PAUL MURRAY: Well, you just heard John O’Donnell, the branch president of the communication workers union in WA [Communications, Electrical and Plumbing Union], saying that this labour hire system to get the NBN [National Broadband Network] built in WA… he thinks that the rates are so low that it’s going to end up as another form of ‘Pink Batts’ scandal, he said. Well, the ‘Pink Batts’ scandal… you can join the dots here… that’s not all over yet, either. It featured quite heavily in the Four Corners program last night. They had a look at, in looking at Kevin Rudd’s track record, how he was hurrying up the spending of the stimulus package for the GFC [global financial crisis] and, of course, that’s what led to the home insulation fiasco, so it was actually part of that Four Corners exposé last night, looking at where Labor went wrong there. It’s actually come up during the course of this week at Senate Estimates hearings. Certainly, the ‘Pink Batts’ scandal is not over yet. The person that was doing all the questioning was Simon Birmingham, Shadow Parliamentary Secretary for the Environment. He’s a Liberal Party Senator from South Australia and he joins us now. G’day, Simon.
SIMON BIRMINGHAM: Good morning, Paul. Good morning to your listeners.
PAUL MURRAY: Now, what were you pursuing in Estimates?
SIMON BIRMINGHAM: Well, we pursued a range of topics but in relation to the home insulation scandal, we looked in particular at what the outstanding debts to taxpayers are. You’d recall, and your listeners would recall, that, of course, this is a terrible scheme in which we saw billions of dollars spent on a program that put in lots of questionable insulation, that tragically resulted in four deaths and more than 200 house fires, but the Commonwealth has been… the Federal Government’s been… going through a process of inspecting houses right around the country, they’ve inspected a couple of hundred thousand houses and they’ve identified many mistakes, many substandard insulation and so, of course, because this insulation was installed at taxpayers’ expense in the first place, they’ve been trying to get it back, get the money back, and…
PAUL MURRAY: So how much is owed to taxpayers’ now?
SIMON BIRMINGHAM: Well, ultimately there’s around $25/$26 million dollars still outstanding to taxpayers under this program. In fact, they’ve tried to get back about $26 million. They’ve managed to recover about $1 million or just less than that. They’ve already written off a couple of million dollars, so we have a vast sum of money that’s still out there and, in fact, invoices for this were issued back in March of last year, so we all know what the likelihood of actually taxpayers getting that $20+ million dollars back from this program is that it’s likely to be just yet more waste that has occurred under this insulation program.
PAUL MURRAY: A lot of those installing companies went bust, didn’t they? There wouldn’t be any money there to recoup, surely, in a lot of the cases?
SIMON BIRMINGHAM: Well, that’s what surprised me – that they’ve sent more than 2000 letters of demand to installation companies but claim to have only made 47 notifications to administrators of defunct companies. Now, it would strike me that there’s probably a lot of those 2000 that no longer exist and that it really is going to be a case of very much trying to chase a rat up a drainpipe, in terms of the chances of managing to track down who you’re trying to get the money from, and, in fact, the Federal Government is in the process of not quite giving up but is about to, it seems, hand it over to a debt collection agency to see whether they can manage to at least recoup some of taxpayers’ dollars that have been thus far wasted on this program.
PAUL MURRAY: Simon, was there a system of grants, Government grants or so, involved in this scheme?
SIMON BIRMINGHAM: Yeah, well, if people think back, essentially the Government was in many instances paying for the insulation that… the Government paid $1800 was the maximum, from memory, to install insulation in somebody’s household. The problem was when they set the scheme up, the average price of installing insulation in a household was $1400, so they set up a scheme that was going to ‘turbo charge’ the industry from day one, so unsurprisingly every ‘Tom, Dick and Harry’ around the country, it seemed, suddenly became a home insulation installer. They got hold of some cheap Chinese imports of insulation and started putting them in people’s rooftops at great, great profit because the Government was paying more to do the job than it actually cost long term professional businesses to do so and the damage out of that was not just $2½ billion of wasted taxpayers’ money but… and not just, of course, the tragedy of the house fires and the deaths, but for those businesses who had been around for, in some cases, decades, reliably installing home insulation, who had a good reputation, the reputation of their entire industry was trashed within 12 months and people are now very cautious about dealing with insulation installers and understandably so.
PAUL MURRAY: Did some of those grants go to companies that weren’t eligible to receive them?
SIMON BIRMINGHAM: They certainly did and, in fact, even, amazingly, when the ‘Pink Batts’ scheme itself was wound up and a lot of the companies went into trouble, to try to save people who were legitimate businesspeople from going under, the Government put in place an industry assistance program to try to assist them through those difficult times and the remarkable thing is that, even with that industry assistance program, they’ve identified at least 57 claims worth more than $5 million that were provided to ineligible companies, so it has been a case of flawed administration on top of flawed administration; botched scheme on top of botched scheme, it seems, when it comes to this insulation program.
PAUL MURRAY: Every way you look at it, it was a dog, wasn’t it? It was really bad.
SIMON BIRMINGHAM: Every step of the way, right down to the fact that, even when it’s come to these inspections, they’ve actually botched the inspection program to the extent that, you’d be amazed to know, they’ve been flying inspectors from Brisbane all the way over to Perth, where you are, to undertake some of the inspections, seemingly because they haven’t trained enough inspectors in Perth to undertake the job. It’s all been a…
PAUL MURRAY: Well, from what we’ve just been… heard about what’s happening with the NBN rollout here in Western Australia, you might be investigating that in Senate Estimates in a couple of years’ time.
SIMON BIRMINGHAM: Well, and that’s the tragedy of it – we’ll have the NBN before the Senate Estimates tonight but, of course, the NBN makes the dollars involved in home insulation look like small fry. The insulation scheme was $2½ billion; the NBN is $43 billion and, of course, so much more waste and damage can be done when you start talking about those sums.
PAUL MURRAY: Yep, thanks for talking to us, Simon.
SIMON BIRMINGHAM: Always a pleasure, Paul.
PAUL MURRAY: Simon Birmingham, Shadow Parliamentary Secretary for the Environment, Liberal Party Senator from South Australia.