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MrDak – Pink Batts and what did really happen??

The role of Mike Mrdak in the CASA/ ATSB wrangle over PelAir was an interesting Senate watch, together with the effect of his obvious advice on Dolan [ATSB] and McCormick [CASA]

I have collected some current articles to demonstrate just how this bureaucrat has acted in the “pink batts” matter, before going to the Infrastructure throne.

Just a bit of reading !!


2. Pink batts scheme ‘poorly planned, implemented’: commission

New Zealand's Industries Await May 28 Budget

Public servants got a hospital pass in the rollout of the home insulation program, the royal commission reports. But those who knew about the danger should have acted.

The department responsible for the rollout of the home insulation program was ill-equipped to manage the process, the royal commission examining the scheme has found. And public servants who were advised of the risk of injury and death neglected to act.

Ian Hanger’s final report into Labor’s “poorly planned and poorly implemented” economic stimulus program is damning of both government and the bureaucracy. It’s also critical of the lack of co-operation from the Commonwealth in providing evidence to the royal commission — with a few exceptions among exemplary public servants.

The report, tabled in Parliament this morning, says the government relaxed health and safety regulations and allowed the use of dangerous foil sheeting in the program, which resulted in the deaths of four installers in 2009 and 2010. Hanger says there was an “inherent” conflict in ramping up the installation of pink batts 15-fold in an effort to stimulate the economy, and the government failed to manage the risk to installers.

He is highly critical of the speed of the decision-making, with a “practically unachievable commencement date … unrealistically adhered to”. Workers were exposed to an “unacceptably high risk of injury or death”:

“It ought to have been obvious, to any competent administration, that such an exponential increase in work to be undertaken would require a similarly huge increase in the workforce to do it …

“It ought also to have been obvious to any competent administration that the injection of a large amount of money into an industry that was largely ‘unregulated’ would carry with it the risk of rorting and other unscrupulous behaviour.”

Hanger found seven “significant failings” in the design and implementation of the program:

  • An “inevitable and predictable conflict or tension” between the independent aims of installing insulation and stimulating the economy;
  • The Department of the Environment, Water, Heritage and the Arts, which was allocated the program, was “ill-equipped to deal with a program of its size and complexity”;
  • A “failure” by the government to identify and manage the risk to installers of injury and death;
  • Using reflective foil sheeting was “manifestly unsuitable and dangerous”;
  • Relaxing training and competency requirements in favour of “supervision” of insulation-specific training “without the nature of it ever being specified or clarified”;
  • Commencing a phase 2 without a “robust audit and compliance regime”, and;
  • Relying on states, territories and employers to “regulate, monitor, police and enforce” occupational health and safety arrangements.

The report says the government knew regulations were lax in the industry and chose it as a result:

“It was observed, by more than one witness who gave evidence before me, that the insulation industry was chosen as being suitable for the HIP, as a stimulus measure, because it was largely ‘unregulated’ and therefore businesses could move quickly into the industry. With the exception of South Australia, which had a licensing regime for insulation installers, there was no insulation-industry specific regulation beyond the generally applicable occupational health and safety regulation. There was a desire by some of those making decisions under the HIP to keep barriers to entry low. That viewpoint serves as an illustration of the preference given to the stimulus nature of the policy over factors such as safety.”

Three installers — Matthew Fuller, Rueben Barnes and Marcus Wilson — died in late 2009, while a fourth — Mitchell Sweeney — was killed on the job in February 2010. Hanger wrote:

“In my view each death would, and should, not have occurred had the HIP been properly designed and implemented. The decision to permit the use of reflective foil sheeting as ceiling insulation was, in my view, fundamentally flawed. It directly contributed to the deaths of Mr Fuller and Mr Sweeney.

“Further, despite knowing that installers were installing reflective foil sheeting across ceiling joists — and attaching it with metal staples — well prior to 14 October 2009, nothing was done to stop that practice.”

Public sector workings exposed

The report exposes the work in government and the public sector to establish the scheme from late 2008, from an early “taskings” document from the Department of Prime Minister and Cabinet to a direction from then-PM Kevin Rudd to the office of then-environment minister Peter Garrett for a “big idea on energy efficiency policy” which was then conveyed to the department.

The report notes development of the program occurred “mainly” in PM&C, which co-opted officers from other departments. Requests made of those officers — specifically Environment Department assistant secretary Mary Wiley-Smith and Beth Brunoro, a former director in the Home Energy Branch — allowed them:

“… little time properly to consider a proposal of this magnitude focused, for the first time, solely upon insulation. They worked hard to meet the tight deadline. Necessarily, their assessment of the risks attending the proposal in particular, could not have been fulsome.”

Of Kevin Keefe, who was given responsibility for the program in February 2009, the commissioner noted he “did not have any particular experience with insulation, but nor did his superiors, or those working for him”.

Crucially, Hanger says Brunoro, Keefe and other members of the department were advised of the serious risk posed by installing reflective foil but “did nothing to further investigate it. They should have done so.”

Hanger also notes that while there were a great many ministers involved, three on a single program, there was also competing overlap in the departments. That is perhaps explanatory of some of what went wrong,” he wrote.

Public servants involved in the program were independently represented during public hearings and interviews. Hanger notes the Commonwealth, which was granted leave to appear on each term of reference, did:

“… not challenge or even test any of the evidence of current public servants, and often took objections to evidence (which the witness’ own counsel did not) that gave the appearance of trying to protect, as best it could, those public servants. This can be contrasted with the approach that the Commonwealth took to those witnesses from ‘outside’ who criticised Commonwealth public servants or the Commonwealth more generally — they were subjected to a much more robust examination.

“I query whether, in future commissions of inquiry, a body politic such as the Commonwealth, which does not represent any of the witnesses being called, ought to be afforded the privilege of being granted leave to appear. The Commonwealth did not suggest one witness that ought to be called. It did not generally volunteer documents that were not the subject of a summons to produce. It did not elicit any evidence of its own volition. All of this is despite the fact that it was the repository of the critical documents and the corporate knowledge of what had transpired.”

Robyn Kruk became secretary of DEWHA in March 2009, but had no involvement in the development of the program, Hanger says. Nonetheless, she inherited the demanding program and tasked the department with adapting to implementing it in the timeframes set by others before her commencement in the role. Hanger says Kruk was forthcoming to the commission, “without hesitation or any sense of defensiveness”.

But Hanger says the Commonwealth “hampered” the commission in the way documents were produced, “piecemeal and haphazardly in 147 separate tranches”. Towards the end of the inquiry, a drive with over 1 terabyte of data (over 100,000 documents) was provided by the Department of Industry, which was the repository of documents for the Department of Environment:

“First, one might ask how 100,000 documents could fall outside of an established filing system. Secondly, one might ask why these documents were not produced much earlier …”


1. Batts scheme kept top bureaucrat awake


  • AAP
  • March 27, 2014 1:28PM


Batts scheme kept top bureaucrat awake

Former Commonwealth co-ordinator-general Mike Mrdak arrives at the royal commission into the insulation program in Brisbane. Source: News Corp Australia

THE former Commonwealth coordinator-general says the Rudd government’s home insulation scheme was the most concerning of all its economic stimulus measures.

Mike Mrdak told the royal commission into the troubled scheme he had reservations about the former government’s capacity to deliver a program to insulate some 2.7 million households in two and a half years.

The man charged with coordinating all of the former government’s stimulus programs in 2009 said there were a lot of unknowns because it was, to his knowledge, the first time the Commonwealth had directly delivered such a large program into Australian households. It emerged early on that the environment department devising the scheme was extremely busy and had inadequate information technology and finance systems to deliver it, he added.

Under cross-examination on Thursday from counsel assisting, Keith Wilson, Mr Mrdak agreed that out of all the programs in the $42 billion economic stimulus package, the home insulation scheme was the one that kept him up at night.

But he said it was always his understanding that training would be an integral part of the scheme.

“Your position was and remained until you left (the role) that training was a critical part of the program?” Mr Wilson asked. “Yes,” Mr Mrdak replied.

“And training of all installers?” Mr Wilson said.

“Certainly that was my understanding.” The inquiry has already heard how requirements to train all installers were scaled back to include only supervisors before the program’s July 1, 2009 rollout.

The home insulation program, announced in February 2009, ended up being flooded with new operators and low-skilled workers. It has been blamed for the deaths of four young installers, one serious injury and at least 100 house fires.

The royal commission before Ian Hanger, QC, continues.

2.  Batts fear kept me awake at night, bureaucrat tells

THE bureaucrat who fast-tracked Kevin Rudd’s $42 billion nation building scheme lay awake at night worrying about the insulation component, a royal commission has heard.

Former commonwealth co-ordinator-general Mike Mrdak — who now heads the Infrastructure Department — told the hearing yesterday he feared the Environment Department would have trouble organising the insulation of 2.7 million homes in 2 1/2 years.

“They didn’t have the program management experience and their systems — IT, finance, audit — were clearly going to have difficulties delivering the program the government had set,” he told the inquiry into the former prime minister’s home-insulation scheme. The program was shut down in 2010 after the death of four installers and more than 100 house fires.

Mr Mrdak agreed the insulation scheme “kept him awake at night”, in response to a question from Keith Wilson QC, counsel assisting the royal commission.

“It was the first time to my knowledge where the commonwealth was delivering a program into people’s homes,” he told the hearing. “This was an area that had a lot of unknowns for the commonwealth.”

Mr Mrdak said Mr Rudd, his environment minister Peter Garrett and parliamentary secretary Mark Arbib all wanted the scheme to rapidly employ unskilled labourers. Mr Rudd’s office and Senator Arbib felt training requirements for installers must not be “too onerous”.

“There was a strong view . . . that the (scheme) should be seen as a program whereby a significant number of skilled, semi-skilled and unskilled people could be employed rapidly,” he said in written evidence.

Mr Mrdak said his office advised them of the “need to get the balance right between sufficient entry requirements and boosting employment in the industry”.

He said he could not recall reading a version of a risk report compiled by consultants Minter Ellison in March 2009 that was tendered at yesterday’s hearing.

It identified deaths and house fires as “critical risks” in the scheme three months before its full launch.

Notes under the subheading “Installation Quality” referred to “shonky quality installations. Dodgy installers/business. *Installer injury. Likely. Major.”

The inquiry heard Mr Mrdak had seven staff to co-ordinate the $42bn Nation Building program, which included the Building the Education Revolution scheme for new school halls and tuckshops.

 3. Insulation subsidy spent on imports

MORE than 56,000 Australian homeowners have claimed government subsidies to fit insulation into their homes.

But the Co-ordinator-General, Mike Mrdak, has confirmed opposition claims that an unknown proportion of $4 billion in taxpayer funding for the scheme has been spent on imports, despite the program being designed to stimulate domestic production ofbatts.

Mr Mrdak warned yesterday in his report on progress on the $43bn economic stimulus package that he was worried that “intermittent supply of insulation material” was a risk to the continuing rollout of the Energy Efficient Homes component of the stimulus package.

“There have been ongoing discussions and forums, including ministerial roundtables with manufacturers and suppliers to monitor the situation and to address and limit supply issues,” Mr Mrdak wrote.

“With energy efficiency a priority in a number of programs, the intermittent supply of insulation material has specifically been identified as a risk.”

Under the Energy Efficient Homes program, owner-occupiers are eligible for up to $1600 towards the purchase of home insulation, with rental properties eligible for $1000.

Because of low take-up of the rental property scheme, Mr Mrdak recommended the abolition of the rental component, rolling it into the owner-occupier stream, with all property owners eligible for the $1600 subsidy.

Last week in parliament, the opposition asked whether $1bn of the stimulus spending had been spent on importing Chinese insulation batts.

On Wednesday, Environment Minister Peter Garrett denied this figure but could not provide the accurate amount.

Mr Garrett also said that only 30 per cent of the stimulus spending covered purchase of batts, with the remainder covering transport and installation, meaning the spending still had a stimulatory effect on the economy.

Mr Mrdak made the same point in his report yesterday, adding batts had always been imported.

Opposition environment spokesman Greg Hunt said the decision to scrap the renters’ scheme showed it had always been a “white elephant”.

“We have pink batts in chaos,” Mr Hunt said.

“One program dumped, the other which must be investigated by a full and urgent auditor-general’s inquiry.

“The collapse of the renters program underscores the reckless way in which the government has been running its multi-billion-dollar pink batts strategy.”


4. Public servant slams pink batts processes

A SENIOR public servant who described Kevin Rudd as “scary” in satirical presentation slides says he was treated unethically while devising the home insulation scheme.

Federal environment department assistant secretary Kevin Keeffe told a royal commission in Brisbane on Monday it was unethical for bureaucrats not to warn him that his business model would be dumped at a meeting attended by senator Mark Arbib.

But Mr Keeffe had to defend his own actions when the inquiry was shown a series of slides he made for a presentation to environment department staff in September 2009, two months after the scheme’s rollout.

The first described former prime minister Rudd, former co-ordinator general Mark Mrdak and then environment minister Peter Garrett as “some scary people”.

“When I say scary, they were key stakeholders we had to manage,” Mr Keeffe told the inquiry.

There were also slides about “scary numbers”, “scary timelines” and “scary stakeholders” in relation to the home insulation scheme.

Earlier, the inquiry heard how Mr Keeffe was furious to learn at a March 31, 2009, meeting that his business model for the program had been dumped.

He said he should have been warned before the meeting attended by Mr Arbib, Mr Mrdak and staff at the co-ordinator-general’s office.

“It’s not the done thing in public service culture for a central agency to not give someone at my level a heads-up this is going to come,” Mr Keeffe told the inquiry.

“To have it delivered to you on a plate is unethical.”

Mr Keeffe was still fuming after the meeting, and fired off emails to others in the department.

“I’m past slow smolder (sic). Seriously cranky,” one email read.

“Still cranky at being put into unwinnable position where blame flows our way,” another said.

Before the scheme’s July 1, 2009, introduction, the environment department’s regional brokerage model was switched to a more centralised one that allowed for the participation of smaller installation businesses.

The scheme ended up being swamped by low-skilled workers who required only a general safety induction before entering ceilings.

Mr Keeffe said he pushed for installers to be trained but was overruled because the government was more concerned about job creation and stimulating the economy.

Training for installers was scaled back to include only supervisors, but Mr Keeffe said it was always his expectation that anyone entering a roof would have to first complete a five-day training course.

He also told the inquiry he didn’t expect installers in Australia to die, despite fatalities occurring in New Zealand.

Four installers died in Australia, including two who were using metal staples to secure foil insulation.

Three New Zealand installers died using the same practice in 2007.

The inquiry before commissioner Ian Hanger QC continues.


5. Kevin Rudd can’t even sack a minister properly, says Tony Abbott

Abbott - Story (316x237)

Kevin Rudd ‘can’t even sack a minister properly,’ says Tony Abbott (pictured). Source: AAP

TONY Abbott has attacked Kevin Rudd for his inability to sack Peter Garrett from cabinet and refusal to apologise directly to the families of the “young men who tragically died” installing government-funded home insulation.

“He can’t even sack a minister properly,” the federal opposition leader said this afternoon after Mr Rudd stood down Mr Garrett from responsibility for the roof insulation scheme.

Mr Abbott said that Mr Rudd had effectively created a new stand-alone Department of Climate Change and Energy Efficiency, to be headed up by Penny Wong, because the Prime Minister lacked the guts to sack the minister.

He said a Senate inquiry this morning had made a mockery of comments by Mr Rudd that he was disappointed he had not asked more questions in relation to safety deficiencies with the government’s home insulation scheme.

The inquiry this morning revealed no briefing was sought by the prime minister from his department following the deaths of installers under the government’s home insulation program.

Former commonwealth coordinator-general Mike Mrdak told a hearing of the inquiry the prime minister had never raised any safety concerns with his department.

“No senator, nothing,” he said.

Safety concerns and individual risks were the responsibility of Mr Garrett’s environment department, Mr Mrdak said: “Our focus was very much on the program delivery,” he told Senators.

Mr Abbott went on the attack arguing that “what emerged in evidence today is that there was a ‘don’t ask, don’t tell’ policy operating”.

“I think the public are getting sick of this kind of political cunning,” the opposition leader said.

Mr Mrdak’s successor, Glenys Beauchamp, said neither the prime minister nor a cabinet member had raised safety concerns following the first, second, third or fourth fatality.

Mr Mrdak said he was not aware of any briefings provided by his department to the prime minister or a member of cabinet.

“Those matters were being handled by the Department of Environment,” he said.

Mr Abbott said an appropriate gesture of contrition would be to sack Mr Garrett and “personally apologise to the families of the young men who tragically died”.

“I think the suspicion is growing this is a government that just can’t deliver,” Mr Abbott said.

Additional reporting: AAP


6. Inquiry told of ministerial confusion over who ran batts scheme

CONFUSION reigned in the Rudd government over which minister was actually in charge of the pink batts program, an inquiry has heard.

It was unclear whether former environment minister Peter Garrett or senator Mark Arbib was in control of the botched scheme, which has been blamed for four deaths and hundreds of house fires.

Mr Garrett’s adviser Matt Levey has told a royal commission into Labor’s home insulation program (HIP) that a document was even drafted to establish the relationship between the two ministers in relation to the scheme’s development.

Mr Garrett found it difficult to guide the program because of Mr Arbib’s involvement, he said.

“Minister Garrett obviously had policy authority, but Senator Arbib was doing an awful lot of work on the program,’’ Mr Levey’s statement to the inquiry read.

“I never fully understood where his (Arbib’s) involvement ended or began. I do not recall whether this was ever satisfactorily resolved.

“It made it very difficult for Minister Garrett to drive the direction of the program.’’

Mr Levey also told the inquiry that staff in Mr Garrett’s department became confused and anxious about changes to the program by Mr Arbib and the co-ordinator-general, Mike Mrdak (Mrdak).

But he agreed those changes couldn’t happen without Mr Garrett’s approval.

The Rudd government announced the pink batts scheme on February 3, 2009, to stimulate the economy during the global financial crisis.

At the time, Mr Arbib had been charged with co-ordinating government stimulus programs.

Senior environment department staffers initially designed a regional delivery model that had the capacity for installer training, but it was changed to a more centralised scheme following a meeting involving Mr Arbib and Mr Mrdak in March 2009.

The scheme ended up being inundated with low-skilled workers who required only a general safety induction before entering ceilings.

The inquiry, which began in Brisbane on Monday, has heard how bureaucrats were repeatedly warned insulation installers would die if safety issues weren’t addressed.

They were also alerted to the electrocutions of three New Zealand men working under a similar program in 2007.

But Mr Levey said department staffers didn’t pass on the warnings to Mr Garrett.

“From my perception, it came as a genuine surprise to the minister that there were serious safety issues with the HIP,’’ his statement said.

Matthew Fuller, 25, became the first worker to die under the scheme when he was electrocuted while laying insulation sheeting at a house in Brisbane’s south on October 14, 2009.

Queenslanders Rueben Barnes, 16, and Mitchell Sweeney, 22, and Marcus Wilson, 19, of NSW, were also killed.

The inquiry before commissioner Ian Hanger will resume on Monday.



7. Former Labor senator Mark Arbib says he wasn’t warned on batts safety risks

Garrett was ‘in charge of pink batts’ 3:0


Former Labor senator Mark Arbib says ex-colleague Peter Garrett was ‘in charge’ of the pink batts scheme.

James Packer - Alan Jones heart foundation lunch at Sofitel. Mark Arbib

Former Parliamentary Secretary to the Prime Minister during the Rudd government Mark Arbib, who says he was concerned the Environment Department was not taking risks “seriously enough’’. Source: News Limited
















FORMER Labor Senator Mark Arbib says he was not warned about safety risks to installers under the Rudd government’s batts scheme before four men died.

Mr Arbib, who retired from politics in 2012, is the first of a slew of ex-politicians to give evidence to the Royal Commission investigating the $2.8bn Home Insulation Program.

Dressed in a dark suit, light blue tie, and white shirt, Mr Arbib swore an oath on the Bible in the witness box before his testimony began, after somehow avoiding a media scrum outside the Brisbane Magistrates Court.

Mr Arbib said he was Parliamentary Secretary to the Prime Minister in 2009 and had a role in publicly spruiking the benefits of the $42bn economic stimulus package, of which the HIP was part.

He insisted he was not involved in decision-making nor the details of the HIP, which claimed the lives of four installers and caused 224 house fires. That job, was for then-Environment Minister Peter Garrett he said.

He said he was not told about safety risks to installers before the first death, in October 2009.

“I do not recall receiving any feedback in any of the discussions I had with industry participants or others about specific safety issues for the HIP, such as the risks of house fires or electrocutions from roof insulation installation work,” Mr Arbib said.

His major concern was fraud and malfeasance, Mr Arbib said.

In March 2009, he emailed federal Coordinator-General Mike Mrdak ordering a risk assessment of the program “ASAP”.

He said he was concerned the Environment Department was not taking risks “seriously enough’’.

However, he said he didn’t see the risk assessment until February 2010, after the deaths had occurred.

Mr Arbib said he did not ask to see the document, even after the first death.

Mr Garrett will give evidence tomorrow, former Prime Minister Kevin Rudd is scheduled to testify on Wednesday and Greg Combet will appear on Friday. Relatives of the four installers will be given the chance to give evidence on Thursday.

Under examination by Counsel assisting the Commission, Keith Wilson QC, Mr Arbib said: “Death was never mentioned as a prospect’

Mr Wilson: “What about injury?”

Mr Arbib: “Not serious injury, no…There was definitely a need for some sort of OH&S (Occupational Health and Safety) qualification, yes.”

The hearing continues.


8. Kevin Rudd admits ‘system failure’ in batts scheme

KEVIN Rudd has conceded that a “system failure” caused the deaths of four installers who were working under his government’s home insulation scheme.

The former prime minister yesterday accepted “ultimate responsibility” for the “deep tragedy”, while accusing the public service of advising him of deadly risks only after the ­fatalities and criticising the role of political enemy Mark Arbib.

Under forensic cross-examination at the royal commission investigating the $2.8 billion Home Insulation Program, Mr Rudd admitted he did not personally demand a safety review or cancellation of the program after the initial deaths.

“I have accepted ultimate responsibility, for what was not just bad, but a deep tragedy, as it affected the lives of the families concerned,” Mr Rudd said.

The insulation scheme was axed in February 2010, after 224 house fires and the four deaths.

Given unprecedented free rein to reveal cabinet secrets, Mr Rudd said he relied on high-level advice from the public service, which told him the program was “on track” until after the fourth death, and from his ministers.

Elizabeth Wilson — counsel for the siblings of 16-year-old Rueben Barnes, the second installer to die when he was electrocuted in November 2009 — asked Mr Rudd whether he personally considered suspending the program after Rueben’s death.

“That advice was not put to me, to the best of my knowledge,” he replied.

The former prime minister said he was preoccupied with “rescuing the economy” during that period and relied on the public service to be “wicketkeepers” and ensure policies were safe.

Mr Rudd said he put in place a co-ordinator-general, “first-class” public servant Mike Mrdak, and a parliamentary secretary, “energetic young minister” Mark Arbib, to ensure his government’s $42bn economic stimulus program ran smoothly.

He said he told Mr Arbib in February 2009 to watch the program, which included the batts scheme, closely so problems could be “nipped in the bud” immediately.

This contradicts Mr Arbib’s account to the commission that he was responsible merely for publicly spruiking the economic stimulus package and had no decision-making power.

Mr Rudd denied being the architect of the scheme, or setting its rushed July 1, 2009, start date.

Glaring safety warnings were clear early in the scheme, but were not passed up the public service chain to Mr Rudd or his ministers.

As early as February 18, 2009 — two weeks after Mr Rudd announced the batts program — the insulation industry warned environment department bureaucrats of three electrocutions under a similar New Zealand insulation policy.

In April more public servants were told of the “high likelihood of catastrophic consequence (death or serious injury)”.

Mr Rudd said that while he was reluctant to act as “judge” by blaming specific individuals, “the system failed … as a consequence, four young people — leaving aside the actions of their employers — have died”.

“All the families are entitled to feel confused, angry, let down by this system, which ultimately didn’t perform to protect the lives of their loved ones,” he said.

Earlier, Martin Sweeney, the father of Mitchell Sweeney, the final installer to die under the program, tearfully gave a brief statement. “No family should ever have to go through what we’ve been through,” he said. “We love you very much, Mitchell, and we haven’t stopped missing you.”

Former climate change minister Greg Combet is scheduled to testify today.

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