stimulus

Error message

Deprecated function: The each() function is deprecated. This message will be suppressed on further calls in _menu_load_objects() (line 579 of /var/www/drupal-7.x/includes/menu.inc).

Cartoon: Lifestyles of a stimulusaire

Published by Anonymous (not verified) on Sat, 26/12/2020 - 9:50am in

Hope you didn’t forget to leave a plate of means tests out before Stimulus Claus arrived!

Follow me online if you want to.

Cartoon: America's worst responder

Published by Anonymous (not verified) on Sat, 05/12/2020 - 9:50am in

Tags 

Comics, stimulus

Stay safe by staying home, wearing a mask, and helping Georgia flip the Senate.

Unsanitized: Deadline Day for Pre-Election Stimulus Comes, And Will Go

Published by Anonymous (not verified) on Thu, 22/10/2020 - 3:02am in

Today is a “deadline” day for whether or not there will be an agreement on COVID relief before the election... Continue reading

The post Unsanitized: Deadline Day for Pre-Election Stimulus Comes, And Will Go appeared first on BillMoyers.com.

A “Brazen Giveaway” GOP HEALS Act is a $30 Billion Bonanza for the Pentagon

Published by Anonymous (not verified) on Thu, 30/07/2020 - 4:17am in

On Monday the Senate GOP released their outline for a new $1 trillion coronavirus stimulus package. A successor to March’s CARES Act, the 177-page document, named the HEALS Act, includes no funding for hazard pay, the Postal Service, state and local governments, nutrition assistance, or help for uninsured or underinsured Americans, but incorporates a $29.4 billion bonanza for the Pentagon.

The package is presented as a necessary measure to help the country fight the COVID-19 pandemic, which has so far caused the deaths of nearly 153,000 Americans. But it appears that the GOP had a very different enemy in mind when writing some parts of it. “To prevent, prepare for, and respond to coronavirus, domestically and internationally,” the bill (pp. 35-38) allocates $686 million for the purchase of extra Lockheed Martin F-35 fighter jets, $650 million for A-10 Warthog fighter-bombers, $720 million for C-130J transport planes, $283 million for AH-64 Apache attack helicopters and $1.068 billion for P-8A Poseidon anti-submarine aircraft.

It is not just the Air Force that will benefit from the new bill; it also includes $41.4 million for Raytheon missiles, $260 million for a new Navy fast transport ship, $250 million for amphibious shipbuilding programs and $375 million for armored combat vehicles. Most of these military spending requests are ones that had previously been subject to cuts in February as the Trump administration moved Pentagon money around to fund construction of the border wall. The plan also allocates (p. 11) $1.75 billion to the FBI for the design and construction of a huge new facility in Washington, D.C.

 

“Amphibious ships don’t feed hungry children”

The new HEALS Act, which differs both in scope and its recipients from the $3 trillion Democrat-backed Heroes Act, which President Trump has promised will be “dead on arrival.” Unsurprisingly, Democrats have condemned the new plan. “The bill contains billions of dollars for programs unrelated to the coronavirus, including over $8 billion for what appears to be a wish-list from the Department of Defense for manufacturing of planes, ships, and other weapons systems,” said Vermont Sen. Patrick Leahy. “The bill provides nothing to address the long lines at food banks and shortchanges education and childcare, but we can shore up the defense industry? I am at a loss for words.” “Amphibious ships don’t feed hungry children,” added House Appropriations Committee Chair Nita Lowey (D-NY).

Yet Democrats have supported other sections of the bill, particularly that to do with cutting unemployment benefits. While providing a second $1,200 check, the HEALS Act also reduces unemployment payments from $600 to $200 per week, although in the long term it would move to a system where the government would pay up to 70 percent of a worker’s pre-COVID wages, a setup that most of Europe opted for in the beginning. “Look, it’s not $600 or bust,” said House Majority Leader Steny Hoyer (D-MD), claiming that a weekly $600 check serves as a disincentive to many to start working again.

The proposed act also ensures that businesses and other entities have near blanket immunity from coronavirus-related lawsuits coming from customers and employees. “Mitch McConnell’s new coronavirus ‘relief’ proposal is an utter disgrace. It somehow manages to make the pandemic and economic pain even worse,” wrote consumer advocacy group Public Citizen, labeling it a “brazen giveaway” to big business and the military.

 

A lack of popular support

Far from wishing to increase spending, a poll conducted earlier this month showed that the majority of Americans (including 69 percent of Democrats) supported Bernie Sanders’ proposal to cut the $740 billion Pentagon budget by ten percent, using the savings to fight the coronavirus and the impending housing crisis it is causing. Yet Democrats in both the House and Senate joined with the GOP to vote down the idea. The $74 billion in savings, the National Priorities Project calculated, would have been enough to end homelessness, pay for 2 billion COVID-19 tests, create one million green energy jobs, or hire 900,000 extra school teachers.

The U.S. military budget rivals that of the rest of the world combined, with the majority of federal discretionary spending already going on warfare. Earlier this month, Congress and the Senate passed Trump’s massive $740 billion military bill, an increase from previous years. Yet it seems too much can never be enough for defense contractors. While it is far from clear how attack helicopters and cruise missiles will help during a pandemic, it is not hard to see who will benefit from the new bill and whose interests are really being served.

Feature photo | Senate Republican Leader Mitch McConnell, R-KY, speaks to a NATO Training Mission – Afghanistan advisor during a visit to meet Afghan National Army soldiers at Kabul Military Training Center Jan. 16, 2011. Ernesto Hernandez Fonte | DVIDS

Alan MacLeod is a Staff Writer for MintPress News. After completing his PhD in 2017 he published two books: Bad News From Venezuela: Twenty Years of Fake News and Misreporting and Propaganda in the Information Age: Still Manufacturing Consent. He has also contributed to Fairness and Accuracy in ReportingThe GuardianSalonThe GrayzoneJacobin MagazineCommon Dreams the American Herald Tribune and The Canary.

The post A “Brazen Giveaway” GOP HEALS Act is a $30 Billion Bonanza for the Pentagon appeared first on MintPress News.

Trudeau government should spend more on affordable housing and homelessness

Published by Anonymous (not verified) on Thu, 23/07/2020 - 7:15am in

On July 21, the Alternative Federal Budget Recovery Plan was released. The document aims to provide public policy direction to Canada’s federal government, in light of the current COVID-19 pandemic.

I was author of the Recovery Plan’s chapter on affordable housing and homelessness, which can be accessed here.

Affordable housing, homelessness and the upcoming federal budget

Published by Anonymous (not verified) on Fri, 20/03/2020 - 10:14am in

I’ve written a ‘top 10’ overview of things to know about affordable housing and homelessness, as they relate to Canada’s upcoming federal budget. The overview is based on the affordable housing and homelessness chapter in the just-released Alternative Federal Budget.

A link to the ‘top 10’ overview is here.

Economic Response to Pandemic: Go Big, Go Fast

Published by Anonymous (not verified) on Sat, 14/03/2020 - 8:34am in

The health emergency created by the COVID-19 pandemic is of
course the primary concern of Canadians, and the first priority for government
to address. But it is increasingly clear that the economic fallout from the
pandemic is also going to constitute an emergency. And it requires government
to respond as urgently and powerfully in the economic sphere, as they are attempting
for public health.

I was invited onto CBC Radio’s special broadcast today to
discuss the economic consequences of the pandemic, and needed policy responses –
and also to comment on the policy announcements made by Finance Minister
Morneau, Bank of Canada Governor Poloz, and Superintendent of Financial
Institutions Rudin at a special joint news conference.

Here are some quick thoughts on what we can expect in coming
months, the nature and dimensions of the policy response, and – of course – how
we pay for it!

What We’re In For:

There is no doubt that the macroeconomy, already near-stagnant
at the end of 2019, will now slide into recession. The immediate spillover
effects of cancelled transportation, cancelled tourism and entertainment events
and services, and reduced output in many different industries are knocking GDP
backward right now. Second-order effects will be experienced across a wide
swath of the economy, as both consumers and businesses scale back their
purchases dramatically. Even a short-term surge in purchases of groceries and
essentials (including toilet paper!) won’t offset that shock decline in aggregate
demand.

Another category of impacts will be felt through disrupted
supply chains. Imported parts and supplies from overseas producers (especially
but not exclusively China) have been seriously disrupted, and that will have a
ripple effect on Canadian production – even assuming we are allowed to go to
work in the first place. All that will be enough to produce a serious, but not
unusual, recession: a loss of 2-4% of real GDP, lasting for 2-4 quarters,
driving unemployment up to perhaps 8%.

However, if we end up facing a full-out lockdown (as experienced
in China or Italy) then the downturn takes on a new order of magnitude. We could
see a decline in second-quarter GDP of perhaps 10% (at annualized rates), and an
enormous jump in unemployment (well into double digits). In fact, if government
statisticians are also on lock-down, we won’t even be able to measure how bad
it gets. How soon and how sharply production begins to recover is unknown,
depending first and foremost on how quickly people are allowed to begin leaving
their homes and resuming normal activity (including working and spending). And
if the experience of the ‘Great Recession’ – a decade of slow growth and
underutilization that followed the 2008-09 GFC – is any indication, we would then
likely face an extended period of hardship, perhaps lasting another decade.

Another dimension of the crisis could be its potentially
dramatic effects on financial stability. It was out of that concern that the
announcement today featured all three critical government players (Morneau,
Poloz, and Rudin) at the same podium – and why all their announcements were
focused on the goal of maintaining credit flows (through emergency lending for
small and medium sized companies, lower interest rates, and relaxed credit quality
controls). Since the 2008-09 crisis, the private credit system has behaved in
predictably Minskian fashion: first cautious, then (as memories of the meltdown
faded) expansive, and finally speculative (entereing Minsky’s “Ponzi” phase). This
time the debt bubble in the U.S. was concentrated in places other than real estate
(the focal point of the 2008-09 meltdown). Risky (‘high-yield’) corporate debt
is the most fragile link in the current financial daisy chain: already
high-yield bond markets have seen interest rate spreads explode (to 7-8
percentage points above normal corporate lending), and credit
is starting to seize up
. With many fragile companies, some of them very
large, unable to borrow (even for routine or ‘overnight’ purposes) just as their
cash flow evaporates from the recession, they will face quick collapse. Other
financial weak spots exist in the U.S., too (including credit cards, student
debt, and some oversold equities).

In Canada, as in 2008-09, the financial system has been less
adventurous and hence is not as fragile. The biggest risk here would be a
serious downturn in inflated housing prices (the main legacy of our own debt
expansion), with cascading impacts on consumer spending, household financial
stress, and ultimately the stability of banks and other financial institutions.
Stopping that kind of contagion quickly is almost as important to the
government, as stopping the spread of the actual virus.

How Government Should
Respond:

I look forward to working with other progressive economists
to imagine and describe a fulsome, comprehensive, ambitious and concrete vision
for responding to this crisis. Here are some of the obvious areas:

Immediate Mobilization
of Resources to Protect Health
: Obviously governments and health
authorities must now throw every possible real resource into protecting health,
as much as they can, including:

  • More staff at health facilities.
  • Alternate off-site or mobile testing capacities.
  • Home support for people quarantined or
    recovering at home.
  • Quick expansion of capital equipment (including
    buildings and equipment), as much as possible.

This mobilization will cost many billions of dollars, and
constitutes an unfortunate form of ‘stimulus.’

Income Protection for
Workers
: The pandemic has exposed a frightening and dangerous aspect of the
new precarious labour market. Only about half of employed people now work in a ‘standard’
full-time permanent job with benefits – like sick leave. So when people are
instructed to stay home from work to avoid spreading the virus, many incur a
major and immediate financial loss. Unfortunately, that will compel some to ignore
the health advice and keep working – with catastrophic health consequences.
This pandemic is reminding us that the wellbeing of everyone, depends on the
wellbeing of everyone else. The short-sighted responses of some business
leaders, complaining about the cost of sick leave and that workers ‘whine’ or ‘fake’
their conditions, is as morally repugnant as it is clinically destructive. (For
a despicable example, see Howard
Levitt’s comments
about workers imagining illness on CBC’s The Current).

An obvious place to protect workers whose incomes are being
interrupted by the pandemic is through the EI system, but it needs immediate
and far-reaching emergency changes (I listed some of these in my recent
Toronto Star column
):

  • Waive the 1-week waiting period for EI (the government has already said it will do that for sickness benefits, but it should do the same for all EI during the pandemic period).
  • Waive the qualifying hours requirement for the period of the pandemic (and, of course, it should be fixed long-term anyway).
  • Consider special emergency payments (similar to EI’s existing natural disaster provisions).
  • Consider special payments to contractors, gig workers, and others not normally entitled to EI.
  • Accelerate work-sharing arrangements to allow more people to keep their jobs.

In addition to extending EI and other income supports,
workers need other protections in the coming period: including waiving
requirements to fetch doctors’ notes and other red tape, and having full job
protection during the pandemic (so their jobs are not at risk for following
health advice). All of this highlights the need for big reform in Canada’s existing
laws governing sick pay (only Quebec ensures minimum paid sick leave), STD and
LTD measures, and job protection. These problems were already glaring; the
pandemic has now brought them to everyone’s attention, and reminded everyone
that their personal health depends on collective well-being.

Other ways to put spending power directly into the pockets
of low- and middle-income Canadians, reducing the financial barriers to staying
at home, could include direct one-time payments to all households (as Australia
did in 2009, with great success), or more targeted income assistance to reflect
and offset the economic impact on more financially vulnerable households. One
option in that regard would be to expand and accelerate payments of GST credits
and Canada Child Benefit cheques.

Debt Relief: Mr.
Morneau and his colleagues moved quickly today to assure businesses that they
can continue to access credit to maintain operations and stave off bankruptcy.
There will likely be a need for more hands-on support for firms in many
industries (including airlines and other transportation and tourism providers).
It makes sense to keep businesses from going bankrupt at a time when
unemployment is rising anyway, but those interventions need to learn from the
mistakes of past rescues. Conditions must be attached to protect employees at
these firms right through the crisis (like no layoffs), and to ensure that
rescued companies are held to long-term performance requirements (including
future Canadian production and employment). The memory of major banks and
automakers that were bailed out at the public’s expense in 2009, and then
quickly returned to their bad old ways (speculative lending and industrial
disinvestment, respectively) reminds us to leverage our support during times of
crisis into long-run influence over their subsequent activities. The best
approach in that regard is to take public equity stakes in these businesses as
a condition of financial support (as some European countries did with banks and
other major bailed-out businesses).

At the same time, other segments of society also need
protection from their creditors, as their ability to work and earn disappears.
There should be restrictions placed on foreclosures and evictions (for both
homeowners and renters), and deferral periods for personal and credit card
debts.

Other Short-Term Fiscal
Stimulus
: The federal government will need to consider other ways to inject
immediate spending power into the economy in its March 30 budget, or earlier.
Expanded transfer payments to the provinces for health-related expenses is an obvious
option. Other ideas are helpfully catalogued in the annual Alternative
Federal Budget
documents.

Longer-Run
Reconstruction
: On the assumption that the coming recession is harsh and
its after-effects long-lasting, the government will need to play a leading role
in the longer-term reconstruction and reorientation of the economy. The
traditional tools of stabilization (monetary and fiscal adjustments) are
clearly not capable of addressing the scale of the problem. Monetary policy,
indeed, has already lost most of its effectiveness: with interest rates near
zero, and borrowers scared deeply about what lies ahead, the emergency interest
rates cuts announced by the Bank of Canada this week will have virtually no
impact on real economic activity in the coming year or longer. (It probably won’t
even reignite house price inflation, which has been its dominant ‘achievement’
of late.)

And fiscal interventions will need to go far beyond
counter-cyclical stabilization. Canada’s economy will need to rely on public service,
public investment, and public entrepreneurship as its main ‘engines’ of growth,
to recover from the coming downturn, prepare for future health and
environmental crises, and improve conditions in our communities. The abysmal
failure of private business capital spending in recent years – which has fallen
by one-third as a share of GDP since the turn of the century, despite hugely
expensive corporate tax cuts – was already indicating a growing role for public
investment to lead the way. Now, in this moment, it is laughable to imagine
that private capital spending or exports will somehow lead the reconstruction
of a national economy that will experience an unprecedented and scarring shock.

There is no shortage of urgent rebuilding required in our
economy and our communities: sustainable transit, green energy, non-market
housing, expanded public services (including aged care and early child
education), and any number of other urgent priorities. The case for mobilizing
those resources, under the leadership of governments and other public
institutions, is compelling. We can put people to work, repair the damage of
this crisis (and better prepare for the next one), and deliver valuable
services. All we need is the willingness to imagine a different model of
organizing and leading economic activity.

Last Nail in
Coffin of Deficit-Mania?

Incredibly, Conservatives like Jason Kenney and Pierre
Poilievre have still been scare-mongering about deficits, even as the public
health emergency gathered momentum. Kenney in particular should be politically shunned
for his incredible decision to attack Alberta’s doctors and rip up their
employment contracts (alongside his other attacks on public health workers) –
just as we ask them to risk their lives, to save ours. This tired old deficit-mania
will have zero resonance with the public in coming months: they are quite
rightly preoccupied with more important things.

Nevertheless, long-standing indoctrination in the ideology
of austerity will hold back the government response to the crisis. Mainstream proposals
for fiscal stimulus will be too small to make a significant difference. For
example, bank economists today are suggesting injections worth 1% of GDP; that
wouldn’t put a dent in the more daunting recession scenarios I described above.
It is not unusual for national governments to experience deficits equal to 5%
or more of GDP during severe economic downturns. That works out to $120 billion
for the federal government. Anything less than that, and the government is
literally not doing its job in trying to protect Canadians from this downturn.

Interest rates, already rock-bottom, have plunged in the
last month. The Government of Canada can now issue 30-year bonds for well below
1% annual interest. That is negative in real terms (ie. lower than inflation).
So quite literally, the government will save
money by borrowing more (paying back less in real terms, after 30 years, than
they borrowed) – to say nothing of the economic and social good that would be
done by putting that money to work in emergency public projects and services.

Of course, we can and should consider alternative financing
mechanisms (like quantitative easing and other methods of directly harnessing public
credit institutions to finance public works). That genie was let out of the
bottle in the 2008-09 crisis, but so far has been used in a stinted, one-sided
way: using central-bank-created money to purchase financial assets from
investors and institutions, in hopes they then spend or lend their excess cash
to get the economy moving. A much better approach – perhaps called ‘People’s
Quantitative Easing’? – would be to use created funds (from the central bank or
other public banks) to directly finance needed investments and services, thus
putting the new money directly into the projects and people that need it most.
That would have much more economic bang for the QE buck. But it would
constitute a sacrilege against the traditional property relationships embedded in
private credit banking.

A Turning Point?

Great crises like this are frightening and dangerous. Our
economic, social, and democratic institutions are still damaged and fraying
after ten long years trying to recover from the last meltdown. Dangerous
populist and authoritarian impulses have sprouted from that hardship.
Progressives are not sufficiently united, confident and focused on what needs
to be done, to turn the tide in our favour.

But a crisis can also be an opportunity. The failure of financialized,
neoliberal capitalism will be laid bare more clearly than ever in coming months.
For example, the inability of rich countries (like the U.S.) to provide even
rudimentary coordination and communication during a public emergency, resulting
in thousands of preventable deaths, starkly highlights the enormous misallocation
of human and economic capacity under capitalism, and its inherent and repeating
coordination failures. The private sector will definitely be unable to get the
economy back on its feet after this crisis. So we need to look elsewhere for
economic leadership.

Just as World War II ‘solved’ the Great Depression by mobilizing
enormous resources in an urgent attempt to meet a huge threat (global fascism),
we now need another, peaceful war – a war on poverty, on epidemics, and on
pollution. And by organizing ourselves as society to fight that war, we will
actually make ourselves better off right now: creating jobs and incomes, providing
needed care and services, generating taxes. And we will benefit in the long-run
by winning those ‘wars,’ and building a safer, sustainable world.

This is the time to develop and advance a progressive vision
for a massive, public-led reconstruction agenda. Parts of it already exist, in
various forms:

Conservatives and the wealthy they serve never let a crisis go
to waste. They follow well the advice of Milton Friedman:

“Only
a crisis actual or perceived produces real change. When that crisis occurs, the
actions that are taken depend on the ideas that are lying around. That, I
believe, is our basic function: to develop alternatives to existing policies,
to keep them alive and available until the politically impossible becomes
politically inevitable.” (Capitalism and
Freedom
, 1982, p. xiv)

Naomi Klein showed us how
the powerful take advantage of crisis to reinforce their power, even when it
was their power that caused the crisis. We gotta know they will try to do the
same with this crisis: pushing their well-known agenda of austerity,
privatization, and inequality into still more frightening and authoritarian
directions.

So we desperately need
our own courageous, ambitious, holistic alternatives. And if we do a good job
educating, organizing, and mobilizing around that more hopeful and democratic
agenda, then it too can become politically inevitable. That’s the silver lining
to this very scary moment.

Jim Stanford is Economist and Director of the
Centre for Future Work, and divides his time between Vancouver and Sydney.

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: http://www.abc.net.au/news/2014-05-21/parker-lessons-to-be-learnt-from-the-pink-batts-disaster/5466762

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: https://newmatilda.com/2014/05/06/real-lesson-pink-batts

Pages