Discontinued

Australia Paid Up to $1,600 a Home in 2009 to Insulate a Million Ceilings in a Year, Using Installers Who Signed Up Online. Its First Industry Meeting Heard New Zealand Had Tried This and Three People Electrocuted Themselves.

On 3 February 2009 Kevin Rudd announced the Energy Efficient Homes Package, part of a $42 billion stimulus plan meant to carry Australia through the global recession. Its centrepiece, the Home Insulation Program, offered free ceiling insulation worth up to $1,600 a home, with a target of 2.2 million homes. It had two aims, to save energy and to create jobs for tradespeople, and they did not always pull in the same direction. From 1 July 2009 the Commonwealth paid the installers directly, Medicare Australia handled the registration and the claims, and the main phase was planned to run for two and a half years.

Before the announcement the industry had about 200 businesses. By October 2009 the register held 8,359, with a workforce of more than 12,000. Queensland's State Coroner later found that before the program the sector had no mandated training or skill requirements and few barriers to new entrants. At the time only South Australia licensed insulation installers. Joining was correspondingly simple. Titan Insulations lodged an online application on 18 September 2009, and its director "just followed the prompts online," according to the coroner. Arrow Property Maintenance registered online and over the phone, faxed in a certificate of insurance, and received a letter confirming it was in. Over one million homes were insulated in almost exactly a year.

The First Meeting

The industry had raised the obvious problem early. At the first industry consultation meeting, on 18 February 2009, Peter Ruz of Fletcher Insulation described New Zealand's experience. The record states: "Peter Ruz provided an example in NZ, where a similar program had to be suspended because three people electrocuted themselves. The majority strongly recommended mandatory training for insulation installers." Nine days earlier, the president of the Aluminium Foil Insulation Association had written to the Prime Minister asking for foil products to be included in the scheme. They were. Mr Keeffe, an assistant secretary in the environment department, later told the inquest that banning one product would have eliminated jobs in some sectors. He also said the department had considered the New Zealand deaths and set them aside, because those had involved do-it-yourself homeowners and Australia's installers would be trained and supervised.

On 3 April 2009 a technical workshop recorded that the program "poses a high likelihood of catastrophic consequences (death or serious injury)" and that a risk assessment of the installation process was required. The coroner found no evidence one was ever done. The department did hire a strategic risk adviser from Minter Ellison and kept a series of risk registers. None of them specifically addressed installer safety. Keeffe confirmed that the catastrophic consequence the department had in mind was death by fire, not electrocution. The adviser, Margaret Coaldrake, accepted that fire was on the register because people might sue the Commonwealth over one. In the coroner's summary of Keeffe's evidence, the department saw itself as having "a light touch regulatory role that enabled rapid market uptake."

Buttercup Court

The market took up. Vision and Network Australia, trading as Countrywide Insulation, was confirmed on the register on 1 October 2009. The coroner found it appeared this had been in error and that the registration should not have been validated. Countrywide listed installers on its competency form that it did not employ, and installed no insulation itself. It quoted for jobs and passed them to subcontractors such as QHI Installations, a company registered with the corporate regulator on 21 September 2009 that began operating on 1 October. QHI's director was 19. His father, an electrician who had entered a bankruptcy arrangement after losing more than $2 million in the building industry, ran the company, and described the program as "an opportunity of a lifetime." The son was made director because, the coroner recorded, he had "nothing to lose." QHI was paid around $300 for an average house and was expected to do about 20 houses a day.

Training was brisk. The director later described his own training, a demonstration by an experienced installer, as just a couple of hours of rolling foil out and stapling it down. According to the coroner, "They were told to keep the power on so they could turn the lights on so they could see." Matthew Fuller, 25, started at QHI on 2 October 2009. On 14 October he and his 19-year-old girlfriend, Monique Pridmore, who had started a week later, were sent to 21 Buttercup Court in Meadowbrook, in outer Brisbane, to lay reflective foil laminate. The quote for the job was $1,595, for 117 square metres. QHI had failed to turn up the previous day and paid the homeowner $150 in cash for his lost wages. Just before 12.54pm Fuller collapsed in the ceiling cavity. A metal staple had gone through the foil and into a live cable. He was declared dead at 1.40pm. Pridmore was badly burnt. By 14 January 2010 Countrywide had carried out 1,521 installations and claimed $1,989,590.14.

The Staples

Rueben Barnes, 16, a first-year carpentry apprentice, had been working for Arrow for three weeks. He had received no insulation training and no induction. On 18 November 2009 he was electrocuted while laying fibreglass batts in a roof at Stanwell, near Rockhampton. Marcus Wilson, 19, died of heat exhaustion in a roof cavity in New South Wales, on his first day in the job. On 1 November the government cut the rebate to $1,200, banned metal fasteners on foil insulation and began inspecting 11,000 ceilings. "The ban on metal staples and fasteners will immediately reduce the risk of electrocution for foil insulation installers," said the environment minister, Peter Garrett. New Zealand, the coroner noted, had banned metal staples in 2007.

Titan Insulations issued its contractors with plastic staple guns and nylon staples and asked for the metal ones back. Mitchell Sweeney, 22, kept his metal stapler, because he owned it. His working partner told the inquest they found metal staples faster, and bought their own. On 4 February 2010 Sweeney was electrocuted while laying foil in a roof in far north Queensland. Five days later the Commonwealth suspended foil insulation. On 19 February 2010 it ended the program.

The Inquiries

A week later Garrett lost responsibility for it. Greg Combet was given the job of winding it up. By then the program had been linked to 93 house fires, and the government said every foil-insulated home would be checked, amid fears that about 1,000 had live roofs. Garrett's department, it emerged, had received a risk register in April 2009 that called for the program to be delayed. Rudd said he was "disappointed with himself" for not asking more questions. "I accept responsibility for that," he said.

The Royal Commission, conducted by Ian Hanger QC, released its 361-page report on 1 September 2014. "Planning was sacrificed to speed," it found. The 1 July 2009 start date had been "practically unachievable" for a properly designed scheme, and the parliamentary secretary Mark Arbib, who had no decision-making authority over it, "at all times pushed" for it. Permitting foil was "fundamentally flawed." Garrett had not been specifically advised of the risk to installers before the first death, and had probably not had or not read the attachment to a briefing that removed the training requirement for novices. "It is highly unsatisfactory that such an important decision miscarried in this manner," Hanger wrote. Each death "would, and should, not have occurred had the HIP been properly designed and implemented."

The hearings had produced their own findings. Arbib told the commission that "death was never mentioned as a prospect." Asked whether anyone had checked that the start date was achievable, Rudd said: "We rely on the advice of our public service friends on that." He said he had no recollection of telling Arbib to "go and sell those pink batts," and added, "I have accepted ultimate responsibility for what was not just bad but in this case a deep tragedy." Combet said he had lived "in constant fear and concern that there may be a house fire in which people may be killed or injured," and that "We received anecdotal reports of new ways of people trying to rort the program, including after it had been closed." The commission heard that $24 million in fraudulent claims had been written off. Labor's Mark Dreyfus said the inquiry had cost about $20 million and added little to "the eight previous inquiries."

On 10 January 2011 the Department of Climate Change and Energy Efficiency wrote to Vision about 666 houses insulated under its registration, which had been found to have 30 different types of defect, "including a number of roofs found to be live," and said it would seek a refund. Vision replied that it had not breached any of the terms and conditions of the program. On 10 August 2011 it advised the department that it had gone into liquidation.

Filed from public reporting:

Australia Paid Up to $1,600 a Home in 2009 to Insulate a Million Ceilings in a Year, Using Installers Who Signed Up Online. Its First Industry Meeting Heard New Zealand Had Tried This and Three People Electrocuted Themselves.

The First Meeting

Buttercup Court

The Staples

The Inquiries

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