All three programs point to serious shortcomings in the ability of the federal Environment Department to manage large-scale public policy roll-outs — for which it historically has had little responsibility.
Another issue seems to have been a catastrophic failure on behalf of the department to forecast demand. All three schemes in question have been wildly popular: so popular in fact that they quickly soaked up all the available contractors in their industries. Financed by government incentives, this massive new demand then began to suck in fly-by-night contractors and opportunists keen for a piece of the action. Unskilled, untrained workers were employed in their thousands, many of them students and young people looking for holiday work or some extra cash. The results have been tragic.
Why the Environment Department got its forecasts so wrong is somewhat of a mystery. An elementary grasp of economics and public administration should have been all that was required to realise that consumers respond to incentives. Just look at the Australian housing market, which has proved itself highly sensitive to government incentives like the First Home Owners Grant. It should have been obvious that injecting hundreds of millions into previously small industries would cause major structural dislocations.
This was exactly what happened with Garrett’s $8,000 solar rebate last year, which proved so popular with householders that it eventually ran $850 million over budget. Garrett had to pull the plug three weeks early, with only 24 hours notice. In this week’s Senate Estimates testimony, it emerged that some solar contractors have still not been paid by the Environment Department.
The multi-billion dollar insulation roll-out proved equally popular. Created as part of the Government’s economic stimulus package, the program was specifically designed to quickly shovel billions of dollars out of Treasury coffers in order to combat the global financial crisis. Speed was of the essence: an Environment Department media release from early 2009 proudly announces that Garrett was “fast-tracking” the insulation scheme. Little thought appears to have been given to whether the Australian home insulation industry had the capacity or the workforce to deliver such a massive program.
This is where Garrett’s protestations that the blame must rest with shoddy contractors runs aground. Almost as soon as the stimulus measure was announced, a sudden boom began to sweep the industry. And soon after that, accidents started to happen. Houses burnt down. Contractors died.
For instance, in November alone two young Queensland installers died as a result of shoddy work practices. One particularly distressing death occurred outside Rockhampton, where 16-year-old Rueben Barnes died after being electrocuted while installing foil insulation.
But electrocution is just one of the risks faced by untrained subcontractors looking for extra cash. Reports have reached newmatilda.com of endemic unreported workplace accidents, like contractors falling through ceilings because they weren’t standing on roof beams. On 24 November, a man died of heatstroke while installing insulation in Western Sydney. As the Sydney Morning Herald reported at the time, “the man had been employed by a subcontractor as a casual worker and … he was not adequately qualified to install insulation”.
It has since emerged that Master Electricians had warned the Environment Department of these risks well before November. In October, the CEO of the Master Electricians, Malcolm Richards, called for an end to the insulation rebate because of the electrocution and fire risk. It now seems as though hundreds and perhaps even thousands of homes may be “live” — in other words: potential death-traps. The Federal Government will now pay to inspect more than 48,000 homes to check for problems, potentially costing as much as $50 million.
And yet despite the warnings, Garrett acted cautiously and incrementally. Last year, he worked to introduce mandatory training requirements for insulation installers. After the electrocution deaths last November, he banned the use of metal staples (which you would have thought posed an obvious risk). But it has taken until now for the Environment Minister to decisively end the program.
Despite a terrible week, the Government is so far standing by its troubled Environment Minister. Senior front-benchers, including Chris Bowen and Julia Gillard, have been given the task of publicly defending Garrett. Labor’s strategists have clearly decided that Garrett remains an asset, rather than a liability, but his accident-prone performance in the job must also have disappointed those who touted the former rock star as a future leader.
In some respects, of course, Garrett is not to blame. Clearly, his department has shown itself woefully incapable of carrying out the ambitious new responsibilities given to it under Rudd. But in politics, what matters is what happens on your watch, no matter whether you personally knew about it. Garrett has taken a significant hit in this scandal. Another scandal before the election could finish his ministerial career.