three stages: the individual load delivery, the daily capping and then

the ultimate capping of the site once the program is complete.42

4.10 The Committee also queried what protections would be in place to avoid contamination with

groundwater during processing of the material and stormwater runoff to neighbouring areas.

As the Committee understands, the key protection rests with the capping components—daily

and final capping of the site. An official added:

As the minister said, the capping is the key component there of separation of

stormwater and rainwater. The capping will be based on impervious level, most likely

clay, and then a soil level above that. The water that is taken off that goes into a

separation from any water that comes out of the actual existing landfill. The existing

landfill moisture goes into leachate dams, which are then treated before they can be

released. The stormwater goes off the site and into the normal area. So there is a

maintained separation of both types of water. It is my understanding that the task

force has found through scientific advice that the asbestos fibres do not move through

groundwater—they are literally trapped once they are buried—and that there is no risk

of groundwater transmission of those fibres.43

4.11 The Committee queried whether the landfill facility had sufficient capacity for the disposal of

all houses and associated materials. The Committee was told that:

The volume is not a concern at west Belconnen landfill. The preliminary designs that

we have done, based on the information that we have available at the moment,

include the disposal of all of the houses, and the cover material, and the capping, at

the same time maintaining the borrow pit being available to the commercial areas of

the city for the disposal of bonded asbestos and the emergency landfill being still

available for the city.44

4.12 The Committee was interested in the level of education and awareness that would be provided

to residents in the neighbouring area regarding the transport of the contaminated waste to

the West Belconnen landfill and was told:

42 Mr Shane Rattenbury, Proof Transcript of evidence, 28 November 2014, p. 3. 43 Mr Phillip Perram, Proof Transcript of evidence, 28 November 2014, p. 4. 44 Mr Phillip Perram, Proof Transcript of evidence, 28 November 2014, p. 9.


...that will be the responsibility of the task force in relation to both the immediate

neighbours and the broader community where we are conducting the demolitions, and

also in this case with the west Belconnen community in relation to the transportation

of waste.

As I indicated in my answer to Mr Hanson before, we do not expect to be seriously

engaged in the demolition program until towards the middle of next year, by the time

we have completed the tender process. One of the key things that we will be doing

through the course of next year will be exactly the education, information and

consultation piece that you are describing. That will fall under the responsibilities of

the task force. Obviously, in relation to particular questions, we will work with our

colleagues at TAMS to ensure that we have picked up the roads, the transportation, as

well as the particular issues. We are starting to get residents of west Belconnen asking,

“Is this okay? Is this going to work?”45

4.13 The Committee also discussed:

obligations of contractors under the Work Health and Safety Act; 46

measures in place for how NoWaste would manage the disposal processing component to

ensure integrity;47

that the current assumption of the volume of waste expected to be generated per house

is approximately 300 cubic metres;48

the demolition tender process, sequencing of the demolition program and its consequent

impact on processing capacity at the landfill site;49

the proximity of the weighbridge to the location of the recycling transfer centre and

measures that would be taken to ensure that traffic management in the precinct is

appropriate;50

the Code of Practice being finalised with the Work Safety Commissioner for the demolition

process;51 and

opportunities for future development/usability of the dump site land in the future—for

example, suitability for sporting fields at a later point in time.52

45 Mr Andrew Kefford, Proof Transcript of evidence, 28 November 2014, p. 18. 46 Proof Transcript of evidence, 28 November 2014, pp. 17–18. 47 Proof Transcript of evidence, 28 November 2014, p. 17. 48 Proof Transcript of evidence, 28 November 2014, p. 9. 49 Proof Transcript of evidence, 28 November 2014, pp. 12–13. 50 Proof Transcript of evidence, 28 November 2014, p. 19. 51 Proof Transcript of evidence, 28 November 2014, p. 10. 52 Proof Transcript of evidence, 28 November 2014, pp. 4–5; p. 10.


2 1

TRANSPORTAT ION OF THE WASTE TO THE LANDFILL S ITE

4.14 The Committee sought clarification on a number of matters connected with the transportation

of the contaminated waste from homes to the disposal site. The Committee was told that to

avoid the risk of the waste escaping during transit established guidelines required it to be

transported in a bonded state. An official commented:

The protocols established for the removal of the materials from the homes is that

when it arrives at west Belconnen it is in a bonded state. I do not have the scientific

knowledge, but my understanding is that a superglue type material is used to bond the

materials before they are loaded into the vehicles. That material, of course, maintains

the bond and that gives the integrity to stop it blowing around or moving during the

process of removal and disposal.53

4.15 The Head of the Asbestos Taskforce added:

When the demolition occurs, the first thing that happens is the bulk of the remaining

loose‐fill asbestos is removed. Those fibres that remain, and indeed the whole of the

structure, are then coated with glue to bond it. It is also subject to dust suppression

and the load is wet when it is loaded at the site. That is done under the supervision of

an asbestos removalist and asbestos assessors with air monitoring in place.

The trucks are covered. So when the load arrives at the weighbridge, yes, all of the staff

are trained. The equipment is properly licensed, the staff are properly trained, and the

load arrives wet and in a covered truck. So the risk during the transportation as well as

that stage through to the dumping is very carefully monitored and regulated.54

4.16 The Committee also discussed the increase in volume of traffic and road design capacity on

access roads to the landfill site including urban linking roads in proximity of the landfill site.

This Committee queried the impact on road condition and whether temporary traffic

management plans for the area and surrounding suburbs may need to be considered.55

MAINTENANCE OF THE PALMERSTO N DUMP S ITE

4.17 In the context of querying whether there were any lessons to be learned from the disposal of

contaminated demolition waste from the original Commonwealth/ACT Government removal

program, the Committee heard that this waste is buried near Palmerston.56

4.18 The Palmerston dump site was also used:

53 Mr Phillip Perram, Proof Transcript of evidence, 28 November 2014, p. 3. 54 Mr Andrew Kefford, Proof Transcript of evidence, 28 November 2014, p. 17. 55 Proof Transcript of evidence, 28 November 2014, pp.6–7; 18–19. 56 Proof Transcript of evidence, 28 November 2014, p. 16. ACT Government. (2014) The ACT Government’s Preferred Way Forward on Loose Fill Asbestos: Supporting Detail, 28 October, p. 25.


...as a builders’ rubble dump, to dispose of rubble from the former Royal Canberra

Hospital, and on one occasion before self‐government to dispose of household waste

during a garbage strike.57

4.1 The Committee was told that the Government is conducting a detailed survey of the

Palmerston dump site to determine whether additional works might be necessary to ensure

asbestos and other waste is properly buried and the site maintained in a safe state in the

future.58 The Head of the Asbestos Taskforce added:

...there has been an initial study of the site which was done by TAMS in connection

with a potential road project around the back of the suburb. That indicated—and we

are acting on it—that a more detailed study is necessary to confirm that the waste

remains safely capped. We are conducting that work in consultation with our TAMS

colleagues to do a survey of that site, as I say, to ensure that the material remains

safely capped.59

57 ACT Government. (2014) The ACT Government’s Preferred Way Forward on Loose Fill Asbestos: Supporting Detail, 28 October, p. 25.

58 Proof Transcript of evidence, 28 November 2014, p. 8; 16; ACT Government. (2014) The ACT Government’s Preferred Way Forward on Loose Fill Asbestos: Supporting Detail, 28 October, p. 25.

59 Mr Andrew Kefford, Proof Transcript of evidence, 28 November 2014, pp.7– 8; 16.


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5 THE PLANNING MIN ISTER

INTRODUCTION

5.1 The Committee heard from the Minister for Planning on 28 November 2014 to examine

matters relating to planning implications of the Scheme—specifically the plans to attach

development rights to purchased blocks as a means of offsetting some of the costs associated

with the Scheme.

5.2 Under the Buyback program, the Government has offered to purchase all affected Canberra

houses to enable government facilitated demolition and site remediation. Remediated blocks

will be offered for sale at a later stage to assist with defraying overall Scheme costs.

THRESHOLD BLOCK S IZE FOR SUBDIV IS ION

5.3 The Committee sought clarification on what would be minimum size of block that would be

allowed for subdivision and was told:

...that is difficult to answer without actually going through and undertaking that

analysis. For each area you would be looking at the existing subdivision pattern,

existing lot sizes and what would be reasonable. For example, if you had a whole series

of blocks in an older suburb that were 1,200 or 1,500 square metres, you would not

want to be going down to 400 square metres. It would be an exercise of having to run

through it; look at the particular site, location and circumstances; make an assessment

from that point; and then provide further advice. We would need to provide further

advice to the government in that respect.60

5.4 The Committee also sought clarification on the matter of RZ2 blocks which are currently

permitted to have multi‐units—as to how many dwellings would allowable on a block in an

RZ2 zone. The Deputy Director‐General of the Environment and Planning Directorate

explained:

It depends on the size of the block. The plot ratio that is permitted in an RZ2 zone, as I

recall, is 50 per cent, and then there are other restrictions in terms of heights, so two

storeys; setbacks; and car parking requirements. There is no set number; it comes

down to the building envelope. If you have a mix of one, two and three‐bedroom units,

60 Mr Ben Ponton, Proof Transcript of evidence, 28 Nov 2014, p. 65.


it could be a varying number, depending on what the design could actually achieve on

the size of the block itself.61

HOLDINGS OF ACT PU BL IC HO USING

5.5 In the case of suburbs with Mr Fluffy homes, the Committee noted that the Government had

large holdings of ACT public housing. The Committee specifically sought clarification as where

there are ACT public housing blocks next to or behind a Mr Fluffy block, would the

Government be considering the amalgamation of these blocks to permit a larger development

density on the aggregated blocks.62 The Minister for Planning commented:

That is an option that we can certainly look at. It would depend on the needs of the

community, and the best outcomes for the community as well.63

TOTAL NUMBER OF MR FLU FFY BLOCKS AND S IZE THRESHOLDS

5.6 As to the number of Mr Fluffy blocks across sizing thresholds, the Minister for Planning

explained:

We know how many Mr Fluffy blocks there are. There are 863 blocks in the RZ1 zone

and 149 blocks in RZ2. Of the 863, there are 567 blocks greater than 800 square

metres. That might help your calculations for the other context there. And 771 blocks

have a block area greater than 700 square metres. In regard to those that are

associated, we would have to come back.64

5.7 The Committee queried—of the total number of Mr Fluffy blocks—what percentage of the

total number would be considered for redevelopment65 and the Minister responded:

All those purchased, I would imagine.66

5.8 As to numbers of affected blocks that could potentially be considered suitable for

redevelopment, the Committee was told:

On the figures the minister gave you, with the 567 blocks that are greater than

800 square metres, that is the current requirement for dual occupancy in the RZ1 zone

but without unit titling. The proposal is to consider reducing that to be consistent with

the RZ2, which would be 700 square metres. So it would be 771 blocks that could be

redeveloped for dual occupancy. That is a very high figure; again, we need to go

through and look at the particular constraints of each of those sites to determine

61 Mr Ben Ponton, Proof Transcript of evidence, 28 November 2014, p. 65. 62 Proof Transcript of evidence, 28 November 2014, pp.65–66. 63 Mr Mick Gentleman MLA, Proof Transcript of evidence, 28 November 2014, p. 65. 64 Proof Transcript of evidence, 28 November 2014, p. 65. 65 Proof Transcript of evidence, 28 November 2014, pp. 65; 66. 66 Mr Mick Gentleman MLA, Proof Transcript of evidence, 28 November 2014, p. 66.


2 5

whether or not you could reasonably build a dual occupancy on those. On face value,

you would expect that you would be able to.67

5.9 The Committee confirmed that 89.3 per cent of the 863 blocks in the RZ1 zone could

potentially end up as a dual occupancy or multi‐unit development.68

POTEN TIAL IMPACT ON TH E CHARACTER OF TH E STREETSCAPE

5.10 The Committee noted that many of the affected blocks were significant in size—in that, 863

blocks are classified in the RZ1 zone of which 567 of these blocks are greater than 800 square

metres—and any future development rights on these blocks could potentially alter the

character of the streetscape and neighbourhood.69 The Committee inquired about the

measures that would be in place to mitigated against this and was told:

Yes. We take the whole suburb into account—the siting and style of the suburb. There

are areas in Hawker which have very large blocks; others are quite small. There are

some blocks there with multistorey development, as you are aware, off Beetaloo

Street. All of that would be taken into account.70

5.11 A Directorate official added noting the restrictions that apply to dual occupancies:

For example, if the house has been located behind another, there are further

restrictions in terms of the size of those. And how those dual occupancies might

present to the street is an important consideration under existing rules. I gave that

answer related to the subdivision and size of subsequent blocks. If we were to

subdivide, for example, corner blocks, that is where it would be particularly important

to make sure, in terms of the streetscape, that you did not end up with a series of

larger blocks and then a number of 300 square metre blocks that you might find in

greenfields areas.71

OTHER MATTERS CONSIDERED

5.12 At the hearing, other matters discussed included:

the Government’s salt and pepper policy approach to public housing;72

possibility of dual occupancy on a battleaxe block;73

67 Mr Ben Ponton, Proof Transcript of evidence, 28 November 2014, p. 66. 68 Proof Transcript of evidence, 28 November 2014, pp. 65–66. 69 Proof Transcript of evidence, 28 Nov 2014, p. 67. 70 Mr Mick Gentleman, Proof Transcript of evidence, 28 November 2014, p. 67. 71 Mr Ben Ponton, Proof Transcript of evidence, 28 November 2014, p. 67. 72 Proof Transcript of evidence, 28 November 2014, p. 67. 73 Proof Transcript of evidence, 28 November 2014, p. 68.


discussion of difference between subdivision and unit title;74

calculations/estimates of uplift from sale of affected blocks—undertaken by Taskforce and

EDD;75

that most people will be able to buy their block back as is but likely to be more expensive

if for dual occupancy;76

whether work had been done on the length of time a block could remain empty;77

waiver of stamp duty for older persons that are downsizing;78

demolition of Mr Fluffy homes that are heritage listed due to safety concerns;79

possible need for additional staff to process DAs (Development Applications);80

whether planning resourcing requirements had been factored into the Appropriation

Bill;81

control of street character once permission for subdivision is granted;82

requirement for a garden to be developed as quickly as possible;83

whether the period of notification for responding to a DA will change and how objections

will be dealt with—expectation that normal period would apply;84 and

impact of DAs on staffing requirements in the Environment and Planning Directorate and

the Planning Authority.85

SU BSEQU ENT TO TH E H EAR IN G

5.13 Subsequent to the hearing, as an indication of the complexity and unfolding nature of the

Mr Fluffy dilemma—on the day following the last public hearing—the Canberra Times

published an article entitled, ‘Solar access rules could affect Mr Fluffy land plans’.86

74 Proof Transcript of evidence, 28 November 2014, pp. 68; 69. 75 Proof Transcript of evidence, 28 November 2014, pp. 69; 70. 76 Proof Transcript of evidence, 28 November 2014, p. 70. 77 Proof Transcript of evidence, 28 November 2014, p. 71 78 Proof Transcript of evidence, 28 November 2014, p. 72. 79 Proof Transcript of evidence, 28 November 2014, p. 72. 80 Proof Transcript of evidence, 28 November 2014, pp. 72; 73. 81 Proof Transcript of evidence, 28 November 2014, p. 73. 82 Proof Transcript of evidence, 28 November 2014, p. 74. 83 Proof Transcript of evidence, 28 November 2014, p. 75. 84 Proof Transcript of evidence, 28 November 2014, p.75. 85 Proof Transcript of evidence, 28 November 2014, p. 76. 86 Canberra Times—‘Solar access rules could affect Mr Fluffy land plans’, 2 December 2014—http://www.canberratimes.com.au/domain/real‐estate‐news/solar‐access‐rules‐could‐affect‐mr‐fluffy‐land‐plans‐20141201‐11wsn8.html


2 7

5.14 This again highlights the difficulty the Committee faced in canvassing all the issues associated

with the Mr Fluffy houses in the short timeframe the Committee had to consider the Bill.


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6 THE TREASURER

INTRODUCTION

6.1 The Committee heard from the Treasurer on 28 November 2014 to examine matters relating

to the financial modelling underpinning the Scheme costs and the budget implications of

implementing the Scheme.

FINANCIAL MO DELL ING UNDERPINNIN G THE SCHEME

6.2 As to the financial modelling underpinning the Scheme, the Treasurer told the Committee:

The financial modelling indicates that the scheme is expected to have a net cash cost to

the government of approximately $366 million not including the interest costs on the

loan from the commonwealth. Under the scheme the government expects to spend

around $897 million purchasing and remediating properties and undertaking the

administrative tasks associated with the scheme. This amount is expected to be partly

offset by the proceeds from the resale of remediated land which is forecast to

generate around $531 million in revenue.87

6.3 The Committee was interested to know the assumptions underpinning the forecast that the

resale of remediated land was expected to generate approximately $531 million in revenue.

A Treasury official explained:

That is built up from a number of factors. The incoming revenue reflects a number of

things. The amount starts with the value of the land that we purchase. So we have

been assuming we will at least get that value back. It is then based on an uplift on that

value based through unit titling of land. That value was calculated as a 25 per cent

uplift in value on average across 88 per cent of the blocks. That 88 per cent of the

blocks that we applied that uplift to is consistent with the numbers you heard earlier in

terms of the number of blocks or proportion of blocks that are over 700 square

metres.88

6.4 The Committee queried the certainty about the assumption that 88 per cent of the affected

blocks would be suitable for redevelopment or unit titling and was told:

These numbers and the modelling we have done are based on averages. So everything

running through all our modelling is based on an average. We take all the blocks and

87 Mr Andrew Barr, Response to QToN No. 1, 27 November 2014. 88 Mr Stephen Miners, Proof Transcript of evidence, 28 November 2014, pp. 78–79.


take an average uplift. This does not mean that all 88 per cent of blocks will get a

25 per cent uplift. It means that some of those blocks may get a zero uplift; some may

get a larger uplift. On average, though, we take the average and we spread it across the

number of blocks that are capable of getting uplift. We certainly have not gone through

and looked at every block and done it block by block. That is simply not possible to do

within the time and it would not add greatly to the accuracy. We have done it on an

average basis.89

6.5 The Under Treasurer added:

...that it is an estimate of what the revenue will be. If, on average, fewer than 88 per

cent are unit titled or, on average, the uplift is less than 25 per cent, the amount of

revenue will be lower. Similarly, if those averages are conservative, the amount of

revenue will be higher. It will be what it will be, essentially. It is an estimate based on

those rules of thumb.90

6.6 A copy of the financial model for the Scheme as provided by the Treasurer is at Appendix H.

BUDGET IMPL ICAT IO NS OF IMPLEMEN TING THE SCHEME

6.7 The one‐off size and cost of dealing with the Mr Fluffy legacy represents about a fifth of the

ACT Government’s annual budget.

6.8 The cost of the Scheme is estimated to equate to approximately 22% of ACT Government

revenue. The estimated net cost of the Scheme is likely to be significant from the Territory’s

perspective. The currently expected net cost of between $300 million and $500 million

represents approximately 10 per cent of the Territory’s annual budget.

6.9 In terms of cash flow to implement the Scheme in the context of the Territory Budget:

The potential cash requirement of up to $1 billion to implement the Scheme is

equivalent to around one quarter of the ACT’s total revenue base and roughly

equivalent to the Territory’s annual spending on health. It is also 25 per cent larger

than the ACT Government’s entire capital works program for 2014‐15. To put this into

further perspective, the potential cash requirement is comparable with a $90 billion

program for the Australian Government. This figure is broadly equivalent to the total

amount of annual Commonwealth spending on health and education.91

6.10 Given the vulnerability of the ACT economy, in part due to its narrow revenue base and

reliance on revenue generated by land development, these estimates would be expected to be

89 Mr Stephen Miners, Proof Transcript of evidence, 28 November 2014, p. 79. 90 Mr David Nicol, Proof Transcript of evidence, 28 November 2014, p. 79. 91 ACT Asbestos Response Taskforce. (2014) The Loose Fill Asbestos Insulation Eradication Scheme. A Guide to the Voluntary Buyback Program, p. 8.


3 1

sensitive to movements in house purchase costs, and complexity of demolition of affected

houses.

6.11 Meeting these costs will require a reprioritisation of some budget priorities with a possible

consequent impact on service delivery. The ACT Government has already identified the

Scheme as one of its key infrastructure and capital works priorities along with the Capital

Metro, health and education.92

6.12 Prior to the announcement of the Scheme, the Chief Minister warned that large parts of the

$2.5 billion infrastructure package as announced in the 2014–15 Budget would be delayed,

including the City to Lake development and a new convention centre.93

6.13 The full impact of the Scheme on the Territory budget will be set out in the 2014–15 Budget

Review94 due to be released in February 2015.

6.14 The Budget Review provides an update of the Government’s financial performance relative to

its financial policy objectives and strategies as detailed in the 2014–15 Budget Papers. This

assessment should take into account the current economic conditions as well as the impact of

policy and parameter changes against activity up to 31 December 2014.

6.15 The Committee queried why the supplementary budget papers accompanying the proposed

bill did not add in the total headline net operating balance impacts excluding contingency to

the data provided in the budget papers—so as to, in effect provide an update on the

Territory’s surpluses or deficits. The Treasurer commented:

We will publish that in the midyear update because there will be other variables that

will be impacted, most particularly when the commonwealth update their forecasts for

the midyear, which I understand will come out shortly. We traditionally provide our

midyear update in late January, early February—certainly by 15 February; that is our

requirement by law. We generally wait until after the commonwealth so that we can

factor in any changes that are pertinent to the territory’s accounts, and we will provide

that update at that point.95

6.16 The Under Treasurer added:

I would also suggest by the time we publish the midyear update we will have a bit

better handle on the timing, particularly in the first two years. We do not expect that

will change the overall impact. But just when that hit occurs on the budget is critically

92 ACT Asbestos Response Taskforce. (2014) The Loose Fill Asbestos Insulation Eradication Scheme. A Guide to the Voluntary Buyback Program, p. 8.

93 Smith, C. and Thorpe, C. (2014) Mr Fluffy asbestos: ACT Government delays budget commitments to pay for clean up, ABC News online, 14 September 2014.

94 Pursuant to section 20A of the Financial Management Act 1996. 95 Mr Andrew Barr MLA, Proof Transcript of evidence, 28 November 2014, p. 78.


dependent on when the contracts to settle the purchases are settled. So it is whether it

is before 30 June or after 30 June.96

IMPACT OF THE SCHEME ON TH E TERRITORY’S BALANCE SH EET

6.17 There will be an uneven distribution in terms of impact on the Territory’s balance sheet

between meeting costs upfront and selling remediated blocks. This will be partially offset by

the purchased properties being classified as assets on the Territory’s balance sheet. However,

once demolished there will be a write down in value of these assets.

6.18 After the proposed Bill is passed the biggest impact on the Territory’s budget will be in the first

and second fiscal year of the implementation of the Scheme. It is expected that the Territory

budget though will be impacted for at least the next decade due to uneven distribution of

expenses and revenues associated with the implementation of the Scheme as well as the

repayment of the loan.97

MANAG IN G TH E BU DGET IMPL ICAT IONS OF TH E SCHEME

6.19 Managing the budget implications of the Scheme will necessitate careful management of the

Territory’s budgetary performance, debt burden and financial strategy.

6.20 The critical parameters of the Scheme98 are:

the net scheme is expected to come out as a cost to the Territory and that cost will hit the

budget;

the net cost of the Scheme will be the gap between the cost of purchasing the properties

(including demolition and disposal of contaminated waste) and the resale value of the

land. The cost will exceed in aggregate the cost of any resale value of the properties;

the Commonwealth loan is a line of credit that will help the Territory manage the

financing impact of the Scheme only;

the fiscal impact will fall to the Territory, its ratepayer and the Budget. The fiscal impact

on the budget will have to managed over the 10 year term of the loan. The biggest fiscal

impact on the operating balance will fall in the first and second fiscal years of the Scheme

two years as that is when the costs will be recognised; and

cash impacts—in terms of when affected homeowners accept the offer to purchase their

properties will be managed through the loan facility. There will also be subsequent cash

impacts in terms of demolition, removal, storage cost of waste together with positive cash

impacts in terms of selling the land.

96 Mr David Nicol, Proof Transcript of evidence, 28 November 2014, p. 78. 97 Inquiry into 2013–14 annual reports, Proof Transcript of evidence, 10 November 2014, pp. 42–43. 98 Proof Transcript of evidence, 28 November 2014, pp. 78–101; Inquiry into 2013–14 annual reports, Proof Transcript of evidence, 10 November 2014, pp. 42–43.


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7 THE CHIEF MIN ISTER

INTRODUCTION

7.1 The Committee heard from the Chief Minister on 28 November 2014 to examine matters

relating to the overarching implications of the proposed Bill for the Territory—Mr Fluffy

homeowners and residents and ACT taxpayers.

7.2 The overarching implications considered included:

net cost of the Scheme to the Territory—confirmation that there is no profit associated

with the Scheme;

net value uplift from blocks that will be rezoned as a means of recovering sunk costs

associated with the Scheme;

the extent to which other buyback schemes were considered in the design of the Scheme;

the significance of the Downer house as the catalyst for the Government’s establishment

of the Asbestos Response Taskforce and the Scheme; consequential fees and charges and

potential Commonwealth tax implications; and

calls for a board of inquiry into the handling of the loose‐fill asbestos legacy in the ACT and

neighbouring NSW.

7.3 The Committee also sought clarification on several aspects of the Scheme design and its

implementation. This included:

the concept of first right to return to blocks;

position on contaminated contents;

position on compulsory acquisition;

valuation date for homeowners opting into the Scheme; and

clarity about options for homeowners who do not sign up to the Scheme.

THE BUYBACK OFFER

7.4 Affected homeowners who sign up to the Scheme by 30 June 2015 will be eligible for the

buyback offer which:

...includes purchasing the home and land at market rates, as if asbestos was not

present, through an agreed valuation process. There is also the waiving of stamp duty

from the purchase of the next home. There is $10,000 for every home owner and

$2,000 for any additional child. There is $1,000 assistance to take financial legal advice

on the offer. There is also the counselling assistance that has been put in place by


Medicare Local, or through the government with Medicare Local, to meet some of the

needs of home owners affected.99

THE S IGNIF IC ANCE OF THE ‘DO WN ER H OU S E’

7.5 The significance of the ‘Downer house’ as the catalyst for the Government’s establishment of

the Asbestos Response Taskforce and the Scheme was discussed.100 The Committee

understands that the ‘Downer house’ had been missed in the original removal program. The

forensic investigation of this house prompted the letters which were sent in February 2014

and the commencement of the second wave of assessment of Mr Fluffy homes. As to the

significance of the ‘Downer house’ to understanding fully the Mr Fluffy legacy—the Chief

Minister explained:

I have to say—I have said it a couple of times in the chamber—that the public servants

who advised the government on that are the unsung heroes of this. Their advice to the

government was to do a forensic demolition. That report came back. It showed

extensive contamination, to a much greater degree than had previously been

understood. But it was a missed house; it was not a cleaned house. The learnings from

that report led to the government believing that we should write to all the Mr Fluffy

home owners and urge them to get a further asbestos assessment done. That

happened in February. Assessments started being done between February and April‐

May, around Easter. That was really when a number of home owners got their first

assessments back. Between that time and August, it became clear that, as the

assessments rolled in, more and more houses which were originally thought to be

cleaned and safe were no longer thought to be so. That is what has got us to where we

are today.101

7.6 Discussion followed and the Chief Minister was asked what information she had received. The

Chief Minister added:

I can honestly tell you that in 2005—I was the responsible minister; I was the one that

had set up a whole range of work relating to asbestos management in the territory—

there was absolutely no information before the government that said these homes

were unsafe, or unsafe to live in. A number of recommendations were made, all of

which were accepted and implemented.102

99 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 44. 100 Proof Transcript of evidence, 28 November 2014, pp. 49–51. 101 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 49. 102 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 58.


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FIR ST R IGH T TO RETU RN TO BLO C KS

7.7 Under the Scheme, affected homeowners, should they wish, may nominate to return to their

blocks (and they will get the first right of refusal/option to buy back the land). Whilst this is an

option, the Government will be looking at adding development rights to blocks as a means of

covering some of the costs associated with the Scheme.103 The Chief Minister acknowledged:

The issue that I think is causing concern is that, as part of our ability to recoup some of

the costs associated with the buyback, we are looking at adding development rights to

those blocks, and that would increase the price of the land. That is causing some

concern to home owners. If we do not do that, if we do not look to take uplift out of

the land, it would mean that you could add around $90 million to $100 million to the

cost of the scheme overall.104

7.8 The Committee was told that as of the afternoon of 28 November 2014—of the 550

registrations to the Scheme:

...about 250 had indicated a desire to return to their block. The remainder had either

said no or were uncertain on that point.105

TRUE COST OF SC HEME

7.9 As to the true cost of the Scheme, the Chief Minister explained:

If we are looking at it in dollar terms, if you are looking at having to find another way

to, say, recoup $90 million to $100 million, it is around $660 per household in

Canberra, if you apply that to the rates base. If you halve that, you would have to look

at recouping about $330 across the rates base, if we were wanting to maintain the

overall net cost at $300 million to $400 million, which we have accepted is going to be

the true cost of the scheme.106

TOTAL NET VALUE UPL IFT FROM THE BLOCKS

7.10 The Committee was told that principally, the costs of the Scheme are partially being funded by

adding development rights to purchased blocks of land from affected homeowners. Whilst the

total net uplift from the blocks will in part offset some of the associated costs it will not cover

them all—in practical terms, there is no net profit associated with the Scheme. The Chief

Minister told the Committee:

103 Proof Transcript of evidence, 28 November 2014, pp. 41–42. 104 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 41. 105 Mr Andrew Kefford, Proof Transcript of evidence, 28 November 2014, p. 41. 106 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 42.


There is no profit associated with the scheme at all. There is an acceptance by the

government that there is a minimum net cost of between $300 million and

$400 million, and that is because there are some costs that cannot be recouped. We

are offering to buy homes that are currently being valued at zero or close to zero

because of asbestos contamination, and we are offering to buy them at market rates as

if the asbestos was not present. We also have the cost of buying the house and the

land, the demolition costs, the waste, the remediation costs—they are all being met.

The majority of that is sunk costs—the house, the demolition, the waste removal, the

decontamination. The only offset to that is the land and being able to resell the land.

We expect it to be a net cost of between $300 million and $400 million. It is hard to say

because we are just starting the valuation process with homes now. The uplift from the

land and the reselling of blank blocks would provide some offset to that net cost. If you

do not proceed with that, you just add that into the net cost. So instead of being

between $300 million and $400 million, you would add between $50 million and

$100 million to that bill. That is the bill to the ACT community, not the ACT

government.107

COMPULSORY ACQUIS IT IO N

7.11 The Government told the Committee that the Buyback program is voluntary, though the ACT

Government currently has powers to compulsorily acquire property in the territory under the

Lands Acquisition Act.

7.12 The ACT Government has indicated that it:

...reserves the right to exercise powers to compulsorily acquire and/or condemn

affected homes in the future in accordance with the relevant statutory processes.108

7.13 The Committee sought further clarification on what compulsory acquisition might mean for

affected homeowners and was told:

If there are people who do not want to take part in the scheme, who might want to

pursue other avenues, we will have to deal with that. And the very clear legal advice

we have got is that we can resume the lease compulsorily, and we would have to

provide just compensation for that. And just compensation would not necessarily be

the same as the buyback offer—in a purely legalistic sense—but we have not taken any

decisions on that.109

107 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, pp. 42–43. 108 Asbestos Response Taskforce. (2014) The Loose Fill Asbestos Insulation Eradication Scheme—A Guide to the Voluntary Buyback Program, p. 13.

109 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 53.


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7.14 The Committee was interested to know when such a decision would be taken and was told

that the timeframe was March 2015. The Chief Minister stated:

I think what we would have to do in, say, March next year is to provide an update to

people about how it is going. I know this will be a matter of constant public

consumption anyway, so we probably do not have to do it too formally. But I think we

would have to start impressing upon those who are not participating in the scheme

prior to the scheme closing what that might mean to them and making sure they are

getting good financial advice around that.

I think it would come back down to once we deal with the people who do want to go

and want to go quickly and are happy with the buyback scheme—or, if not happy,

happy enough—the task force will then shift its concentration to those that have not

willingly come forward to participate. And then we deal with that. Part of that, I think,

is making sure, prior to the close‐off of the scheme, that people have all of their

financial advice, independently provided to them, in front of them before that choice is

taken away.110

CLARITY ABOU T OPT IONS FOR HO MEOWNERS WHO DO NOT S IGN UP TO TH E SCHEME

7.15 The Committee noted that there appeared to be little information about options available to

homeowners who do not sign up to the Scheme—in particular, for the longer term.111 The

Chief Minister commented that:

Yes, it is vague. My hope is that people take up the offer of the buyback and do not

take it up under the feeling that they are being threatened with an inferior offer. That

was the reason behind having 30 June next year as the cut‐off point. In a way, that will

clearly show how many people are in and how many are out. In a sense, we can deal

with that issue then.

But I accept that people want to know what the options are. We have not taken any

decision other than that all of these homes need to be demolished. That is the clear

advice. There is no other way. There is no other way to make these homes safe. That

even goes for the homes that have very little contamination. Because what they

continue to have is contamination. Yes, it might be a little, but they are contaminated.

They therefore are worth less than the market value and at some point in time

someone else is going to have to deal with it, and they have “Mr Fluffy” well and truly

stamped all over their file. That is a problem for any member of the ACT community.

That is the decision we have taken. Every house has to come down. The buyback

scheme provides the voluntary opportunity to come in and realise the financial

110 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, pp. 53–54. 111 Proof Transcript of evidence, 28 November 2014, p. 53.


investment. I know it does not deal with all the emotional investment and all the hurt,

ache and grief that is associated with that, but, in a very pure transactional sense, it

deals with the financial investment.112

7.16 The Government was unable to detail ‘what that might mean to them’ actually meant.

CALLS FOR A BOAR D OF IN QU IRY IN TO THE HANDL IN G OF TH E LO OSE-F ILL LEGACY

7.17 The Committee noted that a number of the submissions had put forward that the current

loose‐fill legacy was a consequence of the failure of successive governments to act upon

information and that a board of inquiry, or similar, should be established to examine these

matters. The Chief Minister responded:

It is important that this comes out. I am sure once we have got through the buyback

scheme and some of the other issues, I certainly believe there should be a very

thorough analysis of what has happened with the Mr Fluffy administration, going back

to the original decision to allow him to spray this into people’s roofs when it was

clearly well understood by people that there was significant risk attached to that, and

all the way through.113

CO N TAM I N ATED C ON T EN TS

7.18 The Committee was interested in further detail on the published policy concerning the

removal of contaminated contents from affected houses which had been provided to

homeowners.114 The Committee was told that the:

...policy says that goods that have been stored in a subfloor or in the ceiling should be

presumed to be contaminated. Goods that are in a cupboard where we found asbestos

should be presumed to be contaminated. But in most cases in most homes it is not the

case that everything needs to be thrown out. That is a decision that needs to be made

based on the asbestos assessment for that particular property and it is a decision that

home owners will need to make with that advice in mind. That document also

countenances the wiping of hard surfaces, if that is something the home owners wish

to do. But, at the end of the day, the decision in relation to contents, apart from those

areas where contamination is presumed, has to be made case by case based on the

asbestos assessment for that home.115

112 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 53. 113 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 58. 114 Proof Transcript of evidence, 28 November 2014, p. 43. 115 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, p. 43.


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CO N SEQU ENTIAL FEES AND CH AR GES AN D POTEN TIAL COMMONWEALTH TAX IMPL ICATIONS

7.19 The Committee discussed with the Chief Minister measures being undertaken to address other

consequential fees and charges arising and potential Commonwealth tax implications for

affected homeowners.116 As to work being undertaken, the Chief Minister told the Committee:

I have sent letters out to everyone I can think of, and even people I did not think of

that the task force told me to think of, and then they sent me another 20 letters to

sign. The task force has been meeting with individual organisations, whether it be

banks or utilities, to talk with them and make sure that there is a bit of a joined‐up

response. I think the worst thing for affected home owners is when they contact their

institution and they say, “Well, we don’t know what Mr Fluffy is.” That is not the

response we want people to have.

It is still in its early days, but I think the framework is there, the communication is

there. The task force obviously has been under enormous pressure since it was

established but particularly since the buyback scheme has been announced. They are

trying to prioritise individual home owners and have discussions with them and at the

same time trying to build in the community capacity and organisational capacity

around it.

I think it is coming together, but if individual home owners have particular banks that

they are having trouble with or any other business then I would suggest letting the task

force deal with them is a good idea.117

7.20 Generally, the Committee heard that the Government’s approaches to the corporate sector

and utilities to ask that they provide assistance and fee waivers for disconnection or

reconnection of services for eligible homeowners had been positive.118

PROPERTY VALUAT IONS

7.21 In making an application under the Scheme, a homeowner agrees to the Australian Property

Institute arranging for the affected block to be valued by two independent valuers. The valuers

will assess the house and land at market value at 28 October 2014 (the date the Buyback

program was announced) irrespective of when the valuations occur. In making an assessment

the valuer will ignore the presence of loose‐fill asbestos and minor maintenance or

presentation issues. The valuation will include fixtures and fittings that would normally pass

with the property. Once the valuation process has been completed, the Asbestos Taskforce

116 Proof Transcript of evidence, 28 Nov 2014, pp. 51; 52. 117 Ms Katy Gallagher MLA, Proof Transcript of evidence, 28 November 2014, pp. 51–52. 118 Proof Transcript of evidence, 28 November 2014, p. 44.


will formalise the buyback offer in a draft deed in which the surrender sum will be the average

of the two valuations.119

7.22 The Committee discussed the single date for valuation of 28 October 14 as being determined

on the advice of the Property Institute.120 The Head of Taskforce explained:

It was the very clear advice of the Property Institute that the government should adopt

a single reference point for the valuation process, and that is consistent with other

similar schemes. In terms of when that offer is taken up, the home owner of an

affected house as at 28 October can elect to take that up at any point between now

and 30 June next year, but the valuation date is fixed at 28 October. So there is a

choice around timing, but the choice of timing in beginning that process has no effect

on the date of valuation.121

7.23 As to concerns raised regarding a single set valuation date—for example, possibly encouraging

people to leave their homes122—and the offer being the average of two valuations as opposed

to the higher valuation, in earlier evidence, the Committee was told:

...that the valuation process that underpins the government’s offer to buy back all of

the affected houses is being undertaken under the supervision of the Australian

Property Institute ACT Division. We held discussions with the president of the Property

Institute as we were going through the design process, and the clear advice we have

from Mr Powderly was that not only does having a single date ensure a degree of

certainty and prevent opportunities for gaming around the scheme eligibility but also it

is very consistent with similar government buyback processes elsewhere and

commercial practice in this sense.

The issue really is one starting from the point that we are in this space because the

houses are contaminated and the best position is for people to leave their homes. So,

yes, there is an incentive because of the effects that you are describing, to move more

quickly. Although, having said that, we have taken advice around this. The state of the

real estate market is, you would have seen from press reports, not strong. We will not

sit here and argue that there is unlikely to be an impact; we are hearing the same sorts

of stories you are. But the advice we have taken and provided to the government as

part of the decision‐making process is that the overall market impact of this is modest.

The other thing worth emphasising in that context is that it is not the case that 1,000

families are being tipped out all at once. There is staging of people moving into the

market. Yes, a number of people have chosen to move quickly. Indeed, as soon as the


120 Proof Transcript of evidence, 28 November 2014, pp. 44; 45. 121 Mr Andrew Kefford, Proof Transcript of evidence, 28 November 2014, p. 42. 122 Proof Transcript of evidence, 28 November 2014, p. 46.


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buyback had been announced we had contact from families saying, “Can I buy a house

first and then sell you my old one?” I think this reflects the whole spectrum of the

responses we are seeing from families, right from, “I want to stay here forever,”

through to, “No, I am really happy to go right now.”123

7.24 As to views on remaining with the set valuation date of 28 October 2014, the Chief Minister

commented:

On balance, I think sticking with 28 October is the right thing to do in terms of ensuring

fairness for everybody. We do not have a crystal ball of what is going to happen to the

housing market. There could be another series of announcements from—I do not

know—somewhere that this is not the flattest the housing market gets. Things change,

and how do we compensate for that? Would it be fair if someone in six months time

got a different result to the one they got on 28 October?

I am going to talk with the Australian Property Institute one more time. I have met with

them once already about this. It is their very firm recommendation that that is the way

we do it. It is in line with other buyback schemes, because it creates that level playing

field, and it pulls forward people into that, “Right, let’s move, take the offer up and get

out.” But I have had a number of representations over it. I would have to say, on

balance, that is my view today but I will have a further discussion with the API.124

7.25 The Committee notes that the valuation date would mean that it is possibly set in a flat market

and to the extent possible is of the view that, to the extent possible, consideration should be

given to factoring in flexibility so that people who make decisions to move further out from the

valuation date are not disadvantaged.

OTHER MATTERS CONSIDERED

7.26 Other matters discussed at the hearing included:

that financial assistance provided under the Scheme—may not cover all costs;125

range of costs covered by government assistance package;126

requirement for homeowners to ‘opt in’ to the Program by 30 June 2015;127

change in the Chief Executive of the REIACT advice regarding impact of the Scheme on the

property market—significant impact—scope to change policy;128

123 Mr Andrew Kefford, Inquiry into 2013–14 Annual reports, Proof Transcript of evidence, 10 November 2014 p. 137 124 Ms Katy Gallagher MLA, Inquiry into 2013–14 Annual reports, Proof Transcript of evidence, 10 November 2014 pp. 137–138.

125 Proof Transcript of evidence, 28 November 2014, pp. 43‐44. 126 Proof Transcript of evidence, 28 November 2014, p. 44. 127 Proof Transcript of evidence, 28 November 2014, p. 45.


effect of shortage of properties on the market;129

support from the Commonwealth—whether more generous support could enable more

flexible program;130

comparison of affected homeowners to victims of 2003 bushfires looking for homes;131

scheme put to the Commonwealth—effect of Commonwealth contribution and ACT

Budget;132

document trail—confidence that all affected homes have been identified;133

that there is no intention to return to sites where affected homes have already been

demolished;134

regime in place governing demolition of homes;135

priorities of government in setting up the Taskforce136, taskforce conversations with

homeowners137 and taskforce staffing numbers;138

need to demolish all affected homes—option for compulsory acquisition—timing of advice

about this—expected March 2015;139

inclusion of expert advice that houses have to be demolished in the Taskforce report;140

emotional support being provided to Mr Fluffy homeowners—personal support—

Medicare Local;141

assistance available for neighbours—comparison with bushfires—“survival guilt”;142

contact with people who were former residents of an affected home—arrangements for

free advice through ACT Planning Authority—health study may engage with former

residents;143

eventual publication of list of affected homes;144

128 Proof Transcript of evidence, 28 November 2014, pp. 45; 46. 129 Proof Transcript of evidence, 28 November 2014, pp. 46; 47. 130 Proof Transcript of evidence, 28 November 2014, p. 47. 131 Proof Transcript of evidence, 28 November 2014, p. 47. 132 Proof Transcript of evidence, 28 November 2014, pp. 48; 49. 133 Proof Transcript of evidence, 28 November 2014, p. 49. 134 Proof Transcript of evidence, 28 November 2014, p.50. 135 Proof Transcript of evidence, 28 November 2014, p. 50. 136 Proof Transcript of evidence, 28 November 2014, p. 61. 137 Proof Transcript of evidence, 28 November 2014, p. 52; 138 Proof Transcript of evidence, 28 November 2014, p. 52. 139 Proof Transcript of evidence, 28 November 2014, pp. 53; 54. 140 Proof Transcript of evidence, 28 November 2014, p. 54. 141 Proof Transcript of evidence, 28 November 2014, pp. 54; 55. 142 Proof Transcript of evidence, 28 November 2014, pp. 55; 56. 143 Proof Transcript of evidence, 28 November 2014, p. 56.


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removal of plants and clearance of gardens;145

reference to submission No. 12—affected homeowners who sold dwelling prior to

buyback;146

the Taskforce’s efforts to deal directly with affected individual homeowners;147

commentary in allegations that Government should have acted on asbestos issue in

2005—need for a thorough analysis of what has happened—when this should occur;148

whether the Taskforce had considered the details of sheep dip remediation scheme

including compensation paid, and comparison with other buyback schemes149;

comparison with other buyback schemes in other jurisdictions;150; and

clarification of the waiver of stamp duty versus reimbursement.151

144 Proof Transcript of evidence, 28 November 2014, p. 57. 145 Proof Transcript of evidence, 28 November 2014, p. 57. 146 Proof Transcript of evidence, 28 November 2014, pp. 57; 58. 147 Proof Transcript of evidence, 28 November 2014, p. 58. 148 Proof Transcript of evidence, 28 November 2014, pp. 58; 59; 60. 149 Proof Transcript of evidence, 28 November 2014, pp. 60–61. 150 Proof Transcript of evidence, 28 November 2014, p. 61. 151 Proof Transcript of evidence, 28 November 2014, pp. 61; 62.


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8 COMMUNITY V IEWS/PERSPECTIVES

KEY INTEREST GROUPS AND ORGANISATIONS

8.1 The Committee heard from a number of key interest groups and organisations on Friday

28 November 2014 and Monday 1 December 2014.

ACT COUNCIL OF SOCIAL SERVICES INCORPORATED

8.2 The Committee discussed with the Director of ACTCOSS the potential impact of Mr Fluffy on

affordable housing if up to a thousand families/households will have to move out of existing

homes and into the market over the next couple of years—the short term impact and over the

longer term. The Director of ACTCOSS acknowledged that:

...there has been significant public commentary on the risk to house prices escalating in

the ACT with a substantial number of people looking for new housing through the

buyback scheme. The ACT Council of Social Service acknowledges that and it

acknowledges the work of the residents action group on those issues and defers to

them on the detail in terms of the impacts on those households.152

8.3 Whilst recognising that 1,000 plus Mr Fluffy households will be in need of housing, the Director

of ACTCOSS was of the view that this demand was part of the bigger issue of housing supply—

in particular, in the context of the affordable housing segment. The Director explained:

The National Housing Supply Council found when they did their last work—their last

published paper was a couple of years ago—that the ACT had a shortfall of about

10,000 houses in the affordable housing segment of the housing market. My view is

that there is some benefit potentially in the buyback process with the plans around

potentially subdividing blocks, changing planning regulations and looking at some

different ways to achieve infill that may contribute to assisting with addressing the

need for more housing. In the scheme of things, given we have a 10,000 household

dwelling shortage, the 1,000 Mr Fluffy households are just part of what is a much

bigger issue.153

8.4 As to short term impacts on the housing market, ACTCOSS was of the view that in those

suburbs where there were larger numbers of Mr Fluffy residences, there was potential for the

market to heat up in those areas. To assist with this market behaviour, ACTCOSS:

152 Ms Susan Helyar, Proof Transcript of evidence, 28 November 2014, pp. 102–103. 153 Ms Susan Helyar, Proof Transcript of evidence, 28 November 2014, p. 103.


...would argue there needs to be as short a time as possible between the evaluations

that happened in October and the opportunity for people to get access to the money

to purchase their next dwelling because that will minimise the risk of the market

escalating with respect to people being able to get into the market.154

8.5 The Committee discussed the importance of support services for affected homeowners post

traumatic events in the short and long term. The distinction between the objectives of these

services in the short and long term was also emphasised. The ACTCOSS Director explained:

... we know that households often in the busy time immediately post event are

focused, they are getting the extra assistance and their needs are recognised. It is often

two years, and, as we know from the Queensland floods, even five years down the

track, households are really struggling. Often their resources have been spent by then.

Their emotional resources have been spent as well. There are often relationship

breakdowns that happen two years post traumatic event. That is probably more of

what I would be concerned about—that we recognise that this will be like other natural

disasters where the recovery effort needs to be quite long term. I think we are learning

more from the natural disasters about how long that recovery effort is.155

8.6 The importance of ensuring the availability of support services in the long term delivered by a

structured recovery taskforce model, similar to that of the 2003 Canberra bushfires. The

importance of following and monitoring the wellbeing—physical, mental and emotional—of

affected families and households in the long term was also emphasised.156 The Director of

ACTCOSS commented:

We need to build in to the bill some resourcing around the long‐term impacts. It is not

just the physical buildings that are the problem for these households. There has been

significant attention paid to emotional wellbeing and people accessing support right

now, and I think that needs to be built in to the forward projections of the cost that will

be incurred in the community.157

REAL ESTATE INSTITUTE OF THE ACT

8.7 The Committee discussed with the Chief Executive of the Real Estate Institute of the ACT the

impact of the Scheme on the housing/property market—the effect of a thousand houses being

withdrawn from the market, a thousand people either purchasing or renting and then at some

stage the Government releasing housing blocks on the market. The Chief Executive

commented:

154 Ms Susan Helyar, Proof Transcript of evidence, 28 November 2014, p. 103. 155 Ms Susan Helyar, Proof Transcript of evidence, 28 November 2014, pp. 103–104. 156 Proof Transcript of evidence, 28 November 2014, pp. 104–105. 157 Ms Susan Helyar, Proof Transcript of evidence, 28 November 2014, p. 104.


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I had hoped that any spike in the market would be minimal. I am finding that is not

the case [emphasis added]. I am finding that not only does our market have about

1,000 houses fewer than what it should have for this time of the year and for the size

of the territory, but we now have the problem where Fluffy owners are fairly active in

the marketplace and seeking to get some sort of resolution.

The other problem, if I may say so, is that availability of land in the ACT does not exist

[emphasis added]. If you want to buy a block of land to build a house on, you might

have to wait three years while they build the road and put in the sewerage, the

electricity and everything else there. When we were advised at a committee stage that

there might be 300 blocks available for Mr Fluffy owners to purchase and move into a

new home, it was not quite right because it will take some considerable time before

the land that they were talking about in Moncrieff and other suburbs will be ready to

build on. Of course, to build a house takes another 12 months.

The impact on the market, as you asked, is that I think it is going to have a fairly—I will

not say severe—serious impact, and that is contrary to what I have been saying in the

last couple of weeks.158

8.8 The Committee was interested to know the views of the REIACT regarding what the

Government could do to minimise the serious impact on the market and was told:

...I do not think it can do very much at all. I think one of the areas that have to be

addressed is the way that we do land supply. Apart from that, I really believe probably

the government are doing everything they possibly can in this area. I am not sure

that there is another step they can take. I am very much aware of the pressures that

the task force are under and I am very pleased about the results that they are achieving

at this point of time. If that continues, the government and those involved are probably

doing the very best they can.159

8.9 In the context of land release the Committee was interested to know why land supply might be

an issue and was told that changes to land supply in the Territory have shifted over the last

decade in the Territory from buying serviced land (with utilities) ready to build on to

purchasing land in advance of its servicing some two years out from it being build ready

land.160 To illustrate the shift, the Committee was told:

I remember when we used to sell land when there was a road in front of it and there

was sewerage and a light pole. We do not do that anymore. We sell something that has

been pegged out—no roads, no nothing—and we ask somebody to pay $200,000,

$300,000, maybe $400,000, for it and wait two years while it is being serviced and fixed

158 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, pp. 32–33. 159 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, p. 38. 160 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, p. 37.


up, and then those people have got to wait another 12 months while they build their

home. Then in some instances what was pegged out is not the end result for them. For

whatever reason, governments have changed their mind about the way that they have

a land supply.161

8.10 As a consequence the Committee heard that developments in NSW, such as Googong and

Tralee, would prove to be attractive for potential homebuyers given the build ready state of

the land supply and the cheaper price of the land. Whilst affected Mr Fluffy homeowners

choosing to purchase homes in NSW would not be eligible for a stamp duty waiver they would

appear to have access to cheaper land and quicker building times.162

8.11 During its discussions with the Chief Executive of the REIACT, the Committee heard examples

of good spirited and compassionate behaviour by not only members of the Institute but also

sellers/vendors in relation to assisting affected homeowners find alternative

accommodation.163 One such example as told to the Committee:

The impact of Mr Fluffy owners purchasing—I had one yesterday where there were

two Fluffy owners competing for the same house. The vendor became stressed

because they were accepting a bid and then another one was coming in over the top.

In the end, the vendor decided that they would stop at the first bid and offer it back to

the first person and say, “There will not be any more bids.” I was pleased with that,

because there were no contracts, no agreements, no acceptance in place. I was

pleased that somebody had a little compassion there from a seller point of view.164

8.12 Whilst the Committee commends the good spirited behaviour of agents and vendors it

emphasises that measures need to be put in place to stop unscrupulous vendors. The

Committee understands that, after the announcement of the Scheme, the ACT Commissioner

for Fair Trading wrote to all real estate agents in the territory at the start of November to

explain their obligations in relation to the Scheme. These obligations included that:

agents had an obligation to explain to purchasers of any Mr Fluffy properties privately sold

after 28 October 2014 that they would not be eligible for the Scheme; and

failure to disclose the impact of the Scheme to persons interested in purchasing affected

'Mr Fluffy' homes or being 'silent' on the matter could be considered to be misleading or

deceptive.165

161 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, p. 37. 162 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, pp. 37–38. 163 Proof Transcript of evidence, 28 November 2014, pp. 32–34. 164 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, p. 33. 165 Proof Transcript of evidence, 28 November 2014, pp. 36–37; Clisby, M. (2014) ‘Mr Fluffy effect’ set to hit the market in early 2015, Canberra Times, 22 November, p. 1.


4 9

8.13 As to the role of the Institute—its Chief Executive emphasised that:

Most of our communication today covers off on Mr Fluffy aspects, whether it is the

emotional side of it or that you need to be more compassionate, you need to ask more

questions, you need to talk more to people. We are doing that all the time. I will

continue to do that until I see the place is settling down and that everybody

understands their responsibilities with this. The penalty for non‐disclosure is huge, and

I do not want the government to find that they need a scapegoat to pin someone to

the wall with a million dollar fine. I want to make sure the communication goes not

only to the members of the institute but to all agents. There are about 800 of them.

They are on my database and they get information all the time about being careful,

about understanding what their responsibilities are and whether they are asking the

questions. I have been into older houses in Deakin and I have asked the question of the

agent, “Is this a Mr Fluffy home?” I have had the answer, “I don’t know” and I have had

to say, “You need to know. You have to find out. If it was not your responsibility in the

past, it is today. You need to know, and you need to then tell people. As they walk

through the door, they want to be sure that what you are telling them is the truth.”166

8.14 The Committee was told that the elderly demographic were having the greatest difficulty

understanding the Scheme and its options. The Chief Executive of the REIACT elaborated:

...I am taking an elderly lady to see Mr Kefford next week because I felt that she did not

fully understand the package that was presented, although I felt the package was

pretty good, I might add. I will take her along and sit with her through that process to

make sure that she—she will be treated the right way—does walk away fully

understanding the process that is in place for her.167

8.15 In the context of impact on the residential property market, the Committee also discussed

whether there were any trends emerging as to the choices being made by affected

homeowners—for example, buying new homes, existing older homes, apartments and

retirement villages.168

FLUFFY OWN ERS AND RESIDENTS’ ACT ION GRO UP (FORAG)

8.16 The spokesperson of FORAG appeared at the hearing on 28 November 2014. As to the

position of FORAG in relation to the proposed Bill, the Committee was told:

The Fluffy Owners and Residents Action Group expresses its support for the draft

appropriation bill in its current form. The purpose of the bill, as we understand it, is to

facilitate the appropriation of money for the eradication of Mr Fluffy homes in

166 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, pp. 36–37. 167 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, p. 32. 168 Proof Transcript of evidence, 28 November 2014, pp. 35–36.


Canberra. I can share with you that, given this is a publicly recorded hearing, I would

like to note that the only points of departure in the group are the implementation

issues around the scheme and not the appropriation bill itself, which is simply to, as we

understand it, facilitate funds to ensure there is a long‐term and enduring solution to

Canberra’s Mr Fluffy asbestos homes.169

...

...I think the ACT government has taken a highly appropriate step to decide to

eradicate Canberra’s Mr Fluffy asbestos homes.170

8.17 The FORAG spokesperson detailed to the Committee the background to the formation of

FORAG—in that it was formed to seek a long‐term solution to Mr Fluffy affected homes—and

the history of the Mr Fluffy legacy in the Territory.171

8.18 The Committee was interested to know FORAG’s membership numbers and was told:

At the moment our numbers indicate that we have more than 600 families in the Fluffy

Owners and Residents Action Group. I understand that approximately 10 of those

families are Queanbeyan property owners. So, on balance, based on my current

knowledge, we would have 590 families in the group.172

8.19 FORAG’s spokesperson distinguished between the proposed appropriation that will fund the

Scheme and its implementation in terms of a policy response—emphasising that:

...before I turn over to the committee for the questions that I know you will no doubt

have in relation to the expenditure of such a large sum of money to provide a policy

response for 1,021 households is that there are many members in my group who do

not feel that this solution in its current terms fits their needs. I believe that is a distinct

point from the matter before the committee today—to consider the appropriation bill

itself. But I wish to acknowledge and respect everybody’s different views.173

8.20 The Committee discussed with FORAG’s spokesperson the implementation issues that were of

concern to FORAG’s members. The Committee was told that these could be categorised into

two groups—(i) those who wish to live out their years in their family homes; and (ii) those who

wish to return to their blocks of land and rebuild after demolition and remediation.

Approximately 57 to 60 per cent of the ACT chapter of FORAG wish to return to their

communities and blocks of land.174

169 Ms Brianna Heseltine, Proof Transcript of evidence, 28 November 2014, p. 20. 170 Ms Brianna Heseltine, Proof Transcript of evidence, 28 November 2014, p. 22. 171 Proof Transcript of evidence, 28 November 2014, pp. 20–23. 172 Ms Brianna Heseltine, Proof Transcript of evidence, 28 November 2014, p. 23. 173 Ms Brianna Heseltine, Proof Transcript of evidence, 28 November 2014, p. 23. 174 Proof Transcript of evidence, 28 November 2014, pp. 24–25.


5 1

8.21 The Committee inquired about the views of those who wish to return to their blocks and was

told:

The people who want to return to their land want the first right to buy back their

blocks of land—not at market value at the time that they buy back in the future; they

wish at that time to be able to buy back their land at the price at which they

surrendered the block of land in the first place to the ACT government. They have also

sought financial assistance with accommodation during their rebuild time, because

they will not have a home to live in. They also have sought financial assistance with

rebuild costs. And they wanted the full coverage of the demolition of their Mr Fluffy

home and the full asbestos management processes that go along with that, and the

asbestos waste costs, to be covered by the ACT government as well.175

8.22 In the context of calls for a board of inquiry into the Mr Fluffy legacy, the Committee was

interested to know why such an inquiry was important to FORAG’s founder, its members and

indeed the ACT community and other affected jurisdictions. FORAG’s founder explained:

With so many thousands of lives deeply affected by the Mr Fluffy asbestos disaster, it

would seem that there is only one course for the ACT government to consider—that is,

to investigate in full the history, including the commonwealth history, around Mr Fluffy

asbestos homes. We feel that so many lives have been put at risk. We do not know the

full risks. All of us who have lived in these homes must live with the knowledge that we

have potentially exposed not only visiting family members, friends, tradespeople or

others through our lack of knowledge about the ongoing asbestos contamination but

also our own children. For that reason, I think that many of us feel that our children

deserve to understand more of the history around the handling of the homes. For us,

this is a matter of looking at information that has been made available over time and

looking at the decisions made. Certainly, we believe that this should be an inquiry that

spans all levels of government, including the ACT, [C]commonwealth and New South

Wales governments.176

8.23 The discussion acknowledged that if such an inquiry was established under the Inquiries Act, it

would be limited to the ACT. Given the size and scale of the legacy, an inquiry that would be

most effective to affected homeowners, and taxpayers, should be one that spans all levels of

government—an inquiry that investigates the full history of various levels of government in the

matter—Commonwealth, ACT and NSW.177 Whilst there was agreement that such an inquiry

was required, the priority in the first instance should be:

175 Ms Brianna Heseltine, Proof Transcript of evidence, 28 November 2014, pp. 24–25. 176 Ms Brianna Heseltine, Proof Transcript of evidence, 28 November 2014, pp. 26–27. 177 Proof Transcript of evidence, 28 November 2014, pp. 26–27.


...to first focus on a solution for us in relation to our homes. The treatment of people

who wish to live out their years—if there could be more flexibility for those families.

The people who wish to return to their blocks of land and rebuild—if there could be

more flexibility so they could actually afford to do that. It was meaningful to them. I

think they would deeply appreciate that. Those who wish to sell up and move on—of

course, they are the happiest in the group. There are a significant number; we

understand it is approximately 45 per cent of our ACT group members. The current

decision fits their needs. But we certainly believe there is commonwealth history here

that needs to be investigated.178

8.24 The Committee also discussed:

the recent work undertaken by FORAG with the Commonwealth Bank to explore whether

the Bank, notwithstanding absolute exclusions in insurance policies with regard to

asbestos‐related claims, will consider claims despite exclusion clauses and apply a

compassionate response. The outcomes of these insurance claims and assessments are

yet to be known179;

recognition that the knowledge and information available to the Asbestos Taskforce about

the treatment of contaminated household goods has evolved, from the initial letters sent

out in February 2014, and acknowledgment that the evolving advice had created

confusion and uncertainty about what contents were safe and caused distress to many

people180;

work undertaken by FORAG, as a body itself outside of ACT Government negotiations, in

relation to lobbying the Commonwealth government for more financial assistance181; and

the responsiveness of the Asbestos Taskforce to provide information/advice in clearer,

plainer language with less words and, if there is flexibility, a chance for the Taskforce to

really influence the outcome for each family182.

LAW SOCIETY OF THE ACT

8.25 The Law Society of the ACT spoke to its written submission at the hearing on 28 November

2014. The Society noted that since the introduction of the Scheme, individuals had been

seeking advice from ACT legal practitioners. As a consequence, and importantly, these

practitioners want to ensure that they are able to appropriately advise and assist such clients

who are in difficult emotional and financial circumstances.

178 Ms Brianna Heseltine, Proof Transcript of evidence, 28 November 2014, pp. 27–28. 179 Proof Transcript of evidence, 28 November 2014, p. 26. 180 Proof Transcript of evidence, 28 November 2014, p. 25. 181 Proof Transcript of evidence, 28 November 2014, p. 29. 182 Proof Transcript of evidence, 28 November 2014, pp. 29–30.


5 3

8.26 In particular, the Society raised in its submission, and at the hearing, the following matters in

relation to the Scheme:

the requirement for legal practitioners to provide a Solicitor's Certificate under the terms

of the Scheme and the limitations on their ability to do so [emphasis added] in the

absence of further information from Government. The Society submitted that there are a

number of matters relating to the Scheme that are yet to be fully or finally determined—

this extends to clarification of the interpretation of section 51 of the Land Acquisition Act;

and for those homeowners who elect to remain in their homes what regulatory

infrastructure/restriction on their normal use of the property will be required;

the importance of retaining some flexibility within the Scheme so as to most appropriately

deal with specific, individual circumstances; and

clarification to parties of the intended purpose of the legal costs grant.183

CLARIF ICAT ION OF LEGAL COSTS

8.27 Under the Scheme $1 000 (inc GST) is provided to eligible homeowners to cover legal costs

associated with the surrender of their lease (the legal grant) and this will be paid on settlement

of the matter. The Society submitted that:

It appears the intention of Government that the legal grant assist eligible homeowners

obtain advice on the Indemnity Deed they will be required to execute and for the

practitioner for provide a certificate of independent advice. The Society notes that the

legal grant is generally adequate in relation to this aspect of the legal work required by

the eligible homeowner.184

8.28 The Society, however, further noted that:

... it is likely that the conveyances required under the scheme will not be considered a

standard conveyance. The market for a standard conveyance ranges from $800 plus

GST and disbursements (total around $1,000) to $2,000 plus GST and disbursements

(total around $2,500). Given that the sales under the buyback scheme will have terms

that differ from the standard 2013 Contract for Sale as it will involve a surrender of

crown lease arrangement (and therefore will not be a standard conveyance), it is likely

that practitioners will charge more than a standard fee. Affected homeowners are

likely to see invoices of $1,500 plus GST and disbursements and upwards.185

183 Proof Transcript of evidence, 28 November 2014, pp. 109–117; Law Society of the ACT, Submission No.58. 184 Law Society of the ACT, Submission No.58, p.2. 185 Law Society of the ACT, Submission No.58, p.2; Proof Transcript of evidence, 28 November 2014, p. 115.


FLEXIB IL ITY WITH IN TH E SCHEME

8.29 The Society was of the view that the Scheme should include as much flexibility as possible to

appropriately deal with specific individual circumstances.

8.30 Whilst noting the advice from the Asbestos Response Taskforce regarding the inability to

negotiate terms of the buyback scheme and understanding the need to apply a consistent

outcome together with the difficulties that may arise in negotiating outcomes with individual

households, the Society:

...is concerned that the application of a "one size fits all' scheme may result in unfair

outcomes in some instances. The Society urges the Government to allow the

consideration of exceptional circumstances of affected individuals in determining final

buyback offers.186

8.31 The Society made particular reference to the needs and circumstances of affected elderly

homeowners—as examples of individual households where exceptional circumstances should

be considered and negotiated. The President of the Society elaborated:

We particularly note that it is our understanding that a number of people who are

directly affected in this circumstance are elderly, so it may well be that there needs to

be some flexibility around things such as time limits that are being placed, particularly

taking into account that, if you miss a time limit, you might have to go back and start

again.187

PROVIS ION OF SOL IC ITOR'S CERTIF ICATE

8.32 Eligible homeowners who elect to participate in the Scheme will be required to sign a deed of

surrender (in regard to their crown lease). The Society understands that the deed will:

set out the process by which the eligible homeowners will surrender their crown lease to

the Territory;

include payment by the Territory of a surrender sum to the eligible homeowner;

include a waiver of the eligible homeowner's rights to pursue legal action against the

Territory and the Commonwealth in relation to any financial loss associated with the

property (excluding any potential personal injury claim); and

require that eligible homeowners obtain a certificate of independent legal advice to be

returned with the deed.188

186 Law Society of the ACT, Submission No.58, p.2. 187 Mr Martin Hockridge, Proof Transcript of evidence, 28 November 2014, p. 110. 188 Law Society of the ACT, Submission No.58, p.2; Proof Transcript of evidence, 28 November 2014, pp. 111–114.


5 5

8.33 The Society commented that legal practitioners with clients involved in the Scheme are

required to provide a certificate of independent advice. The Society stated that it:

...is concerned that if legal practitioners are to properly advise their clients, it is

important that the ACT Government disclose exactly what it intends to do in the future

should owners decide not to opt in to the buyback scheme. The Society argues that it is

not reasonable to expect affected homeowners to make an informed decision on

whether to opt in to the scheme in the absence of knowing what the effects will be

should they decide not to do so.189

8.34 Specifically, the Society was of the view that, in order for legal practitioners, to be able to fully

advise clients making decisions about whether to opt in or opt out of the Scheme, the

following matters require further clarification:

the Scheme is voluntary at this stage, but the Government has not ruled out taking action

under compulsory acquisition processes available to it under the Lands Acquisition Act

1994 in the future. The Government has specifically reserved its right to compulsorily

acquire and/or condemn affected houses in the future;190

information as to the design that any future compulsory acquisition regime may take and

its associated timings is not available. The Society further noted that it was not clear what

the Government's position will be in relation to section 51191 of the Lands Acquisition Act

1994;192

the specific nature of required restrictions on homeowners who elect to remain in their

homes is not known at this time, but is expected to include sealing all entry points for

fibres, the requirement for ongoing testing and the implementation of an asbestos

management plan (at the expense of the homeowner). The obligations are expected to be

made mandatory in 2015 through amendments to the Dangerous Substances Act 2004;193

and

whilst the Government has indicated that consideration will be given to unit titling

subdivision or consolidation of affected blocks in order to assist it achieve the best and

highest value of the remediated blocks and contribute to the overall costs of the

Scheme—the specific circumstances of each block will not be known at the time the

certificate of independent legal advice is required.194

189 Law Society of the ACT, Submission No.58, p.1; Proof Transcript of evidence, 28 November 2014, pp. 111–114. 190 Law Society of the ACT, Submission No.58, p.1; Proof Transcript of evidence, 28 November 2014, p. 112. 191 Section 51 refers to the amount of compensation that would be payable by the Territory under the Act. 192 Law Society of the ACT, Submission No.58; Proof Transcript of evidence, 28 November 2014, p. 112. 193 Law Society of the ACT, Submission No.58, pp.1–2; Proof Transcript of evidence, 28 November 2014, p. 112. 194 Law Society of the ACT, Submission No.58, p.2.


COMPULSORY ACQUIS IT IO N

8.35 The Committee discussed with the Society’s representatives its interpretation of section 51195

of the Lands Acquisition Act 1994 and the Government’s position with respect to

interpretation.196 The Committee was interested to know the differences in interpretation and

the Chair of the Society’s Property Law Committee explained:

Section 51 of the Lands Acquisition Act applies where government compulsorily

acquires a person’s land and where that land contains a dwelling and where that

dwelling was an owner’s principal place of residence immediately before acquisition.

Basically it is when the government takes a person’s home.

It goes on to say that the amount of compensation payable in that circumstance is the

greater of (a) the amount they would have received under the act anyway, which is

essentially market value, or (b) the aggregate of the costs to the person of acquiring a

reasonably equivalent interest in land that entitles the person to occupation in a

reasonably equivalent dwelling.

I understand that the government’s position in relation to compulsory acquisition is

that, for a person to obtain a reasonably equivalent interest in land with a reasonably

equivalent dwelling, if the government is acquiring a property affected by Mr Fluffy,

the amount that should be compensated is the amount it would cost for that person to

acquire another property affected by Mr Fluffy. The society does not necessarily agree

with that.197

8.36 In practical terms—the Society’s interpretation of section 51 of the Lands Acquisition Act is

illustrated by the following example:

It is perhaps best explained with an example. If you have an owner with a four‐

bedroom ensuite house in Yarralumla on a 1,200 square metre block that is affected by

Mr Fluffy, if that property was compulsorily acquired, I think the question would be: is

there a similar property in Yarralumla or the surrounding regions that has four

bedrooms and an ensuite on a similar size block? If there is and it is affected by

Mr Fluffy, I agree that is a similar property. However, if there is not a similar property

that is affected by Mr Fluffy—I imagine at that stage it is very unlikely that there would

be—is the position of the government that they would then compensate for the costs

of acquiring a similar property not affected by Mr Fluffy? I would suggest that is a

higher amount of money than is offered in the buyback scheme.198

195 Section 51 refers to the amount of compensation that would be payable by the Territory under the Act. 196 Proof Transcript of evidence, 28 November 2014, p. 112. 197 Mr John Chamberlain, Proof Transcript of evidence, 28 November 2014, p. 112. 198 Mr John Chamberlain, Proof Transcript of evidence, 28 November 2014, p. 112.


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MAURICE BLACKBURN LAWYERS

8.37 Representatives from Maurice Blackburn Lawyers appeared at the hearing on 28 November

2014. A representative from Maurice Blackburn Lawyers applauded the courage of the ACT

Government’s announcement with respect to the Scheme.199 Whilst the legal issues arising in

the context of the legacy of Mr Fluffy:

...are highly complex and convoluted and there is no simple legal solution to the myriad

different legal problems that arise from the Mr Fluffy exposure or a Mr Fluffy home.

Had the ACT government not taken this step, it would have forced some classes of

home owners to pursue their legal entitlements through the courts. This would have

been expensive, would have been time consuming and, in some cases, would have

offered a potentially inadequate solution to the problem.200

8.38 The representative cited three case study examples to cite the diversity of individuals who fall

into different categories of homeowners to illustrate that a one size fits all approach within the

Scheme will not accommodate the individual circumstances of all affected homeowners.201

8.39 The National Practice Head of Maurice Blackburn Lawyers’ Asbestos Litigation Department

emphasised that given the unique way in which the Government was trying to deal with the

Mr Fluffy legacy, it has an important opportunity to design and implement a buy back scheme

that could be considered world class and serve as a model for other jurisdictions—nationally

and internationally. To achieve this—it was emphasised that the design and implementation

of the Scheme—in particular the details and specifics of the buyback program should be:

...drafted in a timely fashion with the various scenarios taken into consideration. The

threshold issues we can see are as follows. What happens to home owners who do not

opt in to the system? That is a big issue for people. What is their continuing legal

liability to themselves, visitors and the community at large? Will the government

resume their property later on? What does the future hold for people who do that?

What is the legal liability around prospective sales of such property if people have not

demolished or have chosen not to opt into the system? What is the issue with

prospective leases on those properties?

The threat of imposing sanctions on home owners who do not opt into the scheme is a

big issue for people. There is the group that say, “We’re going to opt in.” What is the

ramification of opting in? Then there is the group that say: “What happens to us if we

decide we don’t want to opt in? Where do we stand with all of this? Who is going to

199 Ms Theodora Ahilas, Proof Transcript of evidence, 28 November 2014, p. 118. 200 Ms Theodora Ahilas, Proof Transcript of evidence, 28 November 2014, p. 119. 201 Proof Transcript of evidence, 28 November 2014, pp. 119–120.


look after our interest?” Not enough is known of the details of the scheme for home

owners to make an educated decision and to obtain adequate legal advice.202

8.40 The Committee also discussed with representatives from Maurice Blackburn Lawyers matters

raised by the Law Society relating to the specific needs and circumstances of affected elderly

homeowners203; and clarification of legal costs as per the legal grant provided under the

Scheme204.

NORTH CANBERRA COMMUNITY COUNCIL (NCCC)

8.41 Representatives from the NCCC appeared at the hearing on 1 December 2014 and spoke to the

Council’s written submission. The Council's submission put forward views on the design and

implementation of the Scheme as conveyed at a public meeting held on 19 November 2014

during which affected owners raised concerns with Mr Shane Rattenbury MLA.205

8.42 The Council’s submission summarised cited: (i) a number of moral and financial grounds

underpinning why affected homeowners should be allowed to have their homes demolished

and land remediated by the Government, and for the Government to contribute to financing

the rebuild206; and (ii) in the case of affected owners who likely to be open to the Scheme as it

stands, a number of additional concessions that are being sought.207

WESTON CREEK COMMUNITY COUNCIL (WCCC)

8.43 The Weston Creek Community Council’s written submission put forward the views of affected

Mr Fluffy homeowners in the Weston Creek area on the Scheme as conveyed at a public

meeting of the Council on 26 November 2014.208 The Chair of the WCCC stated:

I am aware that submissions have closed and that the hearing is tomorrow but having

listened to these homeowners last night I wanted to make the following points to the

Committee:

1. Many are struggling with understanding the information that has been received

from the Task Force set up by the Government and remain confused;

2. It is clear that these people are struggling and seem to have been left on their own.

Many coming together for the first time last night;

3. Many feel rushed by time frames set for decisions;

202 Ms Theodora Ahilas, Proof Transcript of evidence, 28 November 2014, p. 120. 203 Proof Transcript of evidence, 28 November 2014, pp. 122–123. 204 Proof Transcript of evidence, 28 November 2014, p. 122. 205 NCCC Submission No. 53, p. 1; Proof Transcript of evidence, 1 December 2014. 206 NCCC Submission No. 53, p. 2; Proof Transcript of evidence, 1 December 2014. 207 NCCC Submission No. 53, p. 3; Proof Transcript of evidence, 1 December 2014. 208 WCCC Submission No. 57, p. 1.


5 9

4. Elderly people, who attended, can't understand why they can't live their life out in

their present home. One couple is in their 80’s. If there is a 5 year time limit to vacate

houses why can't this be extended for individual situations such as this one;

5. Some want to stay where they live and be able to buy the block back at the price

they were valued at on 28 October 2014 after it has been demolished and cleared. Is

this a possibility?;

6. Some of these people, at the moment, are wanting to stay where they are and not

leave their homes unless they can maintain their block; and ∙

7. There are concerns for some Mr Fluffy owners who were not present last night and

are believed to be traumatized by the whole situation and that there is a need by the

community to reach out to them to assist but the community is unable to as they can't

be identified.209

ACT ASBESTOS INDUSTRY FORUM

8.44 The Chairman of the ACT Asbestos Industry Forum appeared at the hearing on 1 December

2014 and spoke to the Forum’s written submission. The Forum represents ACT licensed

asbestos assessors and removalists primarily resident by person or business in the ACT.210

8.45 The Forum’s submission put forward its views on the proposed legislative changes affecting

asbestos management in the ACT. The proposed legislation—Dangerous Substances (Asbestos

Safety Reform) Legislation Amendment Bill 2014—adopts, in the main, Chapter 8 of the

national model Work Health and Safety Regulation (the model regulation), which governs the

management, control and removal of asbestos in workplaces.211

8.46 Debate on the proposed legislation resumed on 25 November 2014 with all parties in the

Assembly supporting the bill. The bill was passed without amendment.212

209 WCCC Submission No. 57, pp. 1–2. 210 Submission No.19, p. 1; Proof Transcript of evidence, 1 December 2014, p. 208 ff. 211 Submission No.19, p. 1; Proof Transcript of evidence, 1 December 2014, p. 209. 212 Legislative Assembly for the ACT, Minutes of Proceedings, 25 November 2014, p.901.


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9 VIEWS OF AFFECTED HOMEOWNERS AND THE

COMMUNITY

INTRODUCTION

9.1 The chapter considers concerns raised by home‐owners about the current ACT Government

proposal for responding to the presence of loose‐fill asbestos insulation in ACT private homes,

as expressed in submissions and evidence provided to the Committee in hearings of

1 December 2014.213

9.2 These concerns are categorised across the following themes:

i. liability;

ii. engagement and consultation;

iii. uncertainties;

iv. effect on the housing market;

v. planning;

vi. investments and improvements to properties;

vii. equity of arrangements; (viii) cost and budget implications;

viii. flexibility;

ix. other options;

x. knock‐down and rebuild;

xi. homeowners wishing to continue in their homes;

xii. contaminated contents of dwellings;

xiii. health concerns; and

xiv. support issues.

9.3 The Committee notes that this is not an exhaustive list.

213 Proof Transcript of evidence, 1 December 2014.


LIABILITY

9.4 A number of contributors to the inquiry advised that in their decision‐making on housing

properties they had relied on assurances provided by the ACT Government that the house was

safe to buy as it had a certificate to say that the property had been ‘cleaned’. As a

consequence some submitters believed this placed a clear burden of legal liability on the

government.

9.5 As seen below, this has implications for how home‐owners view the ACT Government’s current

proposal for a response to loose‐asbestos insulation.

SUBMISS ION BY MOYLE

9.6 The submission to the inquiry by Moyle also put the view that the ACT Government bore legal

liability as a result of its actions. In particular, it:

noted that a Memorandum of Understanding signed between the ACT and the

Commonwealth of Australia on 7 June 1991 had transferred responsibility for the program

to the ACT upon self‐government;214

noted that the 2005 report on Asbestos Management in the ACT had clearly identified

health hazards from contact with loose‐fill asbestos, but that this information had not

been included in a 2005 ACT Government letter to affected homeowners; 215

suggested that ‘information published by the Canberra Times on 27 August 2014 identifies

that the then ACT Government bowed to pressure from then Mr Fluffy owners who

negotiated changes to the 2005 letter (Submission No. 5—Attachment A), so as not to

affect the values of their properties’; 216

suggested that the same article had indicated that the former General Manager of the

Asbestos Branch had voiced objections to this approach and that the head of the 2005

Taskforce had advised the ACT Government of the need to educate homeowners more

thoroughly about implications of the presence of loose‐fill asbestos; 217

suggested that the ACT Government response to recommendations of the 2005 taskforce,

and other representations, had showed it agreeing to and implementing

recommendations to improve the quality of information to home‐owners, but that this

had not resulted in greater disclosure in some circumstances; 218 and

214 Submission No.5, Moyle, p.2. 215 Submission No.5 Moyle, p.2. 216 Submission No.5, Moyle, p.3. This article was also cited by Submission No.28, Brown, p.4. 217 Submission No.5, Moyle, p.3. 218 Submission No.5, Moyle, p.3.


6 3

suggested that the ‘Important Asbestos Advice for ACT homes built before 1985 fact sheet

(Submission No. 5—Attachment C) [failed] to identify loose‐fill asbestos as an issue,

advising instead, under the heading ‘Assessing the Risk’, advising the public ‘to visually

check the condition of the Material Containing Asbestos (MCA) to see whether it is

cracked or broken’, suggesting that ‘if it is in good condition and left undisturbed, it does

not provide a health risk’, but ‘[i]f you suspect it is not good condition, arrange for

appropriate maintenance or removal by a qualified person’.219

9.7 Moyle summarised this as follows:

The ACT Government Asbestos reports (2005 and 2010) identify specific concerns with

exposure to friable or loose asbestos, and note concern regarding loose‐fill asbestos.

The ACT Government fact sheet provided with our 2012 contract of sale does not

communicate the issues or risks identified with loose‐fill asbestos (Mr Fluffy} identified in

the 2005 or 2010 reports.

The letters and certificates provided in 2005 did not convey the information held on the

risks and issues with loose‐fill asbestos, as identified in the ACT Government's 2005

Asbestos report.

No action appears to have been undertaken as per the Government's response to

Recommendation 2(a) (Section 5.1) of the ACT Asbestos Management Review 2010. This

appears to be the case with the information provided to us on our 2012 contract of sale.220

9.8 Moyle put the view that in light of this:

It can be argued that the ACT Government was negligent as it failed to ensure that

information was appropriately communicated. It has been demonstrated above that

the ACT Government was aware of risks and failed to ensure that owners, real estate

agents, builders, and future buyers were effectively briefed of the issues and risks.221

9.9 In response to this, the Moyle submission suggested that there should be

a Board of Enquiry into the handling and operations of the ACT Government's handling

of the Mr Fluffy loose‐fill asbestos issues since 2005, including determining what

information was known by the ACT Government, to the then Minister for Industrial

Relations and Chief Minister.222

9.10 Such an inquiry, it advised the Committee, should include:

219 Submission No.5, Moyle, p.3. 220 Submission No.5, Moyle, p.4. 221 Submission No.5, Moyle, p.3. 222 Submission No.5, Moyle, p.6.


a. reference to the information that the ACT Government, Minister and Chief Minister

had at the time;

b. copies of all reports to the then Minister regarding concerns about the lack of

awareness and potential health risks; and

c. any discrepancies between that and the information communicated to the public,

particularly affected homeowners and people purchasing the properties.223

9.11 Regarding these matters, the Moyle submission made two further points.

9.12 In the first, it suggested that the approach adopted by the ACT Government since 2005 ‘falls

within the category of maladministration’ as defined by the NSW Ombudsman's

Maladministration fact sheet, which listed actions:

contrary to law;

unreasonable;

unjust;

oppressive;

improperly discriminatory;

based wholly or partly on improper motives;

mistake of law; and

mistake of fact.224

9.13 The second point of view the submission put to the Committee was that:

As the current approach does not seek to mitigate possible liability of the ACT

Government in the management of the Mr Fluffy loose‐fill asbestos issues, there are a

large number of affected homeowners that have purchased or renovated their

properties since 2005 and are still within the legal statute of limitations. These

homeowners, such as ourselves, may be forced into a position where we have no other

option but to litigate…225

9.14 In particular, the submission advised the Committee, homeowners who found themselves in

such circumstances could consider litigation in the following areas:

Cost of replacing the property to the same or similar standard of amenity, on the same or

similar sized block in the same or similar location.

223 Submission No.5, Moyle, p.6. 224 Submission No.5, Moyle, pp.6‐7, quoting Ombudsman New South Wales, ‘Maladministration’, http://www.ombo.nsw.gov.au/__data/assets/pdf_file/0015/3705/FS_PSA_13_Maladministration.pdf

225Submission No.5, Moyle, p.1.


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The actual costs of relocation and purchasing replacement properties ‐ removalists,

[conveyancing] costs, etc.

The cost of remediating contaminated items where possible.

The cost of replacing contaminated items where they cannot be remediated.

The costs of renovations approved by the ACT Government within the statute of

limitations that are not appropriately reflected in the valuations.

The cost of amenity improvements which have not been appropriately reflected in

valuations (please see my personal experiences for examples).226

9.15 Regarding this, the submission put the view that such litigation would have the effect of

‘dramatically increasing costs of the program for the ACT Government and taxpayers’.227

SUBMISS ION BY BRO WN

9.16 The submission to the inquiry by Brown put a further view regarding liability. It provided a

chronology listing advice provided to governments, which included a 1968 report which

recommended that:

the Commonwealth Government dissuade or even prevent the company from using

asbestos as insulation due to the harmful nature of the substance and the risk to the

community.228

9.17 The submission noted that this report had also advised the Commonwealth that there were

particular risks in connection with Canberra:

With the present demand for insulation, Canberra may become a large market for

asbestos insulation with many people in the community exposed because some

asbestos will be carried out of the roof space by air currents.229

9.18 The submission noted that:

On 20 December1968, Acting Director Mr Arthur Spears from the Commonwealth

Department of Health forwarded Dr Major's report to the Secretary, Department of the

Interior, with a final recommendation:

The results of our investigations have disclosed what appears to be a serious

exposure to asbestos dust. In view of [the] harmful nature of this substance the use

of asbestos fluff for the purposes of insulating should be discontinued.230

226 Submission No.5, Moyle, p.1. 227 Submission No.5, Moyle, p.1. 228 Submission No.28, Brown, p.3. 229 Submission No.28, Brown, p.3. 230 Submission No.28, Brown, p.3.


9.19 Brown’s submission also cited a Canberra Times article of 27 August 2014 as follows:

The article identifies that a recommendation from the covering letter of this report

from the head of the 2005 Taskforce, Lincoln Hawkins to Minister Gallagher stated

that:

‘it is sensible not to dismiss the possibility that some houses remain that have loose

asbestos insulation either in bulk or residual form. There may also be some non‐

residential dwellings in a similar situation. Whether an acknowledgement of such a

possibility justifies a major survey effort at public expense is a matter for judgement.

There should be little debate however about the need to be prepared, to raise

awareness, to provide explicit information and to learn from the experience of the

1988‐93 program. ‘

[and that]

‘there is no guarantee that current owners of these houses are well informed, or

informed at all, about this issue. A strengthened system is required for providing

appropriate advice to owners and potential purchasers about the management of

any residual fibres.’231

9.20 Brown’s chronology included a reference to another Canberra Times article which reported

that:

‘the ACT Chief Minister Katy Gallagher was warned personally and on multiple

occasions since 2005 that Mr Fluffy home owners were at risk of coming into contact

with the deadly insulation. Documents obtained by The Canberra Times shows that as

industrial relations minister responsible for asbestos, Ms Gallagher received numerous

recommendations to deliver “explicit”, “regular” and systematic warnings to more than

1000 Mr Fluffy owners that remnant asbestos within their wall cavities posed a

potential health risk.’232

9.21 Furthermore, the submission summarised the grounds for holding the Commonwealth and

ACT governments liable as follows:

In 1968 the Commonwealth Department of Health forwarded Dr Major's report to the

Secretary, Department of the Interior, with a final recommendation “ ... In view of [the]

harmful nature of this substance the use of asbestos fluff for the purposes of insulating

should be discontinued.”

The ACT Government Asbestos reports (2005 and 2010) identify specific concerns with

exposure to friable or loose asbestos, and note concern regarding loose‐fill asbestos.

231 Submission No.28, Brown, p.4. 232 Emma Macdonald, ‘Katy Gallagher admits flaw in ACT government's approach to Mr Fluffy asbestos notification, Canberra Times August 28 2014, available at: ’ http://www.canberratimes.com.au/act‐news/katy‐gallagher‐admits‐flaw‐in‐act‐governments‐approach‐to‐mr‐fluffy‐asbestos‐notification‐20140827‐108iun.html . This article was also cited by Submission No.42, Baxter, pp.2‐3.


6 7

The ACT Government fact sheet does not communicate the issues or risks identified with

loose‐fill asbestos (Mr Fluffy) identified in the 2005 or 2010 reports.

The letters and certificates provided in 2005 did not convey the information held on the

risks and issues with loose‐fill asbestos, as identified in the ACT Government’s 2005

Asbestos report.

No action appears to have been undertaken as per the Government's response to

Recommendation 2(a) (Section 5.1) of the ACT Asbestos Management Review 2010.233

OTHER SUBMISSIONS

9.22 Other submissions to the inquiry which sought to establish liability on the part of government

included:

Submission No.2, Kilcullen; 234

Submission No.6, Name withheld; 235

Submission No.8, Woods ; 236

Submission No.13, Donaldson and Fanning; 237

Submission No.20, Evans; 238

Submission No.17;239

Submission No.31, Simpson; 240

Submission No.33, Senanayake;241

Submission No.36, Grant; 242

Submission No.34, Platt;243

Submission No.42, Baxter; 244 and

Submission No.35, Blume.245

233 Submission No.28, Brown, p.6. 234 Submission No.2, Kilcullen, p.2. 235 Submission No.6, Name withheld, p.1. 236 Submission No.8, Woods, p.1. 237 Submission No.13, Donaldson and Fanning, p.3. 238 Submission No.20, Evans, p.3. 239 Submission No.17, p.1. 240 Submission No.31, Simpson, p.1. 241 Submission No.33, Senanayake, p.2. 242 Submission No.36, Grant, p.2. 243 Submission No.34, Platt, p.3. 244 Submission No.42, Baxter, pp.1‐2. 245 Submission No.35, Blume, pp.1‐2.


ENGAGEMENT AND CONSULTATION

9.23 Some home‐owners were critical of what they regarded the ACT Government’s lack of

engagement or consultation with home‐owners affected by the presence of loose‐fill asbestos

insulation in their homes.

SUBMISS ION BY K ILCULLEN

9.24 A submission to the inquiry by Kilcullen advised the Committee that it was inclined to ‘criticise

the way the Government has gone about this’:

Until this present Inquiry, the ACT Government has given little or no opportunity for

owners of asbestos‐contaminated houses to say how they want the problem treated.

We have never, at any stage, been asked any question by the Taskforce.

As far as we know, the Government has made no attempt to collect information about

the different categories of people affected by their plans and the different ways in

which they will be affected. The people affected have had to try to give this

information in the process of criticising an already‐announced plan, and so far the

Government shows no sign of flexibility.

The attitude of ACT politicians seems to be that they are simply acting on expert

advice, and their role is to explain patiently to disgruntled laypeople what the experts'

plan is. On the contrary, politicians are responsible to the public for the value

judgments embodied in the plan.

The Government's plan was made in secrecy and then sprung on the community. They

have made effort to communicate their views to home owners, but the Government

has not sought our views.246

9.25 In addition, it advised the Committee:

The Government also has not made much effort to explain to the rest of the ACT

community why they are being asked to contribute to the solution‐hence some ill‐

informed “letters to the editor”.247

9.26 The submission by Kilcullen went on to suggest that this approach was not consistent with the

principles of ‘participatory planning’; that it had not been ‘consultative’ and that there had not

been an ‘attempt to give people affected any “ownership” of the plan’ as a result of which

there was ‘no “buy in”’.248

246 Submission No.2, Kilcullen, p.1. 247 Submission No.2, Kilcullen, p.1. 248 Submission No.2, Kilcullen, p.1.


6 9

9.27 Moreover, it advised the Committee, this was underscored by other elements of the proposal

which invoked concepts of the compulsory acquisition of properties:

The Government describes the scheme as a voluntary buyback, but there will be

compulsion later for those who fail to volunteer. Government spokespersons suggests

that the law requires that if these houses are compulsorily acquired they must be

valued with the asbestos taken into account‐i.e. that the value must be the land value

minus the cost of demolishing and removing the building. (The Government could

amend the law regarding compulsory acquisition, but they give the impression that this

is beyond their power.) The threat of compulsory acquisition at a low price is a gun

held to owners' heads to make them volunteer.249


9.28 The submission to the inquiry by Moyle put a similar view. It advised the Committee that:

Since the commencement of recent action in 2014, the ACT Government has not

engaged successfully or suitably with Mr Fluffy property owners. No forums have been

run independently to ensure that all stakeholders have the opportunity to be engaged

in discussions about the impact of Mr Fluffy on them, with respect to their individual

circumstances.250

9.29 This, it suggested, was contrary to principles outlined in the ACT Government's Engaging

Canberrans: A guide to community engagement, which committed the government to ‘Open

Government’, entailing:

Transparency in process and information

Participation by citizens in the governing process

Public collaboration in finding solutions to problems and participation in the improved

wellbeing of the community.251

9.30 The submission also noted that the ‘ACT Human Rights Act 2004 identifies that every citizen

has the right, and is to have the opportunity, to take part in the conduct of public affairs,

directly or through freely chosen representatives’.252

249 Submission No.2, Kilcullen, p.1. 250Submission No.5, Moyle, p.2. 251 Submission No.5, Moyle, p.2, citing ACT Government, Engaging Canberrans: A guide to community engagement, available at: http://www.timetotalk.act.gov.au/storage/communityengagement_FINAL.pdf

252 Submission No.5, Moyle, p.2.


SUBMISS ION BY READ

9.31 The submission to the inquiry by Read also expressed concern over whether due consultation

was taking place in relation to the proposed response:

My submission is that you should not be holding this inquiry until the Chief Minister,

her government and task force undertake meaningful negotiations to reach

compromises with all affected homeowners. By doing that in good faith they just might

not need to spend quite so much money.

…

At no point has the task force or the Chief Minister made any overtures to people

about a willingness to negotiate with them over the possibility of long term solutions to

enable them to keep their homes (doing that might even save the government some

money). No, they just want to destroy the homes so the ACT government can get its

grasping, greedy hands on the land our homes stand on so it can be subdivided and

sold to developers. No wonder the government is concerned about Defence releasing

some of its ACT land onto the market. Further, they have no regard for the amenity of

neighbouring properties and the effect on them ‐ or maybe they do as they will find

some way of saying that the land valuations of those blocks have gone up because of

the building of multiple dwellings in the immediate vicinity.

Twenty‐one years ago, when my late husband and I were forced from our home to

allow it to be allegedly cleaned, we only had small items of our belongings stolen from

within our home; this time the government is stealing the home.253

SUBMISS ION BY WESTON CREEK COMMUNITY COUNCIL

9.32 The submission to the inquiry by Weston Creek Community Council (WCCC) advised the

Committee that the WCCC was concerned about information flows to homeowners affected by

loose‐fill asbestos. In particular it advised that:

1. Many are struggling with understanding the information that has been received

from the Task Force set up by the Government and remain confused;

2. It is clear that these people are struggling and seem to have been left on their own.

Many coming together for the first time last night;

3. Many feel rushed by time frames set for decisions;

4. Elderly people, who attended, can't understand why they can't live their life out in

their present home. One couple is in their 80's. If there is a 5 year time limit to vacate

houses why can’t this be extended for individual situations such as this one;

253 Submission No.24, Read, p.1.


7 1

5. Some want to stay where they live and be able to buy the block back at the price

they were valued at on 28 October 2014 after it has been demolished and cleared. Is

this a possibility?

6. Some of these people, at the moment, are wanting to stay where they are [and]

7. There are concerns for some Mr Fluffy owners who were not present last night and

are believed to be traumatized by the whole situation and that there is a need by the

community to reach out to them to assist but the community is unable to as they can't

be identified.254

9.33 In addition, the WCCC advised the Committee that it was:

struggling to understand the detail of what is happening is our community as we are

unable to reach those affected by this situation. We are unable to have a list of

homeowner[s] to enable contact to be made …255

9.34 Similar concerns were also raised by the NCCC in its submission.256

SUBMISS ION OF BR O WN

9.35 The submission of Brown to the inquiry made a further point about engagement in which it

referred to FORAG, the Fluffy Owners and Residents’ Action Group:

FORAG has acted in a representational way for a number of Mr Fluffy homeowners to

the ACT Government and the CERG. This representation has not been effective and as a

result, there are a number of Mr Fluffy homeowners who believe that their views have

not been presented to ACT Government.

Following this, the ACT Government's principles of 'Open Government' have been

severely compromised by FORAG's actions and adequate measures now need to be

undertaken to ensure the integrity of this process.257

OTHER SUBMISSIONS

9.36 Many other submissions to the inquiry also raised issues concerning engagement and

consultation in relation to the Scheme.

254 Weston Creek Community Council, Submission No.57, pp.1‐2. 255 Weston Creek Community Council, Submission No.57, p.1. 256 NCCC, Submission No. 53. 257 Submission No.28, Brown, p.6.


UNCERTAINTIES

9.37 Some home‐owners who contributed to the inquiry expressed concern at uncertainties for

their situations which, in their view, the current proposal entailed.

SUBMISS IONS BY K ILCULLEN

9.38 A submission to the inquiry by Kilcullen advised the Committee that this had a twofold effect.

First, there were practical matters that lay outside of financial considerations :

The proposed sale and buy‐back scheme, as announced, would leave us with such

uncertainties for possibly five years or more. By then we would be around 80 years old

(present ages are 76.8 and 73.2 years respectively); would we have health and strength

to deal with moving house or rebuilding by then? We would not know when demolition

would occur, so would be uncertain how much of our household goods to pack up and

store, or for how long. We would not be able to invite friends and family into our

home.258

9.39 Second, it advised the Committee, there were uncertainties inherent in the proposed financial

dimensions of the plan:

We would have the valuation money (if we accepted it), but would not know how to

invest it as we would not know the time‐frame for term deposits etc. We would not

know how it would affect our Centrelink payments to have a lump sum rather than our

own residence, or for how long. We would not know whether to look for a place to

rent, or to purchase a residence we did not really want, because we would not know

how long it would take for our own block to be offered back to us, at what price, and

under what conditions (apparently likely to be with enforced subdivision).259

9.40 In contrast, the submission advised the Committee, ‘[o]wners need clear time‐frames’:

we … earnestly request that some definite time‐frames for government action be built

in to the sale and buy‐back arrangements for those owners who are sure that they

want to return to the same block if they can afford to do so. This would mean there

would be some reasonably achievable outer limits placed on the time between sale

transaction and demolition (could we continue to live in our home that have been

temporarily remediated, or the part in which no contamination has been detected or

likely, such as new extensions with no common walls with affected areas?).

9.41 ‘Similarly’, it advised the Committee, ‘we need some reasonably achievable outer limits to be

placed on the time between demolition and/or remediation and the opportunity to buy the

258 Submission No.1, Kilcullen, p.2. 259 Submission No.1, Kilcullen, pp.2‐3.,


7 3

block back’, and these ‘statements apply for the most part to other affected owners we have

met’.260

9.42 Another submission by Kilcullen also expressed concerns about uncertainties, in two senses.

The first concerned uncertainty over price which, he said, was ‘unpredictable’:

Spokespersons for the Government have been telling us that real estate prices may

well fall. But this is clearly not what they themselves expect. The Government's plan is

predicated on the assumption that resales will return 70% of the total cost of the

whole project‐i.e. 70% of the cost of the buyback, plus the cost of the demolition, plus

the costs of clearing the block, plus interest, plus administrative costs, etc. This implies

that land prices will rise, since the return cannot be accounted for solely by profits

from subdivision. They tell us that prices may fall, or not rise much, but they are

suggesting to the rest of the community that prices will rise so much that land sales will

yield $700,000,000.261

9.43 The second concerned timelines for re‐purchase:

there is no assurance that the Government will sell the block back soon. The

demolition program will take years, and beyond that the Government may hold the

blocks while they wait (perhaps in vain) for land prices to rise. So if we accepted the

buy‐back in the hope of repurchasing the block, we might have to wait for a long time

and then find that the price is beyond us…262

SUBMISS ION BY MCDO NA LD

9.44 A submission to the inquiry by McDonald also advised the Committee of their concerns about

uncertainty. In particular they noted:

a ‘lack of any certainty in the timing of the release of the [acquired] land’, which made it

‘impossible to plan’;

a the ‘lack of information on whether a block will be rezoned and sub‐divided’, which also

made it ‘impossible to plan’; and

‘details of the proposed subdivision of any block over 700 m2 (in our case our block is 750

m2 so would be included)’ which, the submission suggested, had ’not been articulated by

the Government’.263

260 Submission No.1, Kilcullen, p.3. 261 Submission No.2, Kilcullen, p.3. 262 Submission No.2, Kilcullen, p.3. 263 Submission No.21, McDonald, p.3.


9.45 The submission on to express concern that, in its view:

The program sets out many details of what imposts will be applied to people affected

under this program if they fail to meet any of its requirements, but the same detail is

not being provided by the Government on many major aspects that affect how people

plan to proceed.264

9.46 It also commented on what it regarded as a ‘lack of detail on if and how the Government is

going to consult with neighbouring properties about the proposed rezoning and sub‐

division’.265 This, the submission suggested, left unresolved questions of whether:

neighbours [would] have a chance to object to the changes in the make‐up of their

street or will the Government force these changes through without any consultation or

mechanism for review.266

SUBMISS ION BY MCLELLAN AND SPONG

9.47 The submission to the inquiry by McLellan and Spong advised the Committee that the

proposed scheme:

‘encourages current owners to permanently leave their existing block by selling and

buying another property’;

‘does not facilitate current owners to buy back their block of land, following remediation,

and rebuild’; and

‘does not outline how the buyback purchase price will be ascertained at repurchase, or

methods of appeal’.267

9.48 In response, the submission suggested that current owners ‘should be advised of’:

‘whether their block of land is to be rezoned or remain unchanged’;

‘the proposed demolition timeframe’; and

‘the actual or estimated buyback land price … including evidence for any increase in

value’.268

9.49 Commenting on the situation thus described, the submission advised the Committee that:

In the absence of the above being provided in the negotiation phase, current owners

will have to wait for an unknown period of time for their land to be remediated, rent

264 Submission No.21, McDonald, p.3. 265 Submission No.21, McDonald, p.3. 266 Submission No.21, McDonald, p.3. 267 Submission No.48, McLellan and Spong, p.1. 268 Submission No.48, McLellan and Spong, p.2.


7 5

alternative accommodation for an unknown period and will be unable to fully engage

architects, builders and others for planning, approval and building a new property.269

OTHER SUBMISSIONS

9.50 Other contributors who comment on what they saw as significant uncertainties attached to

the present proposal included:

Submission No.39, Pilkington; 270

Submission No.26a, Erskine; 271

Submission No.29, Alegria; 272 and

Submission No.37, Matz. 273

EFFECT ON THE HOUSING MARKET

9.51 Some home‐owners who contributed to the inquiry expressed concern at the potential effects

on the ACT housing market of the proposed government response.

SUBMISS ION BY P ILK INGTO N

9.52 A submission to the inquiry by Pilkington advised the Committee that it would be beneficial to

‘[s]tagger the acquisition of homes and of their valuations to minimise the impact of ejecting

resident owners into volatile real estate markets’274:

The current scheme is likely to see almost 1000, families seeking homes in their

existing suburbs before June 2015. This is expected to increase house prices and in

effect create a temporary property bubble. These impacted owners, already anxious

from the potential exposure, will be bidding for a home in a much more expensive

market than the one that their home was valued in.275

9.53 The submission also expressed other concerns about timing:

The head of the Asbestos Response Taskforce, Andrew Kefford stated that the

settlement on properties could be delayed, which would allow for a staggered release

of buyers into the market. This does not recognise that if the valuation date is frozen at

269 Submission No.48, McLellan and Spong, p.2. 270 Submission No.39, Pilkington, p.1. 271 Submission No.26a, Erskine, p.2. 272 Submission No.29, Alegria, p.1. 273 Submission No.37, Matz, p.2. 274 Submission No.23, Pilkington, p.6. 275 Submission No.23, Pilkington, p.6.


the 28th of October, and the funds for the property are not paid until settlement,

mortgagees are essentially paying very expensive rent to live in a property that does

not appreciate. This puts them at a financial disadvantage, as does entering the real

estate Fluffy frenzy predicted for 2015.276

9.54 In light of this, the submission advised the Committee:

To minimise the impact on the property market and consequently on the homeowners,

the taskforce should take a more flexible approach to valuations where the medium

term risks are acceptable to the resident owner and the assessors.277

9.55 Making another point about timing and the housing market, the submission advised:

‘[p]rioritising the demolition of homes where the families are hoping to rebuild their

homes to minimise their displacement arid the financial impact of growing land values’.

[This would, the submission advised,] ‘be cost neutral to the territory and of significant

benefit to the impacted owner who wishes to return to the land to prioritise the

demolition of the residence’.278

9.56 In practical terms, it advised the Committee:

Where prioritisation of homes would result in an increase cost for demolition from

moving equipment, impacted owners could be offered the option of contributing

towards the move of equipment to avoid being displaced for up to 5 years.279

9.57 The submission illustrated this with an example:

Where the land is worth $500,000 growing at 2.44% per year the impacted owner

could be reasonably expected to pay an extra $64,050 to reclaim the property at the

end of 5 years (assuming the owner could acquire the property at UIV rather than at a

sub‐divided or unit titled market value).280

9.58 Hence, it suggested, ‘[t]hey may prefer [instead] to contribute $3,000 to compensate the ACT

government for moving the equipment’.281

276 Submission No.23, Pilkington, p.6. 277 Submission No.23, Pilkington, p.6. 278 Submission No.23, Pilkington, p.5. 279 Submission No.23, Pilkington, p.5. 280 Submission No.23, Pilkington, p.6. 281 Submission No.23, Pilkington, p.6.


7 7

SUBMISS ION BY DONALDSON AND FANNING

9.59 A submission to the inquiry by Donaldson and Fanning also made comment on timing, in this

case proposing that the ‘release of the list of affected homes’ should be delayed due to

potential downstream effects on the housing market:

The Government has announced its intention to release the list of affected blocks in

early 2015. We believe that the release of the list should be delayed until properties

are surrendered. Labelling of addresses prior to then would have the unintended

consequence of owners being seen as forced buyers in the real estate market, only

exacerbating pressure on prices.282

9.60 ‘A better approach’, the submission suggested, would be ‘to start a list once properties are

being surrendered and update it regularly as more contracts are concluded’.283

9.61 A further argument in support of this approach, the submission advised the Committee, was

that there were ‘already instances of owners and their children being stigmatised in the

community’, which added ‘enormously to the emotional stress under which victims are

labouring’ and a delay in release of information could also be beneficial in connection with this

phenomenon.284

SUBMISS ION BY PAR SO N S

9.62 The submission to the inquiry by Parsons also addressed effects on prices in the ACT housing

market. It advised the Committee that the:

unexpected tight window has meant there will inevitably be a significant housing price

bubble as owners scramble to find a new home. There are 245 days between 28

October 2014 and 30 June 2015. This means there will be more than 4 sales each and

every day if every owner was able to buy a new home in this period. This is just not

possible.285

9.63 The submission cited reports in the news media which supported the view that the current

proposed scheme would exert upward pressure on house prices in the ACT. It stated that it

was ‘elementary economic theory that increased demand for a fixed supply will lead to a rise

in prices’ and suggested that this was ‘already being manifested even though the buyback

money is yet to be paid’.286

282 Submission No.13, Donaldson and Fanning, p.8. 283 Submission No.13, Donaldson and Fanning, p.8. 284 Submission No.13, Donaldson and Fanning, p.8. 285 Submission No.32, Parsons, pp.2‐3. 286 Submission No.32, Parsons, p.3.


9.64 Regarding this, the submission went on to advise the Committee that:

The Government buyback of over 1,000 houses in an 8 month period will materially

increase demand and therefore increase prices in the pool of housing available. They

are however choosing to buy the Fluffy houses in a different lower market. The

Government obviously has the whip hand in these “negotiations” but it is hardly a fair

offer.287

OTHER SUBMISSIONS

9.65 Other submissions to the inquiry also raised issues concerning the effect of the Scheme on the

housing market.

PLANNING

9.66 Contributors to the inquiry made comment on planning implications of the proposed scheme,

raising concerns about changes in amenity and property values.

SUBMISS ION BY BLUME

9.67 The submission by Blume to the inquiry advised the Committee that, under the scheme:

In what are now quiet residential streets Mr Fluffy neighbours will have adjacent blocks

that for some time, a year or more, will have a vacant house, then a demolition site,

then a cleared vacant block of land, then a building & construction site with finally a

new building or buildings. In our case three within a hundred meters.

Should the blocks be sub‐divided then the neighbours face a transition from living an

area of free‐standing residences on relatively large blocks to having two or three or

more medium density dwellings next door to them with increased noise, vehicular

access, parking implications and other changes to local amenity. In my own case we

have shared entrance going into a dual driveway with shrubs and greenery offering

high visual amenity. Any sub‐division would likely destroy that amenity or reduce it

greatly.

Should zoning variation be proposed to support increased density then neighbours

need to be brought into the process early. There is some irony in all this ‐ allowing

neighbours to also seek a rezoning to subdivide brings a potential increase in the value

of their land, but that could be realised only if they too sold into the market place and

moved elsewhere, or were willing to change their current amenity by having more new

287 Submission No.32, Parsons, p.3.


7 9

dwellings adjacent to or in place of their current residence. For those of us who like

living where they are this is a two‐edged sword.288

SUBMISS ION BY ALEGRIA

9.68 The submission to the inquiry by Alegria also raised concerns in this regard:

We … wish the Inquiry to note that all of our neighbours in this cul‐de‐sac of 9 houses

are concerned about the impact that any future sub‐division our property and another

Mr Fluffy property across the road will have on the character and amenity of this

street. It would be unacceptable for their property values and lifestyle to be adversely

affected through changes resulting from an increase in the number of dwellings in the

street.289

OTHER SUBMISSIONS

9.69 Other submissions to the inquiry also raised issues concerning planning matters as related to

the Scheme.

INVESTMENTS AND IMPROVEMENTS TO PROPERTIES

9.70 A number of home‐owners, in their contributions to the inquiry, expressed a strong

attachment to their housing property, and detailed the material improvements they had made

on their property. This indicated investments in their property of both a material and an

emotional character.

9.71 Some contributors had purchased their homes quite some time ago and had retired. Others

had young families and had bought their homes more recently. These two groups both had

strong concerns about the implications of the proposed response to loose‐fill asbestos, which

are considered below.


9.72 The submission by Moyle put a view from the perspective of younger homeowners, advising

the Committee that they had purchased their property recently, in June2012, as a ‘family

home with the intention of being there for up to 30 years’, while being unaware of ‘Mr Fluffy

issues’.290

288 Submission No.35, Blume, pp.6‐7. 289 Submission No.29, Alegria, p.1. 290 Submission No.5, Moyle, p.4.


9.73 It then went on to detail improvements to the property as follows:

After purchase in 2012, upgraded the amenity of the property including additional split‐

system air conditioning to main living areas, repainting interior of the property,

installation of large solar PV system, installation of security CCTV system, installation of

digital and additional insulation to underfloor area and over heating and cooling ducts in

ceiling cavity. These were made to improve the efficiency, security and comfort of the

property as a family home. Total cost approximately $18,000.291

Installed approximately $27,000 of security and insulation roller shutters to all windows of

the property with street access in February 2014. These were installed to improve the

efficiency, security and comfort of the property. We did not receive the February letter

regarding Mr Fluffy asbestos insulation and as such had no awareness of the issues at the

time.292

9.74 In connection with these expenditures, the submission noted that ‘[u]pgrades conducted to

home improve the security and amenity of the property will not be reflected in the market

value of the home’, and that ‘[w]e would never have spent the additional money on the

property had we been fully informed about the loose‐fill asbestos issues with the property

based on the information held by the Government in 2005 and 2010’, nor ‘would [we] have

bought the property in the first instance.293

SUBMISS ION BY SY MO N S

9.75 The submission to the inquiry by Symons also spoke from the perspective of younger Mr Fluffy

homeowners. It advised that they were ‘trying to come to terms with this disaster’ and that

after ‘a lot of discussion we have realised It's time to just leave it all behind and move on’:

We looked at knocking down and rebuilding, but we can't afford it, it's a lot of money

to put a modest home on this block, so we have been looking and nothing suited our

needs.294

9.76 One of the constraints was that the domestic property needed to accommodate the

requirements of a business in terms of space and storage capacity:

We have a landscaping business, done the hard yards, it's just starting to work so we

need the space to store equipment, but nothing. So we started to look a little further,

not Sydney, not the coast, but 20 kms down the Barton highway, Murrumbateman.

You know what, we think we found the house for us, sheds, room to move, a modest

291 Submission No.5, Moyle, p.4. 292 Submission No.5, Moyle, p.4. 293 Submission No.5, Moyle, p.4. 294 Submission No.7, Symons, p.1.


8 1

house. We made the decision to get our life back on track, put this behind us and move

on ... We could be out early January all going well.295

9.77 ‘However’, the submission advised the Committee, ‘we need a huge mortgage, we need to

borrow money from family [and] it's a real stretch’. Under these circumstances they regarded

it as important that the ACT Government would ‘not be covering stamp duty outside the ACT’.

Regarding this they advised that:

Quite frankly we think this is not flexible and not meeting the needs of us as

individuals. We have been flexible, so it's your turn! I'm amazed that you are making

people stay in the capital under this proposed offer. Now I understand that the stamp

duty is just a figure on paper and that no actual money changes hands from the sale of

our old house and the purchase of a new house, but why can't there still be an

exemption for a purchase in NSW up to the value of our house, surely there should be

some compassionate grounds, moral ideals that should come into play here. We are

tax payers, rate payers, law abiding citizens trying to move on with our lives, we are

not asking for the unthinkable, merely an exemption on our next purchase.296

9.78 The submission went on to say:

Please help us and make this just that little bit easier for us, we are already extending

ourselves because WE HAVE TO, not because we want to. We are a young family trying

to get ahead, but this will set us back. We beg you to please look at our individual

circumstances and help us cover this cost. We haven't used any of the previous

assistance money, we were happy with the one assessment, so far our cost to you has

been minimal. We don't want to be a part of this mess, we are trying to move on, but if

we don't receive the stamp duty waiver we can't.297

SUBMISS ION BY STEPHENSON

9.79 The submission to the inquiry by Stephenson portrayed a similar predicament. It advised the

Committee that:

We currently live in a four bedroom house in Kambah. Over the past few years we have

spent hundreds of thousands of dollars undertaking extensive renovations on our

home. This has become our home where ourselves and two young children live and

intend to for a very long time. We do not want any more than what we have now. Our

four bedroom house in suburban Kambah with an extra large shed is our perfect

abode, and we certainly do not want to lose anything that we have.298

295 Submission No.7, Symons, p.1. 296 Submission No.7, Symons, p.1. 297 Submission No.7, Symons, p.2. 298 Submission No.16, Stephenson, p.1.


9.80 Again, the domestic property was the base for a business which required a certain amount of

space to accommodate plant and equipment:

Just before we got our registered letter (the first we had heard about having a Mr

Fluffy house) we had just finished adding a new $50,000 shed to our property to house

all of our equipment need to run our family business from home, such as; truck, ute,

trailers, tools etc with a workshop on the side.

The consequence of having to move is drastic. Not only do we lose our home and the

work we had done to it: we lose our community and also our business. For us, there is

no way we can store all our equipment ‘somewhere else’. This would be an added cost

to a business that only just makes ends meet now. It is simply a cost of business we

cannot afford.299

9.81 Moreover, the submission advised the Committee that they had strong ties with the local area:

We currently still have a mortgage of around $250,000.00. We want to keep the block

we have now and the size that it currently is, it is close to the children's schools, all

after school activities, family, friends, all our business clients also around this area.300

9.82 The Committee was told that they had:

‘purchased this property years ago with our future in sight’, [but] ‘[s]uddenly our

future is being stolen from underneath us’.301

9.83 Under current circumstances, the submission advised the Committee, it was very difficult to

meet domestic and business requirements by moving to another property:

The simple fact is that if we had to leave the block, or buy back half of our block

because of sub‐division, we would be worse off. There are no other houses to purchase

in our suburb to the same quality to what we have now. The paper quoted there are

103 Mr Fluffy houses in Kambah and only 37 houses for sale in Kambah. We have been

looking everyday and most houses are three bedrooms and run down and old inside ‐

exactly the kind of house we had BEFORE we invested in making it what it is today. We

are being punished by the government for improving our house, supporting local

businesses in doing our improvements and working extra hours to try and pay off our

mortgage early. The government is literally leaving us in more debt, with no home, no

family business and no vision for our future.302

9.84 Commenting on the implications of the current proposal, the submission advised the

Committee that:

299 Submission No.16, Stephenson, p.2. 300 Submission No.16, Stephenson, p.2. 301 Submission No.16, Stephenson, p.2. 302 Submission No.16, Stephenson, p.2.


8 3

We are simply looking for a fair go. We cannot afford to be out of pocket to the extent

the current offer would have us. We believe the government should replace exactly

what we have now and we should be no worse off. Understanding this is unlikely to

happen. We believe the Government should give us' the market value for the house

only, not the land. We should be able to keep OUR full block of land which is only 756m

‐ the government then pays to remove our Mr Fluffy house and we can build a new

house with the money we received for the market value of our old house. This way we

can keep the external shed we just put up and be able to keep our business going. This

would work out cheaper for the government and give us some hope for our future and

our children's future.

As it is now, if we go with the governments offer, we will lose our block. It will get split

in half, which will be tiny, and we would be offered to buy back half a block! This

wasn't our intent years ago. How dare the government decide what we want. This will

result in being hundreds of thousands of dollars out of pocket AND having no room to

put our shed for our business, or for the kids to play.303

9.85 Commenting on the ‘cumulative effect of the situation’, the submission advised the Committee

that they wanted to ‘stress to the Committee is that our response to the Mr Fluffy situation

isn't an isolated event’, and that in their view ‘[w]e don't think the Government understands

how there are a range of financial and personal decisions that this situation affects’.304

9.86 For them personally, ‘the situation will lead to the end of our business ‐ not due to some kind

of false emergency payment cash flow, but because of the loss of physical infrastructure that

our family business invested in on our property’. In addition, a significant health expenditure

planned for the near future would have to be deferred, raising the possibility that the matter

would ultimately be dealt with through ‘emergency surgery [which] will have a far greater

impact on the Government's finances’.305

SUBMISS ION NO.6

9.87 Submission No.6 to the inquiry expressed one perspective from of a cohort of home‐owners

who had been resident for a longer period of time. This submission the Committee that they

had been in their property for forty years and did not ‘want [to] surrender our land’, which was

their ‘principal asset’ in relation to which they stated that ‘[w]e love our home and its

environment’.306

303 Submission No.16, Stephenson, p.2. 304 Submission No.16, Stephenson, p.2. 305 Submission No.16, Stephenson, p.3. 306 Submission No.6, p.2.


9.88 The submission advised the Committee that they were ‘greatly concerned’ that ‘the Task Force

seems to be recommending draconian legislation by mid‐2015 to hugely restrict our ability to

enjoy the existing amenity of our home’, and that ‘after having spent 40 years in this house

with assurances as to its safety’, they were ‘now being told we have had 40 years of deadly

asbestos exposure’.307

SUBMISS ION BY ERSKINE

9.89 The submission by Erskine to the inquiry highlighted investments in a presently‐owned

property in connection with a disability:

Since buying my house I have spent almost $60,000 on modifications to accommodate

my disability. I have totally remodelled the bathroom with a bigger shower with a seat

and placed grab bars in the shower and toilet, built a deck with a ramp for access and

landscaped the garden and paths for easy access. The most recent modification was

$6000 worth of work to improve access to the ramp, completed only 15 months ago.308


9.90 The submission to the inquiry by Brown indicated material and emotional investments in

housing property. In terms of material investments, the submission advised the Committee

that:

‘Significant home improvements have been conducted including upgrading the amenity of

the property as follows:

Addition of air conditioning to main living areas

repainting interior of the property

installation of ducted gas heating

new kitchen installation

bathroom modifications

establishment of a pergola

installation of paved areas

modifications made to garage and of construction of garden sheds.309

9.91 Regarding these improvements, the submission noted that they ‘were made to enhance the

comfort of the property as a family home’ at a total cost of ‘approximately $35,000’, however

‘[u]pgrades conducted to home will not be reflected in the market value of the home’.310

307 Submission No.6, p.2. 308 Submission No.26a, Erskine, p.1. 309 Submission No.28, Brown, p.7. 310 Submission No.28, Brown, p.7.


8 5

9.92 In addition:

Significant purchases and time investment [had] been made for building established

gardens, this includes large procurement of shrubs and trees and the building of

retaining walls and other garden features.311

9.93 In terms of emotional investment, the submission advised the Committee that the property

had been ‘bought as family home with the intention of being there for the rest of our lives’. In

view of this and subsequent investment ‘the prospect of losing my family home and the

memories it contains for myself, my children and grandchildren [was] having a significant

impact on the health of us all’.312

SUBMISS ION BY S IMPSON

9.94 The submission to the inquiry by Simpson detailed emotional investments that included social

ties in the immediate area in which their property was situated:

These are my reasons why I want my family to stay on our block:

I want my children to come home with their friends, swim in our pool and have a meal

together in our gorgeous BBQ area located in our very own sanctuary called our

backyard. The friends get to know us as the parents and we meet our children's friends.

We know where our children are and who they are hanging out with. As our children

grow into teenagers, it becomes more important to be a part of their lives ‐ more so

than when they were toddlers.

Our backyard means more to us than the house .... We didn't make the house but we

have made the backyard into something very special.

…

Our neighbours are family; we have formed friendships with neighbours around us. As

we are a Weston Creek family, our lives were changed forever because of the 2003

bushfires.

We all rallied around each other. Making long lasting friendships in a new

neighbourhood just doesn't seem possible. Our children will miss the children in our

street. They play in the front street with their mates ‐ soccer, cricket, they riding their

bikes.313

311 Submission No.28, Brown, p.7. 312 Submission No.28, Brown, p.7. 313 Submission No.31,Simpson, pp.2‐3.


SUBMISS ION NO. 18

9.95 Submission No. 18 to the inquiry also put a view from the perspective of an older group of

homeowners. This submission advised the Committee that:

After having received and reading report of the Asbestos site assessment of our house

we are of the opinion that there is no [sign] of loose Asbestos visible or present

especially in the living area.

This being the case we cannot understand why our house should even be considered as

a knock down rebuild property. Given that both my wife and myself are now in our 80's

we would find it very difficult to even consider looking for alternative accommodation.

To us our life is revolved around our house and the thought of having to [lose] it would

be a [catastrophe] apart from affecting our health and our normal day‐to‐day way of

living.

We have worked all our life to provide ourselves with a comfortable and happy

retirement and be close to our family.

Also my wife and myself in the past 3‐5 years have had to deal with many health

problems for which we are still having to take medication to keep them under control.

12 months ago I had major surgery on my heart (double by pass operation) which went

terribly wrong which meant a return to the operation theatre directly finishing up with

a 10‐hour operation.

My health has never been the same since and a move of this capacity could have very

severe consequences.

After having lived in this house for the past 22 years we both feel we have not suffered

any ill effects through the asbestos problems supposedly that you say could be

present.314

OTHER SUBMISSIONS

9.96 Other submissions to the inquiry also raised issues concerning matters related to investments

and improvements to properties.

314 Submission No.18, p.1.


8 7

EQUITY OF ARRANGEMENTS—“THE FAIRNESS TEST”

9.97 Some contributors to the inquiry expressed concern at what were seen as differences in the

way different categories of homeowner were to be dealt with by the ACT government.

9.98 A particular concern was the difference between the circumstances of homeowners who had

taken the decision to demolish before the announcement of the Scheme and will now receive

compensation in connection with their properties and those who had not. These concerns

were exacerbated, in the view of contributors, because the ACT government had provided

advice, closer to the time of the announcement of the current buy‐back scheme, that it would

be better to wait until the scheme was announced.

SUBMISS ION BY RYAN

9.99 This was a view put to the Committee in the submission to the inquiry by Ryan, which advised

the Committee that:

In June 2014, we received notice from the ACT Government that our home … had been

determined to be a Mr Fluffy house. By late September, and after detailed

consideration, we decided that we were in a financial position to demolish the house

ourselves, and rebuild, hoping for reimbursement by the current ACT Government.315

9.100 However, the submission advised:

Before we could commence the administration required to demolish our home, and

well before 28 October, we received advice from other families who were also

considering self funded demolition, that the Asbestos Taskforce had advised that this

approach could present too high a financial risk for families, and that we should await

the Government's decision on the way‐ahead. Noting based on this advice, we awaited

the formal decisions from the ACT Government, trusting that any decision would be

fair and equitable for all affected home owners.316

9.101 The submission expressed strong concern at the outcome:

We now find, however, that those families who did demolish their homes before 28

October 2014 have been given the opportunity to retain their land in‐full, and will be

compensated for the rebuild of their home. As we were specifically advised against this

course of action, we now feel that we have been extremely disadvantaged by this

unfair decision.317

315 Submission No.25, Ryan, p.1. 316 Submission No.25, Ryan, p.1. 317 Submission No.25, Ryan, p.1.


9.102 The submission went on to characterise differences between two classes of affected

homeowners:

In relation to acting fairly towards all impacted homeowners, the ACT Government has

by it's decisions created two classes of Mr Fluffy Homeowner:

• those that can keep their current land, either through having already knocked down

their house, or by virtue of living in an expensive, heritage listed area; and

• those who will be forced off their land, through financial hardship, e.g. not being able

to re‐purchase even a sub‐divided block at future market rates.318

9.103 At this point the submission advised the Committee that:

Like many other Mr Fluffy owners, we fall into the second category, and will be

financially (and emotionally) disadvantaged.319

9.104 Regarding this situation, the submission went on to state that:

We must move away from our neighbourhood, our home for 16 years, yet had we

acted against the prevailing advice, we would be able to stay here. This is unfair! 320


9.105 The submission to the inquiry by Erskine put a similar view:

I, like others, took the advice of the ACT Asbestos Taskforce and did not take action

(such as house demolition) before the policy was released on 28 October 2014.321

9.106 The submission advised the Committee that there were ‘a number of major inadequacies in

the ACT Government Policy’.322

9.107 It noted that:

In the “The ACT Government's Preferred Way Forward on Loose Fill Asbestos:

Supporting Detail” on page 13 it states that those who privately demolished their

houses prior to 28 October 2014 will be reimbursed demolition costs, market valuation

of the house and they will not have to surrender their crown lease.323

318 Submission No.25, Ryan, p.1. 319 Submission No.25, Ryan, p.1. 320 Submission No.25, Ryan, p.2. 321 Submission No.26, Erskine, p.1. 322 Submission No.26, Erskine, p.1. 323 Submission No.26, Erskine, p.1.


8 9

9.108 In relation to this aspect of the scheme, the submission put the view that:

This aspect of the policy is not equitable to all Mr Fluffy owners as it advantages to

those financially able enough to have taken this action.324

9.109 Moreover, the submission advised, there was a basis to suggest that some homeowners had

been able to access better information about the likely direction of the buy‐back scheme,

announced late in 2014, than others:

I recently met with a building company that is rebuilding homes for three Mr Fluffy

people who demolished before 28 October and will receive demolition costs and

market value of their house. The building company commented that the building

industry had a strong indication of the direction the buyback scheme would take and

were able to advise their clients so they could demolish before the deadline.325

9.110 At this point the submission went on to ask whether there were:

any enquiry to ensure that those that demolished prior to 28 October did not have the

advantage of some insider knowledge? 326

9.111 The submission also asked:

why should those with the financial advantage be offered this deal and those who

hesitated to do this not be offered the same deal now? Shouldn't the offer be fair and

equitable for all participants?327

9.112 Some other submissions put similar views.

SUBMISS ION BY PLATT

9.113 The submission to the inquiry by Platt advised the Committee that:

We [were] intending to knock down the property but we [were] advised by the

Taskforce over the phone in earlier October 2014 that the knockdown process

[would take] longer than the announcement in late October 2014 (28 October 2014).

Further, the Taskforce had advised us not to do anything but to wait for the

announcement from the Chief Minister because we [would] not be

[disadvantaged].328

324 Submission No.26, Erskine, p.1. 325 Submission No.26a, Erskine, p.2. 326 Submission No.26a, Erskine, p.2. 327 Submission No.26a, Erskine, p.2. 328 Submission No.34, Platt, p.2.


9.114 The submission noted that:

The buyback scheme only applied to 1,021 affected Mr Fluffy homes. However, the

affected Mr Fluffy house owners who elected to privately demolish their property prior

to 28 October 2014 are eligible the following:

o The full asbestos removal and demolition costs will be reimbursed

o The valuation of the former house will be paid

o The buyback offer will extend to vacant blocks at market value.329

9.115 ‘Therefore’, the submission stated, ‘this buyback scheme is not fair and equitable and it does

not apply to all affected Mr Fluffy home owners’.330

SUBMISS ION BY GR AN T

9.116 A similar view was put to the Committee by the submission of Grant:

The Scheme addresses those who demolished privately prior to the announcement

being made. This part of the Scheme is the most inequitable. Those who demolished

prior to the announcement or signed contracts for demolishing are being especially

well looked after in the Scheme whose major selling point is voluntary, flexible and

equitable. They receive reimbursement of the demolition & fair market value of their

home prior to demolition. Since there is no exchange on the crown lease, they can then

sell the bare land allowing them to walk away with hundreds of thousands in profit.331

9.117 The submission advised the Committee that the ‘Taskforce have stated that these

homeowners demolished at their own risk and were in a financial position to take that risk’,332

however it was ‘questionable’ as to

why the government are compensating and looking after families of a high

socioeconomic background and not equally compensating those who need it the most‐

those in a low socioeconomic background.333

SUBMISS ION BY S IMPSON

9.118 The submission to the inquiry by Simpson put a similar view:

It is very difficult to swallow the fact that prior to the announcement the cost of

remediation and new build was going to be compensated by the ACT Government but

329 Submission No.34, Platt, p.2. 330 Submission No.34, Platt, p.2. 331 Submission No.36, Grant, p.2. 332 Submission No.36, Grant, p.2. 333 Submission No.36, Grant, p.2.


9 1

after the announcement, if we choose to follow our original plan then we will get

nothing. This just doesn't seem fair.334

9.119 However this submission also raised concerns as to the management of information and

advice in the lead‐up to the announcement of the scheme in its present form:

We are prepared to finance the cost of rebuilding our home. This was our initial plan

but the plan was placed on hold in August this year until the Government announced

its “remedial actions”. This plan was formulated following advice given to us at the

“FORAG [Fluffy Owners and Residents' Action Group] Town Hall” meetings. My

husband and I feel we were misled by listening to advice that was obviously

incorrect.335

OTHER ELEMENTS OF CONCERN

9.120 Contributors to the inquiry also voiced concerns about other aspects of equity in connection

with the present scheme.

SUBMISS ION BY SMITH

9.121 The submission to the inquiry by Smith focused attention on the predicament of homeowners

who had recently purchased properties which, it transpired, were affected by loose‐fill

asbestos:

People who have purchased their homes within the last two years or so, have not yet

realised an increase in the value of their property sufficient to offset the costs of

purchasing and taking up∙ residence. This is normal. Whilst a home in Canberra is a

sound investment it is one for the longer rather than shorter term. People affected by

the ‘Mr Fluffy’ disaster who purchased their homes in the last two years or so are now

in a situation where they stand to lose considerably on their investment as a result of a

forced early sale. The scheme as it stands may well see families in this situation left

without sufficient financial resources to replace their home, particularly as the price

capping involved results in an ever widening gap between the price offered for their

affected home and the cost of a replacement.336

9.122 The submission described the implications of this situation for the submitters themselves:

Take the example of a young couple who worked hard to save a deposit, took care to

ensure their new home was inspected and passed as OK prior to exchanging contracts

334 Submission No.31, Simpson, p.4. 335 Submission No.31, Simpson, p.3. 336 Submission No.30, Smith, p.1.


and moving in. Having planned and managed their circumstances carefully, one partner

took time out of the workforce to take on the task of raising an expanding family,

whilst the other continued working to pay down the mortgage and meet all of the

other costs of being a home‐owner and parent.

Things were going well for them until the 'Mr Fluffy' disaster. Now, with the offer of a

'buy‐back' at October 28 pricing they find themselves in a situation where they will lose

their home, have little to no deposit (depending on the, as yet unknown, valuation), no

access to a first home owners grant, (used up on the property they are now forced to

leave) and, unable to secure a loan sufficient to purchase a replacement home.

This young couple, through hard work and careful planning purchased a home in which

to raise their children and have been making a success of that. Now, as a result of the

'Mr Fluffy' situation they will become homeless with nothing to show for the years of

hard work that went into becoming home‐owners.337

9.123 In relation to these circumstances the submission asked:

Reparation of the Mr Fluffy disaster will cause inconvenience and some hardship as

they have to uproot from their home and relocate but surely it should not also impose

financial damage that leaves them unable to remain home‐owners? 338


9.124 The submission to the inquiry by Erskine expressed concern at the implications of the present

scheme for homeowners in more vulnerable circumstances:

It would be fair and equitable to offer all Mr Fluffy owners the same deal. For those

that would like to take the offer and move on, that is great but for those (an

appreciable number) who wish to remain on their land and in their communities they

should have to opportunity to do so, as the owners demolishing prior to 28 October

did. But there should be more work done to ensure that people who are disadvantaged

by participating in the scheme are catered for ‐ the elderly, people with a disability or

people at risk of being disadvantaged or marginalised. In a country that places so much

emphasis and pride on home ownership, the ACT Government buyback scheme seems

to be disregarding this.339

337 Submission No.30, Smith, p.1. 338 Submission No.30, Smith, p.1. 339 Submission No.26, Erskine, pp.1‐2.


9 3

SUBMISS ION BY PAR SO N S

9.125 The submission to the inquiry by Parsons cited the ‘guiding objectives’ of the ACT

Government's Preferred Way Forward on Loose Fill Asbestos report:

1. Eliminate, by demolishing all known affected houses, the ongoing risk of exposure to

loose fill asbestos insulation for homeowners, tenants, tradespeople and the wider

community.

2. Provide a fair outcome for owners of affected homes.

3. Provide, so far as is possible and reasonable, flexibility and options for informed

choices to be made by owners of affected homes.

4. Minimise overall net costs to the Canberra community and the ACT Government

(thereby minimising the flow‐on impact to other government policy and program

delivery areas).340

9.126 In relation to these the submission put the view that the program was ‘obviously going to

achieve the first objective and possibly the fourth’, however the ‘other two objectives,

particularly the third, are not being achieved’.341 In particular there were:

Three issues that stand out … the valuation date, the short period the scheme runs for

and the lack of flexibility over demolition timing and most importantly no realistic

opportunity to rebuild.342

SUBMISS ION BY COLL INS

9.127 The submission to the inquiry by Collins expressed concern over differences for owners of

different sized housing blocks:

The offer provided by the Chief Minister and the task force greatly disadvantages

victims whose properties are greater than 800 square metres which is the majority.

The properties will be rezoned and offered back to the original owners at a far greater

price than that paid on surrender. This is not the case for owners of smaller

properties.343

9.128 The submission also expressed concern that ‘due to the possible delay of up to 5 years they

too may not be able to purchase their properties back’ and as a consequence’ the majority of

victims will not be able to return to the properties’.344

340 Submission No.32, Parsons, p.1. 341 Submission No.32, Parsons, p.1. 342 Submission No.32, Parsons, p.1. 343 Submission No.41, Collins, p.1. 344 Submission No.41, Collins, p.1.


9.129 Reflecting on this, the submission stated that the ‘ “Preferred Way Forward” document

recently distributed includes design principles, one of which is “provide a fair outcome for

owners of affected homes”’ however, it observed, it seemed that ‘the last principle “minimise

overall cost ... “ has taken precedence’.345


9.130 The submission to the inquiry by Brown expressed concern at the dual effects of the scheme

and other trends in the ACT housing market:

The current property market in Canberra is tracking backwards with median house

prices down 1.7% over the September quarter. This means Mr Fluffy homeowners are

being forced to sell their properties in a depressed property market and which results

in a financial disadvantage in comparison with a non‐Mr Fluffy homeowner who

chooses to sell their property during a period of stronger property growth.346


9.131 The submission to the inquiry by Blume made a broader catalogue of elements that were

considered inequitable. The submission advised the Committee that:

What has so far been proposed, with the best of intentions, seems to have diverged

from the question ‘what is fair to those affected’ to a much more crude ‘what can we

do to minimise the costs to the ACT Budget’. It is reasonable and correct to ensure that

there is no waste or poor allocation of ACT finances which have been re‐directed to

provide the support for Mr Fluffy residents, but the core focus should be on their plight

‐ and that is far more than financial ‐ but the financial component too is bigger than

seems so far to be recognised.347

9.132 Blume’s critique of the present scheme included the views:

that ‘these are forced sales’;

that ‘[c]osts for temporary accommodation are not included’;

that also not included were ‘any financing costs such as bridging loans, early mortgage

payment penalties or new mortgage setup costs’;

that there could be other costs not provided for, ‘for owner occupants and for landlords

(such as loss of rental income)’ and ‘[r]emoval & storage costs … to leave existing dwelling

and move back to a new one’.348

345 Submission No.41, Collins, p.1. 346 Submission No.28, Brown, p.1. 347 Submission No.35, Blume, pp.2‐3. 348 Submission No.35, Blume, p.3.


9 5

SUBMISS ION BY O’NEILL

9.133 The submission to the inquiry by O’Neill expressed concern at the situation of no asbestos

being found in or on their property. An Asbestos Assessment and Risk Management had been

conducted at the premises, commissioned by the Asbestos Response Taskforce, the findings of

which had shown ‘no evidence of the presence of asbestos was detected in the habitable areas

of our residence’. However, the submission advised, ‘the report recommends, in the long term,

that our residence be demolished’, and this ‘causes us the gravest of concern’.349

9.134 With regard to this, the submission outlined three elements of concern which, it said, were

that:

1. The Taskforce, in conducting its assessments and publishing its reports, has failed

to establish that asbestos fibres are present in all affected homes but has

recommended that all affected homes be demolished;

2. The Taskforce has failed to explain to affected homeowners why it is , necessary to

demolish their homes in the face of the assessment's findings; and

3. The Taskforce has failed to explain to affected homeowners that homes that had

loose‐fill asbestos fibre insulation installed and which had been subsequently

removed and, even though evidence of remnants has not been found, are of such a

danger to the community and home owners that they must be demolished.350

9.135 Commenting on this, the submission put the view that:

The failure of the Taskforce to establish the presence of dangerous levels of asbestos

fibres in affected homes to support its recommendation that the homes be demolished

at public expense constitutes serious maladministration.351

9.136 The submission went on to say that:

It should be noted that whilst the Taskforce will not verify the existence or otherwise

of dangerous levels of asbestos in homes prior to their demolition, it proposes to

examine vacated sites to establish whether levels of asbestos are present. Surely this

could be conducted at an early stage in order to determine whether alternatives to

demolition are possible.352

349 Submission No.27, O'Neill, p.1. 350 Submission No.27, O'Neill, p.2. 351 Submission No.27, O'Neill, p.2. 352 Submission No.27, O'Neill, p.2.


9.137 In addition, the submission proposed that there should be avenues for appeal and review:

We also would like to see some mechanism introduced whereby concerns about

fundamental decisions affecting homes can either be reviewed or, at the least, given

some standing so that the relevant agencies and decision makers are required to give

them appropriate consideration. The capacity for homeowners to have their concerns

considered by the ACT Ombudsman may be sufficient.353

COSTS AND BUDGET IMPLICATIONS

9.138 Contributors to the inquiry made comment on cost implications of present arrangements for

homeowners affected by loose‐fill asbestos. They also made comment on budgetary

implications for the ACT and the costs borne by homeowners relative to those borne by

government.

COSTS FOR HOMEOWNERS

9.139 Submissions to the inquiry expressed strong concern about costs to homeowners under the

present proposal.


9.140 The submission to the inquiry by Moyle advised the Committee that:

The costs of moving are significant with additional fees for the disconnection and

reconnection of utilities, removalists costs, time off work to negotiate and purchase

another property, etc. These are additional costs now to be incurred by myself and my

family, regardless that we are now forced to relocate as we purchased our current

home with the intent of living in there for up to 30 years.354

9.141 The submission also expressed concern as follows:

Buyback offer under current ACT Government response is for market‐value of property

as at 28 October 2014. Estimates from real estate agent and bank indicate that this will

not cover the actual cost of the property (purchase and upgrades) since 2012. Property

market already heating due to increased demand and a lower than normal number of

properties available for purchase meaning that we will be unable to purchase a similar

property in a similar standard in a similar area. As such, the economic loss stands to be

significant (up to 9% of the cost of the property) on these items alone.355

353 Submission No.27, O'Neill, p.2. 354 Submission No.5, Moyle, p.5. 355 Submission No.5, Moyle, p.5.


9 7

9.142 Further, the submission continued:

We are unable to secure finance. ACT Government apparently had not resolved finance

issues with financial institutions prior to announcing the current approach. It is

unknown as to whether they even engaged financial institutions prior to announcing

the proposed management plan. This has left us and many other affected homeowners

unable to draw on the equity in our properties to secure finance, and [therefore]

unable to purchase replacement properties which would enable us to move our

families to a safe location. Obtaining finance at this stage would require us paying

mortgage insurance, regardless of the significant equity that we have in the current

property. This is not being costed into the ACT Government's current approach.356

9.143 The submission noted that the ‘culmination of these issues’ stood ‘to cost my family up to

$150,000 in a worst case scenario’. Moreover:

No compensation has been identified regardless of the serious liability issues identified

above, and these damages cannot be claimed under insurance as with fires or other

natural disasters.357


9.144 The submission to the inquiry by Kilcullen advised the Committee that:

The average owner who repurchases under the present scheme can expect to pay not

only 70% of what the Government paid them in the buy‐back, but also 70% of all of the

Government's other costs; the total may come close to the sum paid them in the buy‐

back. Repurchasers will have a scraped block with no building, and what they were paid

in the buy‐back will have been almost or quite eaten up.358


9.145 The submission to the inquiry by Donaldson and Fanning expressed concern about the

implications of the relative timing of valuations and repurchase:

Under the Government's Scheme, as currently designed, virtually all owners face the

prospect of very significant financial penalties. Notwithstanding Government

statements to the contrary, there is already evidence to suggest that there will be a

significant difference between 28 October valuations and the price that will have to be

paid for replacement homes. This is in no small part due to the short time frame that

has been provided for opting in to the Scheme. It is clear from reports in the Canberra

356 Submission No.5, Moyle, pp.5‐6. 357 Submission No.5, Moyle, p.6. 358 Submission No.2, Kilcullen, p.3.


Times that this is forcing large numbers of prospective buyers onto the real estate

market at a time when the stock of properties on the market is very much smaller than

usual. Press reports indicate that the real estate industry estimates that the stock

available is about 1,000 less than normal.359

9.146 The submission also expressed concern about other costs to homeowners:

In addition to the increased capital cost of buying a new property, there are transaction

costs that will not be covered by the assistance program, not least the cost of bridging

finance and stamp duty payable over the limit currently set by the Government, plus

rental costs for interim (but possibly quite lengthy accommodation), other relocation

costs, costs of replacing household equipment and clothing that cannot be taken away

and so on.360

SUBMISS ION BY CHALLENGER

9.147 The submission to the inquiry by Challenger expressed concern at costs arising from a specific

scenario:

My family's situation is that we sold our Mr Fluffy house in Wanniassa in June with full

disclosure of the asbestos issue, for a loss of around $80,000. We were in a position

where we had to sell because we purchased a new home in Wright in January before

we even had any clue that our existing house was a Mr Fluffy.

We are now faced with a mortgage on our new home that is more than we can afford

and are relying on financial support from my elderly mother to make the repayments.

We want to be reimbursed for the difference between what we sold for ($403,000) and

market value.361

9.148 The submission went on to state that:

The buyback scheme does not address our situation at all and I have written to Andrew

Kefford, the Chief Minister and Minister Rattenbury seeking answers but none of them

have responded to me at this time. I have provided the Taskforce with all the details of

our situation, including copies of two valuations for the Wanniassa house, but have not

yet heard back from them.362

9.149 The submission expressed concern that:

The buyback scheme provides for reimbursement for those who privately demolished

before the scheme and it strikes me as quite unfair and inconsistent that those who

359 Submission No.13, Donaldson and Fanning, p.3. 360 Submission No.13, Donaldson and Fanning, p.3. 361 Submission No.12, Challenger, p.1. 362 Submission No.12, Challenger, p.1.


9 9

privately sold (at a loss and with full disclosure) are not also being reimbursed. Isn't it

the same principle?363

9.150 In addition, it also expressed concern about the implications in different methods of valuation

in the present scheme:

I note that as part of the scheme, those houses which sold after the February letter will

be bought back at the contract price, rather than market value. If we are not

reimbursed the difference then the Government will be making a saving at our

expense, considering that if we had not sold, the government would have had to pay

market value for the house.364

OTHER SU BMISS IONS

9.151 Other submissions expressing concern about these elements of the current proposal included:

Submission No.14, Hallinan and Hughes;365

Submission No.6;366


Submission No.20, Evans;368

Submission No.21, McDonald;369

Submission No.22, Cox;370

Submission No.35, Blume;371

Submission No.37, Matz;372

Submission No.42, Baxter;373

Submission No.46, Hourigan;374

Submission No.50, Smith;375

Submission No.54, Mether;376 and

363 Submission No.12, Challenger, p.2. 364 Submission No.12, Challenger, p.2. 365 Submission No.14, Hallinan and Hughes, p.3. 366 Submission No.6, p.2 367 Submission No.17, p.1. 368 Submission No.20, Evans, p.1. 369 Submission No.21, McDonald, p.2. 370 Submission No.22, Cox, p.1. 371 Submission No.35, Blume, pp.3‐4. 372 Submission No.37, Matz, pp.2‐3. 373 Submission No.42, Baxter, p.2. 374 Submission No.46, Hourigan, p.2. 375 Submission No.50, Smith, p.1. 376 Submission No.54, Mether, p.1.

1 0 0 S T A N D I N G C OMM I T T E E O N P U B L I C A C C O U N T S

Submission No.53, North Canberra Community Council.377

BUDGETARY IMPLICATIONS FOR THE ACT

SUBMISS ION BY GEBBIE

9.152 The submission to the inquiry by Gebbie expressed concern at the transparency of budget

calculations regarding the current proposal:

On the revenue side of the equation, what sum will be gained through the resale of

remediated blocks and what are the assumptions behind this? There appears to be

little information available about this controversial part of the Scheme, except that the

press has reported that the net cost to the Government will be some $300m. If

confirmed, why has $300m been decided as an acceptable deficit? To what extent has

extending greater fairness and certainty to Fluffy owners been compromised by issues

connected to the size of the net contribution to the Government's budget, including its

ability to fund other significant cost priorities such as light rail? In an effort to increase

this revenue stream some blocks, with particular characteristics, will apparently be

rezoned and/or retitled, in addition to being revalued. Further, the resale is to be

handled by the Land Development Agency raising questions of possible conflict of

interest (the initial property valuation is being handled at arm's length). It is important

that the full intentions concerning this part of the Scheme be released as soon as

possible as it contains significant potential for unfairness, discrimination and

uncertainty. Stakeholders need to know up front if their former blocks are going to be

subject to rezoning and/ or change of title arrangements. It is acknowledged that much

of this revenue may accrue in years beyond 2014‐15. However, a holistic approach to

this Bill demands its examination here.378


9.153 The submission to the inquiry by Donaldson and Fanning made comment on budgetary

implications to the ACT of the current proposal:

The Bill is seeking appropriations totalling $762,031,000 million in 2014‐2015. The

Canberra Times of 15 November reports that another $250 million will be sought for

2015‐2016. Details regarding the main expenditure components of the Scheme have

not been provided. The appropriation sought for 2014‐2015 appears on the face of it to

be more than might have realistically been expected, as does the total amount of

expenditure over the two financial years. It would be helpful to have further

377 Submission No.53, North Canberra Community Council, p.2. 378 Submission No.44, Gebbie, p.6.


1 0 1

information about the costs of the program, including how much will be required to

buyback the houses, the expected cost of demolition, expected cost of other assistance

to victims, and details of other costs especially the administrative costs of the program.

Estimates should also be provided of the extent to which the Government expects to

defray costs by future sales of the blocks concerned.379

9.154 In light of this, the submission made a recommendation to:

Seek and make public information regarding the main cost elements of the Buyback

Scheme.380

OTHER SU BMISS IONS

9.155 Other submissions addressing budgetary impacts of the proposed scheme for the ACT

included:





Submission No.13, Donaldson and Fanning;385

Submission No.22, Cox;386

Submission No.36, Grant;387

Submission No.23, Pilkington;388

Submission No.49, Fenwick;389

Submission No.8, Woods;390

Submission No.37, Matz;391 and

Submission No.54, Mether.392

379 Submission No.13, Donaldson and Fanning, p.8. 380 Submission No.13, Donaldson and Fanning, p.8. 381 Submission No.17, p.1. 382 Submission No.35, Blume, pp.1‐2. 383 Submission No.35, Blume, pp.2‐3. 384 Submission No.14, Hallinan and Hughes, p.3. 385 Submission No.13, Donaldson and Fanning, pp.1‐2, 2‐3, 4‐5. 386 Submission No.22, Cox, p.2. 387 Submission No.36, Grant, pp.2‐3. 388 Submission No.23, Pilkington, p.1. 389 Submission No.49, Fenwick, p.1. 390 Submission No.8, Woods, p.2. 391 Submission No.37, Matz, p.1. 392 Submission No.54, Mether, p.1.


RELATIVE COSTS OF HOMEOWNERS AND GOVERNMENT


9.156 The submission to the inquiry by Pilkington included a table which showed three scenarios

illustrating the impact on homeowners the present plan and an alternative plan in which the

ACT government purchased the building only and not the land. This demonstrated, the

submission advised, that ‘where they wish to return, homeowners will be better off financially

by paying rent and a mortgage for two years than they would be under the current proposal to

acquire the land’.393

9.157 The submission went on to consider a ‘counter‐argument to this proposal’, that:

the bulk of the value is in the land, and that by acquiring the land, the territory can

maximise their return by charging the owner the highest value use to reclaim their

land.394

9.158 However, the submission advised this argument was ‘faulty’ because:

It puts government finances first and disregards the impact on the resident owners

from being exposed to asbestos and displaced from their homes. It reduces the

acquisition process from a genuine and compassionate assistance program to finally

properly address the ’Mr Fluffy’ asbestos crisis for families, to an unambiguous land

grab by Government.395

9.159 The submission went on to state that the decision came down to ‘a question of where the cost

is borne’. The current proposal had ‘a $34 million dollar financial benefit to the ACT

government over this alternative’, but it did so at a cost of ‘the approximately $41 million

dollar ($81,000*510 owners) burden placed on home owners wishing to return’. In fact, the

submission proposed, the ‘net cost to the community would actually be $6 million dollars less’

under the alternative proposal.396


9.160 The submission to the inquiry by Donaldson and Fanning expressed similar concerns, advising

the Committee that:

most owners face the fear of large financial penalties as the result of the Government's

decision. They are now in a situation of having to find a replacement home. In what

393 Submission No.23, Pilkington, p.3. 394 Submission No.23, Pilkington, p.3. 395 Submission No.23, Pilkington, p.3. 396 Submission No.23, Pilkington, p.4.


1 0 3

could be a rising market, not only will affected owners have to pay more (and perhaps

significantly more) for a property that is equivalent to the one that they are losing, but

they will also have large stamp duty and other transaction costs. This will have a

permanent impact on future levels of income and standard of living. At the same time,

the Government will benefit from the acquisition of property through rezoning, future

sales and stamp duty. In some cases the Government is likely to make a net profit on

individual blocks through the benefits of selling a rezoned block together with windfall

stamp duty garnered along the way. This is just not fair to the owners of the blocks

concerned.397

SUBMISS ION BY EVANS

9.161 The submission to the inquiry by Evans advised the Committee that:

It may take two to three years before blocks are ready for release. Where a lessee

wants to repurchase a surrendered block the market value of the land may have

increased by up to 50% or much more. As land is the more significant component of

the “surrender” valuation, the result will be that the amount paid as “surrender” value

is likely to be almost entirely absorbed by the repurchase of the block. This would leave

a lessee with a significant shortfall of funding to cover the rebuilding.398

9.162 In light of this, the submission suggested:

Under the Government's proposal, the Lessee exercising a right of repurchase is

effectively being asked to finance the repayment of the Federal Government Loan.399


9.163 The submission to the inquiry by Kilcullen advised the Committee that:

We understand that the government wants to recover as much as possible of the costs

of remediation from later sale of cleared blocks. But it should not be at our expense:

we are the injured parties, having relied on government assurances that have turned

out not be reliable.400

397 Submission No.13, Donaldson and Fanning, p.2. 398 Submission No.20, Evans, p.1. 399 Submission No.20, Evans, p.1. 400 Submission No.1, Kilcullen, p.2.



9.164 The submission to the inquiry by Blume put the view that:

The fundamental question the Committee and the ACT Assembly should be considering

is "What level of loss is to be inflicted on Mr Fluffy residents?", as most will lose

financially regardless of the balance struck between what the community pays and

what is carried by them.401

OTHER SU BMISS IONS

9.165 Other submissions which considered the division of costs between homeowners and the ACT

government included:

Submission No.6;402




Submission No.44, Gebbie;406

Submission No.47, Taylor;407 and

Submission No.22, Cox.408

FLEXIBILITY

9.166 A number of contributors to the inquiry commented spoke about flexibility, both as a stated

aim of the present proposal and as something that should be increased and enhanced in the

proposed scheme if it were to respond successfully to the range of circumstances in which

homeowners now found themselves.


9.167 The submission to the inquiry by Pilkington made the following representation:

In reviewing this appropriation bill, and the eradication scheme behind it, please

401 Submission No.35, Blume, p.7. 402 Submission No.6, p.2. 403 Submission No.14, Hallinan and Hughes, p.3. 404 Submission No.13, Donaldson and Fanning, pp.5‐6. 405 Submission No.21, McDonald, pp.2, 3. 406 Submission No.44, Gebbie, p.2. 407 Submission No.47, Taylor, p.1. 408 Submission No.22, Cox, pp.1‐2.


1 0 5

consider recommending a more compassionate and flexible release for affected

families. The current offer does not give us a reasonable choice, as the only

alternatives are bankruptcy or raising our family in a carcinogenic, contaminated, unlit,

un‐heated, un‐maintainable, toxic home.409

9.168 The submission went on to say that it was:

unconscionable that the ACT government is coercing residents to surrender their

properties and sign legal waivers. We have very little other choice. Our children are

living in a toxic environment, their toys, clothes and beds are considered contaminated

with a class one carcinogen. We are responsible ratepayers, and we have insurance.

But asbestos is not an insurable event. We are cautious property investors. But the one

page notice included in our building file indicated that our home would be safe.410

9.169 In light of this, the submission put the view that flexibility and choice for homeowners was

severely constrained under the present proposal:

We have three choices:

• Sign the waiver, surrender our home at whatever value is offered and accept that we

will be permanently displaced from our neighbourhood;

• Remain in this toxic environment, risking mesothelioma, lung cancer, asbestosis or

plural plaques for our kids, and after June 2015 it will be illegal for us to use our lights,

our sliding bathroom door or our heating.

• Attempt to sell our property, which is currently worth the land value less demolition

costs. This value would not repay our mortgage, we would effectively be bankrupt.411

SUBMISS ION BY STEFANIK

9.170 The submission to the inquiry by Stefanik advised the Committee that the proposal did not live

up to its stated aims of flexibility:

The scheme is marketed as 'fair, voluntary and flexible' however, it consists of a single

option, participate in the 'voluntary' buy back or there are harsh financial and poor

living conditions imposed if you do not participate. Choosing not to participate places

home owners in the situation of being required to turn off heating and seal off lights

and ventilation. These imposed living conditions will be in breach of the Building Code

of Australia (BCA) (Performance Requirement clauses involving lighting and

ventilation).

409 Pilkington, Submission No.39, p.1. 410 Pilkington, Submission No.39, p.1. 411 Pilkington, Submission No.39, p.1.


The threat has been made to home owners that the house will probably be compulsory

acquired anyway and you'll get a much lower valuation. The scheme does not appear

to be voluntary at all. It is an opt‐in scheme with no viable alternatives for home

owners. It is a breach of my right to adequate housing under the Human Rights

Commission.

If you don't want to leave your suburb, your block and community, you'll have to pay

back market value of the land at that time if you chose to have first option for the land

back. You don't even get market value at the time you sell it but are expected to pay

future market value for the land back.412


9.171 The submission to the inquiry by Moyle asked the Legislative Assembly to:

Allow for flexible negotiations within the approach and Appropriations Bill to allow the

ACT Government to reasonably negotiate a suitable outcome and mitigate the risk of

litigation. This could include the allocation of 'compensation' payments of up to

$40,000 (or $30,000 in addition to the current assistance package) to allow

homeowners to remediate or replace items, cover all costs of removal and

conveyancing associated with the relocation. This would be comparable with the ACT

Government's previous approach to the sheep dip buy‐back program.413

SUBMISS ION NO. 6

9.172 Submission No. 6 to the inquiry also asked for greater flexibility in the proposed scheme:

The aim of this submission is to bring to the attention of the Committee the impact of

the current buyback proposal, at least in the documents issued by the Asbestos

Response Task Force, with the object of convincing you, as legislators, of the need for

far greater flexibility in the proposed Loose‐Fill Asbestos Insulation Eradication

program than is currently foreshadowed .414

SUBMISS ION BY BAXTER

9.173 The submission to the inquiry by Baxter advised the Committee that:

The current voluntary buy back scheme is not flexible and does not provide all affected

homeowners with acceptable outcomes. We do not accept that we will∙ incur financial

loses or for that matter, not be entitled to the same outcomes as those Mr Fluffy

412 Stefanik, Submission No.38, p.2. 413 Moyle, Submission No.5, p.6. 414 Submission No.6, p.1.


1 0 7

homeowners who will be retaining their land and receive funding for their demolitions

and rebuilds. We wish to be included in that group of homeowners.415

SUBMISS ION BY GEBBIE

9.174 The submission to the inquiry by Gebbie advised the Committee that:

The Government's zero risk or “one size fits all” approach to asbestos risk is perhaps

understandable from a political perspective. However it is of course at odds with a

flexibility objective and has raised the ire of many Fluffy home owners. Many asbestos

assessments have been carried out with Government support and many of these are

understood to have shown no evidence of friable asbestos in living areas. Yet these

properties are to be treated the same as those where asbestos has been found

creating significant confusion amongst stakeholders. Adding to the confusion, there are

plenty of instances where Fluffy families have occupied these lower risk properties for

many years and are prepared to continue to do so.416

9.175 The submission also advised the Committee that:

The stated intention of the buy‐back and demolition Scheme is to be voluntary. At the

same time the overall Government objective is to demolish all Mr Fluffy homes. This

raises the significant question of what the Government intends to do with those homes

where the owner does not choose to sign onto the buy‐back Scheme. Take‐up of the

Scheme will impact on the required outlays. The Government has stated that it does

not intend to compulsorily acquire these homes at this stage, perhaps a thinly veiled

warning that it still might? Compulsory acquisition of affected properties would also

have implications for the size of outlays in the Bill; some say it would likely decrease

the overall costs of the Scheme? To what extent have these risks been incorporated

into Scheme costs?417

OTHER SU BMISS IONS

9.176 Other submissions that commented on the current proposal, seeking more flexibility, included:



Submission No.32, Parsons;420

415 Baxter, Submission No.42, p.3. 416 Gebbie, Submission No.44, p.5. 417 Gebbie, Submission No.44, p.6. 418Submission No.13, Donaldson and Fanning, p.2. 419 Submission No.21, McDonald, p.3. 420 Submission No.32, Parsons, pp.3‐4.


Submission No.45, de Salis;421



Submission No.36, Grant;424

Submission No.26a, Erskine;425 and

Submission No.37, Matz.426

OTHER OPTIONS

9.177 Contributors to the inquiry described variations to the Scheme that could be adopted in place

of, or additional to, the current proposal.


9.178 The submission to the inquiry by Pilkington recommended changes to the current Scheme to:

• Allow owners who wish to retain their land to surrender their house only. This would

be equitable with the treatment of those who knocked down their houses prior to the

announcement and represents significant savings for the Territory.

• Compensate those who were not in a financial position to knock down and rebuild

their residence but instead chose to sell out at a loss prior to the announcement of the

scheme;

• Allow owners who have chosen to safely knock down and rebuild to apply for a new

crown lease to remove the stigma and legacy of "Mr Fluffy" from their properties,

ensuring that owners, who remediate their own property, at their own cost, are not

disadvantaged compared to those who surrendered their properties to the ACT

Government.427

9.179 However, should the current Scheme ‘not be significantly altered’, its implementation should

be guided by considerations of:

• Avoiding financially disadvantaging and permanently displacing resident home

owners by allowing them to reclaim their land in its entirety at the unimproved value

without imposing increased costs from subdividing and unit titling blocks.

421 Submission No.45, de Salis, p.1. 422 Submission No.52, p.1. 423 Submission No.43, p.1. 424 Submission No.36, Grant, pp.2‐3. 425 Submission No.26a, Erskine, p.1. 426 Submission No.37, Matz, p.3. 427 Submission No.23, Pilkington, p.1.


1 0 9

• Prioritising the demolition of homes where the families are hoping to rebuild their

homes to minimise their displacement and the financial impact of appreciating land

values.

• Stagger[ing] the acquisition of homes and of their valuations to minimise the impact

of ejecting resident owners into volatile real estate markets.428


9.180 The submission to the inquiry by Donaldson and Fanning put forward the following proposal:

1. Owners be given the option of being assessed at the time of opt‐in or valuation

rather than 28 October 2014‐ minimal cost impact on ACT budget based on

Government's own assessment of the real estate market

2. The valuation to apply should be the higher of the two independent valuations

provided ‐estimated cost impact $16.6m to $33.Sm but possibly less over the life of the

Scheme

3. Ensure that the Government's previously announced commitment to a stamp duty

waiver is honoured and that affected owners are not forced to borrow money to pay

the stamp duty up front. If enabling legislation or new regulations are necessary, action

should be taken as soon as possible.‐ minimal cost impact

4. Ensure that stamp duty is waived as promised and not just reimbursed and where

stamp duty is in any event payable (i.e. where the price of the replacement property

exceeds the valuation of the affected property), stamp duty be levied at the basic rate

applying to the difference in value, rather than that applying to the total value. ‐

minimal cost impact

5. Extend the date from 1 July 2015 to at least January 2016 for owners to be able to

stay in their homes without the need for onerous new safeguard measures where no

contamination has been found in living areas ‐ no cost impact

6. Ask technical advisers to come up with more workable solutions for those who need

to stay in their homes for a longer period of time. ‐ minimal cost impact

7. Increase the amount offered under the Relocation Assistance Grant to $25,000 ‐ cost

estimated to be a maximum of $15.31m over the life of the Scheme

8. Make the rebuild option more realistic. Cost impact subject to any Scheme redesign

9. Delay the public release of the list of affected blocks ‐ no cost impact on ACT

Budget.429

428 Submission No.23, Pilkington, p.1. 429 Submission No.13, Donaldson and Fanning, pp.1‐2.



9.181 The submission to the inquiry by Brown put forward the following alternative proposal:

Allow for flexible negotiations within the approach and Appropriations Bill to allow the

ACT Government to reasonably negotiate a suitable outcome and mitigate the risk of

litigation. This could include

a) the allocation of 'compensation' payments with no limiting factors of up to

$40,000 (or $30,000 in addition to the current assistance package) to allow

homeowners to remediate or replace items, cover all costs of removal and

conveyancing associated with the relocation. This would be comparable with the ACT

Government's previous approach to the sheep dip buy‐back program.

b) the right to remain in my home until I become deceased.

c) the ACT Government to absorb any demolition costs and to provide an allowance

for the replacement costs of the house to my benefactors and for my benefactors to

retain ownership of the land.

d) If the ACT Government aren’t able to absorb demolition costs and to provide an

allowance for the replacement costs of the house to my benefactors then I would

request the right for my benefactors to choose to absorb demolition costs and to

retain ownership of the land.430

OTHER SU BMISS IONS

9.182 Other submissions to the inquiry which proposed alternative models and responses included:


Submission No.26a, Erskine;432

Submission No.32, Parsons;433



Submission No.35 Blume;436


Submission No.41, Collins;438

430 Submission No.28, Brown, p.9. 431 Submission No.14, Hallinan and Hughes, p.4. 432 Submission No.26a, Erskine, p.2. 433 Submission No.32, Parsons, pp.1‐2. 434 Submission No.33, Senanayake, pp.1‐2. 435 Submission No.34, Platt, p.3. 436 Submission No.35, Blume, p.5. 437 Submission No.37, Matz, pp.3‐4.


1 1 1

Submission No.44, Gebbie;439and

Submission No.49, Fenwick.440

KNOCK-DOWN AND REBUILD

9.183 Amongst submissions outlining alternative proposals for the response to loose‐fill asbestos in

ACT homes, a common element was a call to make provision so that homeowners would have

access to an option to knock‐down and rebuild (KDRB) rather than surrender their crown lease.

SUBMISS ION BY EVANS

9.184 The submission to the inquiry by Evans proposed an alternative model which included greater

scope for knock‐down and rebuild:

1. Houses to be valued as at 28th October 2014 on the same basis as in the

Government's proposal;

2. Lessees and the Government to sign a legal agreement that the ACT Government will

carry out the demolition and remediation at its expense;

3. No "surrender" value to be paid as the lessee retains possession of the land under

the existing Crown lease. This would significantly reduce the outlay envisaged in the

Government's proposal;

4. When the blocks are remediated and appropriate clearance is given, Lessees are

authorized to enter into contracts for rebuilding;

5. Lessee enters into full possession of the land;

6. Government to provide an equitable contribution to the cost of rebuilding a house of

similar size and quality bearing in mind the level of costs of building as published by the

industry;

7. The lessee commences the process of design and construction of a new residence;

8. Progress payments to be made by Government over a nine to twelve month period,

during the design and construction phase;

9. Lessees to bear any additional costs, or cost increases, above the Government's

equitable contribution (see item 6 above).441

9.185 The submission advised the Committee that the benefits of such an approach would include:

438 Submission No.41, Collins, p.1. 439 Submission No.44, Gebbie, pp.2, 5‐6. 440 Submission No.49, Fenwick, p.1. 441 Submission No.20, Evans, p.2.


• Substantial reduction of initial draw down of Commonwealth funds;

• Reduced budgetary impact by way of interest and repayments in early years when

offsetting revenue is expected to be lowest;

• Greater community acceptance of the program with no perception of the

Government making a profit out of owners' misfortune;

• Flexibility and equitable treatment for the affected owners. In particular, as between

those who have demolished their houses and have kept their blocks and those who

would like to keep their blocks and rebuild.442

SUBMISS IONS BY K ILCULLEN

9.186 Submissions by Kilcullen to the inquiry made proposals to increase options for homeowners to

knock‐down and rebuild properties affected by loose‐fill asbestos.

9.187 The submissions advised the Committee that:

My wife and I want the toxic building demolished, but we want to rebuild as soon as

possible on our present block. We live close to other members of our family, we like

our neighbours and our neighbourhood, since 2001 we have put down roots in the

local community. We moved from Sydney to the ACT to be close to our family. One of

our daughters, her husband and two children are within easy walking distance. We eat

together, the children visit us and play in our house and garden. Other members of our

family who live overseas or in Tasmania visit Canberra occasionally and stay with us.

We want to continue this way of life with minimal disruption, and therefore want to

stay in our present location.443

9.188 In light of this, the submissions advised the Committee:

We want to have the affected building demolished (by the approved contractors) and

to rebuild on its footprint on our land. We seek compensation from the government for

the costs of demolition and the value of the old house (corresponding to what was

offered to those who did the same before 28 October 2014).444

9.189 As a result, the submissions made the request that ‘the Knock Down Rebuild option be added

to what the government offers to affected residents’.445

9.190 The submissions suggested that there were additional benefits of adding this option to the

current proposal, which included:

442 Submission No.20, Evans, pp.2‐3. 443 Submission No.2, Kilcullen, pp.2‐3. 444 Submission No.1, Kilcullen, p.1. 445 Submission No.1, Kilcullen, p.4.


1 1 3

Reduced total cost: The initial cost to the government would be considerably less than the

full cost of buying us out. It would also avoid some of the heavy front‐loading of the costs

of the scheme, and the associated interest payments payable by the ACT government: we

would be content to have our compensation paid out in instalments as the demolition and

rebuilding takes place;446 and

Reduced waste from demolition process: Where owners can be involved during the

demolition process, many tons of cleanable materials can be kept out of landfill. Taskforce

technical advice that has been given in relation to home contents indicates that hard‐

surfaced items can usually be safely cleaned and re‐used. Applying the same rules

provided by experts when it comes to the building, if an owner remains in control of the

property, many tonnes of cleanable roofing metal, metal framed double glass windows

and sliding doors, metal deck railings, water tanks, solar water heaters and panels, metal

window shutters, security doors, detached carports and sheds, etc, can be stored on the

individual property and recycled. Otherwise, huge quantities of material will be going

unnecessarily to a contaminated waste disposal site that will very soon be overflowing.447

9.191 The submissions commented on the absence of this option in the present proposal:

Ms Gallagher’s recent letter and the “Response” do not anywhere acknowledge that

some owners wish to retain ownership of their property while they demolish and

rebuild. This line of opposition to her scheme is simply ignored. This surprises me,

because in a letter she sent me on October 27 she wrote: “I know homeowners have

clear views on what such a solution may look like and, [in your case], the preference is

to have the option to stay on your current blocks. This is one of the key considerations

before the ACT and Commonwealth governments ... “. Why has it dropped out of

consideration?448

9.192 The submissions went on to say that:

The nearest Ms Gallagher's recent letter comes to answering our concerns is when she

says: “I acknowledge that it does not offer everyone everything they want, but I must

stress that to attempt to do so would make addressing this problem financially

impossible”. No one is so unreasonable as to ask that the plan “offer everyone

everything they want”. What we ask is that it include the option to stay on our current

blocks.449

446 Submission No.1, Kilcullen, p.1. 447 Submission No.1, Kilcullen, pp.1‐2. 448 Submission No.2, Kilcullen, p.5. 449 Submission No.2, Kilcullen, p.5.


SUBMISS ION BY WO OD S

9.193 The submission to the inquiry by Woods made a similar proposal regarding knock‐down and

rebuild:

That owners who wish to do so, be allowed to stay and rebuild in their current blocks,

with the government managing and paying for the demolition of the house,

remediation of the block, and contributing equitably to the overall costs of rebuilding a

house of equivalent standard, facilities and surface area, in a progressive programme

across a suitable number of years. The extent of block scraping needed would be

determined technically on a block‐by‐block basis.450

9.194 The submission then went on to outline what it suggested were the benefits of this approach:

Economic

1) Significantly reduced need for capital since the value of the land is not traded. In

most cases the value of the land would be a significant proportion of the valuation as

per the proposal. And the overall figure must be a substantive portion of the

programme budget, since the preference of an estimated 50% of victims was to Knock

Down and Rebuild (KDRB) in their block.

2) Significantly reduced interest payments or opportunity cost, since less capital is at

play (see point 1).

3) Significantly less pressure on the real estate market, since (a) owners will not need

to buy alternative long term housing; (b) owners will only need alternative

accommodation during a comparably short rebuild period; and ( c) demolition and

rebuild will take place progressively, rather than owners being put in the real estate

market place all at once.

Preservation of Social Capital

1) ACT Government and ACT development sector not perceived as profiteering from

the circumstances.

2) ACT Government not perceived as abusing its position as monopoly land supplier.

3) Owners not feeling displaced/confiscated and losing the amenity of their home.

4) Equity vis a vis those who rebuilt between 18 February and 28 October 2014.

5) No discrimination between those accepting the Buy Back and those preferring KDRB.

6) Flexibility and respect for personal and property‐rights of those owners who prefer

KDRB ‐‐ estimated at about 50% of victims.

7) Perception of fairness across the community at large.

450 Submission No.8, Woods, p.1.


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8) Maintain the character of older neighbourhoods.

9) Blocks remain vacant for a shorter period of time, reducing maintenance costs for

the ACT and opportunities for vandalism.

10) No attempt to force fit all situations into one solution.451


9.195 The submission to the inquiry by Donaldson and Fanning advised the Committee that the

current proposal should be modified to include ‘A more realistic Rebuild Option’:

The uncertainties and the conditions being placed on the rebuild option have made it

an unreasonably unattractive option for many, if not all. Efforts should be made to

make it a more viable proposition for those wishing to rebuild on their present blocks.

Greater weight needs to be given to the strength of the emotional attachment that

many have to their present properties and their desire to remain in their present

communities. The Scheme needs to be more flexible and modifications should be

introduced to allow provision to be made for priority demolition, as well as a right to

repurchase at UCV without subdivision.452

OTHER SU BMISS IONS

9.196 Other submissions which argued that more the current proposal should be modified to include

more viable options for knock‐down and rebuild included:


Submission No.9, McKay;454

Submission No.10, Atyeo and Dadswell;455


Submission No.16, Stephenson;457


Submission No.31, Simpson;459

Submission No.29, Alegria;460

451 Submission No.8, Woods, p.2. 452 Submission No.13, Donaldson and Fanning, p.7. 453 Submission No.14, Hallinan and Hughes, p.4. 454 Submission No.9, McKay, p.1. 455 Submission No.10, Atyeo and Dadswell, p.1. 456 Submission No.14, Hallinan and Hughes, p.4. 457 Submission No.16, Stephenson, p.1. 458 Submission No.21, McDonald, p.1. 459 Submission No.31, Simpson, p.3.




Submission No.32, Parsons;463 and

North Canberra Community Council, Submission No.53.464

HOMEOWNERS WISHING TO CONTINUE IN THEIR HOMES

9.197 Some contributors to the inquiry made comment on the circumstances of affected

homeowners who wished to continue to live in their home—as at present— for the balance of

their lives. The majority of these homeowners who were well‐advanced in age. Contributors

who made comment on this put the view that the present proposal did not make sufficiently

flexible, fair and appropriate arrangements for this group.

SUBMISS ION NO. 52

9.198 The submission to the inquiry advised the Committee that:

I am now 83 and my wife is 84

We are both old age pensioners

My wife and I moved into our home when we were married in 1953.

No‐one else lives in our home.

None of our family visits us at home.

We have been here for 62 years and do not want to leave.

Our home was tested in 13 places for asbestos and none was found.

It is a double brick house and they say there could be asbestos in the cavity.

We are not proposing to do any alterations or extensions.

We do not want to leave our home and can see no reason why we should

We would be happy to talk to the committee about our wish to permanently stay in

our home.465

460 Submission No.29, Alegria, p.1. 461 Submission No.37, Matz, pp.1‐2. 462 Hourigan, Submission No.46, p.1. 463 Submission No.32, Parsons, pp.1‐2. 464 North Canberra Community Council, Submission No.53, p.1. 465 Submission No.52, p.1.


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SUBMISS ION NO. 43

9.199 Submission No. 43 to the inquiry advised the Committee that:

My mother … is 92 years of age, with restricted mobility (reliant on a 4 wheeled walker)

is the owner I occupier of a Mr Fluffy house which has been environmentally cleaned

twice.

She wishes to stay in her home but requires in home assistance. The difficulty is that

the only official document issued I received describing her home states the house has

been ‘remediated as required by the Taskforce’.

With this document alone, she cannot get some health service providers to visit her at

home. Plainly the wording of the document is inadequate, it should further state that

the house environment is suitable in which to conduct normal household activities I

house visits.

She would like a system where she can stay in her home, have the house declared safe

and have the health support she needs to see out her final years.466

SUBMISS ION BY GR AN T

9.200 The submission to the inquiry by Grant advised the Committee that there were three ‘groups’

within the larger cohort of affected homeowners:

1. Families who are pleased to opt in to the buyback scheme.

2. Families who would like to stay on their land and rebuild.

3. Families who would like to live out their years in their homes.467

9.201 Regarding the third category, the submission advised the Committee that:

I recognise that those families who identify in category 3 are going to be difficult for

the government as they do not fit into the objective of the Scheme which is to rid the

ACT of all loose fill asbestos affected homes. I do however strongly believe that forcing

elderly people from their homes when they do not want to go is immoral, unjust and

unconscionable.468

9.202 The submission went on to suggest that:

those elderly people … should be allowed to live out their lives in their homes if

asbestos assessments return safe to live in for the medium term. The government

needs to show compassion to our senior citizens and realise that “medium term” is

466 Submission No.43, p.1. 467 Submission No.36, Grant, p.2. 468 Submission No.36, Grant, p.2.


most likely all they have. Upon the end of life of these citizens, homes can then be

acquired from the respective deceased estates and demolished as per the

requirements of the Scheme. It is the right and moral thing to do.469

SUBMISS ION BY WESTON CREEK COMMUNITY COUNCIL

9.203 The submission to the inquiry by Weston Creek Community Council (WCCC) advised the

Committee that:

Elderly people … can't understand why they can't live their life out in their present

home. One couple is in their 80's. If there is a 5 year time limit to vacate houses why

can't this be extended for individual situations such as this one …470

OTHER SU BMISS IONS

9.204 Other submissions to the inquiry which expressed concern at the predicament of homeowners

in this position, or put forward proposals under which they could be provided for, were:

Submission No.54, Mether;471



Submission No.41, Collins;474and

Submission No.11, Salpeter and Mandelberg.475

CONTAMINATED CONTENTS OF DWELLINGS

9.205 Contributors to the inquiry expressed concern regarding costs attached to the surrender of

contaminated contents of dwellings.


9.206 The submission to the inquiry by Moyle advised the Committee that in the current proposal:

no consideration appears to have been given to making good on affected items beyond

the emergency funding already available. Even in this instance, the approach is flawed

469 Submission No.36, Grant, p.2. 470 Weston Creek Community Council, Submission No.57, p.1. 471 Mether, Submission No.54, p.1. 472Submission No.13, Donaldson and Fanning, pp.1‐2. 473 Submission No.33, Senanayake, pp.1‐2. 474 Submission No.41, Collins, p.1. 475 Submission No.11, Salpeter and Mandelberg, p.2.


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and may further expose the ACT Government to liability due to cross contamination

issues. For example, our linen cupboard is contaminated meaning that all linen (sheets,

towels, doonas, pillows) stored in that location must be disposed of. No consideration

or flexibility has been applied to the cross contamination caused through the use of

items stored in a contaminated area on other furnishings such as mattresses. A further

example is the cross contamination of clothes and linen washed with items from

contaminated cupboards.476

9.207 In connection with this, the submission noted that ‘National WorkSafe standards specify cross

contamination in these instances, however this has not been taken into consideration’.477

9.208 Moreover, while the Asbestos Taskforce Report had identified that it had ‘proven the case that

vacuum cleaners, washing machines and dryers cannot be remediated’ and, as such, it was

‘safe to assume that any affected households must replace these items’, there was ‘not

allowance for this in the current approach’.478

9.209 The submission advised that the Asbestos Taskforce Report stated that:

even for short term habitation, considering (sometimes visible) asbestos has been

identified in the living spaces of affected homes, all porous items such as carpets, and

soft furnishings such as curtains, lounges, bedding and clothing may have to be

removed and disposed of as asbestos contaminated waste. Although clothing could

feasibly be washed, there is no validated technique to test that such clothing (and

other porous items) are free from asbestos fibres.479

9.210 Despite these findings, the submission stated:

No provisions have been identified within the current Appropriation Bill and current

approach does not identify a mechanism or provide the flexibility to address these

issues.480

9.211 In terms of the submitter’s own circumstances:

Three cupboards were identified as being contaminated in our property after an

asbestos assessment was undertaken in October 2014. These included the cupboard in

bedroom two used for one of my old daughters and for general storage of other

clothes, the linen cupboard which has been used to store all linen and bedding, and the

476 Submission No.5, Moyle, pp.1‐2. 477 Submission No.5, Moyle, p.2. 478 Submission No.5, Moyle, p.2. 479 Submission No.5, Moyle, p.2. 480 Submission No.5, Moyle, p.2.


entry cupboard used to store the vacuum cleaner, ventilators and other assorted

items.481

9.212 In connection with this, the submitter stated that emergency relief funding had been used to

replace ‘a small proportion of the clothes and linen’, but had been advised that:

a) other clothes that had previously been stored in the affected cupboards will not be

able to be replaced

b) no other clothes that have been washed or stored with contaminated clothes are to

be replaced

c) no allowance to replace washing machine, dryer or vacuum

d) no allowance to replace mattresses or other furnishings that have had contaminated

linen used on them since 2012.482

9.213 Moreover, the submission advised, only ‘[l]imited support’ was available to ‘replace other

items in the property’:

For example, I have raised concerns that our mattresses are contaminated as all sheets

have been stored in the linen cupboard and must now be destroyed. When I informed

a member of the ACT Asbestos Taskforce of the risk of cross contamination as per

WorkSafe standards I was advised that this could not be considered as asbestos was

not located in those areas. I note that no tests were carried out in those locations by

the asbestos assessor engaged by the ACT Government. This extends to clothes and

items that have been previously stored in contaminated cupboards (noting that we

have only been in the property for 26 months) and those that have been washed with

clothes and items from contaminated cupboards.483

9.214 The submission went on to consider further dimensions of cross contamination:

While working in these [contaminated areas of the property] I would enter my primary

vehicle (noting that we have two vehicles in the household) and drive to Bunnings to

purchase parts and items required for this work. I would move straight from the highly

contaminated locations to the vehicle, meaning that it is highly likely that my vehicle is

contaminated.484

9.215 In connection with this, the submission continued, the ACT Asbestos Taskforce had been asked

‘to approve this being tested as part of the asbestos assessment’, but ‘this was declined’ and

the submitter was ‘now looking to have this tested at my own cost’.485

481 Submission No.5, Moyle, p.5. 482 Submission No.5, Moyle, p.5. 483 Submission No.5, Moyle, p.5. 484 Mr Brendan Moyle, Submission No.5, pp.4‐5. 485 Mr Brendan Moyle, Submission No.5, p.5.


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OTHER SU BMISS IONS

9.216 Other submissions which expressed concern about contamination of home contents and

associated costs included:


Submission No.28, Brown;487 and

Submission No.13, Donaldson and Fanning.488

HEALTH CONCERNS

9.217 Contributors to the inquiry expressed concern about impacts on health for homeowners, both

as a result of exposure to loose‐fill asbestos fibres and as a result of stress.


9.218 The submission to the inquiry by Moyle expressed these concerns, advising the Committee

that in May 2014 the submitter had ‘upgraded the pump system for the bladder tanks under

the property in the sub‐floor’, and that the submitter’s ‘eight year old daughter came into the

subfloor cavity with me’. Subsequently, this had been ‘been identified by the Asbestos

Assessor as a highly contaminated area’, and the ACT Asbestos Taskforce had ‘advised me that

both my daughter and I have now been highly exposed’.489

9.219 The submitter advised the Committee that this instance of exposure had taken place one week

before receipt of a registered post letter from ACT Asbestos Taskforce ‘regarding the status of

the property as a Mr Fluffy property’.490

9.220 The submitter also advised the Committee on the health effects of stress as a result of being

the owner of a Mr Fluffy house:

Medical issues including stress are continuing to take a toll on our health. On Friday

21November2014 my blood pressure recorded 179/114. At a doctor's appointment on

Sunday 23 November 2014, my blood pressure was recorded was 149/106 (noting that

I had been resting over the weekend and had given up looking at properties by the

Sunday). My blood pressure during other stressful times has remained within the

'normal range' as tested by doctors. The serious levels of my current blood pressure

486 Submission No.35, Blume, pp.2‐3. 487 Submission No.28, Brown, p.7. 488 Submission No.13, Donaldson and Fanning, pp.6‐7. 489 Submission No.5, Moyle, p.4. 490 Submission No.5, Moyle, p.5.


due largely to the circumstances and uncertainty in the management of the Mr Fluffy

debacle places me at risk of serious medical conditions including heart attack and

stroke.491

OTHER SU BMISS IONS

9.221 Other submissions which expressed concerns about risks to health as a result of exposure to

loose‐fill asbestos and stress and other related health concerns included:


Submission No.42, Baxter;493

Submission No.7, Symons;494

Submission No.16, Stephenson;495

Submission No.28, Brown;496

Submission No.44, Gebbie;497


Submission No.51, Anonymous;499

Submission No.53, North Canberra Community Council;500


Submission No.26a, Erskine;502

Submission No.33, Senanayake;503 and

Submission No.32, Parsons.504

SUPPORT ISSUES

9.222 Contributors to the inquiry voiced concerns about support provided in the immediate term for

owners of properties affected by loose‐fill asbestos fibres. Matters of concern included: 491 Submission No.5, Moyle, p.5. 492 Submission No.34, Platt, p.3. 493 Submission No.42, Baxter, pp.1‐2. 494 Submission No.7, Symons, pp.1‐2. 495 Submission No.16, Stephenson, pp.2‐3. 496 Submission No.28, Brown, p.7. 497 Submission No.44, Gebbie, pp.5‐6. 498 Submission No.46, Hourigan, p.2. 499 Submission No.51, Anonymous, p.1. 500 Submission No.53, North Canberra Community Council, p.2. 501 Submission No.43, p.1. 502 Submission No.26a, Erskine, p.1. 503 Submission No.33, Senanayake, pp.1‐2. 504 Submission No.32, Parsons, pp.1‐2.


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interactions with the Asbestos Taskforce;

the flow of information to affected homeowners; and

the quantum of immediate‐term compensation and financial assistance available

9.223 These are considered below.

INTERACTIONS WITH THE ASBESTOS TASKFORCE

9.224 Contributors to the inquiry made comment on interactions with the Asbestos Taskforce.

SUBMISS ION BY DE SAL IS

9.225 The submission to the inquiry by de Salis advised the Committee that:

We have not been able to secure an appointment with senior management of the Task

Force to discuss our individual case. We have not been allocated a case contact

personnel for our home. Task Force contact through Canberra Connect is not

acceptable.505

SUBMISS ION BY STEPHENSON

9.226 The submission to the inquiry by Stephenson advised the Committee that:

We sent an email requesting assistance to the task‐force on the 19 .11.14 asking for a

nominated task‐force contact to help us. Other Mr Fluffy owners we know have told us

they all had a contact. We have still had no reply.506


9.227 The submission to the inquiry by Smith advised the Committee that:

In my many dealings with the Taskforce over the last almost six months, I have found

them to be polite and as helpful as they possibly can. I understand that, in the

circumstances, they have perhaps had to deal with very unhappy people who often

probably have been rude and belligerent. They have a very difficult job to do and I

appreciate that it is not necessarily their fault that they cannot give me the answers I

would wish to have. All credit to them.507

505 de Salis, Submission No.45, p.2. 506 Submission No.16, Stephenson, p.3. 507 Smith, Submission No.50, p.1.



9.228 The submission to the inquiry by Brown expressed concern at another aspect of interactions

with the Taskforce, which was the quality of the work done at the request of the Taskforce to

remediate areas of an affected dwelling.

9.229 The submission advised the Committee that:

•Two areas of contamination were identified within the premises and in one area in

the outside electrical meter box.

• The Asbestos Taskforce engaged AGH Demolition and Asbestos Removal Pty Ltd to

remediate the identified migration pathways found in the affected property. To date

the remediation work undertaken has been of such poor quality that I have advised the

Taskforce the remediation has been unsatisfactory.

• The poor quality of work associated with remediation activities includes failing to

properly seal identified migration pathways and failure to complete all

recommendations identified within the assessment report.

• While the company used by the Taskforce holds a Class A asbestos licence I have

serious concerns over the skills and abilities of the tradesmen to complete the required

tasks to the level specified in the Asbestos Assessment Report carried out by Safe Work

& Environments. As a result of their poor work practices, I am concerned there has

been further cross contamination.

• I also believe the work was not undertaken in accordance with the initial assessment

report as:

o no Class A Licensed Assessor was in attendance during the remediation work

o the majority of recommendations were not addressed or were not adequately

completed

o a ‘clearance inspection’ on the property is yet to be organised by the Taskforce.

• The remediation work was completed in less than three hours and at a cost of $1870.

I have serious concerns that the ACT Government is not receiving a value for money

outcome on behalf of the taxpayer.

• A meeting has been arranged with the Taskforce to discuss these concerns in more

detail.508

INFORMATION TO HOMEOWNERS

9.230 Contributors to the inquiry made comment on information flows to affected homeowners.

508 Submission No.28, Brown, p.8.


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SUBMISS ION BY MCDO NA LD

9.231 The submission to the inquiry by McDonald raised concerns about a ‘[l]ack of consultation and

information sharing from the Task Force’,509 and advised the Committee that:

The Government and Task Force have not released any documents or summaries on

discussions held with interested parties. The only way we are finding out what is going

on is through Facebook and The Canberra Times.

The Chief Minster said that the Government will soon be able to announce public

meetings where questions can be asked and answered, but these have not been

announced.510

9.232 The submission also expressed concern that ‘[t]he Government seems to have assumed that

the Fluffy Owners and Residents Action Group (FORAG) is a representative spokes person for

all’, but stated that ‘it certainly isn't for us and for many other Mr Fluffy home owners’.511


9.233 The submission to the inquiry by Smith also voiced concerns about information to

homeowners:

Why does it take so long for information to be given to us? For instance I have asked

about solar panels, but am still waiting for an answer. I assume that we are not able to

take the solar panels with us to another home (if that house does not have them

already), but we would wish to have them installed. Would that mean we would not

get the same rebate from the grid that we now receive? That would mean yet another

financial loss to us.512


9.234 The submission to the inquiry by Blume also raised concerns about information:

Transparency in the processes needs to be improved. This should include the

immediate public release of all costings and estimates used by the Government in

coming to its decisions. This would include spreadsheets created by or provided to

Government to determine best & worst case scenarios used as the basis for

constructing the program.

There would be very little commercial in‐confidence material or other reasons to

withhold as the numbers can largely be sourced in the public domain. What should be

509 McDonald, Submission No.21, p.3. 510 McDonald, Submission No.21, p.4. 511 McDonald, Submission No.21, p.4. 512 Smith, Submission No.50, p.1.


provided is access to the work already done in collating and collecting them. Seeing

what are the basis for Government decisions and all the assumptions behind the

numbers would harm no‐one and help many to understand the position taken.513

QUANTUM OF COMPENSATION AND FINANCIAL ASSISTANCE AVAILABLE

9.235 Contributors to the inquiry expressed concern at the quantum of immediate‐term

compensation and financial assistance available to affected homeowners.


9.236 The submission to the inquiry by Moyle advised the Committee that:

The current preferred way forward identifies that money will only be paid as for the

purchase of the properties at market value as at 28 October 2014, and for the provision

of emergency funding of $10,000 per household and $2,000 per dependent child.514

9.237 However, the submission advised:

This fails to identify any other items or matters which would be identified as

'compensation', noting that the legal definition of 'compensation' is a pecuniary

remedy that is awarded to an individual who has sustained an injury in order to replace

the loss caused by said injury. This is the amount received to 'make one whole' (or at

least better) after an injury or loss.515

9.238 The submission drew parallels with another instance where compensation was offered, and

stated that current offers in relation to loose‐fill asbestos should be made consistent with this

other instance:

There are similarities between this and the sheep dip case within the ACT, where

not only were home owners bought out of their properties but also compensated

$40,000 per family (as at 1996). No personal items were required to be destroyed

in this instance.

The compensation included payments for factors such as loss of family home,

disruption and relocation, loss of business and stamp duty.

The financial assistance package made available through the ACT Government is

described as an emergency support package is a grant of up to $10,000 per

household for those people advised by an asbestos assessor to leave their place of

residence. An additional $2,000 is payable for each dependent child residing in

513 Steve Blume, Submission No.35, pp.5‐6. 514 Submission No.5, Moyle, p.1. 515 Submission No.5, Moyle, p.1.


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the home. The purpose of these funds is to cover costs of emergency

accommodation and other necessities such as food and clothing as well as

immediate remediation work.516

9.239 In relation to this, the submission concluded that:

• The current support package does not provide comparable support/assistance levels

to address items identified in the sheep dip/contaminated land issue.517

SUBMISS ION OF DONALDSON AND FANNING

9.240 The submission to the inquiry by Donaldson and Fanning advised the Committee that:

All who opt in to the Program will be facing costs for a wide range of things, including

various legal costs above and beyond the $1,000 currently being provided (which is

strictly limited to Deed related advice), temporary accommodation, contents removal,

settling in costs, replacement of contaminated furnishings and clothing and various

other expenses.518

9.241 The submission recommended a ‘more realistic package’, in which the ACT government would

increase ‘the amount offered under the Relocation Assistance Grant to $25,000 (plus retaining

the existing additional amount for each child)’, at an estimated ‘maximum increased cost’ to

the ACT Budget of $15.31 million.519

516 Submission No.5, Moyle, p.4. 517 Submission No.5, Moyle, p.4. 518 Submission No.13, Donaldson and Fanning, p.7. 519 Submission No.13, Donaldson and Fanning, p.7.


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10 COMMITTEE COMMENT “Love is not about what you say; it’s about what you do.” In this case, for those directly

affected by the Mr Fluffy debacle, compassion is not what we say but what we do. I say that we

need to do more and to make sure that the personal impact on the people is what drives the

decisions, and especially our actions, as we in the Canberra community support Mr Fluffy

residents.520 [Community representative]

The lay of the land is how you know your country—when you look behind you, you can always

see your tracks, the imprints you leave on the landscape. [Ngunnawal Elder]

10.1 The Mr Fluffy legacy is not just about the past, it is about the present, and the future of the

lives of many people—those affected families and households but also Canberra as a

community.

10.2 It is as much about the omissions and commissions of the past as to how this legacy will be

dealt with now and into the future.

10.3 The proposed Bill to which the Committee resolved to inquire into is the mechanism for the

appropriation of additional monies for the Loose‐fill Insulation Eradication Scheme. The

underpinning design and implementation principles upon which the Scheme will rest will be

paramount in determining how Canberra as a community moves forward in its response to the

Mr Fluffy legacy.

10.4 Many witnesses and evidence to the Committee commended the Government for having the

courage to take carriage of a buyback scheme to address the Mr Fluffy legacy. However, many

implored the Government to ensure that the Scheme was able to cater for the diversity of

individuals who fall into the different categories of affected homeowners. Others also called

on the Government to address equity issues for those families and households who took

action prior to the Scheme’s establishment.

10.5 Equally so many witnesses and evidence to the Committee supported the passing of the

Appropriation Bill but called on the Government to make significant adjustments to the

Scheme to accommodate the individual circumstances of affected individuals and families.

10.6 Whilst the Committee also commends the Government for taking carriage of a buyback

scheme ,it believes the Government has an important opportunity—from a policy

perspective—to listen to the views submitted as part of this inquiry and to make appropriate

520 Steve Blume, Proof Transcript of evidence, 1 December 2014, p. 137.


adjustments to the design and implementation of the Scheme, where possible, so that it will

once and for all rid Canberra of the Mr Fluffy legacy.

10.7 Based on the evidence received, the Committee has made comment and a series of

recommendations concerning matters arising in relation to the design and implementation of

the scheme, outliers to the Scheme and overarching liability.

10.8 In the main, these recommendations are focused on ensuring some degree of discretion and

flexibility in regard to the application of the Scheme as a means of ensuring fair and equitable

outcomes are achieved. The Committee is of the view that ensuring fair and equitable

outcomes are achieved for all affected homeowners ultimately benefits the Canberra

community as a whole.

10.9 Due to the short timeframe and the detail included in the previous chapters the Committee

has not included introductory/or explanatory paragraphs to some recommendations as the

Committee believes they are self‐explanatory.

SUPPO RT SERVIC ES

10.10 The Government has acknowledged that households impacted by the presence of loose‐fill

asbestos in their homes need support, just as victims of the 2003 bushfires had required

support.

10.11 In order to provide support to households affected by the presence of asbestos in their homes,

the Government established the Community and Expert Reference Group (CERG), chaired by

paediatrician Dr Sue Packer. According to Dr Packer, the CERG is:

...there to listen to the community and advocate to the taskforce...One of my

intentions ... will be to assist those households and individuals affected by the asbestos

insulation issues to get help and support from government.521

10.12 The Committee is of the view that the availability of support services in the long term for

affected families and households is critical. These services could be delivered by a structured

recovery taskforce model, similar to that of the 2003 Canberra bushfires. The Committee is

firmly of the view that the wellbeing—physical, mental and emotional—of affected families

and households in the long term should be supported via the establishment of a recovery

taskforce model.

521 Macdonald, E. (2014) ‘Sue Packer to head ACT government’s asbestos reference group’, Canberra Times, 12 August 2014.


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Recommendation 3 10.13 The Committee recommends (to the extent that work is not already taking place) that the

ACT Government establish mechanisms to monitor and support the wellbeing—physical,

mental and emotional—of affected Mr Fluffy families and households in the short and long

term.

Recommendation 4 10.14 The Committee recommends that the ACT Government prioritise the implementation of long

term support services via a structured recovery taskforce model for Mr Fluffy affected

families and households.

10.15 The Committee is of the view that implementation of any such long term support services

should remain in place and not be withdrawn whilst still required.

Recommendation 5 10.16 The Committee recommends that the ACT Government ensure that the implementation of

any long term support services for Mr Fluffy affected families and households should not be

withdrawn whilst still required.

IMPACT OF THE SCHEME ON TH E HOUSING/PRO PER TY MAR KET

10.17 Whilst 1,000 plus Mr Fluffy households will be in need of housing in the short and long term,

the Committee recognises that this demand should be considered in the context of

overarching issue of land release and housing supply.

10.18 In the context of the affordable housing segment, the Committee is of the view that the

increase in demand prompted by the affected households may impact on the affordable

housing segment in the ACT.

Recommendation 6 10.19 The Committee recommends that the ACT Government should detail how it will ameliorate

any effects of the Scheme on the property market and affordable housing by the last sitting

day in September 2015.


Recommendation 7 10.20 The Committee recommends that the ACT Government, in light of Mr Fluffy residents and

homeowners entering the rental market, update its Affordable Housing Strategy by the last

sitting day in September 2015.

10.21 The Committee believes that measures need to be put in place to minimise distortions in the

real estate market exacerbated by the entry of Mr Fluffy owners. At a time of some

uncertainty in the real estate market, it appears to the Committee that a key contributor to

this will be how land supply in the Territory is managed now and in the future.

Recommendation 8 10.22 The Committee recommends that the ACT Government investigate alternative ways for land

release in the ACT to address the time lag that currently exists between purchasing land and

it becoming build ready serviced land (with utilities).

10.23 Many of the submissions raised concerns about the lack of clarity concerning the waiver of

stamp duty. The Committee believes that it should be a waiver so as to remove any need for

additional borrowings by the affected homeowner.

10.24 Presently, a stamp duty waiver is not available under the Scheme if a property is being

purchased interstate.522 It is apparent to the Committee that the number of Mr Fluffy affected

homes in NSW is unknown and that at some stage it is likely that affected NSW homeowners

may also be looking to purchase new properties either in NSW or in the ACT. As neighbouring

jurisdictions, the Committee is of the view that there is merit in there being reciprocal waivers

of stamp duty arrangements for eligible homeowners purchasing property in the other

jurisdiction.

Recommendation 9 10.25 The Committee recommends that the ACT Government clarify whether the stamp duty

waiver is a refund of stamp duty or an actual waiver.

522 Asbestos Response Taskforce. (2014) The Loose Fill Asbestos Insulation Eradication Scheme—A Guide to the Voluntary Buyback Program, p. 11.


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Recommendation 10 10.26 The Committee recommends that the ACT Government discuss with the NSW the feasibility

of providing for reciprocal waivers of stamp duty arrangements for eligible Mr Fluffy affected

homeowners purchasing property in either ACT or NSW.

10.27 The Committee notes the comment by the Chief Executive of the REIACT523 that the elderly

demographic were having the greatest difficulty understanding the Scheme and its options.

The Committee is of the view that this demographic of affected homeowners be given

particular attention.

Recommendation 11 10.28 The Committee recommends that the ACT Government investigate the suggestion that some

owners had prior knowledge of the Scheme before the details were released on the 28 of

October this year.

Recommendation 12 10.29 The Committee recommends that the ACT Government ensure that particular attention and

support is provided to elderly, vulnerable, marginalised and people with a disability

homeowners of Mr Fluffy affected homes.

10.30 During its discussions with the Chief Executive of the REIACT, the Committee heard examples

of good spirited and compassionate behaviour by not only members of the Institute but also

sellers/vendors in relation to assisting affected homeowners find alternative

accommodation.524 One such example as told to the Committee:

The impact of Mr Fluffy owners purchasing—I had one yesterday where there were

two Fluffy owners competing for the same house. The vendor became stressed

because they were accepting a bid and then another one was coming in over the top.

In the end, the vendor decided that they would stop at the first bid and offer it back to

the first person and say, “There will not be any more bids.” I was pleased with that,

because there were no contracts, no agreements, no acceptance in place. I was

pleased that somebody had a little compassion there from a seller point of view.525

523 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, p. 32. 524 Proof Transcript of evidence, 28 November 2014, pp. 32–34. 525 Mr Ron Bell, Proof Transcript of evidence, 28 November 2014, p. 33.


10.31 The Committee commends this as a fine example of the compassion of the Canberra

community.

CLARIF ICAT ION—IN TERPRETAT ION OF COMPULSO RY ACQUIS IT IO N AND RESTRICT IONS ON

AMENITY OF PROPER TY

10.32 The Committee is of the view that to enable affected homeowners make informed decisions

about whether to opt in or opt out of the Scheme and for legal practitioners to be in a position

to fully advise clients making these decisions that those aspects of the Scheme that are yet to

be fully or finally determined should be clarified as a matter of priority.

10.33 These matters extend to the clarification of the interpretation of section 51 of the Land

Acquisition Act; and for those homeowners who elect to remain in their homes what level of

regulatory infrastructure/restriction will be required on their normal use of the property.

10.34 In respect of the proposed restrictions on the amenity of affected properties—that the

uncertainty about requirements may inadvertently give rise to the suggestion that it could be

viewed as a means by which homeowners are being encouraged, or indeed forced, to leave

their homes.

10.35 To avoid any such suggestion, the Committee is strongly of the view that the publication of the

mandatory restrictions should be prioritised.

Recommendation 13 10.36 The Committee recommends that, to enable affected individuals to make an informed

decision, the ACT Government prioritise the publication of the level of regulatory

infrastructure/restriction on normal use of the property that will be required for those

homeowners who elect to remain in their homes by no later than 1 February 2015.

Recommendation 14 10.37 The Committee recommends that a Taskforce representative meets specifically with

individuals considering remaining in their home and fully brief them on that decision.

Recommendation 15 10.38 The Committee recommends that the ACT Government clarify its position with respect to

section 51 of the Lands Acquisition Act 1994 by 1 February 2015.


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Recommendation 16 10.39 The Committee recommends that the ACT Government provide comprehensive advice to the

legal community as to consequences of: (1) accepting the offer as currently made; and (2)

not accepting the current offer.

Recommendation 17 10.40 The Committee recommends that the ACT Government reconsiders the size of the grant

being made to Mr Fluffy owners to cover the cost of legal costs.

VIEWS OF AFFECTED HOMEOWNERS

10.41 In relation to submissions to the Committee—the Committee notes the following:

proposing that actions by the ACT and Commonwealth government, historically and in

recent times, establish the responsibility of those governments in relation to the loose‐fill

asbestos contamination of homes;

proposing that the current proposed response to loose‐fill asbestos contamination does

not reflect a due process of consultation and engagement with affected homeowners;

advising as to the human and financial cost of significant areas of uncertainty attached to

the current proposal;

advising as to the negative human and financial costs of specific provisions of the current

proposal, requiring homeowners wishing to remain on their property to sell to

government at a fixed point in time and re‐buy at another, following re‐zoning, and

difficulties faced by homeowners due to unintended influences on the residential housing

market;

advising as to the potential for the change of character of residential areas and loss of

amenity for neighbours as a result of subdivision by the ACT government;

advising as to extensive financial and emotional investment in properties currently held by

homeowners which, it is suggested, are not adequately compensated or managed under

the present scheme;

advising as to significant inequality of arrangements for different cohorts of affected

homeowners, especially those who opted for an earlier arrangement which entailed

retention of crown leases by homeowners, but also significant variations in outcome due

to differences in:

age;

earning capacity;

level of equity or debt;

ability or disability; and


access to liquidity and assets in addition to the property in question;

advising as to a perceived imbalance between costs borne by the ACT and those borne by

affected homeowners, with a common view that homeowners are being asked to bear an

unfair burden of costs arising from loose‐fill asbestos contamination;

advising that the present proposal for management of affected properties represents a

‘one‐size fits all’ approach which is not suited to affected home‐owners’ range of

circumstances;

advising of alternate proposals which would, contributions suggest, cater better to

affected home‐owner’s range of circumstances;

advising, in particular, of the advisability of including a viable option for affected

homeowners to Knock‐Down and Rebuild (KDRB), without the cost and other penalties

which, submissions suggest, are entailed by the present proposal;

advising of the need to make flexible, fair and appropriate arrangements for older

homeowners expressing a strong preference to stay in their homes;

advising of the need to make flexible, fair and appropriate arrangements for affected

homeowners with a disability;


home based business homeowners;

advising of the need to make flexible, fair and appropriate arrangements for affected self

funded retiree homeowners;


pensioner homeowners;

advising of the need to test, manage, and compensate for contaminated house contents

more fairly and equitably;

advising of the need to provide better health‐related support to affected home‐owners, in

particular by reducing uncertainty, and investigate modifying the Scheme to include a

viable knock‐down and rebuild (KDRB) option for affected homeowners;

advising of the need to provide better day‐to‐day support to affected homeowners,

particularly by ensuring that homeowners have an identified contact officer in the

Taskforce who they are readily able to contact, and by ensuring that homeowners are

provided with high‐quality, reliable information about the scheme; and

homes not showing contamination from asbestos sampling and assessments.

10.42 In relation to these representations, the Committee makes the following recommendations.

Recommendation 18 10.43 The Committee recommends that individuals involved in the “Downer House” forensic

deconstruction of the property and who reported the levels of contamination to the ACT

Government be appropriately recognised for their efforts.


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Recommendation 19 10.44 The Committee recommends that the ACT Government amend the current Scheme to offer

homeowners affected by loose‐fill asbestos contamination so that the offer includes a viable

knock‐down and rebuild option and report to the Legislative Assembly on the first sitting day

in 2015.

Recommendation 20 10.45 That the ACT Government consider a “go it alone option” for Mr Fluffy home owners, with

appropriate compensation, a reissued lease, suitable timeframes with safeguards and

validation process for those who want to manage the process themselves, and report to the

Legislative Assembly on the first sitting day in 2015 .

Recommendation 21 10.46 The Committee recommends that the ACT Government give affected homeowners who have

accepted the current proposal—to surrender their crown lease and be compensated for the

loss of the physical home—the opportunity to choose the knock‐down and rebuild option.

Recommendation 22 10.47 The Committee recommends that the ACT Government confirm by the first sitting day in

2015 as to whether the Government will override the provisions of Draft Variation 306 to the

Territory Plan to allow for the sub division or unit titling of acquired Mr Fluffy blocks.

Recommendation 23 10.48 The Committee recommends that the ACT Government release details as soon as the

Commonwealth Government informs them of outcomes concerning: (i) capital gains; and (ii)

pension payments and related matters.

Recommendation 24 10.49 The Committee recommends that as soon as arrangements have been agreed with financial

institutions that the details be made available.


Recommendation 25 10.50 The Committee recommends that the ACT Government reconsiders the size of the assistance

grant made to Mr Fluffy owners in the light of the evidence given to the Committee.

Recommendation 26 10.51 The Committee recommends that the ACT Government consider some flexibility in the way

payments are made to Mr Fluffy owners to facilitate their new housing arrangements.

Recommendation 27 10.52 The Committee recommends that the ACT Government publish indicative timelines for the

demolition, remediation and sale of surrendered blocks by no later than the first sitting day

of March 2015 to enable Mr Fluffy home owners to make an informed decision.

Recommendation 28 10.53 The Committee recommends that the ACT Government amend its current proposal to

homeowners affected by loose‐fill asbestos contamination so that it is capable of responding

to the range of different circumstances for homeowners, including those influenced by

differences in age, physical ability or disability, and financial circumstances.

Recommendation 29 10.54 The Committee recommends that the ACT Government and Asbestos Taskforce establish and

provide clear, authoritative advice, on contamination and cross‐contamination of goods in

affected households to avoid taking contaminated items to another location.

Recommendation 30 10.55 The Committee recommends that the ACT Government, as a matter of urgency, provide

advice on the potential future health consequences of exposure to loose‐fill asbestos for

affected homeowners and other parties who have been exposed.


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Recommendation 31 10.56 The Committee recommends that the ACT Government make adequate provision for, and

ensure that, the Asbestos Taskforce maintain clear lines of communication with affected

homeowners, including the provision of consistent, authoritative information and identified

and reliable points of contact.

Recommendation 32 10.57 The Committee recommends that the ACT Government improves their consultation practices

and in particular makes better use of the circumstances and resources of Canberra’s

Community Councils to bring together and represent their local areas.

Recommendation 33 10.58 The Committee recommends that the ACT Government publish any FORAG submission

provided to the ACT Asbestos Taskforce.

Recommendation 34 10.59 The Committee recommends that the ACT Government determine an appeal mechanism to

address concerns where agreement on the Scheme is unable to be reached.

EXCEPTION AL C IRCUMSTANCES

10.60 Whilst the Committee acknowledges that the Scheme will result in considerable physical,

emotional, and financial upheaval to affected homeowners and their families, the Committee

is of the view that there are some elderly homeowners for whom the worry and inconvenience

at this time in their lives could impact on their health and emotional well‐being in a more

serious/detrimental way than having Mr Fluffy asbestos in their homes.

10.61 The Committee is aware of a number of elderly homeowners who may have overwhelming

physical and emotional hardship in complying with the Government’s proposed scheme. The

Committee is therefore of the view that consideration should be given to exempting these

people from the Scheme, thereby postponing demolition, following provision of advice on the

risks to homeowners and the community on remaining in a Mr Fluffy home. The Committee

strongly believes that the Government should show some flexibility for these extenuating

circumstances on the provision that these homeowners agree to make no renovations or

alterations to their homes without government approval in those years.


Recommendation 35 10.62 The Committee recommends that the ACT Government should consider exempting certain

homeowners from the Scheme. The Committee strongly believes that the Government

should show some flexibility for those in extenuating circumstances on the provision that

these homeowners agree to make no renovations or alterations to their homes without

government approval.

Recommendation 36 10.63 The Committee recommends the exemptions should only be made if these homeowners

have been informed in writing of the risk to themselves and others and make no renovations

or alterations to their homes.

Recommendation 37 10.64 The Committee recommends that should the ACT Government create an exemption for

certain homeowners who wish to continue living in their property, this only be allowed,

subject to surrender of lease on fair terms when vacating the block for: (i) downsizing; (ii)

death; and (iii) contamination reasons.

10.65 The Committee is of the view the disruption as envisaged under the Scheme, as it stands, for

these homeowners will have potentially dire consequences.

10.66 The Committee is also firmly of the view that the Government should give consideration to a

proactive approach in having social workers and Asbestos Taskforce members regularly check

on the well‐being and safety of the homeowners who remain in exceptional circumstances in

their Mr Fluffy homes.

Recommendation 38 10.67 The Committee recommends that the ACT Government give consideration to having social

workers, Asbestos Taskforce members and others with appropriate training, who have been

informed of the risks of visiting contaminated homes, regularly check on the well‐being and

safety of the exceptional circumstances homeowners who may remain in their Mr Fluffy

homes.


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SPECIF IC CASES AN D SPECIAL CIR CU MSTANC ES

Recommendation 39 10.68 The Committee recommends that in the case cited in Submission No. 12, and others so

affected, that the ACT Government includes such families in the Scheme.

Recommendation 40 10.69 The Committee recommends that in the cases of homes where no positive asbestos results

for the property were returned that the ACT Government retest the properties and report

back to the Assembly by the first sitting day of 2015.

Recommendation 41 10.70 The Committee recommends that the terminology ‘clear’ and ‘clean’ should not be used

when addressing the state of asbestos remediated homes.

Recommendation 42 10.71 The Committee recommends that the case cited in submission No. 26 and 26a, and others

affected by disability, as renovations to modify a home for living with a disability are unlikely

to be adequately accounted for in the valuation, the ACT Government consider additional

appropriate financial assistance.

Recommendation 43 10.72 The Committee recommends that in relation to properties where the owners also conduct

home businesses from the property that these blocks be considered for priority remediation.

Further, in the case of these families consideration should be given an additional grant to

assist in the relocation and re‐establishment of the business.

DISPOSAL OF CONTAMIN ATED WASTE

10.73 The Committee is of the view that there are consequent potential impacts for workers

conducting the asbestos removal and remediation and residents of neighbouring blocks during

demolition. Care will need to be taken during the asbestos removal, demolition and block

remediation process to minimise any potential exposure to third‐parties. This will extend to


the transportation of waste in‐situ and its disposal in appropriate and licensed facilities—at the

West Belconnen landfill site.

10.74 The Committee is also mindful that there is potential for consequent increases in traffic

volumes and impact on road design capacity on access roads to the landfill site including urban

linking roads in proximity of the landfill site.

10.75 The Committee makes a number of recommendations concerning matters arising in relation to

the disposal of contaminated waste.

Recommendation 44 10.76 The Committee recommends that the ACT Government investigate alternative sites for

disposal of contaminated waste and report back to the Legislative Assembly by the first

sitting day in March 2015.

Recommendation 45 10.77 The Committee recommends that the ACT Government minimise, to the extent possible,

transportation of contaminated waste on residential routes from affected homes to the

disposal site.

Recommendation 46 10.78 The Committee recommends that the ACT Government, to the extent possible, should

ensure that transportation of contaminated waste from affected homes to the disposal site

is programmed for off‐peak time periods.

Recommendation 47 10.79 The Committee recommends that the ACT Government regularly monitor the processes in

place for treatment of the contaminated waste upon arrival at the West Belconnen landfill

weighbridge to ensure that compliance with mandatory standards is being enforced.

Recommendation 48 10.80 The Committee recommends that the ACT Government regularly monitor the state of access

roads to the West Belconnen landfill precinct to minimise the effect on those roads and the

residents in the proximity of the site. Repairs to roads in the landfill precinct should be a

priority.


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Recommendation 49 10.81 The Committee recommends that the ACT Government, where any marked increase in

volume of traffic on access roads to the landfill site including urban linking roads in proximity

of the landfill site become apparent these should be addressed via the implementation of

temporary traffic management plans for the area and surrounding suburbs.

Recommendation 50 10.82 The Committee recommends that the ACT Government establish baseline testing at the

West Belconnen landfill dump site for asbestos fibre soil and water contamination and test

annually for the next twenty‐five years and that the results be published.

Recommendation 51 10.83 The Committee recommends that the ACT Government develop a factsheet outlining the

safety processes from ‘house to tip’ to ease fears concerning the transport of loose‐fill

asbestos waste and that it be distributed in all affected suburbs and along transport routes

to the West Belconnen landfill site.

Recommendation 52 10.84 The Committee recommends that with regard to the Palmerston/Crace asbestos landfill site

study that the ACT Government table the report in the ACT Legislative Assembly within three

sitting days of receipt by Government.

Recommendation 53 10.85 The Committee recommends that the ACT Government, where possible, should conduct an

analysis of the files documenting the 1988 Commonwealth Government funded Loose

Asbestos Removal program to determine any lessons that can be learned.

BUDGET IMPL ICAT IO NS

10.86 The net cost of the Scheme to the Territory is significant—and is expected to be a net cost of

between $300 million and $500 million. This represents approximately 10 per cent of the

Territory’s annual budget.

10.87 Much of the financial modelling for the cost of the Scheme is based on assumptions for several

variables that are unknown. Whilst the Committee appreciates the difficulty in modelling


when many variables are unknown, coupled with many of these variables being particularly

sensitive to movements in house purchase costs, and the complexity of demolition, the

importance of regular monitoring and reporting cannot be understated.

10.88 The Committee notes that it has been asked to comment on a bill where the final impact on

the bottom line is unknown. Furthermore, given the size of the appropriation in terms of the

Territory’s annual budget—approximately about one fifth—the Committee has undertaken

its consideration very cautiously.

Recommendation 54 10.89 That the ACT Government cost the proposal to allow Mr Fluffy homeowners to retain their

blocks, thereby necessitating a smaller drawdown on the Commonwealth loan facility with a

commensurate lower interest payments against the current purchase and greater

development rights proposal for the life of each stage of the Scheme and report to the ACT

Legislative Assembly on the first sitting day in 2015.

Recommendation 55 10.90 The Committee recommends that the ACT Government detail to the ACT Legislative

Assembly: (i) how it will make the loan repayments over the 10 year life of the loan;

(ii) clarify which budget priorities will have to be reprioritised; and (iii) what the likely impact

(if any) on service delivery will be before the Bill is passed.

Recommendation 56 10.91 The Committee recommends that the ACT Government considers the establishment of a

statutory authority/Territory‐owned Corporation/or suitable entity to conduct the

demolition, remediation, rezoning and sale of the surrounded blocks, along private sector

lines to ensure the best and most suitable return to the budget.

WHO LE OF GO VERNMENT COORDINAT ION

10.92 Successful implementation of the Scheme will effectively require a coordinated approach

across several directorates and agencies.


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Recommendation 57 10.93 The Committee recommends that the ACT Government table in the ACT Legislative Assembly

quarterly progress reports on the implementation of the Scheme.

COMMONWEALTH LEGACY

10.94 The Committee notes the growing costs to the Territory, and its taxpayers, of having to clean

up asbestos legacy issues—including contaminated sites, and unfolding issues such as the

Mr Fluffy homes asbestos contamination—transferred to the ACT from the Commonwealth at

the time of self‐government are starting to mount.

10.95 The Committee also acknowledges the emotional distress and uncertainty, coupled with the

financial cost and burden, being borne by those Canberrans and households directly affected

by the Mr Fluffy homes asbestos contamination issue.

10.96 The Committee is of the view that the Commonwealth Government should acknowledge some

responsibility in relation to the asbestos legacy transferred to the Territory at the time of self‐

government including making a financial contribution to the costs incurred in remediation—if

not for Mr Fluffy but for other aspects of the asbestos legacy transferred to the Territory at the

time of self government.

10.97 The Committee is also of the view that an inquiry that spans all levels of government should be

carried out. Any such inquiry should happen after all affected homeowners have been able to

first focus on a solution in relation to their homes. An inquiry that would be most effective to

affected homeowners, and taxpayers, should be one that spans all levels of government—an

inquiry that investigates the full history of various levels of government in the matter—

Commonwealth, ACT and NSW.526

Recommendation 58 10.98 The Committee recommends that an ACT Board of inquiry be constituted, pursuant to the

Inquiries Act, to investigate the full history of the Mr Fluffy legacy. The Board of Inquiry

should report by 1 March 2016.

526 Proof Transcript of evidence, 28 November 2014, pp. 26–27.


Recommendation 59 10.99 The Committee recommends that when complete, the Board of Inquiry report together with

the report of the NSW Joint Select Committee on Loose Fill Asbestos Insulation be forwarded

to the Commonwealth with a view to a suitable and robust inquiry being established to

investigate the full history.

Recommendation 60 10.100 The Committee recommends that given the size and scale of the asbestos legacy

transferred to the Territory at the time of self‐government, that a suitable inquiry

mechanism be established to investigate the full history of various levels of government in

the matter—Commonwealth and the ACT.

Recommendation 61 10.101 The Committee recommends that the ACT Government establish a process similar to the

Sheep Dip remediation program to address the issue of Asbestos dumpsites in suburban

Canberra.


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11 CONC LUSION

11.1 The Committee thanks Ministers Gallagher, Barr, Gentleman and Rattenbury, and

accompanying directorate and agency officials, for their time, expertise and cooperation

during the course of this inquiry.

11.2 The Committee wishes to thank all of those who have contributed to its inquiry, by making

submissions and/or appearing before it to give evidence.

11.3 The Committee also thanks the ACT community—in particular, the high calibre and heartfelt

submissions from Mr Fluffy homeowners and residents.

11.4 The Committee recognises the significant commitment of time and resources, and for many

the emotional heartache and distress, required to participate in an inquiry of this nature and is

grateful that it was able to draw on a broad range of expertise and experience in its

deliberations. The Committee has based many of its recommendations, or variations thereof,

on suggestions by inquiry participants as recommendations for this report.

11.5 The Committee also emphasises that given the tight timeframe it had to complete its inquiry

the outcome of its inquiry is more than its report alone but also the enduring evidence on the

record from the two public hearings—Friday 28 November 2014 and Monday 1 December

2014—and the views of almost 60 interested members of the community (as part of the 1021

affected homeowners) as put forward in written submissions.

11.6 The Committee has had a limited timeframe in which to conduct this important inquiry. The

Committee appreciates the overriding public interest in the proposed legislation and has

endeavoured to do its best to provide an opportunity for the community to submit their views

and to balance the Government’s desire/request that the Scheme commence in early

December 2014. Commencement of the Scheme in early December will permit the Asbestos

Response Taskforce the opportunity to settle the most urgent purchases of Mr Fluffy homes

before Christmas.

11.7 The Committee has made 62 recommendations in relation to its inquiry into the proposed

Appropriation (Loose‐fill Asbestos Insulation Eradication) Bill 2014–15.

Recommendation 62 11.8 Notwithstanding the preceding recommendations, the Committee recommends that the

Assembly pass the Appropriation (Loose‐fill Asbestos Insulation Eradication) Bill 2014‐15, so

that monies can start being paid to homeowners who have joined the Scheme.


Brendan Smyth MLA

Chair

3 December 2014