Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

A lot has been said about the insulation industry in recent times. It has been brought into the spotlight in a negative way as a result of the government’s attempt to shovel as much money out the door as possible. The result has been an absolute fiasco. There has been fraud. There has been damage to property. There have been deaths. The failure of the system has been monumental, and it will go down in history as a comprehensive failure of this Rudd government.

Leaving that aside, my intention today is to speak of what this failed program has done to a local business in Cowan, Mr Insulation; its owner, Martin Perry; his family; and the dismissed staff. I would like to say at the outset that, having spoken to Mr Perry and visited his business in Landsdale, I have a far greater appreciation of the insulation industry and a high regard for this insulation business, which has been around for more than 20 years.

Mr Perry produces his own cellulose blow-in insulation. For those who do not know of it, it is shredded newspaper that has borax and boric acid flame retardants mixed into it. Mr Perry produces this cellulose insulation in accordance with Australian standards. It will not burn. He demonstrated this by holding a handful of the cellulose and trying to burn it with a propane torch. It went red from the heat and then black, but it did not burn. He similarly showed me the classic fibreglass batts and polyester insulation, lighting a petrol fire and then placing these forms of insulation over it. Again, they did not burn. Mr Perry attributes the fires not to burning insulation but to poor and inexperienced installations.

Apart from the problems with the infamous foil insulation, Mr Perry told me that the major problem has been downlights installed in older houses where no guards were placed around the lights, which are exposed in the roofs. Particularly in homes surrounded by trees, years of combustible leaf litter can accumulate. If the downlights do not have guards around them, that litter can fall onto the top of the downlights and catch fire when it gets hot enough. Even a small fire can then cause the leaf litter through the rest of the roof to also catch fire, creating a roof fire. What makes this more likely is when inexperienced insulation installers do not clean out the roof cavity first but instead push the batts into the roof space, pushing the leaf litter along and into the low points on the ceiling—the downlights. Mr Perry’s point is that the fire risk in older houses with unguarded downlights installed before two years ago are at great risk if insulation is put in without a clean-up of the combustible materials in the roof space.

I, like many members, have been contacted by those local residents who, having participated in that program, are concerned about the reported dangers of insulation installation. The concerns of the public have been fuelled by the reports of fires and deaths and by the cancellation of the scheme. This has resulted in an immediate halt to new orders. For Mr Perry, the owner of Mr Insulation, $300,000 worth of forward bookings have been cancelled. His $80,000 worth of insulation batts in stock are almost worthless. In reality the only part of the business left is new home insulation and, given the stock sitting around, prices for that work are likely to plummet.

Five days before the program ceased Mr Perry paid $4,500 to put staff through a training course. They were staff that have since been predominantly let go. Mr Perry is still owed around $5,500 from the program and I hope that those funds will be forthcoming in the immediate future. If you include prepaid commissions—amounting to $18,000—to some former sales staff, it is estimated that $40,000 has been lost as a result of the program’s closure. I should also say that Mr Insulation was around a long time before the program; it was not one of these businesses that sprung up to take advantage of the scheme and in some cases the loopholes and weaknesses in the scheme. Before the program Mr Perry’s business would insulate between three and five homes per day; last week they had one job for the whole week.

Because of the way it was set up this program invited fraud, shoddy work and major risks. The minister and the government got more than enough warnings yet the program comprehensively failed, with grave results. From visiting Mr Insulation I understand how a legitimate and creditable industry has been brought to its knees because the government did not put the work into making sure this program had the safeguards in place but preferred to shovel the cash out the door.

I think it is important for all participants in this program to assess the risks and seek inspection of their homes if they think they are at risk. There was a time when Australians had confidence in the insulation industry—and they were right to have confidence, if Mr Insulation is typical of the businesses that existed before the program. Now Australians are lacking in confidence because of the government’s mismanagement of the Home Insulation Program. The blame for this lies directly at the feet of the government, whose reckless haste in spending resulted in failures in set-up, administration and governance. We are still waiting die details on how the government will help businesses like Mr Insulation that have suffered as a result of this program.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Before calling the honourable member for Melbourne Ports I would like to congratulate the honourable member for Barker on his appointment as Government Whip.

Patrick Secker (Barker, Liberal Party) Share this | Link to this | Hansard source

That would be nice, Deputy Speaker, but I advise that my appointment was as Opposition Whip!

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

A Freudian slip on my part. I do apologise to the Main Committee.