"We're not picking up the bill for what is a state responsibility," Federal Treasurer Josh Frydenberg said. "The problems in relation to cladding have been a failure of compliance and enforcement at a state level." The levy increase will apply to about six per cent of building permits and will exclude low-rise buildings such as single dwellings and townhouses, and any permit for work under $800,000. But the levy will be hiked by more than 500 per cent for apartment developments of more than $2 million, drawing protests from the property sector. Matthew Kandelaars, Victorian Deputy Executive Director of the Property Council of Australia, said the increases were disproportionate and unreasonable.

“We understand and support the imperative to strengthen public confidence in construction and building safety and address the looming insurance crisis," he said. “However, a unilateral and massive increase in construction costs is not the answer." Flammable cladding on the Neo 200 apartment tower in Spencer Street burnt in February. The tower will now get public funding to remove any remaining flammable cladding. Credit:3AW The premier also said it was possible the cost of the cladding rectification task would eventually exceed $600 million. "I wouldn’t rule out potentially having to invest more," Mr Andrews said. "Ultimately every dollar that's spent removing this lethal, combustible cladding and making these buildings safe ... is money well spent, because I'd much rather be defending that expenditure than spending the next two or three or five years pointing fingers."

Fifteen of the most extreme-risk buildings with flammable cladding – including the Neo 200 apartment tower in Spencer Street, which caught fire in February – will get funding so that works can begin quickly to fix them. Loading Replay Replay video Play video Play video Until now, homeowners who discovered their apartment was covered in flammable cladding have been told it was their job to pay for it to be fixed. Among those homeowners is Jennifer Opie, who with her husband Kevin was last year told by engineers that recladding their apartment building would cost about $1.5 million, or at least $50,000 per property. In November the two retired teachers, who are on pensions, told The Age they simply could not afford a bill of this magnitude.

On Tuesday, Planning Minister Richard Wynne rang Mr and Mrs Opie to let them know they were among the initial private homeowners that taxpayers would help fund repairs for. "He rang and it was a no-ID caller and I don’t usually answer them because I think it’s someone trying to sell us something," Ms Opie said. "He said he was just ringing to let us know that everything was going ahead." Kevin and Jennifer Opie pictured at their South Yarra apartment block in November 2018. Credit:Joe Armao One Frankston South building with flammable cladding will also be among the first 15 to be repaired, as is Spencer Street's Neo 200 tower. One resident on the tower's owner's corporation, Brad Bloomfield, said he had on Tuesday been told the building would be eligible for government-funded repairs.

"It doesn’t help all of the other low-risk buildings with a problem, but it helps us," he said. Phil Dwyer is president of construction industry group the Builders Collective of Australia. He said individual owners should never have been made responsible for fixing cladding issues on their buildings. He said the state government was effectively bailing out the construction industry, which had behaved incredibly irresponsibly by using flammable cladding on so many buildings around Australia.

“It should be the builders and their consultants paying for this, along with the government, because they’ve been totally unwilling to properly regulate the industry,” Mr Dwyer said. The government's Victorian Cladding Taskforce also released a report on Tuesday with 37 recommendations. The taskforce's co-chair, former Liberal premier Ted Baillieu, said the rectification task would be complex, expensive and time-consuming. Victoria was ahead of other jurisdictions in dealing with the cladding problem, Mr Baillieu said, because it had identified affected buildings instead of asking building owners to declare themselves. "In the higher [risk] categories of buildings there are probably 500 buildings that need a rectification job," he said.

Problems with flammable cladding were exposed in Victoria after the 2014 Lacrosse building fire in Docklands. There, a cigarette burning on a balcony sparked a fire that caused a damages bill of about $11 million. Victoria's decision to pay a large part of the repair bill for private apartments makes it the first Australian state to invest taxpayer dollars to help solve the cladding crisis. It follows a similar move by the British government in May. But taskforce co-chair John Thwaites said "wrongdoers" in the building industry should still be pursued for costs of rectifications. "We’ve been very concerned about the culture in the industry where safety has come second to cutting costs," Mr Thwaites said. Loading