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Wednesday, 16 June 2010
Page: 5563


Mr COMBET (Minister for Defence Materiel and Science and Minister Assisting the Minister for Climate Change and Energy Efficiency) (4:42 PM) —I welcome the debate on the matter of public importance before the House because it affords me an opportunity, as the responsible minister, to update the House on progress in the wind-up of the Home Insulation Program and the safety plan and inspections that the government has instituted. I will come to them in some detail. Secondly, it affords the opportunity to address some of the myths that have been propagated by the member for Flinders, some of which we have just heard repeated.

There are four key elements to the program the government has instituted to deal with the wind-up of the Home Insulation Program. These four elements include the home insulation safety program, upon which I will elaborate, the foil insulation safety program, the industry assistance measures that have been instituted, including the manner in which the government has been addressing the issue of payments to insulation installers and others, and the measures the government has instituted to deal with potential cases of fraud under the Home Insulation Program and various other forms of noncompliance with program guidelines.

I turn firstly to the home insulation safety program. This is the program of safety inspections that the government has instituted in relation to homes that had non-foil forms of insulation installed in them under the now terminated Home Insulation Program. These inspections are targeted at those homes that are most likely to have safety issues. Those homes are being targeted for inspection on the basis of an ongoing risk assessment that was recommended by, and has been developed on a continuing basis by, PricewaterhouseCoopers who are contracted to the Department of Climate Change and Energy Efficiency partly for this purpose and partly also for the administration of the home insulation safety program.

The government has committed—and I make this very clear—to inspecting a minimum of 150,00 homes in this category. That is at least the number that the government will inspect in this part of its activity in the wind-up of the Home Insulation Program. If the risk assessment, the development of which will continue to be informed by the results of the inspections, indicates that more houses need to be inspected, they will be. That is the commitment of the government. We have committed to inspect at least 150,000 homes and we will inspect as many as are necessary according to the risk assessment that will continue to evolve and be informed by the results of inspections as they come in. In addition to that commitment, any household that has safety concerns with installations of insulation made unde the Home Insulation Program can request an inspection through the safety hotline which is 131792. Those inspections are being performed and they are being carried out in addition to the minimum of 150,00 homes that I have indicated.

I go to some of the myth making in relation to this issue. The commitments by the government that I have outlined are extremely important. The member for Flinders, the shadow minister, has consistently said—and has done so in the matter of public importance submissions that he has made—that there should be a commitment that all houses be inspected. I emphasise the government’s commitment to inspect as many as are necessary and appropriate as informed by an ongoing risk assessment.

One needs to consider the nature of the installations that were made in developing such a risk assessment. A number of companies that are longstanding, reputable firms in the insulation industry carried out a very significant number of installations during the term of the Home Insulation Program. Two major manufacturers and installation firms, CSR Bradford and Fletcher Insulation, for example, along with their network of small- and medium-size enterprises active in the installation business did a lot of work under the Home Insulation Program. Those firms offer a warranty, in some cases a lifetime warranty, for the product that has been installed and also a warranty for the work done during the installation of the insulation. In these circumstances, for example, where those companies have made this commitment to their customers—a warranty for product and installation—it is perfectly appropriate for the government to be saying to those companies that we expect that they stand behind their work. Those are the commercial warranties that they have provided and this matter must inform the risk assessment that the government, through PricewaterhouseCoopers, continues to rely upon in targeting and prioritising homes for inspection. CSR Bradford placed an ad in the paper quite recently on Sunday 22 May stating the following:

If you have had Braford batts installed in your ceiling by a Bradford Comfortchoice specialist under the federal government home insulation program, you made the right choice. We will be writing to Comfortchoice customers over the next few weeks to provide reassurance that by choosing to have Bradford Gold or SoundScreen batts installed by one of our approved Comfortchoice installers you can be sure that the insulation was correctly installed by a longstanding and reputable business and it is safe and effective. Comfortchoice installers work to the highest industry standards.

Many tens of thousands of homes were installed under those arrangements under the brand of CSR Bradford. The company has publicly indicated its preparedness to stand behind all of that work, including the installations that have been carried out. They run a hotline. They have advertised it nationally. They have written to all of the homes that were installed by them under the program, indicating they stand behind their work. Why should their work be trashed by the coalition and the shadow minister and brought into question in the way that it is with the myth making and scaremongering that has been conducted? The responsible way of approaching this issue in identifying the number of homes to be inspected and prioritising those homes for inspection is to conduct a proper risk assessment and not to be engaged in scaremongering about the issue.

On this front, I can advise the House that so far approximately 37,000 houses have already been inspected under the home insulation safety program and that includes about 5,000 requests for urgent inspections from households with the rest being conducted as part of the targeted inspection program that I have indicated. In order to scale up the rate of inspections, which are currently occurring at the rate of around 2,000 homes per week, the government through PricewaterhouseCoopers and the Department of Climate Change and Energy Efficiency is pursuing the engagement of additional contractors with appropriately trained inspectors to carry out further inspections of homes that had insulation installed in accordance with the priorities established by the risk assessment.

Recently, heads of agreement were signed with CSR Bradford and UGL Services for inspections and safety remediation work to be carried out. That will enable another significant scaling up in the rate of inspections being carried out per week. UGL Services in particular will undertake the engagement of small- and medium-size enterprises, including insulation installation firms, and engage them in the home inspection work provided they have an appropriate compliance record. These are very important commitments.

The member for Flinders has raised a number of issues about fires. Periodically—about every fortnight—on the department’s website, the figures for the number of fire incidents that have occurred are updated. Far from it being secret, the last update happened yesterday on the department’s website. Hardly a secretive matter, it was identified that 174 fires have been linked to addresses where insulation has been installed under the discontinued program. It is very important to indicate that firstly that update to 174 fires includes a number of fire incidents that occurred as far back as October last year. The department waits upon advice from the respective authorities for the information to come in. Where an incident has been investigated and has been associated with the home insulation program, sometimes the passage of that information takes some considerable time. That is one reason why there was a jump in the number of fires posted on the website yesterday. I hope that that helps alleviate some of the fearmongering about this particular issue.

The other thing that is very important to understand about this is that a fire incident is not necessarily a fire that structurally damages a dwelling. The number of homes that have unfortunately been the subject of a fire incident that has caused structural damage—according to the reports that have been provided to us by the fire authorities in the various states and territories—is about six. That is out of the 174 fire incidents that have been reported and recorded on the department’s website. The overwhelming majority of cases, fortunately, are incidents in which there has been some smouldering detected in the ceiling, oftentimes around down lights or other electrical appliances in the ceiling and the mechanisms in place have been able to capture the fire incident at a fairly early stage.

It is very important to recognise these things in context. It is also very important in our public commentary—and I offer this gratuitous observation to my colleague opposite—that we do not go around fearmongering about this issue. It is one thing to be saying that we are going to be offering support to people. But it is also very important to deal with the facts in an appropriate way and not create unnecessary fear and concern. In making that statement, I do not make it from the standpoint that we should necessarily underplay any of the issues to which I am averting. But it is very important that people are able to operate on the basis of the facts.

I indicated also that the government has instituted a foil insulation safety program. This is in respect of homes, numbering slightly in excess of 50,000, which had foil insulation installed in them. In relation to that, the government has, through various arrangements, now overseen about 24,000 inspections of homes that had foil insulation installed. We have committed that every home will be subject of a safety inspection, with the result being either the removal of the foil insulation on the advice of a local electrician or alternatively—also on the advice of the electrician to the householder—the installation of circuit breakers or safety switches in the circuits of the particular home. That is a program that has been designed in consultation with the key authorities expert in this matter, including the Queensland Electrical Safety Office.

There has also been some commentary in relation to the circumstances of firms within the insulation industry. The government has made available assistance packages totalling approximately $56 million. One of them is an insulation workers adjustment package, which contains a $10 million component to assist businesses in particular in the retention of employees or, alternatively, the redesign of some of their business activity. In addition, there is a $15 million package to support firms that at the termination of the program held insulation stock. Quite a number of applications have come in for that assistance and they are being processed expeditiously by AusIndustry in partnership with the Department of Climate Change. In fact, so far 98 applications have been approved under that specific program, totalling grants in the region of $6.1 million. Applications and payments continue to be processed.

A lot of progress has been made, too, in relation to the clearance of claims for payments by installers following the conclusion of the program. In short, more than 100,000 payments were outstanding at the conclusion of the program. We have now got to a position where about 30,000 claims for payment remain. About 6,000 of them require very detailed follow up. They are incomplete claims for payment and require phone calls to every claimant. But about 25,000 claims are the subject of investigation for fraud or various forms of non-compliance. It is important that that process be allowed to be pursued.

Finally and on that front, the government, through the department, appointed a set of forensic auditors to follow up on allegations of fraud. That work is now well advanced. KPMG were appointed for that particular task and are well advanced in it. I look forward to receiving a report from the department on that issue. (Time expired)