Home Insulation Program Commission of Inquiry Bill 2011

 
Mr HUSIC (Chifley) (11:39): The government is extremely disappointed that the opposition has decided to introduce this bill into the House. To stand accused by the opposition of not being open and transparent in our management of the Home Insulation Program is simply untrue. As the member for Parramatta outlined previously, the government has always welcomed scrutiny of the Home Insulation Program and we have supported each of the reviews into the program and accepted their findings. The government recognises that there were a number of issues in the design and implementation phases of the program, and we have never denied the fact that, in doing so, we have learnt the lessons from the mistakes we have made. However, what is more important is that the government has worked tirelessly in managing the closure of the program to a level that provides confidence in both householders and the industry, and in managing this closure the government has been completely open and transparent, through our actions demonstrating how baseless the opposition's claims suggesting otherwise have been.

When the current Minister for Climate Change and Energy Efficiency assumed responsibility for the program following its closure in February last year, he made a number of commitments to parliament, on 10 March 2010, all of which have been addressed over the last year. In particular, the minister stated that he would focus his effort on ensuring safety for householders, providing assistance to industry and dealing strongly with fraud and non-compliance. I would like to now focus on what has been achieved against these objectives so I can highlight the priority the government has given to remediating this program. I also seek to demonstrate how the opposition has sought to derail the government in doing this important job over the last 12 months through its petty and opportunistic stunts.

Safety has always been the government's main priority in remediating the Home Insulation Program. Accordingly, we established a comprehensive safety inspection plan for both foil and non-foil insulation installed under the program. Under the foil insulation safety program, all houses with foil insulation installed under the Home Insulation Program were offered a safety inspection with the option of having the foil insulation removed or, on the advice of a licensed electrician, safety switches installed. Under the Home Insulation Safety Program the government committed to inspect a minimum of 150,000 households insulated with non-foil insulation. These inspections were targeted based on a risk assessment. Based on independent analysis from the CSIRO and internationally renowned Booz and Company the government will conclude both the HISP and FISP upon completion of the committed inspections. This means that the government will continue to undertake targeted inspections under the Home Insulation Safety Program, HISP, until a minimum of 150,000 inspections is reached. This is expected to be completed by mid-2011. The government will also finalise all inspections under the Foil Insulation Safety Program, noting that there are still a number of households with foil who have either refused an inspection or have not been contactable, despite repeated efforts.

To provide an extra level of reassurance to HIP households, the government will continue to offer inspections to those households who want them, until June 2012. Householders who have safety concerns should contact the safety hotline on 131792.

The government committed to providing an independent analysis of the safety inspection program and to release details of the inspection result. We publicly released this information on 20 April 2011. The overall result showed that around 24 per cent of dwellings do not comply with relevant HIP insulation standards. However, importantly, the CSIRO analysis clearly indicates that noncompliance with the relevant standards does not directly equate to a fire risk and that only a fraction of those houses that fail to comply are exposed to a fire risk.

The CSIRO analysis also clearly indicates that there is always an inherent risk in having insulation installed. The fire incident rate prior to the HIP was around 2.4 incidents per 100,000 homes. I am advised that the current rate for HIP is around 2.5 incidents and falling. Given that the fire incident rate has fallen to the level that occurred prior to the program, Booz and Company found that inspecting homes beyond the current level is not likely to have a material impact on the reduction of risk. The information provided here today is the result of painstaking work by the organisations involved and the Department of Climate Change and Energy Efficiency. The government's main concern was that, if we released this data too early without any proper context or analysis, this would only cause confusion and unnecessary concern among the general public. I am told the government also provided several opportunities late last year to privately brief the member for Flinders on the safety inspection results and consistently explained its reasons for not releasing the data prematurely. The government also explained many times that the decision not to release the inspection results was based on advice provided by the Department of Climate Change and Energy Efficiency.

However, this was not good enough for the member for Flinders and his colleagues. He refused the explanation, he refused the private briefings and he refused to listen to common sense. It is not hard to reach the conclusion that the opposition were ignoring facts and reality because this was an inconvenience in achieving their ambition, which was to use this difficult situation to score cheap political points. So, rather than taking a constructive approach, giving confidence to householders and the insulation industry, the opposition shamelessly moved a motion seeking the immediate and premature release of the safety inspection data. Were they interested in getting the correct facts? No. Did they apply due care to avoid unnecessarily worrying householders? No. Thankfully, the House saw the opposition's actions for what they were—stunts—and voted against the motion.

The government has made the safety of households a pre-eminent objective. We have now reached a sensible way forward in closing down the inspection programs. This would never have been achieved if the member for Flinders and his colleagues got their way with this ridiculous motion.

The government fully accepts that some unscrupulous operators defrauded the program. In his speech to parliament on 10 March 2010 Minister Combet said that one of his four key objectives in winding down the Home Insulation Program was 'to identify and put in place processes to deal with issues of non-compliance and fraud'. He also said that he would 'rigorously pursue those individuals and companies that had engaged in' this behaviour. That is why he moved quickly to request an Auditor-General's investigation into the program in early March last year. Unfortunately, this has been conveniently forgotten by the opposition.

Minister Combet also supported the engagement of a forensic auditor to investigate how fraud was perpetrated under the program. A number of activities were undertaken on 2 March this year aimed at targeting those who allegedly committed serious fraud under the program. This involved a joint operation between the Australian Federal Police and the Department of Climate Change and Energy Efficiency, in which 35 search warrants were executed across three states. Concurrently, the department launched a comprehensive debt recovery program aimed at recovering all debt owed from fraudulent and non-compliant activities. These activities were the direct result of the, again, painstaking and difficult work undertaken by the department and in the KPMG forensic audit.

This work has enabled the AFP and the department to identify how the fraud was committed under the program and those who committed the fraud. Obviously, while investigations are continuing, the government will not be making public comment on specific detail. To do so would be irresponsible and put in jeopardy the painstaking work being carried out by the authorities. Any reasonable person would understand this—anyone, of course, other than the opposition.

In the member for Flinders's media release of the same day, he demanded to know:

… how much the Government is seeking to recover from those targeted in current fraud investigations;

So, while complex investigations into these matters are ongoing, before the investigations are even complete, the member for Flinders would like to know specific details of how much money is to be recovered—again, simply a cheap political stunt that does nothing other than demonstrate that the opposition does not want us to manage the closure of the program effectively.

The government provided a $56 million assistance package to the insulation industry once it decided not to continue with the program, and we remain committed to assisting the industry as much as we can. The government will continue to liaise with industry and state and territory governments over the next few months to determine other contributions that might be made to improve standards. The opposition, however, would have you believe that they have the insulation industry's interests at heart. Nothing could be further from the truth, for the opposition's policy is that the government inspect all 1.2 million homes that had insulation installed under the program. Through this position, the opposition is immediately bringing into question the credentials of hundreds of legitimate installers who did the right thing on the program.

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Ed Husic MP
Federal Labor Member for Chifley


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