The HIP and the case of the missing risk

Published by Anonymous (not verified) on Sun, 07/09/2014 - 4:50pm in

I really want to write more about the case of the missing risk – the one risk that should have been at the centre of concern for those planning the Home Insulation Program. The risk of injury and death to HIP workers and homeowners.

As became clear in the Royal Commission hearings, the possibility of injuries resulting from the scheme was initially part of the HIP Risk Register, but later fell out without comment or redress. To me this embodies the disconnect between the upper levels of the public service and government, and the reality of the work of implementing programs on the ground, that I argue is a symptom of outsourcing.

This is a snippet about the missing risk that I have included in a draft I’ve sent to The Conversation:

“Until the electrocution of 25-year old HIP worker Matthew Fuller in October 2009 the risks facing HIP installers were not even included in the 20-page central “Risk Register” drafted and administered by Coaldrake. When questioned about this Coaldrake told the Commission that she was merely a facilitator, and that no-one in DEWHA had ever told her workers could be injured as part of the program. This was not the case. The Commission uncovered the fact that injury to installers had been raised at an early DEWHA risk workshop. In fact this key risk had been listed in drafts of Coaldrake’s own risk register that were circulated between 13th and the 27th March 2009. But when it disappeared off the register between 10.54am and 12.05pm on the 27th neither Coaldrake nor any of the DEWHA staff noticed.”

But I think this issue could do with its own article…

ABC Drum “Lessons to be learnt from the pink batts disaster” 21/5/14

Published by Anonymous (not verified) on Sun, 07/09/2014 - 4:08pm in

The royal commission into the pink batts program reveals the need for well-resourced government departments, not gutted shells only able to dish out money to the market, writes Jean Parker.

Tony Abbott’s $20 million anti-Labor political advertisement, otherwise known as the Royal Commission into Kevin Rudd’s Home Insulation Program (HIP), is all but concluded. Eight weeks of hearings have revealed the picture of a worthy program turned lethal by a lack of public service capacity, and by the decision to outsource an inherently dangerous program to the market.

In the week that Joe Hockey’s budget announced deep cuts to the public service and inducements to privatise yet more state government agencies, the lessons from the HIP should also be a warning to the Abbott Government.

The high point of proceedings, falling neatly two days after the budget, was the appearance of Rudd at his verbose worst.

Four years has added little to Rudd’s understanding of what he agreed was a “system failure” that wrecked the HIP. What was revealed for the first time was Rudd’s role in hand-picking key personnel for the program – environment secretary Robyn Kruk, stimulus coordinator Mike Mrdak, and Senator Mark Arbib, who Rudd tasked with being a “set of eyes focused on implementation difficulties across the entire Nation Building and Jobs Plan”.

Interestingly, the Commission heard Kruk and Mrdak were the people who thought the Environment Department lacked the capacity, experience and skills to deliver the program. The solution was a HIP business model based on delivery by the free market.

Under the eventual market rebate model the Commonwealth was the funder, not the provider of the program.

On days 11 and 12 the Commission heard from then assistant director of the Environment Department, Kevin Keefe, who headed the HIP inside the department. Keefe testified that he was “blindsided” by the new model.

According to Keefe the message was clear:

Don’t do things in a government slow way. Let’s let the market do its work … let the market rip.

It was this design that made the program “an accident waiting to happen”. The HIP created a $2.8 billion frenzy of unsafe and unsupervised work by young, untrained workers. Just as it was designed to do, virtually overnight the HIP created a surge of market activity. Where prior to the scheme there were roughly 70,000 houses retrofitted with insulation every year, at the height of the HIP the number reached 180,000 in one month.

As his father recounted in the Commission on Friday, the first worker killed in the HIP, 25-year-old Matthew Fuller, was employed by a telemarketing company run by two bankrupts and an Irish guy “in from off the street”.

Matthew’s employers were one of 10,000 companies that sprang up to take advantage of the HIP. Qualifying as a “registered installer” under the HIP meant you were able to “supervise” an unlimited number of subcontractors and employees.

Registration and claiming rebates was done entirely online and Kevin Fuller told the Commission that the required industry white card could be obtained online in an hour or so, while a training session was meant to be two days but was more commonly “a couple of hours in the morning, couple of hours in the afternoon”.

These low barriers to entry meant Matthew’s employers were subcontracting the insulation of houses within three days of starting the company. Matthew was electrocuted nine days later working unsupervised in a Brisbane ceiling.

Mr Fuller said despite a brief suspension as a result of Matthew’s death, his employers recouped $2.64 million from the HIP at a rate of $40,000 a working day.

It was “make hay while the sun shines” as another registered installer told the Queensland Coroner last year.

This orgy of profiteering was no accident. It was the logical outcome of a policy design relying on the profit motive to deliver the program in an unregulated industry.

Former minister Greg Combet testified that he “lived in constant fear” of more disasters when he realised the sheer extent of dangerous and fraudulent behaviour endemic in the HIP. After four deaths and hundreds of house fires Rudd brought Combet in to terminate the program in the realisation that the HIP was off the rails.

As Combet’s evidence shows, the cowboy attitude of Matthew’s employers was far from isolated.

There had been patently, it seemed to me at that time, been an extensive amount of noncompliance. There were obviously flaws in the design of it.

The operations of the HIP show the need for a public service with the capacity and skills to deliver and regulate government programs.

This in-house knowledge and experience has been consistently eroded by 30 years of bipartisan support for outsourcing and privatisation. As the HIP reveals, what this results in is government departments that are little more than gutted shells whose only role is to dish out money to the market.

The HIP also shows the need for “red tape” regulations in workplace safety, and government departments with the resources and skills to properly police them. Yet the system failure that doomed the HIP could be repeated in the universities, the hospitals, and the infrastructure sector if Abbott’s budget policies are implemented.

Rather than rebuild public capacity, Abbott’s budget will further erode it. The lessons from the HIP should provide a warning to Abbott, but he doesn’t seem to be listening.

Jean Parker is a researcher who wrote her PhD on Labor’s stimulus spending under Kevin Rudd. She is a teacher at the University of Technology, Sydney and a member of Solidarity.

Published in the ABC Drum 21st May 2014:

New Matilda “The real lesson from Pink Batts” 6/5/2014

Published by Anonymous (not verified) on Wed, 07/05/2014 - 4:21pm in

The Commission of Audit has handed the Abbott government a blueprint for privatisation at the exact time the pink batts inquiry is revealing the dangers of outsourcing, writes Jean Parker

On the same day that the Commission of Audit was released in Canberra, Tony Abbott’s Royal Commission into the Home Insulation Program (HIP) resumed its hearings in Brisbane. Reading like a neoliberal how-to guide, Tony Shepherd’s report calls for a new wave of outsourcing and privatisations. Yet the evidence emerging from the HIP Royal Commission provides a salutary warning for Abbott and Hockey: outsourcing government programs to the market comes at a cost.

Abbott’s instigation of a Royal Commission into Rudd’s “pink batts” scheme is clearly an exercise in keeping Labor’s failures fresh in our minds. But the Royal Commission paints a picture of a government program that failed primarily because of its reliance on “market delivery” — precisely what Hockey’s Commission of Audit demands more of.

Over a month in to the Royal Commission it is increasing clear that it was the design of the HIP that made the program “an accident waiting to happen”. By outsourcing the program to the free market the HIP allowed unsafe and unsupervised work to be carried out by young, untrained workers. The deaths of the four young men working on the scheme were not just tragic accidents, they were the result of a program design that came from Rudd’s own office for Prime Minister and Cabinet and his hand-picked stimulus chief.

The insulation industry was deemed a great “shovel-ready” stimulus target by Rudd and his staff precisely because the lack of existing regulation meant there were no barriers to entry — great for flushing money into the economy and boosting small business, not great for creating meaningful energy efficiency or ensuring workers’ safety.

Behind the headlines about missed warnings and a rushed rollout, much of the Royal Commission’s proceedings have revolved around the program’s business model. As the Brisbane hearings have revealed, the market delivered rebate model was not initially favoured by the Environment Department staff charged with getting the scheme off the ground, but was foisted on them by senior officials close to Rudd.

Former assistant director of the Environment Department Kevin Keefe described how, 20 days into the program, he was abruptly presented with a new “free market” business model. In March 2009 Keefe attended a meeting that included Senator Mark Arbib, Rudd’s hand-picked stimulus coordinator Mike Mrdak and other senior staff from the Department of Prime Minister and Cabinet. Keefe believed the meeting would discuss the progress his department had made in getting the HIP up and running. But the heavy-hitters from Rudd’s department “blindsided” Keefe and presented a wholly new model as a fait accompli.As Keefe testified, the message of the new model was clear: “don’t do things in a government slow way. Let’s let the market do its work … let the market rip”. This laissez-faire logic was at the heart of the HIP’s design around a rebate. As witness after witness has told the commission, a “principle” of the program was that the key legal relationship in the HIP lay between the householder and the installer. The Commonwealth was the funder, not the provider. Or, as then secretary of the Environment Department Robyn Kruk put it in her statement to the Commission “… there was a strong emphasis on encouraging a high level of participation by homeowners and low-skilled workers by removing red-tape and making the program business friendly”.

The fateful decision to remove the requirement that each installer under the HIP be trained, to only requiring a trained supervisor (itself ill-defined in the program guidelines), was also justified by the notion that the government should not create “barriers” to participation.

Just as it was designed to do, the HIP created a surge of market activity virtually overnight. Prior to the scheme there were roughly 70,000 houses retrofitted with insulation every year — at the height of the HIP the number reached 180,000 in one month. As one installer reported to the Queensland Coroner last year, the attitude for the tens of thousands of start-up companies that flooded into the sector was “make hay while the sun shines”.

Those responsible knew that the HIP rebate would distort the insulation industry and draw in thousands of new start-up businesses. From a stimulus perspective, that was the point. And yet still they designed the program around the premise that existing OH&S laws would be enough to regulate industry and ensure the safety of the new recruits entering the nation’s ceilings.

It was when the department tried to beef-up safety rules, after the electrocution of 25-year-old Matthew Fuller in October 2009, that the anarchy created by the HIP was fully revealed. Even after then minister Peter Garrett banned stapling metal fasteners into foil insulation, an audit found that 33 per cent of installers were still using the banned metal staples. The “light touch” design of the HIP made it impossible to impose effective safety rules down the track.

For 30 years governments on both sides of politics have increasingly outsourced public services to the private sector under the rubric of efficiency and savings. The Commission of Audit’s call to sell off state assets and build new infrastructure through public private partnerships is more of the same. The effect is a hollowed-out public service, unable to regulate, with no in-house knowledge of how to safely deliver services. If the government listens carefully to the messages coming from their Royal Commission they will think twice before continuing down this path.

Published by New Matilda 6th May 2014:

SMH “How government freed itself of liability in insulation deaths” 8/7/2013

Published by Anonymous (not verified) on Tue, 07/01/2014 - 5:33pm in

The coronial inquiry into the deaths of the three young Queensland insulation workers on the home insulation program in 2009-10 has found that haste led the federal government to skimp on safety procedures.

But the speed of the insulation rollout was only one aspect of the program’s failed design. More central was the federal government’s neoliberal assumption that a ”market-driven delivery model” would be superior to an in-house government program in which the Department of Environment would have directly employed insulators and ensured the safety of working conditions.

Instead the government designed the program to systematically wash its hands of any consequences, by outsourcing the risks of its program to householders and start-up insulation firms. Kevin Rudd apologised to families last week, but the difficulties they will face in fighting for compensation were engineered by the government he led.

The key document that informed the model of the insulation program was a ”risk register” that contracted law firm Minter Ellison provided to the Department of Environment in April 2009. In this register, the government’s risk consultants advised that the program be thoroughly outsourced. The resulting rebate model ensured that the government’s only real role in the program would be to provide the funds, which would be delivered through the Medicare rebate system.

Minter Ellison’s risk experts doubted the department’s capacity to deliver the program in a more hands-on way within the tight deadlines demanded by the stimulus program. Even a direct contract model based on the government choosing a few large construction contractors, like that used to deliver the government’s school halls program, was seen as beyond the capacity of the department. The solution was to bring in the free market.

The other concern that led to the rebate model was that it would protect the government from legal and financial liability, or transfer that risk away from the department and onto householders and insulation installers. The real risks of the scheme were borne by the four young men killed working on the program and hundreds of people whose homes caught fire as a result of badly installed insulation. In the 20-page list of conceivable risks, there is no mention of the dangers that might face the program’s workforce. Risk of fire is mentioned once.

Rather than the government providing a safe program for workers and the community, the risk experts were there to shelter the government from legal and financial consequences. The design of the insulation program attempted to remove the federal government as a legal party from the scheme altogether. As the secretary of the Department of Environment told a Senate inquiry: ”The department had a clear design whereby the contractual relationship was between the household and the installer. The installers were not contracted by the government to install insulation under the program. Information was, however, given to the householders to support them to make informed choices.”

So householders agreed to the quality of what was put in their ceilings, and insulation installers were responsible for their employees under existing state and territory occupational health and safety laws. This is little help to the family of one killed worker, Reuben Barnes, who will struggle to win compensation now that Barnes’ employer has gone bankrupt.

Because the federal government designed the insulation program so as to take no liability for the actions of workers, it was unable then to control or effectively regulate the scheme. The problem became clear as the number of house fires and injuries mounted in late 2009. Then environment minister Peter Garrett responded by issuing three sets of increased safety regulations in September, November and December of 2009. With controversy engulfing the program, Garrett terminated the program.

If Rudd’s apology to the families of the killed workers signals a reversal of the neoliberal consensus that outsourcing and public-private partnerships are the best way to provide government programs, then it would be indeed be something to celebrate. Remember that Rudd’s stimulus spending was launched with great fanfare about the return of the social democratic state in the face of the global financial crisis. However, as the real workings of the ”Pink Batts” scheme show, the idea of market-knows-best continues to inform the way that Australia’s ostensibly public services and programs are delivered. Without recognising this, we cannot make sense of the failure of the insulation scheme, nor ensure that other workers are protected.

Jean Parker is a PhD student at the University of Technology, Sydney and member of Solidarity.

This article was published in the Sydney Morning Herald Opinion July 8th 2013

Employee Free Choice Act Could Be Biggest Reform Since New Deal

Published by Anonymous (not verified) on Wed, 17/09/2008 - 4:00am in

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This legislation would give employees a fighting chance to regain some of their lost rights.

While it hasn't gotten much attention, one of the most important issues that our elections this November could decide is the future of organized labor in the United States. This is important not just for the 15.7 million workers who happen to be in unions, but for the vast majority of the entire 154 million-member U.S. labor force. The wages, benefits, and working conditions of most employees are affected by collective bargaining even if they don't have a union. For example, employers who want to keep unions out will sometimes have to offer their workers such amenities as health insurance.

One of the most important problems that our economy has faced for the last 30 years has been stagnating real wages. With inflation now running at 10.6 percent over the last quarter, the problem appears to most people to be rising prices, including food and energy. But for more than two decades prior to the past year, inflation has been tame. Yet the real -- inflation-adjusted -- wage of the typical employee barely increased at all over the whole 34 years from 1973-2007.

This is amazing, when we consider that productivity -- the amount that workers produce per hour -- increased quite substantially over the period. Measured very conservatively, if we take "usable productivity" -- the increased production that we can expect to be reflected in rising wages -- it rose by 48 percent from 1973-2007. So our economy grows but, unlike in the past, most employees do not share in the gains.

One important reason for this great leap backwards is that the rights of workers to organize and bargain collectively have been sharply curtailed over the last three decades.

For example, employees still have the legal right to petition for a federally-run election at their workplace, in which workers can vote on whether or not to join a union. To get such an election, they need the signatures of at least 30 percent of the employees. But after the employees get enough signatures for the election, employers very often intimidate workers through threats and firings before the vote is held. The Center for Economic and Policy Research has estimated that one in five workers who are actively involved in a union organizing drive can expect to be fired. Many others are "persuaded" to vote against the union through a long, captive audience campaign of employer threats and harassment.

As a result of these tactics, only about 12 percent of employees are organized in unions today, as compared with 35 percent in the 1950s. Reform legislation called the Employee Free Choice Act would give employees a fighting chance to regain some of their lost rights. This bill would mandate that an employer recognize the union if it obtains the signatures of a majority of employees. There would be no need for the long and costly -- especially to the workers who are fired -- election campaign.

A poll by Global Strategies Group this month found that 68 percent of middle-class Americans support the Employee Free Choice Act. Polls also indicate that tens of millions would join a union if they had the choice.

The bill passed the House 241-185 but was filibustered by Republicans in the Senate. It's a party-line split in the Senate (except for support from Republican Senator Arlen Specter). So the bill would need a Democratic president and something close to 59 Democrats in the Senate in order to pass.

This law would probably change Americans' lives more than any legislation since the New Deal brought us Social Security. The political influence of millions of new union members would also bring us closer to such basic reforms as universal health care. It's all long overdue.
Mark Weisbrot is Co-Director and co-founder of the Center for Economic and Policy Research. He received his Ph.D. in economics from the University of Michigan. He is co-author, with Dean Baker, of Social Security: The Phony Crisis (University of Chicago Press, 2000), and has written numerous research papers on economic policy. He is also president of Just Foreign Policy.

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