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Green Loans an insulation-style mess

Simon Birmingham

by Simon Birmingham

14 Jul 05:45am

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Filed under: Environment, Green Loans, Peter Garrett

34 comments

Deaths, house fires and safety concerns have seen the Rudd/Gillard Government and Peter Garrett take plenty of heat over the disastrous Home Insulation Program, but three damning reports released last week reveal the failed $300 million Green Loans program was mismanaged on a similar scale.

The environment portfolio has become a giant fiscal sinkhole. Photo: Ray Strange

The aforementioned deaths and house fires have understandably commanded more attention, but the scope of maladministration highlighted last week show that Peter Garrett has just as much to answer for over Green Loans and seriously calls into question the capacity of this Government to deliver whatever its latest climate change policies might entail.

Of key concern is that the report of the Faulkner inquiry (conducted by former Victorian Department of Human Services secretary Patricia Faulkner) identified 149 breaches or issues with Government procurement and contracting guidelines and legislation, including deliberate and systemic breaches with allegations of kickbacks to departmental staff.

Other problems identified included poor contract management, poor financial controls, poor management controls, a faulty program design described as “unnecessarily complex and
over engineered”, significant cost escalations and weak budget control, an apparent failure to factor in any interest rate rises and a lack of control over the number of assessors.

This lack of control over assessor numbers in particular has caused much pain and financial stress for those who invested their time and money in helping the environment through this Government program only to find they would not be contracted, or in any case that the work had dried up.

The Government had promised the appointment of 1000 home sustainability assessors for a program that only commenced in July 2009, but by March this year had signed contracts with 4000.

Astonishingly, a further 5000 have already trained to become assessors, many more than will ever be contracted. If they haven’t already long since written off their losses and given up, these thousands are left hanging while the Government supposedly finalises plans for future contracts… if it ever lifts the freeze that’s now been in place for four months!

For those who missed the recent production of the classic play Waiting for Godot, Godot still hadn’t shown up by the time the curtain fell. The thousands of assessors waiting for decisions from the Minister now responsible, Penny Wong, will likely see the end to this program before any such decisions are forthcoming.

Potentially more damaging in the long term is a general loss of public confidence in Government environmental programs.  At least 100,000 homeowners who had a sustainability assessment undertaken missed out on the interest-free loan of up to $10,000 that was supposed to be available to them, all because the Government never gave back their reports until after it had suddenly discontinued the loans component of its Green Loans scheme.

In fact, just 7000 loans were delivered out of the 200,000 Green Loans promised by Labor before the last election.

The election promise is a key point, not only because this constitutes a clear broken promise but because Green Loans was planned long before home insulation.  Green Loans wasn’t an emergency measure to stimulate the economy at the height of the global financial crisis.  It wasn’t an idea conceived at the last minute and rushed in order to generate jobs.  Yet Resolution Consulting still found the “focus was on meeting Government expectations for the timeliness of the program delivery rather than running the program effectively and in accordance with Departmental requirements.”

Green Loans was first promised in April 2007.  The fact that even after being elected in November 2007, Labor had no loans on the table until July 2009 should have been a warning sign of difficulties in program development.

These are some of the reasons it is not enough to say, as Penny Wong has, that Peter Garrett had simply relied on advice, and that he later instigated some audits (long after the loans program had essentially collapsed).

Last week’s reports highlight fundamental flaws in the program design, let alone its implementation and oversight, yet Peter Garrett and the Rudd/Gillard Government ploughed ahead.  Peter Garrett was the Minister responsible for a bad program that he imposed on the Department, and he was the Minister responsible for overseeing its development and implementation.

Add Green Loans to Peter Garrett’s record of the disastrous Home Insulation Program, plus repeated scrapping and suspension of solar programs causing uncertainty for that industry, and it is simply unbelievable that he still sits at the Cabinet table on the same Cabinet Minister’s salary.

There are still two more reports on Green Loans to come in. PricewaterhouseCoopers was given the specific task back in February of auditing the assessor accreditation process and adherence to the terms of the Protocol for Assessor Accrediting Organisations between the Department and the only accrediting organisation it ever appointed.

Penny Wong must commit to publicly releasing this report also, with assessors and taxpayers footing the bills deserving to know fully what went wrong.

Those following this debacle will also eagerly await the Auditor-General’s inquiry into Green Loans, due in September. If it proves to be even half as damning as the Faulkner inquiry it must surely signal that the last of Peter Garrett’s many lives has been reached.

And until a Minister is made accountable for these failures, voters will be left to judge at the ballot box whether Labor can be trusted to deliver programs to address climate change and help the environment, or whether they simply inflict damage and pain on those already trying to make a difference, as well as enormous costs on taxpayers.

Most commented

34 comments

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    • Bob H says:

      07:55am | 14/07/10

      Australia is paying a very high price so that Rudd could hang around the bald guy who sang in a group while he was at university.

      Reply

    • Against the Man says:

      08:07am | 14/07/10

      The first line of this article states death and Rudd/Gillard. If Queensland health is responsible for hiring Dr Patel then Rudd/Gillard/Garrett are responsible to some extent for the insulation project failure/death/money wastage. There needs to be further investigation into this. This is serious and Gillard may have blood on her hands.

      Reply

    • Roja says:

      12:54pm | 14/07/10

      Interesting leap of logic there, however Qld health are liable for not firing Patel for gross negligence as he was an employee in one of their hospitals. 

      If the government are responsible for the insulation deaths, under your logic they are also responsible for every workers death on construction sites, mining, shipping, freight and so on - which means Howard, Keating, Hawke, Fraser and every Prime Minister we have ever had all have blood on their hands too. 

      If you were the parent one of those four young men that tragically killed due to their employers inadequate training and OH&S standards, I would respect your opinion on the matter - however none of them hold the government responsible.  Abbott is a ghoul for continuining to use their deaths, even in a budget reply, for political gain.

    • Against the Man says:

      03:29pm | 14/07/10

      http://www.theaustralian.com.au/politics/rudd-admits-home-insulation-scheme-mistakes/story-e6frgczf-1225872389972

      Rudd has already admitted mistakes were made. Therefore they do bear some level of responsibility. What I want to know is where they went wrong (rush job, ignored warnings?) and who was involved (Gillard/Garrett?). If warnings were heeded as per the article how come mistakes were still made?

      This is not exploiting the deaths rather finding out why they happened and what can be done to prevent them. Labor and people like you want to forget about it and sweep it under the carpet and in my books are the real ghouls.

      And shame on you for assuming the family members of the deceased don’t hold the government responsible. Do you know that for a fact?

    • Ben Gia says:

      05:19pm | 14/07/10

      Roja,
      The government are responsible for the deaths of those workers because they created an economic bubble that made it advantageous for shonky operators to do massive amounts of work with little or no training and no real warranty for their work. The government should have seen this from the beginning (and indeed they were warned about it during) and created real barriers to entry for shonky operators to enter the market.

      They knew that the operators were bringing in poor quality insulation materials and they knew that they were doing bad work and they chose to ignore the situation. Now we have 4 deaths and billions being spent on checks not to mention the whole industry is stuffed.

      Had the government not created a situation where the operators had been encouraged to do bad work with terrible materials OR they had created barriers to entry for new operators trying to quickly enter the market (which was obviously going to happen), then all the above problems would have been avoided. Of course they are responsible.

    • Roja says:

      05:36pm | 14/07/10

      Nice article, I remember when reporters let you decide if something was ‘bungled’ or ‘botched’ - not reported it as fact, but oh well the media everywhere is in a crisis of crapness. 

      I certainly agree with you and Rudd that the administration of this process was rushed, and as a consequence, poorly administered.  There are ongoing investigations, which are slow to deliver - which is expected with any legal / admin process (and such tardiness was how they got into the mess in the first place).  However if the stimulus had of been directed at mining companies and people died would you hold the government responsible for that?  Mining has a strong union that protects he safety of it’s workers (the positive of unions, I am aware they have negatives) where roof installers did not appear to come under any union agreement nor protection.  Would it also not be more of a socialist ‘big government’ drive to implement additional legal protections? That is something the liberal party professes to avoid isn’t it? 

      No doubt Rudd n co should be held responsible for excessive waste, but for the four workers deaths?  Surely you don’t believe that.  No reasonable person could.  However I do agree that out of this there needs to be protections for employees and improved regulations for installers to adhere to.  As a consequence I would hope that would reduce the estimated 75 house fires that occur every year from poorly installed insulation (that was pre stimulus).  That equates to 825 house fires under Howard rule, plus I have no doubt some workers died - why didn’t Howard do something?  Because it wasn’t political so nobody cared, or even knew about it.  Hindsight is a great thing, but either the liberals didn’t see it coming either, or they did and kept quiet which is a much, much worse thing.

      As for the parents, you are right - I have only seen two of the workers parents interviewed about the matter to make that statement, I was doing my own leap of faith to say the others felt the same way.  I have however read the full report on the scheme, which left me with the opinion that responsibility for their deaths lies in the hands of the negligent small business owners that employed them, if anyone.

    • Against the Man says:

      08:55pm | 14/07/10

      Nice try Roja, you would be a decent ALP spokesman. But at the end of the day those deaths would not have happened if the ALP/Rudd did their job right. Civilian deaths because of incompetent applied government policy? You bet and the history books will leave Rudd and his mates a decent length chapter on this. You can live in denial, that is your right in this society.

    • Rodger says:

      10:33pm | 14/07/10

      @Ben Gia - I know friends that were ‘cold called’ by shonky operators who said don’t worry about getting a second quote or even inspecting the work.  Several friends that are prone to laziness and were complicit in lying on the form ended up with crappy insulation, those that got off their arse and actually called a second place got decent insulation.  Let the buyer beware. 

      It’s easy to blame labor, much harder for people to take responsibility for their own actions - or lack of.

      That said I do see you point from a moral stand point - just not a legal one. 

      Under that logic every government has paid welfare to drug addicts who have overdosed and died.  No controls have ever been put in place to prevent this happening, therefore those too are the fault of the government.  The government trains elite soldiers, some have died in training, others died deployed in action - that too is also the governments fault.  I simply don’t believe you can prosecute them for making much larger decisions that had such unforseen results.

    • Roja says:

      10:47am | 15/07/10

      @AtM - “at the end of the day those deaths would not have happened if the ALP/Rudd did their job right.”

      You are welcome to prove that with facts mate, however self righteousness is not admissible evidence in any court I know. 

      This is from the actual report…

      The associated political wrangling has overshadowed the duty of care of employers, which, put simply, is a requirement that they do everything reasonably practicable to ensure a safe working environment. While determining the causes of deaths and serious safety hazards and any liability for these is a matter for coroners and work safety agencies, clearly there would seem to have been some unsafe work practices by employers operating under the HIP.

      ... In short, employers haver a duty of care to their employees.

    • Dash says:

      08:19am | 14/07/10

      More evidence of the waste and incompetence of this Labor government. We cannot afford another term of this rubish. How many more failures will it take for the media and the people of Australia to wake up?

      Reply

    • Anthony of WA says:

      08:49am | 14/07/10

      Labour has lost 2 of its more experienced minsters but the 2 less competant Wong and Garrett remain, If reelected just think how things will improve

      Reply

    • Tails says:

      08:59am | 14/07/10

      Who’s gonna save me? Who’s gonna saaa-aave me?
      I pray for sense and reason…

      INDEED

      Reply

    • Jason CR says:

      10:21am | 14/07/10

      “In the end our reign came down, in the end our reign came down…

    • DD Ball says:

      09:25am | 14/07/10

      I was approached by many suggesting a contract for me to help me out financially. They suggested I could use the loan to go to my home loan and reduce payments. Then they said I had to use the loan to buy green products, like energy efficient light bulbs etc, and to get rid of my air conditioning. I don’t use air conditioning a lot, but I will keep it. It wasn’t going to do what I had been told to use it for. I had no desire to buy green products .. I already supported a now defunct green energy outfit who used my money to buy al gore dvd’s. The entire scheme was conceived as a rip off, and implemented as one too.

      Reply

    • neil says:

      03:01pm | 14/07/10

      I met someone who did just that, he went through the process qualified for a loan, the money was put straight into his bank account and he put it into his mortgage. So now the tax payer is subsidising his interest on $10,000 for the next four years.

      None of these reports/audits/investigations are going to look at how the $70 million of loan money that was approved is being used. The terms of the loans allow the home owner or renter to pay a minimum of $300pa for 4 years. So over 4 years at 8% thats $22 million that the government will pay in interest.

      Even if the money was used for items that qualify you could by a new laptop to replace a desktop PC or a 50” LCD TV to replace your Plasma because they use less power. But there is no requirement to show you stopped using the old appliance.

      What an absolute joke.

    • Super D says:

      09:33am | 14/07/10

      Well should we really be surprised?  I mean seriously, this is the department of the environment - staffed by aging hippies and youthful activists.  Can we be at all surprised that they have a limited capacity to manage programs?  These people would be used to flitting from one noble cause to the next with the luxury of moving on when a new cause popped up.

      I would suggest that just as companies such as Woolworths and McDonalds require their managers to have face to face experience dealing with the public all public servants should be required to spend time at the tax office or centrelink.  These agencies are used to people trying to scam them on a daily basis, the wood ducks at the environment department clearly were not.

      Reply

    • Phil says:

      09:56am | 14/07/10

      Very good point.

      As someone used to say, the problem with School Teachers was that they never left school. (Teachers seem to be much better these days or is it that i have grown up and think I am wiser, not sure really)

      The problem with Public Servants, many on the ALP side of Politics, Government Agencies is that they have never held a real job. Never had to fight it out for a promotion, complete projects on time and on budget. Many have never been in private enterprise, has their own balls on the line for anything, nor taken any real risks, cept with others money and careers.

    • ibast says:

      09:56am | 14/07/10

      I’ve never rated the insulation debate as a credible issue.  To me it was a public service bungle and not something that should derail a government of a good portion of it’s term in office.  The media has a lot to answer for here. 

      The light-globe issue is one that sh!ts me to tears however.  This was government (Garret’s) police and it provides no net benefit.  All it doesn’t is make life difficult for me.

      Reply

    • Jason CR says:

      12:01pm | 14/07/10

      The death of four Australians and the threat of fire to 10000’s of households isn’t an issue???  If it wasn’t a government bungle, why was Garrett removed from his portfolio? 
      I’m sure the families of the four young Australians share your frustration with the light globes….how petty and utterly ridiculous.

    • ibast says:

      12:24pm | 14/07/10

      I’ll admit the light globe comment was flippant, but I still find it frustrating.

      As for blaming any minister for deaths in a workplace, that is just political spin.  OH&S laws have been laid down for a long time.  The death of these young men is the responsibility of their employer and the individual.  Is every minister supposed to inspect every worksite in Australia to ensure it is OH&S compliant?  That is just ridiculous.

      For the opposition to use their deaths for their own political promotion is just grubby politics.  The media giving it any credibility is equally grubby

      Garret was stood down to lessen the political backlash, not because he was within light years of being responsible for these deaths.

      In the end Rudd deserved to be ousted on this one issue alone.  Not because the policy was incorrect, but because he allowed the opposition to sidetrack him on this nothing administration issue, instead of getting on with running the country.

    • Jason H says:

      12:47pm | 14/07/10

      Jason
            So the employers of the four bare no responsibility at all.
      one died of heat exhaustion I fail to see how you can even at a stretch can blame the public service because someone didn’t drink.why are two of the employers before the courts and not the public service.Ever heard of personal responsibility,  maybe Simon could have included in his rant that here in SA where he comes from unless you have a builders licence you couldn’t do the work.
      The ones I feel sorry for are the legitimate businesses that lost work due to these shonky operators

    • Simon Birmingham says:

      01:24pm | 14/07/10

      Insulation was a policy bungle first and an implementation bungle second.  If you design a program that makes a product free to people, where provision of it has low barriers to entry yet offers large profits, then you have designed a program that will attract plenty of shonks.  That’s what Garrett & Labor did with insulation - they got the program design wrong to start with, they got plenty of warnings they chose to ignore & as a consequence they must take responsibility.

    • neil says:

      03:20pm | 14/07/10

      The insulation program was put forward to the Howard govt and was rejected for the very reasons that turned it into a disaster under Labor.

      The same bunch of fanatical green public servants in the DoE sold it to Rudd and Garrett after it had been rejected by the Libs.

      This was six months before the election, these PS’s need to be held accountable as much as the gov’t and minister.

    • Jason CR says:

      03:32pm | 14/07/10

      Where did I write that Garrett was to blame directly for the deaths?

      I merely stated that it was an important issue to judge a government on.  It was a government policy that was seriously flawed and the implementation straight from amateur hour at the pub. 

      Despite warnings to ministers and RUDD it continued and lives were lost.

      Labor muppets can put whatever spin they want on it.

    • kwaka says:

      10:03am | 14/07/10

      Rip off??  How is an interest free loan a rip off?  We used the $10k loan to install 12 solar panels on our roof, which will reduce our energy bills, and make our small contribution to reducing the load on the grid.  If you had no intention of using it for what it was designed for, why would you apply for it?  If you didn’t apply for it, and didn’t use it, what is your problem?

      Reply

    • Roja says:

      01:56pm | 14/07/10

      Some people are very glass half empty types - they see one case where it went wrong and assume that it happened across the board.  It’s like a current affair showing one guy receiving a compo payout when he is working / cartwheeling / weightlifting at the olympics and this makes it easy to paint every person on compo with the same brush, despite the fact that the vast majority are legitimate non-cartwheeling types.  It is half arsed, childish behaviour usually done by people with an ulterior motive. 

      The narrow view approach appears to be applied by entrenched conservatives when talking about a labor government, and never applied to liberals when they are in power or even on reflection of what actually happened when they are in power.  Of course the reverse applies equally to entrenched labor supporters. 

      For the rest of us that live a little closer to the middle, we try and see both sides and weigh up all the evidence in a more intelligent manner.

    • Mr Pastry says:

      10:05am | 14/07/10

      I can only think that Jools has not already presented the tax payers with his head on a stick because she can’t find a venue big enough.

      Reply

    • greenvalue says:

      01:01pm | 14/07/10

      A real shame is the fact that for every dodgy Home Sustainability Assessor (doing the Green Loan assessment) there were at least 2 or 3 people working in the field who are seriously interested in a more sustainable future and giving people the right and knowlegable advice.
      Now every one of them is either out of work, or seriously “under-employed”, since Penny Wong has capped assessments to a maximum of 5 per week for each contracted assessor.
      And it’s sad how many low-income households, who were keen to implement changes, have missed out on their Green Loan funding to invest in cleaner and energy-saving devices (solar hot water, under floor insulation, proper shading, etc. = all in the recommendation list).

      A frustrated assessor who will not vote for this Labour (bofw < you decipher)

      Reply

    • Tails says:

      02:11pm | 14/07/10

      Are the first two words “bunch of”? If so, I’m pretty sure I’ve got the rest.

    • Bruce says:

      02:35pm | 14/07/10

      The issues regarding Green Loans is a pandoras box. The problems associated with it are much the same problems as the “Bats”  and BER schemes. I believe if we dig deeper the proverbial will “hit the fan” big time. All details must be released before any election is called. Otherwise it will be very clear that the labor party wants to brush this problem and other badly managed programs under the table. The federal labor government is now becoming a mirror copy of the incompetent NSW state labor government.

      Reply

    • Anjuli says:

      03:52pm | 14/07/10

      Has any one noticed that Rudd put Garret in as minister but while Rudd has gone others are still there no matter what mistakes have been made,and being rewarded .This government is certainly on the nose.

      Reply

    • Ben G says:

      04:28pm | 14/07/10

      There are no problems with the Green Loans scheme. There were problems, but then they axed Kevin Rudd, and now there’s no more problems, it’s a completely different government.

      Reply

    • Marilyn Shepherd says:

      05:43pm | 14/07/10

      Simon Birmingham is talking utter tripe as usual.  Garrett hasn’t done anything remotely wrong but the Howard mob helped to start two frigging wars that have caused the deaths of nearly 2 million people.

      Will you get a grip you little creepy crawly.

      Reply

    • Joe says:

      11:19pm | 14/07/10

      I think we are so lucky that Abbott got in and saved us from Rudd/Gillard’s ETS. The ETS would be like this green loans scheme applied to the entire economy. They can’t even manage 1000 of these acessors, imagine them trying to manage Gillard’s ETS. There is reporting of a lot of rorting of carbon credits in Europe. This is all literaly hot air, and nonsense. Please save us from more of this.

      Reply
 
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