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Interview with John Stanley, 2UE Radio, Sydney
21 August 2009
STANLEY: I want to return to something we first raised in the show a few weeks ago. It concerns the issue of free installation that's being offered as part of the Federal Government program to stimulate the economy.
Plenty of people have raised what they think are flaws with the program. They believe that there's one company using market share to buy out all the insulation, leaving nothing for the smaller operators. Bunnings has apparently done a deal with a company called Spotless, to exclusively provide them with insulation, and because Bunnings is such a big company, they've bought up the bulk of the insulation.
We've been trying to raise these issues, because quite a few of you have raised it; people who've got it ready. And this is the purpose of this, people who have got themselves ready. They've got themselves trained and prepared to provide the service of this insulation and take advantage of the Government grant. But because you can't get the stuff, you can't actually do it.
There's also the question of whether the demand is so great that it is leading to a lot of imported insulation being used, and a number of other questions that I thought we'd be able to raise and we have been able to raise today with the Minister for the Environment, Peter Garrett, who joins me on the line now.
Peter Garrett, good afternoon to you.
GARRETT: Hi John.
STANLEY: You'd be aware of a lot of these problems. I'm sure they've come to your attention. Just first of all, Spotless and the deal with Bunnings Warehouse. Is that freezing out a lot of smaller people who are prepared to do this work?
GARRETT: Well John, we did hear one installer suggest to the department that Bunnings was stockpiling, and the department investigated that claim. I've been told that Bunnings has said that this isn't the case. In fact, Bunnings is saying to the department that all the insulation product that they receive on a weekly basis is sold within a week. They say there's no stockpiling of the product. And they also say that they're selling to all customers on an equal basis, so that's the information that we've got back from Bunnings.
I don't want to hear of anyone stockpiling. I've got to take Bunnings at face value if they're giving us that information. So that's what we received in terms of advice from them.
STANLEY: Okay, so that's they've said, so if indeed Spotless has got some deal with Bunnings to take all the insulation they've got, then that would be contrary to what they've told you?
GARRETT: Look, I don't know whether there is an arrangement of that kind at all as alleged. What I do know is that we don't have any confirmed reports at all of retailers attempting to take advantage of the Governments rebate program.
We're monitoring it closely, and it's a demand driven program. And you're quite right. There's strong demand on the program, but if there's any evidence of anti-competitive conduct at all, then I wouldn't have any hesitation in asking the ACCC to take any appropriate measures because they are the body responsible for determining whether that activity falls within the categories of unfair trading or anti-competitive conduct.
STANLEY: So if anyone's got what they consider to be evidence of that, they could get in touch with us, and we could put them over to you could we?
GARRETT: Or to the ACCC. Either/or, the department will certainly follow up on any query, response, or complaint that's made or that's alleged, and the ACCC would be the same.
STANLEY: So again, Bunnings receives their loads of insulation, and they then sell to whoever has placed orders with them. Is it possible that because Spotless is there as a large orderer, they may have just put their order in and they're just getting all the stuff that comes in?
GARRETT: Well John, who knows. I don't know the answer to that question. It's a legitimate question to pose. What I can say is that given that Bunnings has said to the department they're not stockpiling the product and that they're selling to their customers on an equal basis that my assumption is that they are conducting themselves in that way. And if there's a legitimate business arrangement that Bunnings and Spotless have been working together, it may fit within that. That's something for them to determine.
STANLEY: Yeah. Would you be worried, though, that there were people who were willing to work, to do this work, and that's what this whole thing was set up for; but can't get the product to install - so that's the stumbling block? They've got people there. They've got people willing to bring them into their homes and take advantage of the program, but they haven't got the batts to install. Are you aware of that?
GARRETT: Not specifically, but I think that the key to your question is simply this: if anybody - and here there's an allegation about Bunnings and Spotless, but there may be other allegations - but if anybody is conducting themselves in this program rollout where there's evidence of unfair trading or anti-competitive conduct, then that is a matter for the ACCC to concern itself with. And I think the fact is that most factories in Australia are running at 24/7. We're getting huge amount of stimulation in the economy. Thousands of jobs have been running out there. And we do know that it's a very popular program, as it should be, because it reduces people's energy cost as well as getting insulation in the roof.
STANLEY: There's no doubt about that. But I...
GARRETT: But I do think that if there is a specific allegation of that kind, it is something for the ACCC to take up. And I would insist that the ACCC would consider any allegations of that kind if they were properly substantiated.
STANLEY: Okay. So we can direct those people, what, to the ACCC, or to your office? How do we do that? Because I've actually got - I've got a full board of calls here and I'm sure they're all claiming...
GARRETT: To the department website is the right way for them to go. But they can also come through our office and we'll refer them on.
STANLEY: Okay, alright, so we can refer them on.
Okay. I might take some of those calls in a moment. But let me ask you this. The question of, for instance, Fletcher Insulation that makes pink batts, one of the biggest companies, they're importing about a third of their product from overseas. Are you aware of what proportion of the batts are being imported?
GARRETT: Well I think all we've got again is some anecdotal evidence in that newspaper report about Fletchers. What I do know is that other insulation deliverers, like AGI, for example, are delivering 100 per cent of their Australian manufactured product, and they're not importing, delivering any imported product; and that all of the insulation manufacturers here in Australia are going flat out at this point in time.
We want to minimise the amount of imports that come in while making sure that there is the product there for the installers to put in people's roofs.
STANLEY: Have you got any idea what the proportion of imports might be?
GARRETT: No we don't have a clear sense at that point in time because that data's not here. I've got the department looking at the question of proportions. There's always been some imports with insulation material but it's still got to meet the same Australian standards that the local material does. So I don't have a concern that if there are imported materials coming in that they're below standard. There's always been some.
STANLEY: But it's going to China that money because you're hearing the anecdotal evidence of container loads of the stuff coming in from China.
GARRETT: Yeah but John look we're six weeks into this program. Before we started this program I met with all of the installers, associations, the relevant stakeholders, the manufacturers, Fletchers and others, and we know two things; they were laying people off and they were closing down their factories. Now their factories are going flat chat and they're putting people on. And the second thing is we know that the vast majority of jobs in this Government home insulation program are downstream jobs of manufacture. So they're all about dispatch, they're about transport, they're about getting the material into the roofs, they're about the compliance and the like.
So the majority of jobs are in the post-manufacture process. We want the local manufacturing industry to continue to go gangbusters. We are going to monitor that and I'll get additional advice from my department about the proportion. But what I am confident about is that it's an incredibly successful program, we've got a very small number of complaints but we will follow them through absolutely rigorously. We are generating jobs, we are giving people the opportunity to get small businesses up and running, and this early in on the program I've only got about 0.2 per cent of the number of applications that we have that have requested any issues around compliance. We'll follow those through.
And finally, as I think I said the other day to someone else on the radio, I've also written to everybody in the country who's received insulation up to now to check that they're satisfied with the insulation that they received and to identify for my department any issues that arose which we will then also follow up.
STANLEY: Okay. Just - there's also been the suggestion that some installers, dodgy ones, are forging signatures and trying to overstate the number of square metres so they can claim the maximum rebate. So if it was 1600 bucks they may have only put in say $800 worth of insulation, but they're forging signatures and forging documents to try to get the full 1600 bucks.
GARRETT: Well again if people have issues that they want to raise in terms of alleged action that you're referring to, John then they should refer it both through Fair Trading, ACCC and my department. We will follow up on it. But just quickly to say that we've got a compliance and audit strategy in place. It includes targeted and random activities; it includes inspecting the work that's done. It includes looking at their records relating to the program. It looks at verifying the claims that have been made, and it also looks at verifying their installer compliance. And remember the way this program works is that installers have to be on the installer provider register. If there's any substantiated evidence that they have breached the guidelines in any way then they will be struck off the register so they're not able to participate in this program any more.
I'm confident, mate that the great majority of installers and certainly the industry as a whole who we've been working with in a really cooperative way, want this to be a great program for Australians delivering the insulation into their roofs...
GARRETT: ...at the proper and fair price. You know doing the job that it's meant to do but if anyone, anyone breaches the guidelines I take a dim view of it and that's why we've got a compliance program and mechanisms in place.
STANLEY: But the reason I took this up, and the concern I have was that the number of people who rang me who did exactly what you intended this program to achieve, that is they went out there, they got themselves geared up to do this, in some cases they hired people, got all the equipment ready to become installers to give themselves some work. That's what this is intended to do, to create the work. They actually can't get the batts. So what do I do with those people? I've got a list of those, how are they going to get the batts that they need to install?
GARRETT: Well my recommendation very strongly to them is to be in touch with the Australia and New Zealand Insulation Council. We're working closely with that Council on a whole range of measures, not only questions of supply but questions of how we see the delivery of this program right around Australia.
GARRETT: I'd also say to them that there are existing installing organisations who also are out there in the market place, and to this extent what we really want to see is that with manufacturing gearing up we're running almost at 24/7, we do know that there are going to be additional expansions to some of the factories here in Australia, that will mean that we will have more batts and more other forms of insulation...
STANLEY: I understand.
GARRETT: ...coming into supply. This is happening very, very quickly because it's a very, very popular program, and I know that the manufacturing side of the industry is going flat out to try and meet that demand.
STANLEY: Okay and just a final one. The $50 billion Gorgon gas project. You've suggested today you might make a decision within a week as to whether to give it the go ahead. Do you seriously suggest that you might not give it the go ahead?
GARRETT: Well, John the question here is looking at the approvals conditions that have already been done by the West Australian Environment Minister. My approval on this project isn't about the project itself, it's - that's been dealt with the by the West Australian authorities - it's about whether or not the project has any impact on matters under the national environment legislation. That's confined to impacts on listed, threatened and endangered species, and specifically the matter in front of us, a question about flatback turtles and the impact that the proposal might have on them or not.
STANLEY: Are you seriously telling me you'd make the phone call to Kevin Rudd and say look I've got a problem with a flatback turtle, this can't go ahead?
GARRETT: No - no what I'm saying is this; I look very carefully at the advice that comes through to me. I'll look at the decision and the conditions that have been put on by the West Australian Minister, and I will make sure that I've clearly looked at all of the other submissions that have come forward to me, and that on that basis I will make the decision.
I simply make the point that I'm the regulator and this exercise - as I have been on some of those other contentious issues which some of your listeners will know about - and so I play it absolutely by the book, absolutely by the Act, and I'll continue to do that in this case.
STANLEY: Okay, Mr Garrett we'll keep in touch. Thank you.
GARRETT: Thanks, John.
STANLEY: The Federal Environment Minister Peter Garrett.