Depreciación

7.6.1 At the time that the 18 February 2009 meeting was taking place, draft Guidelines for Phase 1 of the HIP were being prepared. Mr Carter reported to Mr Mrdak about the HIP by email on 16 February 2009 including by providing a copy of the draft Guidelines as they then stood.146

7.6.2 That draft was circulated to industry stakeholders, for example, by Ms Brunoro on 20 February 2009 for ‘consideration and feedback’.147 _{The decision to circulate them at that}

time was because of a ‘hard deadline’, by which she seemed to mean it was a deadline that absolutely had to be met.148 _{Responses were to be provided by 3pm on Monday} 143 Transcript (16 May 2014) 4991 (K Fuller).

144 Transcript (24 March 2014) 642 (M Levey).

145 Statement of Kruk at [43], STA.001.010.0001, 26 March 2014. 146 AGS.002.008.3386, 1.

147 AGS.002.010.0818, 1.

(ie 23 February 2009). Recipients were asked to ‘… add comments to the draft document in the relevant area and attach any technical or other material that may be useful to supplement the comments’.

7.6.3 The chronological proximity of the first industry consultation meeting and the issue of the draft Guidelines was deliberate. Not only were steps in the program happening in quick succession due to the abbreviated time in which it was to be formulated and rolled out, but the industry consultation meeting was only one source of information utilised by the Australian Government in formulating them. Mr Keeffe told attendees at that meeting that it was intended to seek industry views and ideas on or related to the implementation of the insulation components of the EEHP. A focus, he said, was to obtain industry input on issues required to finalise the Program Guidelines for release on 26 February 2009. Attendees were advised that they could provide comments on the Guidelines by the afternoon of 23 February 2009 (following circulation by the Department by 19 February 2009), essentially over the weekend.149 _{That is what in fact occurred.}

7.6.4 A weekend within which to consider draft Guidelines for a $2 billion scheme was grossly inadequate and is indicative of the undue speed which always attended the HIP. 7.6.5 The Guidelines were, on 26 February 2009, approved by Mr Garrett. I consider them in

greater detail presently.

7.6.6 Version 1 of the ‘Early Installation Guidelines’ for the Energy Efficiency Homes Package— Homeowner Insulation Program offered some short general information about the Program: why the Government was providing assistance to households, and stressed the availability of ‘early installation’, and that Guidelines for the Program itself would be available from mid-2009.150

7.6.7 Eligibility requirements were imposed. Applicants were, materially, required to be over 18, to be an Australian citizen or permanent resident, submit a reimbursement application with copies of tax invoices from the purchase and installation of ceiling insulation and to arrange for the installation of insulation by an ‘authorised installer.’ The product and insulation requirements were set out in those Guidelines.

7.6.8 The Guidelines said that upon 1 July 2009 the Australian Government would be establishing a register of skilled insulation installers by region or location. The purpose of the register was said to be:

… to ensure those with appropriate skills and new entrants are available in sufficient numbers, and are skilled to deliver quality installations.151

7.6.9 This disclaimer appeared:

The Australian Government accepts no liability for any loss, damage or cost incurred as a result of, or arising from, the installation of a ceiling insulation which has been the subject to the assistance offered under the Homeowner Insulation Program, or its process.152

7.6.10 It was considered important to some working under the HIP that there was a direct contractual relationship between the householder and the installation installer. This was thought, in my view naively, to absolve the Australian Government from any responsibility to householder, installation installer or workers engaged under the Program.

149 AGS.002.025.0219, 1. 150 AGS.002.027.0295, 3. 151 AGS.002.027.0295, 6. 152 AGS.002.027.0295, 8.

7.6.11 In a Departmental document dated 4 March 2009 reference is made to the feedback from industry concerning the first version of the guidelines. It includes:

The reflective foil products industry is concerned that eligibility of their products is not clear enough in the guidelines. Allowing installers to opt for either a whole roof system R-value or an R-value of the insulation material will confirm that reflective foil based products can be installed under the program as well as bulk insulation products.153

7.6.12 It was proposed to amend the Guidelines to read:

Products that fall outside the scope of the installation standard (AS3999, 1992) must be installed in accordance with s.3.12.1.1 of the Building Code of Australia.154

7.6.13 No satisfactory explanation was given as to why DEWHA officers succumbed to the pressure of the reflective foil industry. But they clearly did. The only way to do so was to allow a whole of roof R-value, something cautioned against by leading industry figures, to which I have referred.

7.6.14 Version 1.1 of the Guidelines was released on 12 March 2009 with amendments to the material R-value, insulation installation and downlights and eligibility of products outside the scope of AS3999.155 _{A total roof-system R-value was permitted. The initial}

guidelines required products to be installed to AS3999-1992. However, as I have set out in Chapter 5, this Standard expressly did not apply to RFLs. The amendment of the Guidelines was, I am satisfied, as a result of lobbying by that section of the industry that installed foil products. It was a matter that was debated at the 18 February meeting and was a matter of some ongoing differences of opinion between rival groups of the industry. 7.6.15 Mr William Kimber, who did great deal of work on preparing the Guidelines, continued to

liaise with industry, and be beset by self-interested sections of the industry. Mr Kimber was also in contact with Mr Brian Ashe, Manager–Major Projects and Research of the Australian Building Codes Board (ABCB), regarding technical aspects of the HIP.156

7.6.16 Ms Horvat from Mr Rudd’s Office took a keen interest in the guidelines.157

7.7 Mr Kimber

7.7.1 Mr Kimber joined REED (reporting to Ms Brunoro) on 3 March 2009.158 _{He then acted}

as Director (in Ms Brunoro’s position) for two months from late April or May 2009. He worked on the HIP until 21 May 2010 when he took leave.159 _{Mr Kimber assisted with}

the development of the Program Guidelines and technical requirements for the HIP, particularly addressing the matter of R-values.160 _{In an email dated 24 February 2009,}

under the heading ‘Why has a whole roof R-value not been used?’ it is stated:

• The rounded values chosen allow for enhanced program simplicity for households and installers. Evaluation of whole roof performance is affected by issues such as roof pitch, orientation, and roof materials.

153 AGS.002.028.1148, 1. 154 AGS.002.028.1148, 1. 155 AGS.002.027.2148, 2. 156 ABC.002.001.0205, 1-2.

157 Statement of Levey at [117], STA.001.003.0001, 19 February 2014; Transcript (21 March 2014) 536 (M Levey). 158 Statement of Kimber at [4], STA.001.024.0001, 4 April 2014.

159 Statement of Kimber at [5] and [6], STA.001.024.0001, 4 April 2014. 160 Statement of Kimber at [7], STA.001.024.0001, 4 April 2014.

• Performance can be more readily verified without the need for verification of whole roof R-value by qualified assessors, as is required for new houses under the Building Code of Australia.161

7.7.2 After feedback from the ABCB on 25 February,162 _{Mr Kimber amended this to read:}

• Using insulation material R-values rather than whole roof values, will allow installer compliance with the program guidelines to be easily and readily verified. This will facilitate the achievement of program objectives. • A valuation of whole roof performance is affected by issues such as roof

pitch, degree of ventilation of the roof, and roof materials. Verification of whole roof R-value by qualified assessors is most practical for new houses as covered under the BCA.163

7.7.3 Notwithstanding these sensible suggestions, a whole-of-roof R-value was permitted, to accommodate the use of RFL insulation under the Program.

7.7.4 On 27 February 2009 William Kimber wrote to Brian Ashe and others.164 _{He said:}

With the early installer guidelines released yesterday we have received some immediate additional feedback from industry. Concerns have been expressed that reflective foil products are being unfairly excluded from eligibility due to: • use of an R-value for the insulation material, rather than the whole roof

space, and;

• the requirement to adhere to AS3999-1992…where the installation of reflective foil products is outside the scope of the Standard.

The comments also suggest that excluding reflective products in this way is contrary to ACCC fair trade requirements….We don’t think that the current guidelines excluded any insulation products that meet the minimum performance requirements, as guided by the BCA. We have also said to industry that we will be continuing to consult with them and receive their suggestions for change in the lead up to implementing the second phase of the programs in mid-2009.

In the meantime are you able to provide your views on the technical issues raised in the two dot points above? It is possible to make adjustments to the early installer guidelines if that is needed. However your independent views are needed to inform this…

7.7.5 Dr James Fricker, whose evidence I refer to in greater detail in Chapter 9 when considering whether RFL insulation should have been permitted to be used under the Program, wrote on 26 February 2009 complaining that the way the Guidelines were drafted meant that only bulk insulation was acceptable.165

7.7.6 In assessing the guidelines and the feedback from industry, Mr Kimber and Ms Brunoro were working against the backdrop of a considerable pressure of time—to get things done without necessarily being able to spend the time to do them in a carefully considered way.166 161 ABC.002.001.2286, 2. 162 ABC.002.001.0209, 1. 163 ABC.002.001.0209, 2. 164 AGS.002.010.0719, 2-3. 165 AGS.002.027.0238, 1. 166 AGS.002.010.0736, 1.

7.7.7 Mr Kimber also liaised with the CSIRO about technical aspects of the Program that were necessary to be resolved for the Program Guidelines. On 27 February 2009 Mr Kimber wrote to the CSIRO asking if it could provide technical advice on insulation products and program design issues.167 _{There was discussion about the testing of products for}

compliance with standards required by the Program. The CSIRO referred Mr Kimber to AS/NZS4859.1.168 _{It advised:}

The performance issues are very complex and in many cases the in situ performance is uncertain, unresolved and disputed. These matters, and the extremely acrimonious nature of insulation industry, are likely to greatly complicate the process.

7.7.8 For reasons that are not easy to understand this and other warnings about the technical deficiencies of RFL insulation (over and above any safety issues) were not heeded. 7.7.9 On 27 February Mr Plevey of EE-Oz sent his warning to DEWHA.169 _{I deal with that, and}

other warnings in Chapter 9 of this report.

7.7.10 Mr Kimber had, as I have already observed, much involvement in the early design of the HIP. However, I found his oral evidence troubling. He was called twice to give such evidence. He was recalled largely because of evidence given by Dr Troy Delbridge between 1 and 3 May 2014. When he first gave oral evidence, between 18 and 20 April 2014, Mr Kimber professed a very poor recollection of relevant events. When asked about matters in which he was clearly involved and which were within the scope of his role in the HIP, he said (often) that he could not answer the question without being shown documents or simply that he had no recollection. On those occasions where he asked to be shown documents, he was unable in most cases to identify the documents that might assist him to recall the particular events.

7.7.11 Mr Kimber had ample time to prepare to give his evidence. He was interviewed on 2 February 2014.170 _{He did not sign his statement until almost two months later (on 4 April}

2014). He was separately represented by Counsel at the hearing when he gave evidence. 7.7.12 Although I considered Mr Kimber to be obtuse in the evidence he gave on the first

occasion, having had the benefit of observing him give further evidence, I am satisfied that he was basically honest, albeit reluctant, in doing do. I was, for example, not convinced that despite his having written many of the emails about which he was asked, and having for a time been the Acting Director of the Home Insulation Policy Team, that he could lack (to the extent he did) knowledge of the events about which he was asked. He seemed very reluctant to give direct answers to questions asked of him by Mr Perry QC about a series of emails (many of which he wrote) in May 2009 concerning the competencies to be required under the HIP.171 _{He professed confusion about which phase of the HIP he}

was being asked about, despite it being obvious (and made clear to him) that the emails concerned the requirements to be applied for the HIP from 1 July 2009 onwards. 7.7.13 On more than one occasion he declined to answer questions without being shown

documents, even though they in some cases were annexures to his statement or shown to him on other occasions during his evidence. On one occasion he professed not to recall a document that was annexed to his statement that he had read the night before he gave evidence.

167 DEB.002.004.0027, 5. 168 DEB.002.004.0027, 2. 169 AGS.002.023.3172, 2.

170 Statement of Kimber at [1], STA.001.024.0001, 4 April 2014. 171 Transcript (10 April 2014) 2623-2630 (W Kimber).

7.7.14 Mr Kimber was less reluctant and unhelpful in the evidence he gave on the second occasion. He said he became concerned about compliance and safety issues from the first week of the program in February 2009. He became particularly concerned about risks to installers after a meeting on 3 April.172 _{The risks to which he was referring related}

to working in confined spaces and materials handling. He said that the concerns about risk were passed on to his superiors and to the Minister. However, there is no document to confirm this. Mr Kimber also said that he had a concern that the HIP was not ‘ready to go’ in terms of training or compliance on 1July and that the risks were such, at or about this time, that it was time to ‘take a break’.173 _{I accept this evidence because it is}

supported by much other evidence, which I refer to elsewhere in this report.

7.7.15 I do not accept, however, for the reasons set out above, that Mr Kimber made this clear to his superiors. Despite claiming to have done so, there is no documentary evidence to support this and to the extent he claimed to have done so less formally, he was not able to offer details of having done so such as might render his evidence reliable.174