Penny Wong (SA, Australian Labor Party, Minister for Climate Change and Water) Share this | Link to this | Hansard source

I seek leave to make a statement on the Green Loans Program.

Leave granted.

I thank the Senate. As the Senate would be aware, some two days ago I was sworn in as the Minister for Climate Change, Energy Efficiency and Water, adding energy efficiency to my existing portfolio responsibilities. This change recognises the inextricable link between the challenge of becoming more energy efficient and the challenge of tackling climate change. The change also means that the energy efficiency programs previously administered by the Department of the Environment, Water, Heritage and the Arts will now be delivered by the new Department of Climate Change and Energy Efficiency.

One such program for which I am now responsible is the Green Loans Program. This program recognises the public benefit in helping households identify how they can improve their efficiency and reduce their impact on the climate and the environment. There has been strong demand for this. Australians want to do their bit. We should be finding ways to help them. Nevertheless, there have been problems with this program. Given that reality, I have asked my new department for a frank assessment of the program’s status and design. In the meantime, I am conscious of the concerns that have been raised by the community, and by members and senators. I therefore believe it is appropriate to update the Senate on the current situation with the Green Loans Program.

When the Green Loans Program was launched in July 2009, it was intended to have three components aimed at assisting Australian households to improve their energy and water efficiency. The first was a free home sustainability assessment. A trained assessor visits the home and talks with householders about the sustainability of the home and their current practices. The assessor then compiles an assessment report indicating what the householder might do to save energy and water, and to improve their sustainability. The second was a $50 Green Rewards Card for households who had participated in a home sustainability assessment. This was for the purchase of small items to improve efficiency—for example, energy efficient light globes and the like. The third was access to an interest free green loan, for amounts of up to $10,000 over a maximum period of four years.

The experience of the first six months of the Green Loans Program led the government to announce significant changes to the program on 19 February 2010. These were:

• An additional 600,000 assessments, on top of the 360,000 assessments already available under the program;
• A cap of 5,000 on the number of assessors who would be contracted to deliver household sustainability assessments under the program;
• A weekly cap of 15,000 assessment bookings and a daily and weekly cap per assessor of three and five assessments respectively;
• Changed booking arrangements such that each booking call to the call centre can only be made by or on behalf of individual assessors; and
• Discontinuation of the loans component of the program.

The government began implementing these changes from 19 February 2010. In line with agreements between the government and relevant financial institutions, loans under the program will be discontinued from 22 March 2010.

As I said, there have been a number of problems with this program. It is apparent that the program had a number of design flaws, and that aspects of the program have not been administered to the standard that the government and community expect. Since assuming responsibility for this program, I have put in place an immediate process to fully identify and get to the bottom of these problems. My priority in the coming weeks and months is to deliver on the fundamental policy objective: to provide high-quality, timely and useful sustainability assessments to Australian households. In order to do that, it is important to address the issues with the program—issues that have become evident to me over the past week through the complaints I have heard from households and green loans assessors. I will deal with each of these issues in turn.

First, to the issue of household sustainability assessment reports. As at 28 February 2010, 305,327 home sustainability assessments had been booked and, of these, 210,864 had been completed. This is clearly a very popular element of the program. However, only around 84,000 reports produced as a result of those home sustainability assessments had been sent out to households as at 28 February 2010. There are currently around 100,000 reports that have been submitted to the Department of the Environment, Water, Heritage and the Arts but which had not yet been sent out to households at the time responsibility moved to the Department of Climate Change and Energy Efficiency. The remaining reports have not yet been submitted to the department by assessors following completion of the home sustainability assessment. The delay in sending reports is unacceptable. Performance, in terms of the time it takes for households to receive their report after having an assessment completed, must be significantly improved. I have asked my department for further advice on what actions can be taken to improve performance in this area.

Second, to the number of assessors. Currently, there are around 4,000 assessors contracted to the department to conduct home sustainability assessments under the Green Loans Program. The government’s changes to the program on 19 February indicated that the number of assessors to be contracted under the program would be capped at 5,000. For an assessor to be contracted under the program, they must first complete a set training course and seek accreditation through the Association of Building Sustainability Assessors, or ABSA. They can then apply to the department to be contracted to take part in the Green Loans Program.

I am advised that ABSA’s figures indicate that there are approximately 7,500 people, including those already contracted, who have completed assessor training and been accredited with ABSA. I understand ABSA figures estimate approximately a further 1,800 people have completed training but have not been accredited. Clearly, this is a very difficult situation, with more accredited assessors than available contracts. It is a hard fact that there are going to be people who are accredited who will not be contracted under the program.

Third, the prompt payment of invoices is another area that has attracted criticism. I understand there are more than 1,500 invoices currently in hand and that work is underway to process those quickly. In line with government requirements, my department will be working toward having all correctly submitted invoices paid within 30 days. I am advised that only a very small percentage of correct invoices received to date from assessors—that is, less than four per cent—have been paid outside the 30-day period. However, it is apparent that many assessors are experiencing delays in payment. It is also clear that part of the problem appears to lie in ensuring that each invoice contains the correct information so it can be processed.

Around 50 per cent of invoices received by the Department of the Environment, Water, Heritage and the Arts have been incorrect or incomplete when first submitted, creating delays in payment. This figure, while still too high, is an improvement on earlier figures indicating that around 70 per cent of invoices were incorrect or incomplete when first submitted. The 30-day timeframe for payment applies from the date at which a complete and correct invoice is received.

To address the problems with invoicing, the Department of the Environment, Water, Heritage and the Arts developed a template for assessors to use, along with a step-by-step guide to filling in the template. Departmental staff have also been contacting assessors directly if they have submitted an incorrect invoice to explain what needs to be fixed. These practices will continue under my new department. Given the large number of invoices currently on hand and expected in coming weeks, I have asked my department to provide additional resources to ensure that correct invoices are paid within the required timeframes. I have also asked my department to hold discussions with ABSA about how it can assist its members to submit correct invoices.

Fourth, when the Green Loans Program was rolled out in July 2009, households receiving a home sustainability assessment were eligible for a $50 Green Rewards Card. However, no Green Rewards Cards have been distributed to households to date. I have asked my department to provide further detail on how this might be addressed quickly, and will consider this matter further when I receive that advice.

Fifth, there is the issue of the loans themselves. In the first six months of the program there was a low uptake of loans. This was due to a number of factors, including the slowness with which assessment reports were made available to households and a potentially lower appetite to enter into debt in the latter half of last year given the global financial crisis. As at 28 February 2010, participating financial institutions advised that they had received 2,864 applications for green loans and had approved 1,705.

DEWHA has been working, and my department will continue to work, with the financial institutions to assist in processing applications before 22 March 2010, which is the cut-off date for loans to have been approved and contracts signed, in line with the government’s announcement on the discontinuation of this component of the program. I am aware that a number of financial institutions have stopped taking new applications for green loans, instead choosing to focus on processing the loan applications they already have to hand ahead of the 22 March 2010 deadline. As at 28 February, I am advised that all correct invoices received from the financial institutions had been paid.

Sixth, the government understands that there are many households and assessors seeking information on the Green Loans Program at the moment. There are currently two call centres operating for the program. The booking hotline receives bookings for assessments from assessors and households, and provides advice to financial institutions. As at 3 March 2010, the average wait time for the booking centre was less than 10 seconds for all categories of callers, and the maximum wait time was less than two minutes.

A second hotline was established on 20 February to provide information on the changes to the program. On 20 and 21 February, the call centre performed outbound calls to inform assessors of the changes to the program. Since 22 February, the call centre has been receiving inbound calls. The demand for information through the information hotline has been considerable. I understand that the average wait time for callers is down to less than three minutes at this point in time.

The department has also set up a centralised process for dealing with written enquiries, via the ‘contact us’ tab on the green loans website. Unfortunately, due to the volume of written enquiries received, particularly since the program changes were announced, the time taken to respond to these enquiries has been considerable. To give the Senate some sense of the scale of this, the Department of the Environment, Water, Heritage and the Arts received more than 7,500 written enquiries over the period 25 February to 9 March 2010—that is significantly more enquiries than were received over the course of several months previously.

I understand that people may be frustrated about the timeliness of responses to email and online queries. I have asked the secretary of my department to consider the need for additional resources in this area to ensure enquiries are responded to within reasonable time frames. I would ask households and assessors to bear with the government as we work through the many outstanding inquiries. The government will endeavour to make information on the program available via the internet, the information line, and via direct communications with assessors as we work through the implementation issues associated with this program.

Seventh, it is important that this program has a stronger compliance and audit component to ensure that assessments have been properly completed. I have asked the secretary to ensure that existing compliance and audit activity for this program is expanded and fast-tracked and that further advice be provided to me on this issue as soon as possible. We have an obligation to ensure that public funds are being used responsibly, and for the intended purpose.

Eighth, there has also been some criticism of the quality of training provided to assessors by training organisations. This is of particular concern to me because it goes to the public confidence in the quality of the assessment reports which households are receiving, and in the program itself. The compliance regime which I have directed the department to expand will be focusing on the quality of assessment reports provided by assessors. This will be important information to help us identify the risk of assessors not meeting their obligations under their contract.

I have also asked my department to provide me with options to assure and improve the professional standard of assessors contracted to the program. Work is already in train to put in place a nationally accredited training module for assessors. The timing of this is subject to Commonwealth and state and territory processes in the training sphere and is likely to be some months away. Because this accredited training module is still some time away, I intend to explore interim mechanisms to improve confidence in assessors’ professional standards as soon as possible.

It is obvious, from the information I have provided to the Senate today, that the challenges for the Green Loans Program are many. The government acknowledges these challenges. The problems which exist are not acceptable and that is why I am taking steps to address them. As I have indicated, I have asked my department to provide significant additional resources to:

• address the backlog of assessment reports not yet provided to households;
• reduce any delay in payment of correct invoices from assessors, and ensure assessors are informed of correct invoicing techniques;
• expand and fast-track the compliance regime for the program to ensure quality assessments are being provided;
• provide me with advice on interim steps to assure and improve the professional standards of assessors;
• provide me with advice regarding the Green Rewards Card; and
• further improve customer service standards by ensuring the wait times on telephone hotlines remain as low as possible, and that there is significant improvement in the time taken to respond to email and online enquiries.

These are significant problems to overcome, and they may take some time to address. However, I have made it clear that these problems should be rectified as soon as possible. Addressing these issues is only the beginning of a process of improvement in this area. There are a number of reviews currently underway which will provide additional information to the government on what further action, if any, ought to be taken.

I will shortly be meeting with representatives from the assessor industry body, ABSA, for the first time to discuss this program. I will also be meeting with assessors to discuss their concerns. I want to signal now that the way in which I intend to address the many problems with this program is to engage fully with its stakeholders. I want to work with them to help resolve these problems.

I want to turn now, in closing, to a number of reviews which are currently underway in relation to this program. Prior to the Green Loans Program moving into my portfolio, Minister Garrett had instructed the Secretary of the Department of the Environment, Water, Heritage and the Arts to immediately implement an independent external process of inquiry in relation to all contractual agreements and procurement processes entered into during the final design and implementation of the Green Loans Program. This inquiry is underway and will report in April 2010.

Minister Garrett also initiated an audit of the assessor accreditation process and adherence to the terms of the Protocol for Assessor Accrediting Organisations between the department and ABSA as the accrediting organisation. This is being conducted by external audit firm PricewaterhouseCoopers. This audit is due to conclude shortly. Further, the Australian National Audit Office has started a performance audit of the Green Loans Program. The Auditor-General currently expects to complete this audit in the second half of the year.

Management of this program in the short term needs to have regard to both the timelines of these reviews and the issues these reviews have been set up to consider. Approximately 4,000 assessors are presently contracted to take part in the program. As I have outlined, the government is reviewing the relevant contracts and processes to ensure assessors currently contracted to conduct assessments are meeting all of the program requirements, and will take further action as is necessary. I also intend to take the opportunity to consider the findings of the reviews into contractual arrangements and procurement under this program, and into accreditation processes, before proceeding to finalise additional assessor contracts. This will enable the outcomes of the reviews to inform both subsequent and current contracting arrangements. In the meantime, new bookings will continue to be accepted, existing assessors contracted under the program can continue to complete assessments in line with the cap of five assessments per week and three assessments per day, and households that have booked assessments will continue to receive their assessments.

In closing, I make clear again that the government is committed to delivering programs that are effective and deliver value for money. In regard to the Green Loans Program, I will be working quickly to achieve these objectives. I thank the Senate for the courtesy of allowing me to make this statement.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

by leave—I move:

That the Senate take note of the statement.

At the outset, I thank the minister for the courtesy of providing a copy of the statement shortly before making her remarks. This is clearly ‘air the dirty laundry’ day for the government. The visit by President Yudhoyono and the media attention that goes with that visit have seen not only this minister come in here and make a statement on the Green Loans Program but, as I understand it, Minister Combet make a similar statement, on the Home Insulation Program, in the other place. These two poor, unfortunate government ministers have had to pick up the mess left by Minister Garrett in his portfolio. They have come out today to air the dirty laundry and reveal what a comprehensive mess and disaster he made of his portfolio.

It is safe to say that in the Green Loans Program there has been mismanagement of monumental proportions. The only reason the Green Loans Program has not consistently been on the front pages over the last couple of weeks, as the failure upon failure of it has been realised, is that it has had to compete with the human tragedy of the Home Insulation Program for disgraceful management and poor policymaking by this government. It has had to compete with another program equally mismanaged by Minister Garrett. The fact that Minister Garrett continues to occupy a seat around the cabinet table, despite his failures in the Home Insulation Program and his failures in the Green Loans Program—which Minister Wong has just so comprehensively outlined—is an indictment of the government’s and the Prime Minister’s standards of ministerial conduct.

Today the minister has outlined all of the dirty linen in green loans. She has made, in many ways, a full confessional. In making that full confessional, there has been talk of reviews and lots of nice attempts at comfort but no changes and no actions to address the problems that have been encountered in this program. In fairness, the minister has had just two days in the portfolio and it has been a little under two weeks since the Prime Minister announced the changes. But, frankly, this government should not just be saying, ‘We’ve got a massive problem’; they should be saying, ‘We’ve got a massive problem and we have a plan to fix it.’ It is the plan to fix it that is so sorely lacking.

The problems in this program have been evident not just over the last couple of weeks but from day one. This was originally an election policy the government took to the election. In the election 2007 policy document Solar schools—solar homes the promise was to:

Offer low interest Green Loans of up to $10,000 each to make 200,000 existing homes more energy and water efficient, with subsidised environmental audits and free Green Renovations packs.

The government funded its policy in the 2008 budget, the first budget of the Rudd government. We started asking questions in the budget estimates in May 2008 and we were aghast—I know that Senator Milne was there as well—to see just how poorly planned this program was. We were so aghast that, in the press release I put out after those budget estimates, on 29 May 2008, I said:

His own program now appears too hard for Mr Garrett to actually deliver.

Those words, sadly, seem a little prophetic today. Minister Garrett was two weeks ago stripped of responsibility because he could not deliver on this program. He could not deliver because, as was evident, his departmental officials had no idea what they were doing.

At that time, alarm bells should have been ringing inside government about the Green Loans Program. Instead, they charged ahead. Just like with the Home Insulation Program, they failed to listen to the warnings, they failed to acknowledge that the department did not have the skills or the capacity to deliver and they simply charged ahead blindly into the future, hoping it would all work out for the best.

On this program, they did not even have the excuse that it was part of the stimulus package. That is the excuse that gets wheeled out for the Home Insulation Program—that it was part of the stimulus package and therefore needed to be done quickly. This one was not even part of the stimulus package. Then, they scaled back the program before it even started. By the time it became operational, in July 2009, they had wound back the promise of 200,000 green loans to 75,000 green loans. Yet they still could not get it right in the implementation.

Let us go through some of the issues that the minister highlighted in her ministerial statement. She acknowledged that 210,864 home sustainability assessments have been completed. Of those, around 84,000 reports have been returned from the department to households. Around 100,000 reports that have been submitted to the Department of the Environment, Water, Heritage and the Arts have not yet been sent out to households. Well over half of the reports completed in this program, which has been operating since July last year, a hundred thousand of them, are languishing in the department of environment somewhere not getting back to households. It is abject failure of process to return reports that have been completed on people’s homes, completed by homeowners who acted in good faith in getting a home sustainability assessment undertaken by assessors who acted in good faith in going in there and completing that assessment and returning it to the department of environment, and 100,000 of them, more than half, have languished in the department ever since then.

The minister highlighted the number of assessors. She said there are around 4,000 assessors contracted to the department. Those 4,000 assessors and the approximately 7,500 people who have actually been accredited with ABSA or the further 1,800 people who have completed training—so 9,300 trained assessors all up—wonder why there is not enough work to go around, why they have not been able to get through to the booking service, what has gone wrong. Most of all they wonder why there are so many of them. Why are there more than 9,000 trained assessors out there and why are there 4,000 contracted to the department? Assessors made their decision to get involved based on statements such as Minister Garrett’s press release of 8 May 2009, when he said there would be 1,000 home sustainability assessors, or the statement of Ms Robyn Kruk, the secretary of the department, to the Australian Economic Forum on 20 August 2009 when she said the program would be delivered through training 1,000 home sustainability assessors. So the government went out there and told people, ‘You might like to become a home sustainability assessor and we will accredit 1,000 of you,’ and somehow accidentally ended up with 4,000 of them.

How on earth does this happen? How does this government consider itself to be remotely capable in the management of this program when it ends up with four times the number of assessors trained to what it said it would have? It is a remarkable failure. Of course, these people have paid money to become assessors, have taken time out of their lives to become assessors, have set up business plans on the premise of becoming assessors, have set their lives up on this premise, only to discover that the government did not live up to its word, did not deliver on the promises it made and has failed them miserably as a result. It has failed to pay them as well. There are 1,500 invoices currently waiting in the department of environment to pay assessors. Indeed, it has failed to obviously put in place a clear process for how those invoices should be submitted, because around 50 per cent of invoices received by the department of environment have been incorrect or incomplete when first submitted. I find it hard to believe that 50 per cent of assessors are getting it wrong. The department must have put in place a totally flawed framework, and indeed the previous minister’s statement indicates that it was previously as high as 70 per cent of invoices being incorrect.

The minister said that there were three key pillars to this program, one being the home assessment, another being the green loan, and the third being the Green Rewards Card. This program was started in July 2009 and people who got an assessment were meant to be getting a $50 Green Rewards Card. What did the minister tell us today? No Green Rewards Cards have been distributed to households to date. When questioned at estimates just a few weeks ago, the department had no idea how they were going to provide them to households. So they have had since July last year when the program started, let alone more than a year before that when the budget funding was first announced, to work out how to send $50 cards to people—and they could not even send one of them out, for the more than 300,000 assessments that have been undertaken. It is an absolute outrage and a complete failure in the department, and indeed of the minister for not asking and finding out what on earth was going wrong. Why wasn’t the minister bringing the departmental officials in and saying, ‘How can you be getting every single aspect of this program so fundamentally wrong?’

We look at the applications for green loans and at Minister Garrett when he announced changes to the Green Loans Program on 19 February. He said they were going to discontinue the loans component of green loans. It sounds like something out of The Hollowmen that the government now has a Green Loans Program that does not have any loans. But that strange fact aside, he said that they were doing so because it had proven to be less popular. We now know it had proven to be less popular because more than half the assessments undertaken never made it back to households, because 100,000 of them were languishing in the department or even more probably at that time failing to get back to households. But they said they would give people until 22 March to apply. We know that there are still 100,000 assessments languishing there, therefore those homeowners cannot apply for a green loan. They do not have any chance to do so.

The minister today said that she was aware that a number of financial institutions have stopped taking new applications. Let us look at that number. Back on 14 February, before the loans component was suspended, there were 16 participating financial institutions and eight which were developing a product to offer. Today what does the green loans website say? It says that only three of them are left. So ‘a number’ is basically all of them. I understand that when contacted today the Berrima District Credit Union said that it is not offering green loans anymore, and the Community First Credit Union said that it had pulled out as well. So there is only one left, and that is the AWA Credit Union, available to Alcoa employees, contractors and their families. So the only people up until the 22 March deadline that the government has put in place for people to apply for a green loan who can still actually put an application in are employees of Alcoa—the only people in Australia are employees of Alcoa. The minister says a number of financial institutions have stopped taking new applications; they all have. Australians can no longer take out a green loan despite the government’s assurances that they had until 22 March.

The minister indicated that DEWHA is struggling to keep up with the more than 7,500 written inquiries and complaints it received over the period 25 February to 9 March. I am sure Senator Milne would agree that our offices have received a fair number of written inquiries and complaints over that period too, that we have all heard from people screaming and complaining, wanting to know what the government is going to do to fix this mess. The minister promised that work was already in train to put in place a nationally accredited training module for assessors—some would say a little too late because 300,000 of the 900,000-odd assessments have already been concluded. There will probably be more than that by the time this training module is put into place. So the government now is questioning whether the training was appropriate for the assessors it has had in the field for so long. The government employed more than four times the number than it intended at the start and is now trying to work through a training program to fix things. Well the horse has well and truly bolted. It is a little late in many ways to be closing the gate but better to get things right now than never, I guess.

The minister said that she will soon meet for the first time with representatives from the assessor body, ABSA. Again, I acknowledge she has been the minister for only two days but in the two weeks since the Prime Minister made this announcement I would have thought the association representing the assessors would have been one of the first groups the minister would have met. I suggest to the minister that, as ABSA officials are in the building at present—I know because I was meant to be meeting with them right now—perhaps she could meet with them today to discuss the many concerns of the thousands of registered assessors. The minister indicated that a lot of reviews are under way. That, of course, is the process of the Rudd government—if in doubt, review; if in doubt, set up another inquiry. That is the way they promise that things will be fixed.

There is an independent, external process being put in place for reviewing within the department of the environment. I trust that will shift across to the new department. There is an audit and report under way which will be completed by April. An audit of assessor accreditation processes is being undertaken by PricewaterhouseCoopers. The commitment I would like to hear from the minister, which she has not made, is that all of these reviews and all of these audits will be released publicly, so that we can see just how wrong the government got it and, more importantly, the recommendations, so that we can hold the government to account to fix this debacle. The minister should today commit to publicly releasing these audits, these reviews, as soon as they are completed. The government has poorly managed this program and should be held to account for how it will be administered in the future.

There are a litany of flaws and failings in the minister’s statement today, but they are cold, hard words and little else for the people affected by this program—the assessors and homeowners who have acted in good faith, the small business people and people concerned about the environment who acted in good faith to do their best to improve their homes, only to be so severely let down by the government. The minister’s statement is full of cold words but has little on action, little that will explain to people out there, to the assessors, how the thousands of assessors, who are now effectively unemployed because of the government, will manage to find work.

The government put in place a cap of 5,000, yet there are around 9,600 assessors. How is the government going to support all of those assessors? With the cap on assessments that can be put in place by the government, will there be enough work even for the lucky 5,000? Having accredited 4,000, how will the government choose the other 1,000? What will be the merit process be? The government has not outlined any of those points. What of the homeowners who invited assessors into their homes to conduct an assessment in the belief that they could apply for a green loan? What is the government going to do for those who have had assessments, some as far back as October of last year, who at least know that there are no longer green loans available, those 100,000 who are still waiting to get their report back? What is the government going to do for them?

What is fundamentally missing from the minister’s statement today is any sense of how the government is going to evaluate the success of undertaking nearly one million home sustainability assessments across Australia. At least under its original model there was the green loans component. We could see how many people took out a loan and could measure what they did with that loan. Now people will get an audit undertaken and that audit will be returned to them, we hope, a little more speedily than has been the case to date, but the government will have no idea what people do in response to that audit. There is no evaluation process in place, there are no evaluation mechanisms and the government should be saying how it is going to measure the benefit from a program spending $150 million-plus of taxpayers’ money. We know there will be lots of paper flying around but what will be the environmental benefit; what will be the energy efficiency benefit; what will be the water savings? These are the things the government needs to spell out and needs to ensure are quite clearly measured.

Lastly, we had a burst of honesty last Friday from Dr Parkinson, the head of the Department of Climate Change. When briefing staff, he acknowledged that his department has no more skills in program delivery than the department of environment, which has just been stripped of this program. I am pleased to hear the minister say that she has instructed the department to commit extra staff resources. Lord knows they have plenty to go around—staff who have been hired to work on the ETS who have nothing to do at present. I am pleased to know that she is reallocating those staff to work on this program and presumably on the home insulation debacle as well, but she needs to ensure that they know about program delivery not just about policy development. Otherwise, we will see the same tragic mistakes, mistakes which result in a waste of money, loss of opportunity, loss of jobs and a disaster for all Australians.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise to comment on and to note the statement of the Minister for Climate Change, Energy Efficiency and Water on the Green Loans Program. This is a tragedy. It is a tragedy for the environment and the economy and it is a great human tragedy as well. It is one that should never have occurred. This was a great idea: retro-fitting Australia’s houses to be energy efficient is something that the Greens have been advocating for a long time. It was a way of creating jobs and building critical mass for the technologies involved. It was part of a transition to a low-carbon economy. It was about cutting power bills for people by making their houses more energy-efficient and therefore cutting their demand. It was all the things you would want: it was a new direction in education and training, it was the right direction for the economy and it was about saving energy and cutting people’s cost of living. It had all of those elements going for it and yet it was mismanaged in the most appalling way by the Department of the Environment, Water, Heritage and the Arts and by Minister Garrett’s oversight of that department.

To begin with, I will comment on the complete lack of recognition in this statement of the human tragedy that has been the green loans scheme. First of all, it is a human tragedy for the assessors. We have in front of us lists of numbers. I was the first person to point out in this place that Minister Garrett had said this would be limited to between 1,000 and 2,000 assessors. I raised with the minister some months ago the fact that ABSA had pointed out, and they were warned a long time ago, that they were going to exceed that number and there were going to be a whole lot more assessors who were trained and accredited. But the government did nothing. It was denied by the department. It has been denied in estimates—it has been denied and denied. If I had the time I would go back through all the department’s answers in estimates and see who misled the Senate over that time. But I do not have time for that because I actually want to address what has gone on here.

Let me explain about this human tragedy, Madam Acting Deputy President. I have received hundreds of emails from assessors and the stories are incredibly similar. People have left good jobs in many cases to retrain as a home sustainability assessor. People trying to get back into the workforce saw this as worthwhile, purposeful work for the future in a growth industry. Companies took on additional people in order to do this work. And what was the cost to them? The costs were manyfold but on average people paid around $3,000 for training and they had to pay for insurance and accreditation. Many of these people did not have that money and some of them had to borrow money or to sell things. Some of them used their credit cards—maxed out their credit cards—in order to be able to do this. In fact, there is one story online today from someone who says:

... I left my comfortable desk job last year, set up my own business, and trained to become a government-licensed Home Sustainability Assessor.

Three months later, I still haven’t done a damn thing for the environment. I don’t even have a licence. My family is surviving on credit cards, and I am edging dangerously closer to bankruptcy every day. So how did it come to this?

That is a story I am being told by a lot of people. Today there are about 10,000 people across Australia who have outlaid money in good faith and who are now being told, ‘Sorry, that’s it. The government got it wrong, so we have transferred responsibility to another minister. We’re not looking back, we’re looking forward. We’re working out how we’re going to address this into the future.’ I can appreciate Minister Wong’s point of view: that is what she has been charged with and that is what she must do. But the community expects a few answers here. Who is going to be held responsible for the fact that many people are now in financial difficulties? Many people’s hopes are dashed. Who is actually responsible for this? The community wants accountability and I have been asking this government about accountability for the green loans scheme from day one.

The thing that goes with accountability is compensation. The Prime Minister took personal responsibility for the insulation debacle. He said, ‘Insulation companies lost money because of the government’s mismanagement and we are going to pay compensation.’ Something has to be done here too. Something has to be done for these people. We have people trained, accredited and registered as assessors. We have others trained and accredited, and others trained but not yet accredited. The government says that at the end of this process the number of assessors is going to be capped at 5,000. The point is: some of the people who are trained, accredited and registered have appalling training; some have excellent training and some who have been trained recently but are not yet accredited have excellent training. So we have a complete hotchpotch of quality in the training that is being provided to people even though they have had to pay a relatively similar amount for that training. I would like to know from the minister what she is going to do.

I would also like to alert the minister that in that department Stephen Berry led people to believe that the government, at government expense, would train people to upgrade their qualifications to certificate IV. I told the government that in estimates and have provided evidence of that to the government. Therefore, I want to know from the government: is it going to pay to allow those assessors who want to stay in the business to upgrade their qualifications, so they have a good level of training, at government expense? And, given that they were misled about the nature of the scheme, is there going to be compensation for people who decide they are not going to proceed with trying to get accreditation or registration? One issue that the government has not mentioned here is compensation—it clearly needs to be looked at and paid. It is a question of fairness.

The other human tragedy is the consumers. People in good faith had booked a home sustainability assessment. In some cases, people turned up at the door and said: ‘I am not even going to bother to come inside. I don’t need to come inside. Tick and flick—have you got this, have you got that? Tick the box—okay, here’s your assessment money from the government and off I go.’ So there were sharks and cowboys all over the place in this program. Other people spent two or three hours going right through the house, explaining to people what was going on and how they could be helped, and so on and so forth. But, when these reports came back from the government to those 84,000 or so consumers who received one, the reports will be of incredibly uneven value because of the way in which they were done.

Another matter which the minister did not mention but which I wanted to look at was that RMIT worked on the tool that underpinned the software for this program. That tool was changed at various times through the program so that what was emphasised as being important changed in how the reports came out, in many cases making fools of the assessors who had said to the householder, ‘Well, the best value for money would be X and the report coming out says no, it would be Y.’ That issue of the usefulness or otherwise of the tool is important.

The quality of these assessments for the householder is even more critical now because, since they are not going to get a green loan, they are probably going to be thinking that on this list of things that probably could be done there is something they might save up to do. If the report is wrong, worthless or skewed in the wrong direction, then they are going to be working in their home for something that is not going to deliver them energy efficiency benefits. There needs to be an audit which goes back and looks at what the house was, what the report was and the accuracy of that report and the weighting of this tool. For example, air leaks in houses should be one of the basic things that should be done, yet in some of these reports that is not weighted as a basic thing that you would do for energy efficiency.

Let me go to the part played by the banks. Now that there are no loans, people are going to finally be very angry—because there are only 84,000 reports out there at the moment. So, out of 210,864 people who have had their assessments done, 126,864 households are not now able to apply for a green loan. They cannot apply for one without the report and even if the report comes it is too late—the banks are not offering. Why aren’t they? The government was meant to have a contractual arrangement with financial institutions. The government says the loans are meant to be available until 22 March, so how can they just all pull out of it and say they are not offering these any more?

We have heard reports of people who got the $10,000 and offset their mortgage with it. They have not spent it on any of the technology that they supposedly got the loans for because the banks do not care. As long as the government pays the interest subsidy on the loan, the banks are not going to go out to check whether the householder has actually bought anything with it or whether they are just using it as an offset on their mortgage. All kinds of problems are associated with this.

On the human level for the assessors, whilst it might sound reasonable for the government to cap the number of assessments to five per week, it has now condemned people in this program to a very small amount of part-time work. So a lot of assessors who went into this thinking it would be a full-time career now will have to abandon it altogether because they will get only two days work when they want full-time work. We are going to lose a lot of the good, well-trained assessors from the program because the government has now declared it to be simply a part-time program. The other thing that the government did not address in this statement is how five companies got to have special arrangements with the government when individual self-employed assessors and small business did not. How did that happen? We still have not heard why Fieldforce had a special arrangement with the government whereby they could bypass the booking system. The minister did not talk about why the government failed to deliver the online booking service that was promised and why we continue to end up with the call centre and the chaos that has gone on with the call centre ever since.

There are so many issues here that really need to be looked at. Frankly, this has been very badly designed. It is not like a lot of other programs where if one thing goes wrong there is a domino effect and the whole thing falls over. This was flawed in its design and flawed in its implementation. Every aspect of the design was wrong. For example, an audit program was built into the pilot phase of the Green Loans Program. It was never implemented. There was no audit function in this program. Who is responsible for that? Is it the minister? Is it the department? Is it the secretary? Apparently, it is nobody now because we are looking to the future; we are not looking to the past. The fact that there are people around Australia who have been ruined financially because they took the government at its word does not seem to matter now because we are moving forward; we are not looking back. The Greens are looking back and forward at the same time. I wrote a letter to the Auditor-General and said that this program was a complete mess. I do not write to the Auditor-General lightly. I said, ‘You really need to look at this use of taxpayers’ money, the management of the department, because the minister has carefully made sure that the internal audits that were being done were looking not internally at the department’s workings but at the department’s association with ABSA and the department’s association with other people.’

I am very pleased that, as a result of my letter to him, the Auditor-General has agreed to do a full audit of the department and how all this debacle occurred. But that is not going to take us forward on the key questions that I think the government has to address. The first is that it needs to reinstate some green loans. You have to be able to borrow some money when you get your report; otherwise, what is the point? You will have a report in your hand but to no end. Where are you going to get the money from to actually implement the report? Secondly, the government needs to look to the quality of the reports that have already been done and conduct a reality check on the ground in those houses to make sure that the reports are reasonable.

Third, there will have to be an audit of the nature of the training that all the auditors did and some fair process, because it simply would not be fair to keep the 4,000-odd people who are registered with the government at the moment and to keep out other people who have been trained and accredited when there is such uneven quality. That means offering people the opportunity to upgrade their training at Commonwealth expense or, alternatively, offering for them to be compensated and to be able to withdraw from the scheme. We have got to have some way of doing this fairly, and it is no use saying: ‘I’m sorry. This is a hard decision. Some people are going to miss out.’ They are going to miss out because the government made such a mess of this in the first place. It is absolutely imperative that the government recognise, as they did with the insulation scheme, that there needs to be compensation. They need to sort this out now in a fair and just way and make sure that there is some compensation and that people are allowed to leave. I particularly want to hold the government to account for Stephen Berry’s promise that the government would fund upgrading to certificate IV, and for saying there was no training program in place in the first place. Yes, that is true, but there was a training program in Victoria that could have been used as an interim measure. Perhaps the minister will see that as an interim measure.

How can it be that the department embraces and launches a program and they do not even have a template of how you invoice for this particular program? They do not even have software that works. They do not even have their online booking service that they promised from day one. They do not even have their audit function. They have not got anything in place when it is launched. Then this debacle ensues over months and months. When people bring it to the parliament, the government says: ‘No, everything’s fine. We’ve fixed the software.’ Wrong. The software has never worked properly in terms of this program. ‘Oh, we’ve got the online booking system ready but we’re just not switching it on because if we do there’ll be this whole rush at the green loans.’ Well, the booking system was promised from day one. So I want to know: who is responsible to make sure we never have this debacle in project delivery again?

I want to make sure that we have a green loans program moving into the future that has green loans at the end of it and that has high-quality assessment reports on households that people can have confidence in and know are an accurate assessment of the energy efficiency of their home and the improvements that could be made. But I want to make sure that there is a fair and just way for some of the people who have in good faith entered this program to now be able to leave it, in terms of their training. It is a disgrace that you have people out there, as this person says—and he is not the only one—surviving on credit cards, edging dangerously closer to bankruptcy every day. Several people have had to sell their car, for example. There are all sorts of human tragedies here. It must be addressed.

The Prime Minister cannot take responsibility for insulation just because the community is so outraged about the fact that people have died as a result of that program. The community had every right to be outraged about that, and the Prime Minister was right to start looking at taking personal responsibility and at compensation. But on this one he has to do the same, and even more so, because this was not rushed through in the stimulus package. This was an election promise in 2007. It was in the 2008 budget and it began on 1 July 2009. It was a supposedly well thought through election promise, a budget responsibility. It had a lead time since the government came into it. And it was an utter and complete debacle. How can that be? How can it be that a Rudd government promise with all that lead time ends up with every single aspect of the program being mismanaged, to the tragedy of families around Australia, to loss for the environment, and to loss of consumer confidence in the transformative nature of these programs to the low-carbon economy? That is something that the government will be held to account for by the community as we approach the federal election.

Question agreed to.