Insulgate

While the Royal Commission into the Home Insulation Scheme has a lot more evidence to examine, today’s evidence from an Environment Department official does not bode well for the former Rudd Government.

In the Hearing, Mary Wiley-Smith, said that she had been contacted by an official from the Department of the Prime Minister and Cabinet and asked to undertake a costing and risk analysis of the proposed scheme in two days, without consulting colleagues or the industry.

This raises a number of red flags

  • Ms Wiley-Smith reports to the executives in her Environment Department, not to PM&C. Did she act on her own accord, or did she have instructions from higher officers in the Environment Department such as the Secretary?
  • Why wasn’t the Department of Finance involved in the costing?
  • Why was PM&C designing a program – it is supposed to ensure good process and to coordinate among the line agencies and the central agencies. Did all of the public servants in PM&C decide to throw away good process?

For a program such as the home insulation program, the correct process would go something like this:

  • the line department (in this case the Environment Department) would prepare a Cabinet Submission from the Environment Minister with a full outline of the proposal with costings agreed with the Department of Finance
  • a regulation impact statement would be agreed
  • relevant agencies and the central agencies (PM&C, Treasury and Finance) would be given time to analyse the Submission and provide coordination comments
  • the Submission would then be provided to Cabinet Ministers with a clear five days in which to formulate their thoughts
  • the Cabinet would consider the Submission.

This process is designed to weed out the crap proposals and ensure there is sufficient scrutiny brought to bear. It is not foolproof, no process can be, but it is orders of magnitude better than the process actually followed.

Now I’m not saying that other governments have not cut corners on processes when it has suited them. But Insulgate is one of many examples of where the Rudd Government and the public service failed the people of Australia.

The senior public servants at the time deserve to be condemned too. They acquiesced to the Rudd bully, as did his ministerial colleagues, and they collectively failed in their duties to the people of Australia. They are all a bunch of cowards, more interested in preserving their office and perks.

Insulgate should never have happened. That it did says a lot about the State of the Service.

About Samuel J

Samuel J has an economics background and is a part-time consultant
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43 Responses to Insulgate

  1. harrys on the boat

    Can Rudd be jailed after this RC?

  2. Bruce of Newcastle

    I would like to know where Ken Henry comes into the story. He was the one saying “Go early, go hard and go households”.

    Pink batts could not have been pushed harder or quicker. And it was squarely aimed at households through the subsidy. Of course enormous subsidies attract shonks like rancid blood attracts flies, which is something anyone could have predicted with a moment of thought.

    I hope he is called to give an account.

  3. Docket62

    Can Rudd be jailed after this RC?

    He’s made of Teflon. You could lock him up in solitary and he’d ooze through the bars

  4. Samuel J

    Bruce – exactly. And if you really wanted to ‘go early …’ then why weren’t tax cuts given?

  5. Toiling Mass

    Rudd would not have seen much risk – the scheme had two stages:

    1) Spend shitloads of money
    2) Bask in the adulation

    I truly believe that is all he would have seen.

  6. candy

    Kevin Rudd and Peter Garrett were warned about the dangers and ignored it. I wonder if the documentation will surface or if it has been destroyed.

  7. Rabz

    1) Spend shitloads of money
    2) Bask in the adulation

    Reminds me of the business model of the underpants gnomes.

  8. Bertie_Wooster

    Good post. I’m an exec with a central agency in the APS.

    The Rudd/Gillard years are widely considered to be the most shambolic in decades in terms of government administration. The Home Insulation fiasco was bad because people died as a result, however it is by no means an isolated stuff up.

    I think i could make a few cardiologists a bit of coin by telling Cat readers the anecdotes I’ve collected over the years, but I’m afraid there are very strict prohibitions on public servants making comments on matters like this.

    One day perhaps.

  9. cohenite

    Can Rudd be jailed after this RC?

    With as much justification as Gillard.

  10. C.L.

    Rudd/Gillard death toll: 4004.

  11. politichix

    Bertie you big tease! Go on dish the dirt.

  12. entropy

    While I agree a program such as this should have gone through a full cabinet process, it is not that uncommon for a minister and the first minister of a government to get together and decide to implement an urgent program that would get the tick off through a highly abbreviated cabinet process. The recently announced drought assistance for example would fit that scenario.

    Not the sort of thing you want for this or more importantly, the NBN.

  13. entropy

    And as for

    Ms Wiley-Smith reports to the executives in her Environment Department, not to PM&C. Did she act on her own accord, or did she have instructions from higher officers in the Environment Department such as the Secretary?

    of course she would have, and would have contacted her higher ups immediately. In fact she would have cleared her scheme with her superiors before sending it across to PM&C.

    I would not regard it as unusual for the central agency to know exactly who to approach that would actually do the work. This officer did her duty according to the policy boundaries she was given.

  14. AP

    The risks were easily found using his thing called “google” (regardless of the long weekend). New Zealand had deaths caused by foil insulation in a similar scheme. In fact, our own Federal government’s website stated the risks from electrical wiring and ceiling fires very clearly (capture from 22 Jan 2009):

    http://web.archive.org/web/20090122215215/http://yourhome.gov.au/technical/fs48.html

  15. johanna

    This process was mind-boggling. Having spent some years in the APS, including at PM&C, I never encountered anything remotely like it.

    One thing that leapt out at me was that the senior staff of Environment left this hapless branch head and one other person to cope with this extraordinary and politically sensitive request. It seems that the lure of the long weekend out of town took precedence.

    On the occasions when I and colleagues had to work a whole weekend, senior management (division heads, dep secs and sometimes even the secretary) were very much present – sometimes all day, sometimes just for an hour or two to see how things were going, and to lend a hand if needed. Their job is to steer the ship and take responsibility, not dump it on the bottom rung of management and bugger off for the weekend.

  16. Bruce of Newcastle

    Thanks Bertie for your excellent comment. I am sorry that you have to work in a sea of progressivism (at least that is how it appears to me, a private sector guy).

    My wish is that organisations like the public service could operate on an empirical and professional basis, but ideology seems to hold all the trumps in this current century. For which I am sad.

  17. Des Deskperson

    Ms Wiley-Smith was an Assistant Secretary at the time – an SES Band 1. Why did PM&C go directly to a person on the bottom rung of the SES rather than though the agency hierarchy, which could have arranged to have the job done more comprehensively and in the same time frame, assuming that was essential.

    Why was it Wiley-Smith that was approached? Why on earth did she agree to such an unusual request without immediately informing her superiors who, as Samuel points out and as the Public service Act makes clear, are the people to who she is responsible? The notion that a senior public servant and her subordinate would bust a gut over weekend at the request of an outside agency – even PM&C – and agree not tell anyone in their department is bizarre!! What particular connections or vulnerabilities might Wiley-Smith have, or is she simply he fall-person for her Department.

    I’ve only glanced very briefly over today’s testimony and perhaps I’m being unfair, but she doesn’t come across well as a witness, there’s a lot of stuff she doesn’t seem to know or remember.

  18. Des Deskperson

    ‘of course she would have, and would have contacted her higher ups immediately. In fact she would have cleared her scheme with her superiors before sending it across to PM&C.’

    But in her testimony. she says she did none of these things!! She must have advised her superiors at some time, because she says the advice given to PM&C also went to her Minister, but she doesn’t say when. So is she ‘young and niave or is she covering for someone?

  19. johanna

    Des, it just beggars belief that she did not tell someone up the line about it. It was her duty and obligation to do so, no matter what some thug in PM&C said.

    But if she did not, she should have been fired.

  20. entropy

    Sorry, Des. I had not read the transcript. Take back what I said.

  21. Des Deskperson

    This is on page 44 of the transcript of today’s hearings. The witness is Ms Wiley Smith:

    MR WILSON: So you weren’t allowed to share [information about the task] with your other colleagues in the Department of Environment?
    THE WITNESS: We had that impression, yes

    This can, of course, be interpreted in a number of ways – ‘colleagues’ could mean simply ‘peers’ – but it is odd, don’t you think. that if she did clear it up the line, she didn’t mention it her testimony, particularly since it is a crucial element in any judgements about the governance of the project?

  22. Johno

    According to the report in The Oz, Ms Wiley-Smith said she and her colleague were told not to inform their co-workers. That could include her superiors.

    Even more gobsmacking is that they were also informed that they could only inform their minister, Peter Garrett, once the programs had been costed.

    Who made that call? DPM&C or Krudd?


    http://www.theaustralian.com.au/national-affairs/kevin-rudds-department-wanted-batts-scheme-costed-in-just-two-days-inquiry-told/story-fn59niix-1226856877459

  23. Johno

    For a program such as the home insulation program, the correct process would go something like this:

    the line department (in this case the Environment Department) would prepare a Cabinet Submission from the Environment Minister with a full outline of the proposal with costings agreed with the Department of Finance
    a regulation impact statement would be agreed
    relevant agencies and the central agencies (PM&C, Treasury and Finance) would be given time to analyse the Submission and provide coordination comments
    the Submission would then be provided to Cabinet Ministers with a clear five days in which to formulate their thoughts
    the Cabinet would consider the Submission.

    A lot of people like to criticise the public service for being bureaucratic and process obsessed. Hopeful the RC might be a useful reminder that there is a very important place for process. Not process for process sake, but good processes that produce good outcomes.

  24. kae

    This is going to be so interesting, quite fun I’d imagine, for us to see the ALP try to squirm out of this.

    Not so much for the ALP.

  25. johanna

    Whatever she was told, she doesn’t report to someone in PM&C, and there is no question that it was her responsibility to immediately inform her boss, or someone else up the line if she couldn’t get hold of her boss.

    “We got that impression” is pretty evasive.

  26. entropy

    Maybe the supervisors were not available. Does batemans bay still have non existent mobile coverage?

  27. I am the Walrus, koo koo k'choo

    Bertie Wooster you bloody tease.

    Spill the beans, lad! Do it for the country!

  28. CatAttack

    The problem was exacerbated by the usual Labor naivety which resembles that of a two year old. When I first heard about the scheme my very first thought was every man and their dog with a second hand ute would be lining up to scam the government. And lo and behold they did.

    Same with the proposed cash for clunkers. I heard a dozen different ways people in the industry would fort the system. But it seems Labor just can’t bring themselves to ask these sort of questions. Hence the rise of the people smugglers. Are they retarded or in on the scams?

  29. Mick Gold Coast QLD

    “Mary Wiley-Smith, said that she had been contacted by an official from the Department of the Prime Minister and Cabinet and asked to undertake a costing and risk analysis of the proposed scheme in two days, without consulting colleagues or the industry.”

    I’d enjoy briefing a solicitor and barrister on the questions which would make this mug public service sheila squirm, on the basis and efficacy of her costings and on the nature and extent of the risks assessed. She’s from the Environment Department for Pete’s sake, probably with an arts degree (envimunt studies) or a fake university-tech college certificate in being a bloody clerk. I’ll bet she’s not an engineer or a quantity surveyor – oh what a splendid first question: “What are your qualifications and experience in such a task?”

    She’s not allowed to talk to anyone but she nonetheless held herself out as competent to cost a specialised installation in hundreds of thousands of dwellings across many states with variant legislation and regulations. How did she determine her per unit costs – look it up in Rawlinsons or Cordells?

    What did she assume on product availability and price in the face of sudden exponential demand, for example. If Lindsay Fox was asked to deliver an industrial meat slicer to 75,000 homes in 5 weeks you can bet his quote would be somewhat different if he had 25 weeks to do it, and if there were 33,000 destinations.

    How many insulation installers were available in Australia in 2008? Where were they? What was their capacity? Were they product or practice certified – is certification mandatory? In all states and territories? What data was considered on incidents in the industry and how was that used to enumerate risk? and so on – do please answer in detail Missy.

    One could completely destroy her in just a morning in the box.

  30. CatAttack

    Same crowd who did the NBN on the back of a beer coaster and didn’t do any sort of risk assessment. WTF. Asbestos in the Telste pit!!! Who would have thought.

    You wouldn’t let Labor organise a piss up in a brewery.

  31. C.L.

    The light on the hill is 200 burning houses.

    Thanks, Labor!

  32. Yohan

    This is really a beat up and witch hunt. There a hundred other things to attack Rudd for, but not this. All the federal government did was provide funding for the home insulation.

    Not training employees properly, doing dodgy roof work, houses burning down e.t.c, the responsibility for all that stops exactly with the companies who installed the insulation. To say otherwise is to misunderstand the nature of property rights and the freedom to contract.

    When Rudd and Gillard passed 10,000 regulations from 2007-2013, those were acts of government that intervened by force of law in the property rights of individuals, negatively effecting our life and standard of living.

    But when government gives billions of funding handouts for home insulation, it was private business that contracted with home owners to provide the service.

    Whether the funding arrangement was lax and allowed fly-by-night companies to claim funding is immaterial to who has responsibility for the deaths, it is the person/company that is responsible, not who provided the funding.

    To say otherwise is political opportunism. To be consistent, you may as well say Tony Abbot is personally responsible for the death of that Iranian in Manus Island.

  33. Anthony S Adams

    Why did PM&C go directly to a person on the bottom rung of the SES rather than though the agency hierarchy?

    That’s easy! It was Friday preceding a LWE and she was the only one left.

  34. johanna

    Anthony, she might have been the only one left in the building, but Secretaries and Dep Secs are available 24/7 for urgent matters. PM&C could have contacted someone who was much better placed to deal with this very unusual and urgent request.

    Getting to the bottom of why she was contacted will be very interesting.

  35. Johno

    And why the urgency for a project that was going to take two to five years to implement.

    This unnecessary haste killed people. Who can be held criminally liable for those deaths?

  36. @yohan, you really don’t understand the nuances here do you? The scheme in itself, had it been done properly may have made a contribution to the economy. However to demand a full costing & rollout proposal within 2 days, especially when all other stakeholders were not to be informed or, even if they could, wouldn’t have been available because of the long weekend beggers the imagination & credibility of most people, yourself being the exception.

  37. brc

    yohan the point is that the process was not followed, rushed and misinformed decisions were made, and people died as a direct result. It’d important to investigate these things not to get at Rudd- he’s already gone – but to make sure these things don’t happen again. The next time a Rudd decides to save the global financial system by throwing money at an ill-prepared system, someone will be able to refer to this RC and suggest that due process be followed.

    The fact that it will further despoil the Rudd legacy is just the icing on the cake, not the primary purpose.

  38. johanna

    It was a classic example of Kevni’s “too much red cordial” approach to government. When he had a thought bubble, it had to be implemented by yesterday. He was, as Sir Humphrey remarked about politicians, like a toddler. When he wanted something, he wanted it RIGHT NOW. By the time he got it, he had forgotten that he ever wanted in the first place.

    There are many tales like this about Kevni’s rule. This is just one of them. It was an appalling period for public and fiscal responsibility.

  39. Des Deskperson

    ‘Getting to the bottom of why she was contacted will be very interesting.’

    Indeed! How was PM&C, err, lucky enough to get on to one of the (hopefully) few senior managers in the entire APS who, it appears, would carry out their bizarre orders without question? What are her connections, what was she promised, what hold might they have over her?

    The alternative – that Ms Wiley-Smith is typical of the younger SES in high profile departments – is depressing but it’s also unlikely. Even the most slavish and ambitious young apparachik would have realised that their interests lay in keeping their own senior people in their own agency informed.

    .

  40. johanna

    Indeed, Des. Imagine the scene on the Tuesday morning.

    SES1 (branch head) to SES2 (division head): By the way, something happened on the weekend.

    SES2: Oh, what was that?

    SES1: Well, it’s a long story …

    There is an expression in law about people “going on a frolic” of their own. It is a way of disassociating their actions from the people around them.

    Well, one thing I learned in the Public Service is that “going on a frolic” is akin to professional suicide. No sentient being could get into the SES without realising that.

  41. Carpe Jugulum

    Yohan, to even suggest that krudd just provided the funds is disingenuous horsepucky.

    These morons threw a bucket of money in the air with no oversight, this lack of planning lead to the deaths of 4 people. These numbnuts have to be held account.

  42. Nads

    The scheme was simply a debacle from start to finish. I really can’t comprehend how Ms Wiley-Smith did not completely cover herself from the clear and present process and policy risks. It seems the larger the scheme the looser the governance procedures followed by the Rudd Government. And it is hard to see how, even if the scheme had been properly administered, that it would have resulted in even a modicum of community benefit – the purported environmental gains are illusory and any stimulus benefits could have been better (and less fatally) achieved with alternative policies.

  43. Yohan

    @yohan, you really don’t understand the nuances here do you? The scheme in itself, had it been done properly may have made a contribution to the economy. However to demand a full costing & rollout proposal within 2 days, especially when all other stakeholders were not to be informed or, even if they could, wouldn’t have been available because of the long weekend beggers the imagination & credibility of most people, yourself being the exception.

    Alan my comments are to do with the running media commentary and often here on the CAT, how KRudd is somehow responsible for the deaths of the 4 insulators. Just exasperated.

    I agree with every part of your comments except for the bit about how the scheme could have been beneficial for the economy if implemented properly. Using up scarce resources (because printed money is always ultimately a claim on real goods) on things like insulation, which is far down the order of want satisfaction economically, would always have resulted in waste and lower economic growth, compared to the same money/resources used by consumers to their own desired ends.

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