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Doorstop interview: The Domain, Sydney
1 November 2009
PETER GARRETT: The Government announces today a series of important measures to continue a very strong rollout of energy efficiency programs for Australia that will enable us to reduce greenhouse gas emissions and energy costs, and give Australians the confidence that the steps that they are taking are making a real difference. Not only to their pocketbook but to greenhouse gas emissions as well.
Amongst those changes to the Home Insulation Program I’ve announced today that we will bring into place a series of increased measures to deal with both consumer protection, safety, and a rebate reduction down to $1200. We believe that this will achieve a number of important goals. One is to have a more orderly rollout of the insulation program. It’s a very strong demand driven program, and now that consumer confidence is returning into the marketplace we believe that this will provide more efficiencies for the program in terms of the insulation costs, and we’re very keen to see this program rollout over time and get value for taxpayer dollars.
We’re also announcing a series of safety measures effective as of today: a mandatory ban on metal fasteners for the installation of insulation: the provision of mandatory inclusion of covers to be placed over lights and down-lights and so on in ceilings. And also for the state of Queensland -where there is quite a great deal of foil insulation – the beginnings of a very thorough compliance program in terms of checking those installations that have taken place in Queensland.
As well as that from December 1st, we will be in a position to publish a name and shame list of any installers that have been removed from the register because of unfair or dodgy behaviour. We will also have in place a system of pre-examination of the installation space prior to the insulation being installed in order to make sure whether the installers know exactly whether there are or aren’t any risks in terms of the installation. This comes on top of additional compliance measures that we’ve put into place. I expect us to have some 11,000 ceiling inspections concluded by the end of the year. We have PriceWaterhouseCoopers providing independent audit and compliance advice. And as well as that of course we have now a nationally accredited training program for installation.
Additional to that we’ve also announced a series of important announcements on energy efficiency generally. From November 1st we will now see the requirement for televisions that are imported into Australia be subjected to minimum energy performance standards, and to have an energy rating affixed to them. We are also announcing for the super efficient fridges, air conditioners, and as well as other appliances: a ten star rating label which will give Australians better consumer choices if they actually want to purchase really energy efficient, super efficient appliances.
And today as well the phase out of incandescent, energy inefficient light bulbs comes to its final point. And I expect that States either will have, or will bring into place the regulations that finalise that phase-out.
All of these energy efficiency measures will provide significant cost-benefits to the Australian community. They will enable us to continue to rollout energy efficiency which is the cheapest, the most cost effective, and the most accessible means for us to reduce our greenhouse gas emissions as we go forward. And it’s a big part of the national energy efficient agenda that the Rudd Government has delivered so far.
JOURNALIST: We heard last week that there’s going to be a Senate inquiry into the insulation scheme, and the Opposition has been saying that too much money has been spend on this scheme, can this rebate reduction be seen as a concession?
GARRETT: Look the Opposition have never been in favour of Australian’s getting ceiling insulation, they opposed this scheme in the Parliament and at this point in time with the Greens saying that they want additional measures to come into the scheme, and the Opposition wanting it to be cancelled or be reduced in some way, I don’t think that this inquiry is anything more than a political stunt. The fact is that we have consulted widely with the industry since the beginning of the rollout of this scheme. We’ve had safety and compliance measures in place from day one. We are adding to them today. And we are doing that on the basis of consultations that we have had with industry, and I’ve noticed today that they have been very warmly welcomed by the industry and I think that’s a good thing.
JOURNALIST: When you say these changes will result in a more orderly rollout of the stimulus measure, what was disorderly about the way it was applied before?
GARRETT: Well I think everybody knows that this was a very very popular program. We have now insulated some 500,000 households; this is the single largest energy efficiency program that this country has ever seen. And today our announcements mean that we are adding measures for safety for compliance and for effectiveness.
And I have to say in relation to the Oppositions plan or calls for things like a Senate inquiry, the Opposition are at sixes and sevens over every issue that counts. Today we have media reports about Senator Joyce saying that people have got to stand-up and be counted in terms of people’s disagreement with his views about the ETS. He says he is going to stand on the ETS. And last week we had Senator Minchin saying even if there was accommodation by way of amendments to the Governments CPRS Bill, this still wouldn’t necessarily be passed. The Opposition are a black hole on policy here on CPRS and generally. Mr Turnbull needs to finally show a little bit of leadership and pull his troops into line and provide some consistency as we consider these very important issues in the last term of the Parliament. And I think that if Malcolm Turnbull can’t get out of his black hole and deal with the rabble that the Opposition has become then any faith that anyone has that we can have a reasonable debate about these issues would be significantly reduced.
JOURNALIST: Would you say [inaudible] reduction of the rebate from $1600 to $1200 to stop the rorting?
GARRETT: We already have a number of measures in place in terms of compliance and auditing and I added to those by requiring a market-based price guide which would give a triggering if anyone was delivering quotes from an installer which was significantly above the relevant price guide. And I have to say I am advised that the figures to hand show that we have not seen significant rorting under this scheme at all: that the average of the amounts that are being sought by way of rebate are consistent. What this change to the rebate will do is will provide more competition in the market, and it will drive demand in an orderly fashion. It will enable to rollout to happen in such a way that installers can provide a good quality service and we will be watching very carefully for anyone who doesn’t fulfil the guidelines and the new measures that I brought in today.
JOURNALIST: Is this winding back the stimulus?
GARRETT: Well what it’s doing is making sure that the consumer confidence that we can see in the system is well managed. It’s recognising that over time the opportunity for installers themselves to deliver a more competitive product is there.
JOURNALIST: But is this a decision to wind back the economic stimulus package? This was part of the [inaudible].
GARRETT: This is a decision about making a program that’s already very successful, and has been the biggest rollout of energy efficiency that Australia has ever seen a better program.
JOURNALIST: But when you combine with the rollback of the first homeowners grant it could be seen by some as a windback of stimulus more generally?
GARRETT: Well I think as far as the insulation program is concerned we wanted to do a number of things when we brought this program into play. We wanted to see an uptake of insulation that was much greater than we have ever seen in Australia– and we’ve done that. We wanted to see significant employment generated in the program and we’ve done that. And we wanted to see consumer confidence and demand build up so that we were employing Australian’s to do the jobs right across the supply line – now we’ve done that. At the same time we recognise that this is a program that has already exceeded its projections in terms of rollout. It’s important that we calibrate this program so we have an orderly rollout and we provide more competition for installers in the market place, more value for the taxpayers and the ceiling insulation that they put in their roofs.
JOURNALIST: You mentioned that these cutbacks would allow spending in other areas, what other areas can we expect the Government to support now?
GARRETT: Well I didn’t say that. What I have said is that we have responded to issues that have been brought to us by stakeholders and by the industry. I have been consulting with industry and having stakeholder meetings on this Home Insulation Program ever since we started it. And we put in place a range of measures to deal with compliance, guidelines, training and the like. And I’ve always said that if we needed to add to those measures on the basis of careful consideration of the issues that the stakeholders and industry brought forward to us we would do that, and that’s what we’ve done today.
GARRETT: Well in relation to the money that is saved that is up to the Government to determine what issues it’s going to deal with, and how it’s going to manage it. What I would say is this – we wanted to rollout ceiling insulation in a way that is both effective and efficient. We’ve now got over half a million homes in Australia with ceiling insulation in them. This has been a phenomenally successful program. Now we have got consumer confidence in the system it’s appropriate for us to drive some additional competition for installers to recognise that there’s the opportunity to continue to deliver this program in an orderly way with demand being managed and that’s what we’re doing.
JOURNALIST: What effect is the cutback of the rebate going to have on the size of the overall program?
GARRETT: My expectation is given the expectations that were running with the $1600 rebate we will actually see mores homes insulated as a consequence of the reduction of this rebate, but that something that I’d want to monitor very carefully. I think the key thing here is that since February we have rolled out one of the most successful programs that this country has ever seen in energy efficiency. Half a million homes insulated and significant installations of solar hot water as well, significant employment growth in the industry, and a rigorous compliance and auditing procedure in place to make sure that they delivery is done in a way which efficient and accountable.
What we are doing today is recognising that there has been significant demand in the program and that’s its projections have run out were greater than we anticipated – that’s a good thing – it means that Australians really recognise the importance of getting their ceilings insulated, reducing their energy costs and greenhouse gas emissions, at the same time we want to make sure there’s efficient delivery of this program by installers and the rebate at $1200 will enable that to happen.
JOURNALIST: What did PriceWaterhouse say about the rollout of the program, does that raise any red flags for you, or is this being done on anecdotal evidence from industry?
GARRETT: Look we’re not dealing with anecdotal evidence here, and PriceWaterhouse are providing us with good information in terms of our monitoring compliance and audit. And additionally the Auditor-General when he wrote to me confirmed that the measures that we have in place satisfy him so that we will be audited in the ordinary and normal course of events.
I’m very confident that the compliance measures that we’ve got in place are very thorough. We expect to have some 11,000 ceilings inspected. I’ve written to every householder previously seeing whether there were any issues which they want to raise in terms of the requirements that we have of installers. Again, we’ve written to every single installer reminding them of their obligations under the guidelines. We will continue to both rollout the audit and compliance program, but also pickup any anomalies that are identified with this system, such as we’re doing in Queensland with these announcements which we’ve made today.
JOURNALIST: [inaudible] are you glad to see the hand of Peter Costello directing the Future Fund?
GARRETT: Well in relation to Mr Costello, I think that whatever side of politics you are on you would recognise that he has considerable economic experience and he’s going to be able to bring that experience to bear this new position that he has.