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Press conference, Phillip St., Sydney
19 February 2010
GARRETT: Good afternoon everybody. Thank you for coming. I’ll just make some space for myself on the podium. I also have Robyn Kruk, the Secretary of the Department with me as well.
The Government’s announcing today a series of changes to the environmental programs of the government to boost safety and to improve environmental performance. And these changes are intended to boost safety for households and safety for workers whose employment has been funded by these important programs.
And the changes today include the establishment of a new Household Renewable Energy Bonus scheme to replace the Home Insulation Program and the Solar Hot Water Rebate. And as well as that significant changes to the Green Loans Scheme to boost its effectiveness and sustainability.
Now these changes that we are announcing today will ensure that we continue to help householders and businesses contribute to the important journey to a low carbon economy, dealing with greenhouse gas emissions by taking practical action in the households.
And they also put the householders back in charge of taking that action. The Renewable Energy Bonus Scheme will enable householders to save money on power bills, to reduce their carbon emissions and it replaces both HIP and the solar hot water program – both of which have been discontinued as at close of business today.
Under the Renewable Energy Bonus Scheme households will be able to receive a rebate for the installation of ceiling insulation or solar hot water system or a heat pump system. One thousand dollar rebates will be available for ceiling insulation or the hot water systems, $600 for a heat pump system.
And the new rebates will be available for systems installed after today.
The scheme will institute several key changes regarding the delivery of ceiling insulation. Householders rather than installers will claim the $1000 rebate directly through Medicare.
We will introduce a new registration scheme requiring all installers to register, to provide a cash bond up front before they can install insulation, to show evidence of meeting all the training and skill requirements that are directed and in place and to provide certified quality assurance and also occupational health and safety plans.
We will also be introducing a strengthened compliance regime, importantly, in concert with state and territory occupational health and safety and fair trading authorities.
It is intended that the insulation component of the renewable energy bonus will come into operation by the 1st of June this year.
Our objective remains to see insulation installed in up to 1.9 million homes including those already installed under the home insulation program.
We are also announcing today that we will commission an external assessment of the proposed implementation arrangements for the Renewable Energy Bonus Scheme and that will continue to provide insight into the scheme during its operation.
The assessment will look at whether the arrangements and the planned timelines that we are proposing for the scheme are sufficient to make the governments expectations of safety met.
In relation to the discontinuation of the Home Insulation Program, installers will have seven days to claim outstanding rebates for work completed prior to the close of business today.
The Government is prepared to consider appropriate transitional arrangements for legitimate industry participants and a hotline will be available. And I expect to have meetings with industry at the earliest opportunity.
I want to emphasise that the Government places particular importance on the impact of this announcement on workers. Workers will have immediate access to assistance under the Government's Compact for Retrenched Workers, meaning they will get immediate access to high level support, retraining, and help in finding other jobs as quickly as possible. A hotline will be available for them as well.
We will continue to roll out the existing electrical safety inspection program of all homes that have had foil insulation installed under the Program.
And the Government is prepared to check as many houses as necessary which have had insulation installed under the Home Insulation Program.
We will also establish a new Home Insulation Review Office to handle all complaints and inquiries, immediately address risks created by unscrupulous operators and appoint an independent reviewer to conduct a review of the Home Insulation Program design, implementation and delivery.
Now in relation to the Green Start program. The Green Start Program will commence from January 1st 2011.
The Green Loans Program will now provide for additional assessor opportunities to the end of this year. The loans component of this program will be discontinued. There has been a very low take-up of loans under this scheme and we will provide a significant number of additional assessments to enable householders to tackle climate change through a redesigned program – and additional 600,000 assessments on top of the existing commitment of 365,000 assessments that we have made under the Green Loans program.
The redesigned program means that the less popular loans component will be discontinued. There will be a cap on assessors of some 5,000 allowing an extra 1,200 trained assessors to contact the department and to begin that work.
There will be a weekly cap of 15,000 assessments and a daily and weekly cap per assessor in order to make sure that there is an equitable distribution of work for assessors under this program. These new arrangements will apply to the end of 2010. The Green Start program, which will also include assessment capacities in it, will commence from the 1st of January 2011.
Before I ask Robyn Kruk to come and provide some additional information to you, I want to make some additional remarks about risk and about the Home Insulation Program.
Australians have been putting insulation in their ceilings for a long time. And it is the case that in any building industry or installation exercise, there are risks involved. At every stage of the Home Insulation Program I have acted on clear advice that has been brought forward to me, to put in place measures in order for those risks to be acceptably managed. And we have done a number of things.
This is not a legislated program. The requirements I have put in place come on top of the existing state regulatory frameworks for occupational health and safety, workplace safety and the like, that are in place for the safe conduct of building and other activities right around Australia in different jurisdictions.
The greatest sanction that this program has had is to remove installers from the program and the guidelines have been strengthened to ensure the installers were fully aware of their responsibilities under the program.
And I have to say that the great majority of installers, and the great majority of the insulation industry have observed those guidelines. And have done as the government would have required in the delivery of this program.
The fact is that there have been a small number within a large program, unscrupulous shonky installers who have not observed the guidelines and the requirements that I have put in place.
And as a consequence, the risks that are identified in this program at this point in time of the advice that comes to me cannot be managed to an acceptable level and so it is appropriate, timely and responsible to announcement the closure of this program and a transition to a new program in the future.
I just want to emphasise one more time, the Government’s focus is on safety – safety to the households and safety to those who are working in the roofs. I have at every step of the way, acted on advice to assure me that risks can continue to be managed acceptably. On the basis of the most recent information that has come to us through that risk assessment process, I am no longer of the view that that is the case, and so I have taken the actions that I have and the government is making the announcement that it has today.
I will invite Robyn Kruk to speak to you briefly on some detailed matters in relation to compliance and risk and then I am happy to take any questions.
Thanks very much, Robyn.
KRUK: Robyn Kruk, I am Secretary of the Department of Environment, Water, Heritage and the Arts. If I could add to the Minister’s comments just to explain the compliance and audit regime we currently have in place. The Minister has detailed the very stringent requirements that have been introduced over the life of the program. In addition to that, we have put in place both a random audit of inspectors going into roofs, and also a more targeted audit of inspectors following up work where we have concerns raised about the potential quality and safety of installations. The advice that the Minister refers to is as follows.
The most recent advice that we obtained is that while can I say there was a very high level of compliance in relation to these works, we had an indication that up to 8 per cent of works were not complying with the very high safety requirements that we had put in our guidelines.
Now I would like to stress that our guidelines are very stringent. I would also like to stress that that would pick up areas where we believe there is a potential risk, not necessarily a risk that may have manifested in fire. So that may relate to, for instance, the depth of the insulation material, the closeness to the downlights and the issues that the Minister referred to earlier.
It has also indicated that, in some instances, the quality of the insulation was not of the standards that we had actually required. That was 16 per cent. That could pick up again a range of sort of particular problems.
Can I stress that this is a program that has probably had one of the highest compliance and audit regimes put in place. It has continually strengthened through its lifetime. I for one know that when I had insulation included in my roof I did not receive a letter asking me whether I was happy with the quality of the insulation, or get an inspector actually coming into the roof.
To date we have undertaken 14,000 inspections of roofs. That is in addition to the many thousands of desk audits that we have undertaken of the various companies. My recall is, I think, approximately 25 per cent of companies have undertaken, have been the subject of a compliance audit.
I stress that we have had incredibly good feedback in terms of the running of the program, from many consumers. The complaint rate, keeping in mind that we actually do go out to consumers and ask them whether they are happy with the program, has actually been 0.6 per cent.
But to echo the Minister’s comments, as we have continued to audit, as we have continued to raise the safety and quality standards for the program, it was this data that led the Minister to take the decision to terminate the program.
Thank you very much.
GARRETT: Thanks Robyn. Happy to take questions.
JOURNALIST: Will there be compensation for businesses, actual compensation?
GARRETT: We will discuss with businesses what appropriate transitional arrangements can be considered. My expectation is that the new register for installers and the stringent requirements that we will put in place for insulation will be issues that can be managed well by existing credible and high reputation industries. On that basis I am looking forward to meeting with them soon to outline to them what our needs are in terms of appropriate and safe delivery of insulation and their capacities in the short term as we ramp up to the scheme by June.
JOURNALIST: Does this whole failure reflect that you didn’t adequate consult with the industry beforehand – the reputable people who are already in the game of installing insulation?
GARRETT: One of the features of this program has been consultation. And it is important for me to emphasise that I have taken very seriously not only the consultation process, listening carefully to the views that have been brought forward to me, but also technical experts views and then the advice that is provided by the Department. And we will continue to do that. But I think this program needs to be seen in a complete context and let me put it to you this way.
This program was put in place to respond to the global financial crisis, to provide fiscal economic stimulus and it delivered on that program requirement and it delivered in spades. We have over a million homes now insulated. We have householders with significant reduction in energy costs. We have greenhouse gas abatement as a consequence. And we have had a significant opportunity for industries to participate and roll out this program.
And each step along the way, we have sought to take into account the necessary safety and training requirements to ensure that the program can not only be delivered effectively but safely and properly.
In doing that, there is no question at all that the number of installers who have sought to contravene the guidelines that I have put in place, who have not discharged their appropriate duty of care either to the householder or to their employees, and who have sought to subvert this program, gives rise to an additional level of risk.
That is the situation that I face and I am responding to it. I will again consult with industry as we have up to this point in time. I have every confidence that Australia’s insulation industry will continue to deliver insulation into people’s homes through the Renewable Energy Bonus that we are proposing – the rebate – and additionally across the whole of the building stock of Australia.
But safety is a priority – it must be. I understand that very well. I always have, and that is why I have acted to day.
JOURNALIST: But Mr Garrett, how do you respond to what you have now admitted to, that the Government was unequivocally warned that deaths could occur [inaudible]?
GARRETT: Well again, and I have said this in my statement to the Parliament, on every instance when information or material or advice has come forward to me which requires action to increase the safety requirements under this Home Insulation Program, I have acted. And it is important to note from the terrible first fatality that we saw in the middle of October, the range of additional measures that I brought to bear to ensure that insulation could be installed safely. I did that on the basis of advice. I have taken advice again today, as I have at each and every stage of delivering this program.
And that is the responsible course of action for a minister in my situation.
JOURNALIST: So, Mr Garrett, no credit to the claim that you should stand down?
GARRETT: I think the right response for anybody when their political opponents are using what was a tragic situation to launch a political attack is to focus on what any minister has actually done. I stand by my actions in this program. I intend to keep on delivering energy efficiency programs for the Government in a way which is not only consistent with our agenda but is consistent with the overall public requirements for safety.
JOURNALIST: In hindsight, do you think that the original program should have had the measures that the new program has, that you have announced today?
GARRETT: You know what, I reckon that we are at that particular stage of looking at the way in which a program rolled out, where we need to respond to things that have arisen as a consequence of its rollout. I mean, let me refer to my decision to increase the mandatory requirements of training for people in this program. And let me advise you that of the insulation companies involved, some 2,500 would have met those requirements, nearly 4,000 would have been suspended, and some 1,050 would have been de-registered.
Now if you had have put to me six month ago, or 12 months ago, that this would be the level of non-compliance in a program that we were putting forward in this way, I probably would have said, yeah you have got a point. But the fact is that, at the end of the day, any minister and any government has to legislate on the basis of the advice that they have.
And frankly, the situation here is that if any installer or any individual installed insulation under the guidelines as brought forward by the Commonwealth and by me as minister, with the training requirements that I put in place as well, where none existed, then there would not be an unacceptable level of risk. That is the bottom line in the prosecution of the Opposition’s case.
And the fact is that unacceptable levels of risk which arise as a consequence of rogue behaviour by irresponsible people, determined to flout the conditions that the program puts in place, place those programs in jeopardy. But they also require a response by me as minister, and today I have taken that action.
JOURNALIST: Mr Garrett, as recently as two days ago you were saying that this program had been a success – four lives lost and a 100 homes burnt. So at what point did you decide it was a failure?
GARRETT: On the basis of the advice that I have received from the Department, on the basis of the advice that Robyn Kruk has just outlined to you, and seeking advice on the risk management strategies and program that we already had in place.
JOURNALIST: .Just to be clear, that is the advice ... [inaudible] ... that one in ten of the homes has got a safety problem?
GARRETT: That is the accumulation of that advice and other advices as well.
JOURNALIST: So that is 100,000 homes?
GARRETT: Again, it is important to be very clear about the figures that the Secretary has put to you. And the reason I say that is that we all have a responsibility, those who are questioning me, and me providing the answers not to produce an additional level of anxiety or fear in a program which isn’t warranted.
Yes I accept, and have always said, that if there is any other additional material that comes through to me and advice that requires additional safety measures to be added to this program, then we would do that. At the same time, this particular information as it comes through doesn’t specify specifically what the level of risk is.
I want to give you an illustration of this because it is an important point and I think it needs to be heard. When I was aware of the fact that there had been a fatality in Queensland, the advice to me showed that the potential for metal fasteners used in ceiling insulation which used foil, gave rise to an unacceptable risk. I banned metal fasteners. I also instituted a random audit of those ceilings in Queensland.
The initial results of that random audit, showed that (a) metal fasteners were still being used but (b) there were existing risks as a consequence of work or construction or electrical work or otherwise, that were in those ceilings prior to the Home Insulation Program being brought into place.
And it is very important in the reporting of this to recognise that we have taken risk issues in relation to this program very seriously. In doing that you then get the identification of other risk issues in relation to earlier work.
The sum total of my remarks to you is this, being faced with that advice, having gone through those various stages, continuing to amplify and build strength into our regulatory approach, and still finding on the basis of the most recent advice that has been outlined to you, that there is still an unacceptably high level of risk, I have taken the step that this program should not continue in its current form. And we will apply the necessary rigors and measures for a program in the future to delivery safely.
JOURNALIST: So that advice should have been given to you at the start, shouldn’t it?
GARRETT: In each stage along the way, not only have there been consultations and stakeholder engagements, but advice that has come through to me. Before the Government brought forward a Home Insulation Program, there were no nationally accredited training schemes. These things take some time to develop, but we committed ourselves to it. And we saw it through and we delivered it. And we took advice from unions, we took advice from training organisations and we took advice from the industry.
JOURNALIST: ... [inaudible] ... the quality of that advice in the first instance?
GARRETT: Each advice that comes through to me, I read carefully and clearly and then I take a decision to act upon it. I have confidence in the advice that comes to me. I act upon it. I come to my own views about certain….
JOURNALIST: How would you describe the quality of the first lot of advice that you received?
GARRETT: In terms of setting up an appropriate framework for the delivery of insulation, under the Home Insulation Program, with a set of nationally accredited guidelines, with nationally accredited training scheme, and to enable that to be done in a way which was consistent with management of risk, that advice was appropriate at that time.
JOURNALIST: Do you expect now to see a significant reduction in the number of insulation companies, or sub-companies, that were taking advantage of the old scheme. Will this eradicate all of those companies?
GARRETT: That will be difficult to say because when the rebate for the scheme came from $1600 to $1200, there was a view around that there would be no more insulation going on because of the size of the rebate. That clearly didn’t happen. And I believe it will be the same in terms of the ongoing life of the program as I have described it.
There is significant opportunities for insulation companies to continue to put insulation in buildings, homes, housing developments and the like – and they will continue to do that. What I think will happen as a consequence of my decision today, is that the shonky operators, those that have continually tried to flout the guidelines, those that have wanted to come in and take advantage of a program and potential take advantage of people as well in terms of their consumer rights, they are now no longer in anyway, shape, manner or form, a part of our program delivery.
JOURNALIST: So people don’t need to worry about insulation companies rocking up to their door, stories of them simply claiming to give quotes, starting to put insulation in their roofs. All of that will now stop?
GARRETT: That is now correct.
JOURNALIST: But won’t the new scheme be tainted by the failures of old one. I mean people are going to stay away from insulation. It sounds dodgy. You yourself have said that dodgy operators are active….
GARRETT: The compliance requirements under the new scheme will be worked through with state regulatory authorities. And I expect that the states, and I hope that the states, will meet with us and we can together work through the most stringent and appropriate set of requirements for delivery of the program from June. And I do that, recognising that we have commissioned an entity to give us advice in relation to that scheme. To identify what the appropriate measures and levels for both safe delivery and effective delivery are.
JOURNALIST: Mr Garrett, how are you going to stop householders from rorting the scheme. What is going to stop me from turning up for my $1000 from Medicare?
GARRETT: Again, there is always a requirement, any transaction in the Commonwealth or in the state, for consumers to ensure that they actually exercise their consumer rights and for that person delivering the product to make sure that they exercise….
JOURNALIST: - …going to come and check people’s houses?
GARRETT: ……..There will always be, and there is a continuing, ongoing monitoring and compliance program in relation to the existing scheme. There will certainly be ongoing monitoring and compliance in relation to any scheme of delivery. And furthermore, in relation to any issue that a householder has in relation to the existing scheme and a future scheme, they have the opportunity to bring any matters of concern to the department for appropriate investigation.
JOURNALIST: But is that a yes, you will be checking people’s houses to make sure they have got the insulation before they claim the rebate.
KRUK: Minister if I can assist. Those random checks are done at the moment anyway before Medicare makes a payment, the submission of various invoices with the works as well. I think the Minister is indicating, as you would be aware, you can’t build a scheme that can’t avoid a 100 per cent any chance of rorting. You can certainly build in a number of safeguards. You do that by random checks. You do that by phone calls to households. But you also look for patterns of behaviour as Medicare has actually done for the life of the existing program. Sorry ... [inaudible] ... to assist.
JOURNALIST: Will all the people responsible for the old program in your department keep their jobs?
GARRETT: The delivery of the program and making sure that we bring forward measures which we think are absolutely critical for people to be able to get energy efficiency happening in their homes will continue. Any matters concerning performance or otherwise in relation to any department is a matter for the secretary. She won’t be canvassing that in front of the media.
I want to conclude by saying one thing. I have always, through this entire exercise, taken a very clear view both about the proper actions I should take as a minister, the high values that we place on safety, the necessity for there to be in place frameworks and guidelines to make sure jobs are done safely and properly. And that if any other information came through to me by way of advice suggesting that we needed to take additional measures, then I would take them.
I have done that through the course of this program whilst we have seen over a million insulated and significant benefits accrue, particularly to those householders who would not have been able to afford insulation. But I recognise that those issues that have arisen most recently require response. It is not because Tony Abbott is shouting at me and accusing me of industrial manslaughter, that was a completely irresponsible claim by the Leader of the Opposition and he will have to account for the use of those terms. I know myself how I have acted in relation to this matter. I stand before you very confident that I have acted properly and diligently and I am going to continue to do that in my job as Environment Minister.
Thanks very much.