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Transcript of interview with Ashleigh Gillon: Sky News, AM Agenda: 10 February 2010: solar panel rebate; suspension of foil from the Home Insulation Program; Green Loans program.

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10 FEBRUARY 2010

SUBJECTS: Solar panel rebate; Suspension of foil from the Home Insulation Program; Green Loans program

GILLON: Good morning and welcome to AM Agenda, I’m Ashleigh Gillon.

The Environment Minister, Peter Garrett, is under fire over two key programs being carried out by his department. Firstly, it was revealed that there has been an $850 million blow out on the Government’s household solar program. And the Green Loans program is now also under review.

The Environment Minister joins me in the studio.

Good morning Minister, how are you?

GARRETT: Good morning.

GILLON: I want to start though on the decision yesterday to suspend rebates for foil batts under the insulation program. Apparently there has been four potentially related deaths occurring since that program began. Three of those deaths happened in the second half of last year. So why did it take until mid-February to do something about it?

GARRETT: In the first instance Ash, the decision that was taken by me in November last year to ban metal fasteners was taken as a response to the potential and also the unfortunate incidents in two cases that had happened under the program where installers had used metal fasteners over the foil, and that produces conductivity. And we took advice from the industry and from the department and banning metal fasteners was seen as the way of dealing with that particular issue. We have also made it compulsory for installers to conduct a risk assessment before they go into the ceiling. And we also began a targeted audit of some 10 per cent homes in Queensland that had ceiling insulation which was the foil. That has identified a small number, some five out of the 400 results I have on my desk, where the metal fasteners have still been used.

Now it is clearly in breach of the guidelines but given that the safety issues here are absolutely important, I have done the right thing and the proper thing by suspending that program.

GILLON: Is it true that you were warned by the electrical contractors association a year ago that unless certain standards were adopted then there could be electrocutions of home owners or installers?

GARRETT: All of the decisions that we have taken we have taken on the basis of consultation with the industry. We heard the concerns that were raised by electrical contractors and others in relation to foil insulation.

GILLON: But ignored them?

GARRETT: No, no we didn’t ignore them. We took the decision then, on that basis, to actually ban those metal fasteners and in doing that, that was acknowledged as the right step to take at the time. What I have said here is that any installer that doesn’t exercise the right duty of care in installing insulation in these ceilings is breaching the guidelines but also breaching the responsibility that they have to their employees. I am very, very concerned if there is any potential issues that remain around foil insulation and that is why I have taken the proper step and the right step to actually suspend it on the basis of the information that has come to me.

GILLON: Is that problem just confined to Queensland or should other states worry as well?

GARRETT: It is mainly in Queensland where foil insulation is commonly used. We have approximately 40,000 foil insulations in the program. Most of those, some 30 or so thousand - 32,000 or 33,000 - actually I think it is a bit more than that - are in Queensland.

We’re doing a targeted audit of some 10 per cent of the homes in Queensland. I am expecting more results and I have called for more results of that targeted audit to see whether there are any additional issues that have arisen as a consequence of us seeing what has happened when these installations have taken place. If we need to increase safety measures, we will.

GILLON: Why only 10 per cent though? The Opposition is calling for every house with a foil batt to be audited. Apparently the electrical sector is saying that there could be over 500 live houses in Queensland alone.

GARRETT: Well it was necessary for us to get a sense of the scale of this issue. The appropriate…

GILLON: Yes but how do you know?

GARRETT: Well the appropriate way to do that is to look at the information in front of us. And I said yesterday in the House and I say it again this morning, I am taking advice from my department now, I have already received the results of some 400 of those audits.

There is some 2000 that need to be undertaken. 1000 have been done. I am waiting now, and I have asked for that information now, on what is contained in those additional audits. If I believe that there is a need to have a more comprehensive audit on this program I will make that decision and I will make it quickly.

GILLON: It does seem that the real crux of the problem is that people haven’t been trained well enough, that they don’t really know what they are doing at installing these pink batts and foil batts. And I know that regulation is a state issue and you have said there are regulations in place that of course you expect people to comply with, but aren’t you the one who decides who qualifies for the rebate? Don’t those qualifications need to be stricter?

GARRETT: Well we have got in place a very strict set of guidelines. We have got a name and shame register, we have increased the safety requirements under the program - they are now higher than what they would be under the Australian Standards or the Building Code’s. There are tough regulations in place in relation to this program. And there are also training measures in place too.

I mean at the start of this program which is the largest energy efficiency program that we have ever seen, there was no training for ceiling installers at all. We have taken that matter on and we have addressed it. At the start of this program the requirements that we now have in place for ceiling insulation were never there. So we have lifted the standards of safety.

Always in programs of this size and scale there will be a small number of people who don’t do the right thing. We have got measures in place to deal with them. Strict compliance and strict monitoring. I want to make sure that a successful program continues to rollout, to deliver the kind of benefits that it is to Australian households, but I also want to make sure that it is done in a way which guarantees the safety of the installation and that is what yesterday’s decision was about.

GILLON: On the solar power program, we’ve learnt that there was an $850 million blow-out. Is that correct and isn’t that embarrassing for a Government that is trying to reign in the spending?

GARRETT: Not at all and that is not new news particularly, that is not new. This particular delivery of the government’s budget on solar panels is a very significant commitment.

GILLON: Isn’t that the latest figure though? I understood that we heard in Senate Estimates yesterday that that was the new figure, $850 million?

GARRETT: This has been reported as the new figure but that figure has existed basically within the budget figures up to this point in time.

GILLON: Right, but it remains that there is a massive budget blow-out, is that right?

GARRETT: Well it is not a blow-out. We have expended the budget on the solar panel rebates and we have done it in a way which has delivered and will deliver over 100,000 solar panels to householders. We made that decision because we wanted to literally

deliver solar panels to Australian homes. This Government has done it. Eleven times the number of the former government in its term of office. And we have then moved to allow people to get support for solar panels through the Renewable Energy Target.

That decision was taken last year; it was taken on the basis on the basis of fully expending the money necessary for our commitment on solar panels. And then we have also made solar panel support accessible to people through the Renewable Energy Target as a result.

GILLON: Well the solar industry doesn’t seem as pleased. That were saying that this scheme was poorly managed, they had a boom now they are saying they are in a bust because of the changes that you made to this program.

GARRETT: The changes that we made to that program last year and the sustainable growth path for this industry are actually working very well and I am very, very proud of what the….

GILLON: Is that what representatives of the solar industry are telling you?

GARRETT: Well I am very proud of the record that the government has in terms of delivering solar. I mean 11 times what our opponents delivered when they were in government. Eleven times. A significant commitment to solar panels and expending the program and making sure that we met that demand at the same time providing people with the opportunity, through the Renewable Energy Target, where there is continuing demand for solar and there is a sustainable growth path for the industry.

Also, add in to that the solar hot water rebate. Add in to that the fact that we have got a commitment to solar power stations as well. This is an industry that has prospered under this Government. Yes there is very strong demand for solar. We are very fully committed to it.

GILLON: On the Green Loans scheme your department head has said that the program is failing to meet benchmarks, it is not performing as well as intended, is it?

GARRETT: I am not happy with the way in which the Green Loans program has been delivered up to this point in time and the fact that we do have some issues in there which require resolution. And I have made that clear and I have also made decisions…

GILLON: And you also take responsibility for that?

GARRETT: Well I take responsibility for addressing those issues which is what I have done by doing two things…

GILLON: And the fact that this program isn’t living up to expectations?

GARRETT: Well again, by addressing these issues, by ensuring that the department conduct the appropriate inquiry and review into the rollout of this program and decisions that have been taken under it, I have already initiated an audit by Pricewaterhouse on one component of the program and yesterday in recognition of the fact that there were some allegations about behaviour in this program I have done what I think is the right thing.

I have commissioned the department to ensure that there is an independent, external inquiry into matters around contractual arrangements and the like. Now that is the right action for me to take as a minister. Again, this is a program which is strongly demand driven. We will fulfil our commitments in terms of 360,000 household assessments on energy efficiency. So we are delivering on these programs. But if issues arise which require attention then we will address them.

GILLON: Are you really delivering on these programs though? How many loans did you expect to have handed out at this stage and how many have been handed out?

GARRETT: I didn’t have an expectation of numbers over the life of the program because the business of people…

GILLON: I thought the target was 75,000 loans?

GARRETT: Up to 75,000 loans under the program. But the issue around the loans is…

GILLON: So how many have been given out?

GARRETT: The issue around the loans is very straight…over 1000.

GILLON: So 1000 out of 75,000?

GARRETT: Yes but it is not given out by the government, Ashleigh. It is a matter for the householder, once they receive their assessment.

GILLON: This is your program.

GARRETT: Well let me just be clear about the program though. We are committed to providing the opportunity for householders to borrow, interest free, up to $10,000. That is a decision they take at their own behest once they have received their assessment, with a financial institution like a bank and to the 360,000 assessments by assessors. Now we will fulfil the commitment of 360,000 assessments by assessors and that is a fantastic thing for us to do. And on the question of loans it will be a matter of how many of the householders decide that they actually want to take up the loans or not.

GILLON: So the low take-up suggests that people aren’t really happy with your scheme, they are not really taking it up, they are not really taking advantage of it and obviously don’t think it is worthwhile.

GARRETT: Well it is a question for people that decide whether they want to borrow that extra money or not. We provide the opportunity for people to do it. Some have.

GILLON: [inaudible]…will you cancel it?

GARRETT: This program is a commitment on our part both for assessments and for the opportunity for people to take loans. And the end of the day….

GILLON: What is the point of doing this if people aren’t actually taking it up?

GARRETT: Well they may take other steps in relation to energy efficiency in their households without taking up the option to borrow the money. And I mean clearly, what we are saying here is a very large number of assessments. We have 140,000 plus assessments that have been conducted. So people have that information in front of them. It is then up to them to decide whether they just want to take some measures around the house, whether to take advantage of existing say state government or other programs, or whether they want to take the option of taking up the loan,

GILLON: Is there any way of knowing how much energy is being saved through this program since it started?

GARRETT: Well we will certainly evaluate the program over time. It is a program which is in its infancy at this point in time and we will certainly be doing surveys to see what kind of decisions householders took when they made the decision either to take up the loan or when they got the assessment.

I make one really simple point - these programs are significant programs and they are programs which give householders the opportunity to understand what they can do in their houses in relation to energy efficiency measures. They also give householders the opportunity in the home insulation program to reduce their energy costs and to reduce their greenhouse gas emissions. Now we are delivering big time in that area. Yes, there

are going to be wrinkles in the delivery of some of these programs and we want to…

GILLON: Well another wrinkle is that you’re not paying these assessors on time, are you?

GARRETT: Well assessors, again, under this program assessors have got to actually submit a form for appropriate payment, to the department, which is properly filled in. And advice that came into estimates last night from the department said that on many occasions the forms themselves aren’t properly filled in. So we are now providing feedback for the assessors to enable them to see a template on how the form needs to be filled in properly. If forms are filled in properly and the assessments done as it ought to be done, then assessors will be paid on time.

GILLON: Okay, Peter Garrett, good luck ironing out those wrinkles. Thanks for your time this morning.

GARRETT: I am on my way.