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

I table the ministerial statement on the Home Insulation Program.

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.

I rise to speak once more, as many have in this House, on the Home Insulation Program—the topic of the ministerial statement given yesterday by the Minister Assisting the Minister for Climate Change, Mr Combet. It was given almost at the same time as the Minister for Climate Change, Energy Efficiency and Water, Senator Wong, herself was making a ministerial statement in this place in relation to the green loans saga. As I said yesterday when taking note of that ministerial statement, it was transparently the government’s ‘air the dirty laundry’ afternoon. With all of the other things happening in Canberra yesterday, with the visit of the Indonesian President and otherwise, the government decided it was a good time to get all the dirt out—to wheel it out. So we had the spectacle of Senator Wong and Minister Combet both on their feet in both chambers at the same time making full confessionals, as it were, on behalf of the government about the manifest failures in the programs that Peter Garrett, then the Minister for the Environment, Heritage and the Arts, was responsible for administering on behalf of the government.

These two programs—the Home Insulation Program and the Green Loans Program—together are worth billions of taxpayer dollars, together involve hundreds of thousands of Australians and together are a failure and a disaster on every score that anybody could consider. They are a failure and a disaster not least of all because in both instances there were warning signs for the government that it failed to heed and failed to act upon in relation to these programs. Had it heeded, had it acted upon, those warning signs, it could have averted the disasters that have occurred in both of these programs.

Specifically, the Home Insulation Program is truly a human tragedy, an economic tragedy and an environmental tragedy. Peter Garrett has truly overseen a tragedy on all three fronts in this area. The human toll has been well discussed in this place, the other place and through the media—the tragic loss of life of four young installers, house fires in at least 93 Australian homes, the potential risk to thousands more Australian homes fitted with either foil insulation or other insulation products, that homes may be at risk of electrification or indeed, following on from that, potentially at risk of fire. There are real risks, real tolls and real human tragedy in this.

We have seen, from the government’s need to bring an early halt to this program, further human tragedy which is related to economic tragedy, and that is the loss of jobs and the loss of businesses. There have been serious problems affecting real people throughout Australia—thousands of ordinary Australians. Senator Colbeck cited today some examples from Tasmania. We could all cite examples from each of our home states of people who have been put out of work as a result of the mismanagement of this program, people who are losing businesses, in many cases business that were operating long, long before the government brought about and supercharged this program with its stimulus spending last year. It is a seriously grave toll on the human front and the economic front from that loss of jobs and that loss of businesses.

But let us not forget the use of taxpayers’ money here. Around 1.1 million installations of insulation have occurred under this program at a subsidy of between $1,200 or, for most of the life of the program, $1,600. We are looking at well in excess of $1 billion that has already been spent by the government on insulation under this program. Some of it, of course, has been worth while. Some of it will be of benefit to those lucky homeowners who have had the right product installed correctly. But all too much of it either has been installed incorrectly or has been the wrong product. Indeed, in too many instances, we see that the financial mechanisms put in place to ensure that this program did not attract fraudsters were inadequate. We see homes that have been insulated do not really exist.

The government has failed to manage every aspect of this program. On the budgetary front, there is not only the wasted money that has gone before but also now the cost of the clean-up—the fix-up—and how much that is going to be. We see no evidence from the government as to what that will be. There is no idea from the government as to what the cost of that clean-up is. In his ministerial statement, Minister Combet talks about the clean-up and talks about getting it done, but there is no cost estimate. When asked in this chamber today, Minister Wong could not give any indication of a budgetary allocation towards the cost of this clean-up. All we know is that industry estimates vary. The cost of removing the foil insulation or installing electrical safety switches could be between $50 million and $150 million with industry estimates of the overall cost of the inspections and the work required to fix up this mess ranging up to $450 million—a bill that the Australian taxpayer is going to have to bear; a cost because of the mismanagement of this program and a cost that comes on top of the $1 billion-plus spent on this program to start with. This is massive waste of taxpayers’ money and, indeed, is a massive budgetary and economic tragedy.

Lastly, it is an environmental tragedy because of the loss of confidence that has occurred from the damage to reputable businesses that were doing the right thing in trying to install product that had an environmental benefit. There is the loss of confidence that has occurred among investors who might have thought about going into this industry and providing environmental benefits. There is the loss of confidence that has occurred from homeowners in terms of getting insulation into their homes. It is a massive loss of confidence across the board in pursuing the type of environmental outcomes that the government said this program was about when it started.

Today, we learn that there could be further environmental negatives flowing from the clean-up of this program. The government, in saying that it is going to take foil insulation out of potentially 50,300 homes, has no idea of what it will do with that foil insulation. It has no idea whether it will end up in landfill or where it will go. I do not know how much energy goes into manufacturing foil insulation, but I imagine that it is not insubstantial. I imagine that a reasonable amount of energy goes into manufacturing foil insulation. I imagine that it comes with a reasonable carbon footprint when installed, with the aim, of course, that it then repays that and more over its life. If it is ripped out within months of being installed and put into landfill, that is energy and economic, financial and environmental resources wasted by this government. It is a waste of resources for the economy. It is also a waste of human and environmental capital.

The government says that it stands by the ministerial statements it made yesterday in regard to the clean-up for this program and the fix-up for the Green Loans Program. Those ministerial statements are fine. They are welcome. The government needs to act with urgency in cleaning up this mess. Today we heard Minister Arbib urging this side of the chamber to make sure that we support a new program on home insulation. They challenged us to support a new program on home insulation. I challenge the government to make sure they get a new program on home insulation right, that they get the terms of it correct, that they make sure all of the safety standards are up to scratch and that they make sure that the new program restores, as I said before, the confidence of businesses, installers and, most importantly, homeowners that they should be investing in home insulation and pursuing the environmental benefits that that offers.

There is a big task for this government. These ministerial statements make a start in laying out some of the government’s commitments, but they do not give any level of detail. The opposition will be holding the government to account for that detail. We do want to know exactly when the fix-up will start, exactly when it will be finished and exactly how much it is going to cost. We expect answers to these things over the coming weeks and, most of all, we expect the government to deliver for the Australian people by cleaning up the mess of its own making.

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

I will speak briefly to the motion. I want to start by saying that I think in this debate it would be useful if we could try and separate the fact from the hyperbole, the fact from the exaggeration and the fact from what is simply a political attack.

There was some discussion in the chamber earlier today whereby senators on that side suggested that the government had shown no regret. I think it is unfortunate that those statements were made because the government’s regret has been communicated very clearly in public statements and also by the minister assisting me in his statement, which was made in the House yesterday and tabled here today. He has expressed in a personal context his deepest regret and sympathy to the families on behalf of the government as well as himself as minister. I did want to make that point because I think there is no-one in this chamber who regards the deaths of four young men as anything other than a terrible tragedy, and that view has been put by the minister publicly as well as privately, and the sympathies communicated to the families.

There are undoubtedly significant problems with this program. I would remind those opposite that this was a very large program. As Mr Combet has said, the amount of insulation rolled out in less than eight months was to 1.1 million Australian homes. That is an average of around 137,000 homes a month. In fact, each month the number of home insulation jobs was around double the previous annual average. So, in a month, under this program, the government funded around double the previous annual average undertaken. It is an extraordinarily large number, and there are environmental benefits as a result of that rollout. It is also important to remember that the large majority of insulation installations were completed in compliance with the program.

Leaving that aside, there are clearly issues. The government has not hidden from those. We have been upfront about them. Another misfact that was put in the chamber today by another senator is that the government did not act on any of the warnings. That is not true. If you look at the statements, including the ministerial statements made by Minister Garrett and other public statements which ministers have put on the public record, we have made clear the way in which the government responded to different warnings and new advice. The most recent new advice we have also acted on, and that was in relation to the advice regarding foil whereby the advice subsequent to Minister Garrett closing this program is that the foil will need to be removed or safety switches installed. The government have moved quickly to act on that advice and have indicated that we will do so and that we will fund it.

In relation to budget issues, as the Treasurer has said, we are also very upfront about the fact that we will need to fund these measures. Those amounts will be considered in the context of budget preparation. The government will make those clear as and when they become available. This is a difficult set of problems but it is a set of problems that the government is determined to fix. Minister Combet is to be commended for the way in which he has taken on board this program, the way in which he is moving as quickly as is possible to rectify the issues in the program. He is responsibly addressing each of the various policy issues which have arisen.

But that is not enough for the opposition. They continue to come in here and make a range of assertions, many of which are simply not true, about what is occurring in relation to this program and at times, if I may suggest, are almost gleeful about some of the issues. In question time today the question about carbon footprint was put. For an opposition led by a man who thinks climate change is absolute crap to be attacking aspects of this program on the basis of carbon footprint speaks of utter hypocrisy. It really demonstrates that the opposition, in large part, are not interested in the facts associated with this program, nor in how the government is remedying those problems—but they are interested in making a range of inaccurate and wild political accusations.

This is a government that is determined to remedy the issues in this program. We will continue to work to do so. We will not pretend to the Australian people that we can fix it overnight, because we know that that is not the case. What we will say, as Minister Combet has said, is that we will work assiduously to remedy the problems with the program and to deal with the issues which have arisen.

In relation to this program, I would also make the point that this is a very comprehensive ministerial statement outlining the way forward. Minister Combet has clearly indicated to the Australian people, through the parliament, a great deal of transparency and openness about the issues and how we propose to address them. I think he is doing a very good job in relation to this program. As I said, we know these things cannot be fixed overnight, but we are determined to address them and the government has laid out the ways in which it intends to do so.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I would also like to make a few brief comments about the ministerial statement because, like the minister, I too have sat here and been a little disappointed at the level of some of the debate. I think Senator Birmingham’s contribution actually had a lot of positive aspects to it. He was trying to walk a fine line in acknowledging some of the reality that we are confronting in terms of the consequences of this program and the way that it has unfolded but at the same time trying to make some political opportunity out of it. Now this is a political environment and I understand the temptation from time to time to do that, but I think we need to cut away from some of those things. We need to look at the ministerial statement, which is a very honest attempt by this government and this minister to acknowledge and identify the problems that this program has had, and identify a proper way of addressing the problems. Of course the government has expressed regret for some of the negative outcomes of this program. This government takes the deaths very seriously and is deeply concerned about the reasons why they occurred.

Senator Birmingham, in his contribution, did identify the major problem with this program, and that was fraudsters, shysters and shonky operators coming into the system and conducting fraud, criminal activity and non-compliance. They avoided their obligations under the law and, in particular, under the occupational health and safety law. That is of deep concern to this government.

It is very easy for the opposition to say, ‘Well you should have managed the program better.’ There has been a rollout of 1.1 million homes in insulation since this program began, averaging 137,000 homes being insulated per month. I think what the opposition are suggesting is that the government—and the hyperbole over there would suggest the minister himself—should have been on the job checking on every operator in every instance, to make sure that they were following the program guidelines. The operators were legally obliged to follow these, and to comply with their legal requirements regarding occupational health and safety and all the other employment arrangements that are supposed to be put in place. These are the normal things every single employer is supposed to do. The suggestion that the minister or the department should be on the job watching every single operator—with 137,000 homes per month being insulated—is just ridiculous.

It is an obvious political line which they would like to run: ‘Well you are responsible for the program because you run it.’ We have taken the responsibility that we should take. But the problem with the fraud was not about the government making the money available for home insulation; it was about criminal activity—people avoiding their legal obligations as employers. They ought not do that. Those people ought to be held to account and this government will make them be held to account. This government, with the Federal Police and the other law enforcement agencies, will pursue those people who defrauded the Commonwealth through this program, who avoided the program guidelines and their obligations under the law and who failed to put proper occupational health and safety programs in place for their employees. They are the shysters; they are the ones who have brought it undone.

The minister went through this in detail in his statement yesterday and it is a pity more members of the opposition have not actually read it. It gives us an honest assessment of where the program is and what this government is going to do about it. The opposition says, ‘Tell us exactly how much this is going to cost.’ A lot of those things are still being worked through in fine detail but not too far into the future we will be able to identify those costs.

I think a question was asked in question time today about what sort of square meterage of insulation had been installed—what a ridiculous question. Every house has a different square meterage. To expect the minister in question time to do a calculation and work out how many square meters of roof insulation have been put in to 1.1 million houses is just ridiculous.

It demonstrates the poverty of the debate that the opposition have brought to this whole issue. They ought to now be a little bit more serious. They have made their political points, they have made their political opportunism, but they ought not make politics with the tragic aspects of this program. We need to get on and pursue those who have defrauded the government and those who have avoided their obligations. But it is also worth making the point that there were a lot of excellent operators in the system. There were long-established companies that did well, and the vast majority of home insulations were actually done in accordance with the program guidelines and with the law. It is a shame that it was those unscrupulous operators that took advantage of this program that have brought it into disrepute and created the problems we have. We acknowledge that that has damaged the whole of the industry—we freely acknowledge that. That is why, through the ministerial statement, the minister has indicated a range of programs of assistance to the industry itself and assistance to those employees who, as a result of a program closing down, will find themselves in a difficult employment situation or unemployed. We have programs in place for that and we have industry assistance programs.

We would have preferred to be in a situation where this program could continue to be rolled out, but that was not the decision that was made because of those operators that avoided the obligations of the program and their obligations under the law. So here we are doing what the government needs to do. We want to now fix those problems. We freely acknowledge the problems that are there and we want to do what is in our power to fix those problems and move forward. It is nearly as if the opposition, after acknowledging the problems and having the government acknowledge the problems that we have, do not want the solution. They do not want the solution, and now it is about opposing what the government is putting in place to address those very issues.

We want to provide some certainty for the future of this industry. Home insulation is an important thing. This program was delivering home insulation to many hundreds of thousands of people who otherwise would not have been able to afford it. The vast majority of the insulation has been installed properly. People across the board, the vast majority of those 1.1 million households, are actually obtaining the benefit of the government’s program. That ought not be lost on people. The stimulus impact to the economy when it needed it was also achieved. That ought not be lost either.

The government has taken responsibility for the management of the program for which it had responsibility and control. We need to home in on those who undermined the system, those who defrauded the Commonwealth and those who avoided their obligations under the law. We need to pursue those people and we need to really sheet the blame home honestly, without the politics that the opposition likes to apply to this, and ensure that we can move on with this program.

Question agreed to.