The ANAO has delivered another savaging of the Department of Environment, this time over the Housing Insulation Program.
The report closely follows one of the most damning indictments of the bureaucracy in recent years by the ANAO, in relation to that Department’s handling of the Green Loans program.
While the ANAO confirmed the outcome of earlier reviews, such as that by Allan Hawke, that showed that the Government’s demand for a speedy roll-out of the program and the unregulated nature of the insulation industry opened the way for high levels of non-compliance under the program’s guidelines, the audit identified the switch on 1 July 2009 from paying households the insulation subsidy, to directly paying it to installers, as a key decision that substantially increased risks in the program.
And again, as under the Green Loans program, Minister Peter Garrett was given “overly-optimistic” (particularly about the Department’s capacity to manage risks) and “inaccurate” reports by his Department, which — crucially — never told him of resource constraints within the Department that prevented the program was being delivered effectively. In October 2009, Garrett demanded that Department improve the timeliness and accuracy of its briefing of him.
The resulting internal departmental review found a number of systemic problems both with the Department’s own information systems and its reporting processes. Four months later, the Department still hadn’t rectified some of the problems.
In the ANAO’s view, the initial phase of the program — meant to be an interim phase — “had reasonably sound processes for assessing householders’ claims for rebates against the program’s eligibility criteria and payments to householders provided a degree of assurance that the installations had been completed.” The second phase, intended to be the main phase of the program, was developed by the Department after an extensive round of consultations, and aimed at a faster implementation (the Department had originally proposed a five-year rollout for the program but had been told by the Government to implement it within two-and-a-half years).
While the main phase of the program was being developed, the relevant division of the Department charged with handling the program was warning the Departmental executive that it was “already seriously stretched in terms of its capacity to deliver.”
In developing the main phase of the program, the ANAO found that the Department assumed that householders would bother to check what sort of job installers were doing, and that installers would voluntarily comply with program guidelines about training, safety and installation. Both assumptions turned out to be flawed.
The design of Phase 2 was strongly influenced by the clear riding instruction from the Commonwealth Coordinator‐General to reduce red tape and commence work on projects as soon as possible, in keeping with the stimulus objective of the program. Consequently, some of the controls and mitigation strategies which could have been expected to have been implemented as part of HIP were not in place. While the department took steps to address some of these risks, treatments were inadequate.
Critically — as the Hawke Review found — the Department did not have an effective audit and compliance program in place to coincide with the main phase of the program, partly reflecting the flawed assumption that installers would voluntarily comply with guidelines. This was the governance gap that saw shonky operators converge on the industry, with tragic results, even as the Department introduced training and accreditation processes into the industry for the first time outside South Australia.
The interim compliance program was ineffective in stopping fraud and fly-by-nighters.
It wasn’t until late September that a more effective compliance program, run by PwC after a lengthy tender process, was established, and even then there continued to be problems with Departmental resourcing — PwC complained in February this year that the relevant area appeared too under-resourced to respond effectively.
While this report isn’t quite as damning as that relating to the Green Loans program, it shows again the serious failings of a Departmental executive that under-resourced a critical area (for much of 2009, the same area as that running Green Loans), allowed their Minister to be misled on crucial issues and given an inaccurate picture of how the program was being implemented, and failed to push back against Government demands that the program be rolled out as quickly as possible.
Do members of that ‘departmental executive’ still hold responsible positions in the new department? Who are they? What salary scales are they on? I’d like to know more about them.
The report also cleared then Minister Garrett of any wrong doing. But of course that hasn’t stopped the loud mouthed turkey Greg Hunt from once again demanding that Mr Garrett be thrown out of cabinet. This is the same Hunt who accused Garrett of being responsible for the deaths of the 4 workmen during the insulation, the same Hunt who on 4 Corners sat along side the parent of the young teenager killed during installation and milked that parents loss politically for all he could get. Hunt is a gutter dweller, he is a nasty evil user of any disgraceful means he can find to gain political points. A worthy leading member of the Abbott mob.
Gillard & Swan are up to their elbows in this debacle, along with that now disgraced incompetent Rudd the Dud. Obviously lacking both political & logistical judgement, these fools insisted against all advice that the HIP proceed when any bright 16 year old student would’ve seen that the base data DID NOT MAKE SENSE e.g:
1. Retrofit installations prior to the HIP were approx 70K per nationally. The HIP aimed to ramp up installations overnight by a factor of 15 to more than 1 million per asnnum i.e. 15 years of installations by an untrained work force in the first year to February 2010.
2. As was clearlystated at the first HIP stakeholders meeting in Canberra on 18 Feb 2009, it would be impossible to train enough tradesman or anyone else to effectively install insulation to the Australian Standard AS3999 1992: a 17 year old standard which was way out of date with best practice (thanks to Fletchers Insulation & CSR Bradford Insulation for preventing the standard’s review due initally in 1997, for ‘cost advantages’ over their competitors). Rudd’s Department of Prime Minister & Cabinet representative at that meeting, Andrew Wilson, when asked by meeting Chairman DEWHA’s Beth Riordan to respond to these concerns, advised that the PM wanted this program undertaken straight away.
3. Local industry production capacity would obviously not be able yto meet anything like these new artifical market demands, so cue a flood of unregulated, bodgy insulation products from around the world in the thousands of tonnes. (who would ever have thought?) These bodgy remian in Aussie ceilings to this day, and may be dangerous.
There’s additional compelling base data against the HIP if you want to hear them.
The ANAO report makes it clear that DEWHA advised that the HIP delivery was NOT POSSIBLE in the time frame. Garrett should have made his own assessment at that time, and like the intelligent 16 year old, decided that the HIP was a lemon, and resigned his Ministry. The DEWHA staff were never going to be able to deliver this stupid program, and they said so.
But Pete decided to stay aboard the Rudd 73% Approval Rating Train…he can’t back away from that fact.
My other clear recollection of the first meeting of stakeholders in Canberra on 18 Feb 2009, is the facile, boasting of CSR Bradford personnel immediately prior that it was their lobbying of Rudd & co that got this program underway. What a terrible legacy they’ve made for themselves– the complete destruction of the Australian retrofit insulation sector in one fell swoop. These guys wouldn’t know effective public policy if it bit them on the arse…that’s what Fletchers & CSR get for letting middle-ranking marketing executives loose in Canberra.
The majority of the 270 + pre-HIP small retail insulation companies around Australia have been left with debts of up to 2 million each, and had their life savings destroyed.
And to think Gillard as late as yesterday is sprouting the bullshit that compensation has been paid to affected legitimate insulation businesses…for the record those with the $2 million debts have received ‘up to $50 K” each….what a complete distortion of the real damage done by Gillard & cvo’s incompetence.
Let’s not forget Gillard is the politician who’s given us Cash for Clunkers, Community Climate Change Cabinet….and Rudd the Dud, along with crazy Mark Latham.
Lindsay Tanner couldn’t bear to serve under her, as he has always briefed against her & describes her a a ‘conservative careerist’…about the worst trait one polly can ascribe to a collegue.
These incompetent bastards will be lucky if they last 6 months….based on their performance to date, they don’t deserve to last 6 weeks longer.
Nice boilerplate you’ve got there.