Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Hansard source

The Home Insulation Program was an example of systemic policy failure with the deepest human consequences. The ministerial statement today continues the practice of systemic failure. In that which has been presented there are three systemic failures and one grand human omission.

The systemic failures are very simple and I want to start with those. Firstly, we know that there are 240,000 houses which have either unsafe or dodgy insulation. There is no plan to find and fix the 240,000 houses out of the potential million. Without a plan to examine all of the one million houses there is no solution to this problem, because almost one-quarter of them have either dangerous or dodgy insulation as a result of a program which was monumentally ill conceived and ill executed and which caused enormous human damage.

The second of the systemic failures is that there is no plan for small business in its moment of need right now. Small business is calling for assistance either in the form of a buyback or of financial assistance. There is a minor component in the existing program, but the small business program, which was promised almost two weeks ago, is now almost two weeks overdue and today’s statement has come and gone without assistance for those firms which are laying off workers on a daily basis. Almost 1,500 workers have lost their jobs, and there is no plan for small businesses which are currently going into liquidation.

The third systemic failure in the statement today is that there is absolutely no transparency in, honesty about or accountability for the extraordinary policy failings which represent perhaps the most systemic policy failure of the last 20 years in terms of its human consequences—not one word about the costs of repairing the government’s program. The National Electrical Contractors Association has referred to potentially $450 million as the cost of repairing a program which was already on track to being $1 billion over budget—potentially $450 million of costs, and not one word of transparency in a ministerial statement about a grand program failure in costs, not one word in real terms about the causes within the government both in terms of design and in terms of monitoring and responding to the 21 warnings which were given to the minister, and not one word as to why only three cases of criminal fraud have been reported, when we know that 0.5 per cent of 16,000 audited cases, approximately 80 cases, have already been identified as likely cases of criminal fraud. There is a disparity between the 80 in the government’s own figures and the three which have been reported to the Federal Court. Those are the systemic failures.

So the pattern of denial and systemic failure, and a program which has been catastrophic in human terms, continue. But in showing the House’s sense of responsibility to the people whom it affects, there is one grand human omission. The minister, and I give him credit for this, made reference to the four young boys—Matthew Fuller, Reuben Barnes, Marcus Wilson and Mitchell Sweeney—whose lives have been lost through association with this program. The government has previously called upon the parliament to make apologies for the wrongs of previous governments. There is no doubt that this government had a duty of care, that it breached that duty of care and that there has been damage on a systemic and a human scale. The minister, his predecessor Mr Garrett and the Prime Minister have all failed to apologise to the families of those four young men and have all failed to apologise to the now 105 homeowners whose homes have been damaged or lost through fire as a result of this program. I call upon the Prime Minister to say sorry, and to use the word ‘sorry’, to the families of those young men who were lost and to the homeowners of the 105 homes which, it has now been admitted, have been damaged or destroyed through fire during the course of this program. That is the least, in terms of human responsibility, which the Prime Minister, the new minister and the previous minister, Mr Garrett, can do.

Against that background, I want to examine briefly three things: the scope of the tragedy, the systemic causes of this grand program failure with its profound human consequences and then the lack of solutions as to what must be done as we go forward. In terms of the scope of the tragedy, let us be absolutely clear that it begins with what we now know to be 105 associated house fires. What we had thought was a figure of 1,000 potentially deadly electrified roofs as a result of the foil insulation program is, we know as of today, closer to 1,500. We also know that there are 240,000 either unsafe or improperly installed and inadequate cases of insulation. We also know that there is a $1 billion blow-out in the program. We also know that there is a potential $450 million bill which future generations will have to pick up for the failures of this program, and above all else we know that there have been four human tragedies associated with this program.

Against that background, it is inconceivable in a Westminster democracy that a minister who received not just one, two, three or four but 21 warnings of grand systemic failure should retain his job as a minister of the Crown. He is a cabinet minister of Australia, the highest position in the Westminster system which can be occupied in Australia short of being Prime Minister. Mr Garrett remains in that position. He has lesser responsibilities but he has the same pay, the same status and the same entitlements. He was tickled with a feather and it is as if this grand systemic failure has been brushed off by the Prime Minister.

So we have no apology. The word ‘sorry’ has not appeared. There has been regret that the government might be held in lower esteem as a result of this—which is a contempt on all of those people who have suffered as a consequence of a design that did not care about the human consequences of a ministerial process which could not be bothered to intervene to take steps when there were public warnings, public debates, adequate notice and every chance and every responsibility for action.

So that is the scope of the tragedy. But let us look at the causes. How could it be that we come to this statement today, which recognises 105 house fires, a potential 1,500 deadly electrified roofs, 240,000 either dangerous or dodgy installations, a $1 billion blow-out and a potential $450 million worth of fix-up costs to fix the roofs—not to mention, above all else, the human tragedy? The causes date back to the stimulus package which was announced by the Prime Minister in February last year. Right from the outset, the opposition warned that the package in its totality was not appropriate for Australia. We had reservations. But we now know that there were warnings all the way through. What was proposed here was to place an industry on steroids and to multiply its size. This industry was multiplied more than twentyfold and in so doing it was evident from the outset that it would attract shonks, shysters, frauds, dodgy installers, those with criminal intent and those who did not care about the human impact. There was a duty of care from the government to make sure that it did not create an unsafe environment for homeowners and young installers. That duty of care was obvious. It should be imbued into every program, and that duty of care was not exercised.

We know this, because the government received warnings to its project control group from the Department of the Environment, Water, Heritage and the Arts. The environment department set out a design structure which would have ensured that existing operators tendered in order to win the right to carry out the program, and the project control group, we are told—but there is total silence on this in the minister’s statement—overrode those instructions and that design. They removed the safeguards and in so doing they created an industry which said, ‘Let it rip.’

They love to talk about ‘let-it-rip capitalism’ on that side. They created the greatest example of ‘let-it-rip rorting’ in Australian policy history. They did so because the Prime Minister’s department, carrying out the desire of the Prime Minister and Ministers Arbib and Garrett, drove forth a set of outcomes which removed the safeguards. So from the outset the program was rotten and it was evident that there would be risk. That is not something which the opposition has come upon; it is something that the department of the environment warned about from the outset.

We also know that from that point on there were 21 specific warnings to the government from external bodies. As the program began to unfold, the warning signs were not just ignored; they were buried, and the result was catastrophic. Often in this place people will overstate, but it is not possible to overstate the human impact and the systemic problems caused by this program. It beggars belief to imagine that the minister responsible for that program remains in his position as a cabinet minister under the Crown in the second-highest role available in the Westminster system in Australia.

Firstly, the design was obviously rotten. Secondly, there were 21 warnings. These warnings came from the electrical authorities within the industry, from the union movement, from the states and territories, and from the opposition. Let me go through what I believe were the four most critical and damning of warnings. On 9 March 2009, Mr James Tinslay, the CEO of the National Electrical Contractors Association Queensland chapter, personally wrote to Minister Garrett directly. He warned of the risk of fire and the risk of systemic failure and that it was evident that increasing the size of an industry twentyfold without safeguards would create a structural flaw which would bring human consequences.

The second thing that occurred was that on 29 April the state and territory authorities, in a phone hook-up of fair trading authorities with the Commonwealth, warned not just of problems but also of fires and fatalities. The words were very clear. They said that this program could not be regulated. They said that, because of its size and scope, the program—its fundamental essence, nature and design; everything which the Prime Minister craved—was unsafe and unsustainable, and paper changes would not solve the issue. At that point, before the program had commenced, the government was warned that it had a ticking time bomb and it was lighting the fuse. It was warned by the states and territories. At that point—because we know that the Western Australian government have made this statement public—they were expecting a failure rate of 10 per cent. A failure rate of 10 per cent out of 2.7 million installations is 270,000 failures. The government authorised a program which it knew would have 270,000 failures.

It turned out that they underestimated the failure rate; the failure rate is closer to 24 per cent. How could they proceed in good faith when there were warnings from the state and territory authorities of fires and fatalities, of a system which could not be regulated and of a system which would have a 10 per cent failure rate, or 270,000 homes? They proceeded nevertheless, and the reason for that is that, at the top of the tree, the Prime Minister was determined that this program would bring political kudos. They would roll out the money and roll out the benefits, and if 270,000 homeowners had a small problem then that was a price which they were willing to pay. That is not a price which any government should be willing to pay. This program was not worth one house fire, let alone one life. It is extraordinary that these warnings were in place.

The third of the critical warnings came on 16 October when Master Electricians Australia wrote to Minister Garrett, as well as releasing a press release. In that letter the CEO of Master Electricians Australia, Malcolm Richards, said to Minister Garrett that unless there was an immediate suspension of the foil program they could not rule out further fatalities. I know those words because I have read them and rolled them around in my mind. I find it extraordinary. They warned that if the program for foil insulation was not suspended then there would be further fatalities. Sadly, that was prescient. It was correct. This was a warning from the experts, a warning made directly to the minister and a warning made both in public and in private. That warning was correct, it was profound and it was ignored. The consequences are real, important, human and can never be undone.

The fourth warning—and I left this until last because it is perhaps the most significant—is that the entire Minter Ellison risk report and risk register which were delivered to the government on 9 April 2009 contained a systemic dismantling of the program which was proposed. I have read that report, which we had to extract from the government through the Senate estimates program. I have read the risk register, which was buried when the minister made a statement one Friday afternoon which was never acknowledged. The risk register had to be drawn out of the Senate estimates process. The risk register set out the risk and the consequences of fire under the program as being five out of five—the risk was five out of five and the consequences were five out of five. It set out the risk of systemic fraud and the risk of departmental programmatic failure and the inability of the department to manage the program. In a high-calibre report it set out all of these risks in a way that was prescient. Most importantly it said the program’s commencement should be deferred by three months because it would simply not be possible to commence the program in a way which would deal adequately with these risks.

That report of itself should have been enough for the minister who formerly had responsibility for the program, who remains the minister for the environment, to lose his job—to do the honourable thing and withdraw. But that was the 21st of the warnings which we learned of. It is clear that there was a systemic failure in design, a complete ignorance of the risks and the warnings and a willingness to turn a blind eye.

What we then move to when we see this is not just that there were 21 warnings from official authorities but that the opposition called for an Auditor-General’s inquiry for the first time on 26 August. I wrote for the first time on 27 August. We called on seven occasions before the first of the fatalities for an Auditor-General’s inquiry into rorting and, in particular, into dangerous work practices. We then called on multiple occasions for an Auditor-General’s inquiry. I wrote for a second time on 18 November 2009 and for a third time last week, on 1 March, calling for an Auditor-General’s inquiry. I am pleased that the minister responded two days later to that letter and that finally the government acknowledged that the program was so rotten and corrupted in its design, its execution and its ignorance of the warnings that they could no longer resist an Auditor-General’s inquiry.

Having said that, we see that we called publicly for an inquiry and that the industry, the unions and the states and territories all warned the government. But we know that right at the heart of this was the Prime Minister’s project control group, which said at the outset, ‘Keep going.’ So we want to know what the project control group said, how they overrode the advice of the Department of the Environment, Heritage and the Arts, on whose instruction they overrode the advice and on whose instruction they continued to drive forward.

What we also know is this: with the systemic design flaws, which had real human consequences, and with the continued pattern of ignoring the 21 warnings, we have brought ourselves to this situation where the program has been terminated because it was simply unsustainable. But the program was only terminated, and the minister was only reassigned in his duties, once the political heat, the opprobrium and the public criticism became too great for the Prime Minister. Only the day before he removed the minister, he was defending the minister in this House. He was defending the program, and he started to tally up the human losses to indicate that they were an acceptable statistic, as if they were acceptable collateral damage. It was not until the Leader of the Opposition asked whether the Prime Minister was really saying that these human beings and the loss of people’s homes were an acceptable price for the program that the penny seemed to drop that there are real human beings that have been the victims of this program.

What I want to say beyond that is: as we look forward, what do we see is fundamentally flawed and fundamentally missing? In terms of the future actions, there are five areas for future activity. The first, in terms of safety, is finding and fixing the 1,500 deadly roofs and the 240,000 dodgy installation jobs. In relation to the 1,500 potentially deadly electrified foil roofs, I accept the proposals put forward by the minister today. They are appropriate, they are in line with what we believe should happen and we believe that that is a step forward today. However, there is no time frame as to how long homeowners will have to wait. The minister’s own department was advising a week or two ago that it would take up to five years to find and fix some of these roofs. So we want a time frame. In relation to the 240,000 dangerous and dodgy roofs out of the 1 million, there is no plan to ensure that all of those million are inspected. There is no plan to find, fix and replace the 240,000 dangerous and dodgy roofs, let alone a time frame.

The second of the major areas, after safety, is cost. There is no statement from the government as to what the cost of finding and fixing the consequences of this debacle is. The National Electrical Contractors Association told a Sunday paper just over a week and a half ago that it could be $450 million to carry out the job properly. We expect a full statement of costs when parliament resumes tomorrow. We want a full statement as to the likely costs.

The third area of future activity is small business, and this is not about restarting the program. I express my and the opposition’s deep reservations about restarting the program. We will keep an open mind, but we express our deep reservations about restarting a program which would simply inflame the problem of putting an industry on steroids and about which there are no adequate safeguards. But we will reserve our position. But right now there are numerous small businesses who have contacted the coalition. All of their messages have been passed on to the government, but those small businesses have no answer to the contracts they have struck in terms of stock held and insulation in bondage. We know about contracts for foam and transportation vehicles and all sorts of fixed costs from which they have no escape. So there is no plan for small business, and we expect an interim statement by the end of this week in relation to small business.

Fourth, there is no statement in relation to the training for those people who will be finding and fixing the 1,500 foil roofs. We have already heard stories of unscrupulous businesspeople trawling for business, going through records and trying to pay for records of houses where foil was installed.

Fifth, there is a very interesting question here: who, in the new Department of Climate Change and Energy Efficiency, has the experience to carry this out? That is not a department with a history of interface with the public. It is the department that put together the renewable energy target, not to mention the emissions trading scheme. The renewable energy target is being redone as we speak, and we will work with the government to fix that up, but honestly! Does this mean that there will be a large number of people who will simply be transferred from the Department of the Environment, Heritage and the Arts to redo the same job under a different hat? How many people will be moved from the one department to the other and simply have their departmental masters changed?

I now turn to the inadequacies in the ministerial statement with regard to the past. There are four elements here. First, we have no statement in relation to warnings. When did the Prime Minister’s office receive the Minter Ellison report and risk register? We have asked that of the Prime Minister. We have no answer. We expect that to be part of the second statement. There must be a second statement brought before this House—and we would like it tomorrow—as to when the Prime Minister received the Minter Ellison risk report and register. When did his office receive that report?

The second of the areas in relation to the past is ministerial interference in the safeguards presented to the cabinet and to the project control group by the Department of the Environment, Water, Heritage and the Arts. We know from public reports that the department of the environment put forward a program which would have allowed for tenders by existing installers that would have made a massive difference in terms of safety and quality. Who overrode that decision and why? Was it the Prime Minister? Was it his office? Was it Minister Arbib? We want a full statement as to why the project control group overturned the safeguards proposed by the department of the environment.

The third of the issues in relation to the past is criminality. On the basis of the figures given by the minister, we know that the opposition have sent forward from our office alone at least 17 reports of potential criminal fraud. Three have been reported to the AFP, but we know that with a 0.5 per cent criminal fraud rate out of the 16,000 audits done to date that that should equate to about 80 potential frauds. Why have there only been three reports to the AFP, when that figure was in place before Christmas? There have been effectively no new referrals to the AFP.

Lastly, in relation to the past, there should be an apology. The Prime Minister and Minister Garrett should simply say the words ‘I am sorry’ to those who have been affected—the 105 homeowners; the people who live in uncertainty with regard to the potential 1,500 deadly electrified roofs; the 240,000 homeowners out of the one million who have dangerous or dodgy insulation; and, above all else, the families of those young men who are no longer with us.

This program has been a debacle from the start. This ministerial statement continues the failures. It does one thing, which is to provide a repair process for the foil insulation, and that is welcome, but it fails on every other front. There is no plan to find and fix the 240,000 dangerous or dodgy roofs. There is no plan to assist the small businesses which are under daily threat of liquidation. There is no transparency about the cost, about the issue of criminality, about the causes, which go right to the heart of this government—and there is no apology. The word ‘sorry’ has not been used, to the best of my knowledge, by any senior member of the government to express their concern.

This ministerial statement fails in its duty. The government has failed. Minister Garrett must go. The Prime Minister should make the next statement and he should cover the fundamental flaws which remain with the program and the fundamental failure to acknowledge the causes, the consequences, the cost and the human issues that this program has brought upon Australia.

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