Pearls and Irritations

Repost: Pink Batts – facts and fiction. John Menadue

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John Menadue

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Written by John Menadue

The following is a repost from July 11, 2013. I wonder if it is necessary for the Abbott Government to rake over the past rather than concentrate on the future!

The fiction is continuing in the uncritical media that only the Commonwealth Government should bear responsibility for the problems of the Home Insulation Scheme. We should consider the facts…

  • 1.1 million Installations were completed under the scheme. There was clearly a rush by the Commonwealth Government to roll out the scheme as part of a successful stimulus plan to provide work as the global financial crisis bore down on us.  Because of the stimulus plan Australia avoided most of the disaster that befell many other countries during the GFC. That should be recognized. But mistakes were made
  • In a column in Crikey of 26 April 2011, there were research findings by blogger Possum Comitatus, which were based on a CSIRO analysis of insulation fires.  (It was not about deaths.) Possum Comitatus concluded that ‘the HIS was three times safer than the industry it replaced in terms of the fires experienced within twelve months of getting installed’. He then looked at the rate of fires over the longer term and came to the same conclusion that the industry was safer following the HIS than it was before. He concluded ‘ultimately the HIS … was much safer in terms of the fire rate than what preceded it’.

Certainly the number of fires was up, but that was perhaps not surprising given the major increase in installations. But the rate of fires was down.

Ian McAuley in  New Matilda of 8 July 2003 has pointed out

  • Regulation of the home installation industry is in the hands of State Governments, not the Commonwealth. The states were and still are responsible for safety. In the recent coroner’s finding on a death in Queensland, he recommended that three managers from two insulation companies be referred to the Queensland Attorney General for breaches of the State Electrical Safety Act.
  • The Commonwealth Auditor General found that 29% of installations had deficiencies ranging from minor to series safety concerns. He found that the program was open to fraud, finding 4,000 cases of potential fraud and 67 cases of payments being made to contractors without any work having been done. This is clearly an industry which has attracted more fly-by-night operators than some others. The small industry sector has some downsides.

Clearly the scheme was poorly administered by the Commonwealth and Kevin Rudd has apologised. But the safety/regulation issue is the responsibility of state governments. Further, the rate of fires was down following the introduction of the program.

Under the rubric of small government the Commonwealth Department of Environment found itself unable to properly manage the programme. The necessary government skills and experience were just not there. Consultants Minter Ellison therefore advised the Commonwealth Government that the programme be outsourced which in effect limited the Commonwealth’s role to funding and not supervision.

There is plenty of blame to go around, but it seems that some of the media have chosen only to focus on the Commonwealth Government and Kevin Rudd. The News Limited publications have been particularly sloppy and partisan on the issue. Once again, their political hectoring ran ahead of their  examination of the facts.

On safety issues beyond the home installation industry, we find that workplace deaths across all industries has fallen by one third since the election of the first Rudd Government. These figures are from Safe Work Australia. Most deaths have occurred in agriculture followed by construction. This downward trend in workplace deaths has been occurring for many years. How much has been due to an emphasis on safety by Ministers Shorten and Albanese is hard to access. But the trend is certainly in the right direction.

But the myths and the fictions of the pink batts continue.

Comments

7 responses to “Repost: Pink Batts – facts and fiction. John Menadue”

  1. Raja Junankar Avatar
    Raja Junankar

    Pink Batts, Greedy Capitalists, and Government Responsibility
    Raja Junankar
    University of Western Sydney,
    University of New South Wales,
    and
    IZA, Bonn

    There has been a tremendous outcry over the failed insulation scheme. At the height of the Global Financial Crisis the Federal Government (under Kevin Rudd) provided grants to cover the insulation of roofs to increase employment for (especially) construction workers who may have been laid off during the downturn. This led to a huge increase in the insulation of homes which, not only led to increased green house efficiency, but also to an increase in employment. With the sudden increase in demand for insulation, several new players entered the market to provide insulation. Some of these were sub-contractors for large established firms like Bunnings, but others were new entrants with little experience. The sudden appearance of quick profits clearly led to new providers who had little experience or expert knowledge in installation or electrical safety. Lives have been lost, and some homes have been lost through fires. In many cases the households had not had the wiring in their roofs checked by qualified electricians for ages, if at all. Who is responsible? The Government? The greedy capitalists? The homeowners?
    According to good neoclassical economists, no private sector agent would provide faulty services (products) as they would be concerned about their “reputation”. It is clear, especially after the GFC, that this is a false premise.
    A home may be an electrician’s nightmare, because a do-it-yourself person has done some installation of lights or fans in the roof, or because the builder had cut corners and used some inexperienced electrician to do the wiring, or it was an old house that had wiring done over fifty or hundred years ago. If an experienced insulation worker enters the roof, s/he should obviously check that there are no loose live wires around. But if the contractor (in an attempt to make a fast buck) has hired a young inexperienced worker, the contractor is putting the life of the worker at risk! Who is responsible? The home-owner? Or the contractor?
    If we look at the statistics on workers compensation claims for the deaths of employees due to work-related causes, we see that in 2006-07 (the last year for which statistics are available) 215 males and 21 females died. The Construction industry recorded the highest number of fatalities in any industry (50 fatalities, 21 % of all fatalities). ). In such a dangerous sector, the highest levels of safe working should be standard procedure, but this was not universally the case under this scheme. According to newspaper reports, there were 4 fatalities in the insulation program since its inception. Each case is one too many. Who is legally responsible? Who is morally responsible? The home owner, the contractor, the sub-contractor, or the government?
    Yes, there should have been better regulation of the insulation industry. Yes, the government should have spent more time in preparing for the sudden increase in demand for insulation before the scheme was introduced. The question of legal responsibility will be decided in the courts. The question of moral responsibility is more difficult to assess. In my view, the moral responsibility has to be shared between the home owners, the capitalist firms, and the government. But, fatalities in the work place are not unknown events. We need to increase safety in the work place. Unions have been fighting for increased workplace safety, but the previous government of John Howard was busy in killing the union movement.

    26th March 2010

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