Failed Home Insulation Program continues to hurt Australians

The Rudd Government’s disastrously mismanaged Home Insulation Program was abruptly halted nearly two years ago. But many Australians are still feeling the impact of this poorly conceived and appallingly executed program. I see the evidence of this in my electorate every day.

One group of Australians who have been very badly affect are those who were well established in the home insulation business when this program came along

An example in my electorate is that of Mr Doug Mill and his long-established home insulation business, the Demand Group.

When the Rudd government announced the Home Insulation Program (HIP) in February 2009, the Demand Group invested heavily in anticipation of the program—indeed, they felt there was little option. But things started to go very wrong. The problems Doug Mill observed included watering down the skill requirements of installers, the delay in auditing and the reduction in the rebate amounts and, in turn, the insulation of  inferior products. The program began to unravel and was closed in February 2010.

It was in the latter stages of the program, and in the mop-up schemes after the program was cancelled, where, in the words of Mr Mill, the 'fun' really started for him and his business as they sought to comply with the new requirements that were imposed. For example, Mr Mill says he faced administrative bungling when the government failed to register the insulation products his company used as approved products. Additionally, Mr Mill says, his applications for competency and compliance were rejected based on erroneous information.

For the Demand Group the HIP has been disastrous financially and has depleted their business to a third.  First, they now face a profound slump in demand – the inequitable consequence of a program which insulated 1.1 million homes brought forward about 15 years of work.  Second, the group was overlooked for work under the follow up programs – therefore missed out on millions of dollars of inspection and rectification work.

The Demand Group, together with similar businesses, has made a legal claim for compensation against the Commonwealth. When these businesses met the Commonwealth lawyers they were told that the Commonwealth was not liable. But the government lawyers suggested they consider making a claim under the Scheme for Compensation for Detriment caused by Defective Administration, the CDDA scheme. Mr Mill therefore made an application to the Minister for Climate Change and Energy Efficiency. After the four different inquiries and investigations that have taken place into the Home Insulation Program, it is clear that there was defective administration in the operation of the scheme, suggesting that the threshold requirement for the application of the CDDA scheme has been met.

Long-established businesses in the insulation sector – of which the Demand Group is but one of many examples - have paid a very high price for the Rudd government's incompetent administration of the Home Insulation Program.  I call on the Minister for Climate Change and Energy Efficiency to give careful consideration, in good faith, to the claims lodged by the Demand Group and other affected insulation businesses.

Of course the detrimental impact on insulation businesses is only one side of the story.  Most tragically we must not forget the four young Australians who lost their lives through electrocution while installing insulation batts, due to inadequate safety standards in the program.  Nearly two hundred Australian households have endured the horror of their house burning down due to defective insulation being installed.  In addition, hundreds of thousands of Australians have had to live with the uncertainty of faulty installation. There have also been numerous fraudulent claims for rebates, generally where no insulation has actually been installed.

In my electorate, there appears to have been systemic fraud – against Australian taxpayers – encouraged by the lax administration of this program.  I have had three cases of apartment blocks where insulation has been installed without consent of the owners, presumably with the intention of the installer being able to justify making a claim.

These operators have compounded fraud with trespass as they have broken into the apartment buildings to install the insulation.  My constituents have made complaints about these criminal actions.

What is extraordinary and galling is that these people whose homes have been broken into have been told by the Government that they may never been informed as to the progress or outcome of their investigations.

I have sought to highlight this contempt by the Government for ordinary Australians through questions in the Parliament and a Private Members Motion.

The Government simply re-states its intent to keep Australians in the dark.

Finally, there is the waste of money.  There is the massive cost of the program in the first place, and then the cost of the inspections required after the failure of the scheme, and the industry assistance package to businesses adversely affected.

A specific experience of one of my constituents illustrates the colossal waste and mismanagement.

This lady owned an apartment in one of the blocks where insulation was installed without consent.  When she complained to the Government’s hotline, inspectors were dispatched to examine what had been installed.  She was surprised to be told by the two gentleman who turned up that they had flown that morning from Brisbane to Sydney to do this one job.