So the cladding scandal will result in the Victorian government meeting most of the cost of rectification works. It will probably be too expensive to remove all of the cladding, so the effort will be to make buildings with non-compliant cladding safe by removing the cladding from the highest risk areas.

But the owners of these buildings and apartments within them will still likely be left with losses in capital value. Even if the buildings are made safe, for as long as non-compliant cladding remains in any part of a building, potential new buyers are likely to be put off.

Illustration: Andrew Dyson Credit:

The state government has called upon the federal government to contribute half of the cost for the rectification, indicating the scandal is a national problem. Treasurer Josh Frydenberg has rejected this on the basis that it is a state regulatory failure. But the federal government controls the importation of the cladding, labelling requirements (which could have contained warnings about its uses), and the development of the national construction code under which use of the inflammable cladding was permitted in some circumstances - though not generally the non-compliant uses that have created the current issues.

Responsibility for the cladding scandal goes beyond builders. It includes other building practitioners. Only one civil case on cladding has run to conclusion- the Lacrosse building fire of November 2014. The Victorian Civil and Administrative Tribunal found that the builder was entitled to recover the overwhelming bulk of damages awarded to owners from other building professionals- the private building surveyor (33 per cent), the fire engineer (39 per cent) and the architect (25 per cent). It is likely to be a similar story with other non-compliant cladding laden buildings.