Chapter 1
Introduction
1.1
The Green Loans Program was announced as part of the Labor government's
election platform in 2007 and commenced in July 2009. In essence, the program
involved householders obtaining free sustainability assessments of their homes,
following which they may have been eligible to receive an interest-free loan
with which they could make improvements, or purchase products, which would
improve the energy efficiency of their home.
1.2
However, the program was riddled with problems from the outset, with a
lack of forethought given to various important issues including assessor
numbers, inadequate controls over the quality of assessor training and no way
of monitoring the quality or number of assessments. This led to a blow-out in
assessor numbers, which put significant strain on the bureaucrats managing the
program, as well as on the program's systems—particularly its assessment
booking and processing systems.
1.3
By December 2009 almost 10 000 assessors had undergone training and the
government's systems proved unable to cope with the level of demand for
assessments that even half this number of assessors generated. Assessors were
having to wait on hold for up to two and a half hours to book an assessment and
up to five months to receive payment for assessments they had completed, and
new assessors were waiting as long as six months to be accredited and receive
their government contract. Householders were frustrated by not receiving their
assessment reports, and accordingly not being able to apply for loans.
1.4
On 19 February 2010 the government responded to these serious problems
by cancelling the loans portion of the program and placing caps on the number
of assessors and the number of assessments they could conduct. Assessors who
had spent an average of $3000 on participating in the program either found
themselves with a greatly reduced income, or with no way of recouping their
costs at all. Householders who had received assessments but not reports were no
longer able to apply for loans—the very reason for them having requested
assessments. On 8 March 2010 responsibility for the program was transferred to
a new Minister who recognised the serious problems with the way the program had
been planned and managed.[1]
1.5
On 10 March 2010, the Senate referred the matter of the government's
Green Loans Program to the Senate Environment, Communications and the Arts
References Committee (the committee) for inquiry and report by 21 June 2010. On
21 June 2010 the Senate agreed to extend the reporting date to 6 August 2010.
As a result of the prorogation of the 42nd Parliament, the committee
tabled an interim report on 6 August 2010 stating its intention to
table a final report as soon as practicable in the new Parliament.
1.6
The terms of reference for the inquiry were:
(a) the Government's Green Loans Program (the program), with particular
reference to:
(i) the administration of the program from a pricing, probity and efficiency
perspective, including:
(A) the
basis on which the Government determined the amounts of the loan to be made
available and Government subsidy thereof,
(B) regulation of Home Sustainability Assessment practices, including the
promotion of assessments,
(C) accreditation of Home Sustainability Assessors,
(D) ensuring
value for money for taxpayers,
(E) waste, inefficiency and mismanagement within the program,
(F) ensuring the program achieves its stated aims of improving water and
energy efficiency, and
(G) the
consultation and advice received from financial institutions regarding their
participation,
(ii) an examination of:
(A) employment
and investment in Home Sustainability Assessments resulting from the program,
including that resulting from Government statements regarding the number of
accredited assessors,
(B) the effectiveness of the booking system,
(C) the effectiveness and timeliness of Home Sustainability Assessment
reports being provided,
(D) the
early reduction by the Government in the number of Green Loans to be offered,
and subsequent discontinuation of the loans, including by financial
institutions in advance of the Government's announced date of discontinuation,
(E) homeowner actions for which Green Loans have been sought and approved,
(F) the level of evaluation of homeowner action following any Home
Sustainability Assessment, and
(G) what
advice was provided to the Government on the feasibility and effectiveness of
the program, including to what degree the Government acted on this advice, and
(iii) an analysis of the effectiveness of the program as a means to improve
the water and energy efficiency of homes, including comparison with alternative
policy measures;
(b) consideration of measures to reduce or eliminate waste and
mismanagement, and to ensure value for money for the remainder of the program,
noting the commitment of funding for an additional 600 000 free Home
Sustainability Assessments despite the discontinuation of the loans; and
(c) other related matters.
1.7
In accordance with its usual practice, the committee advertised details
of the inquiry in The Australian on 24 March 2010 and 7 April 2010. The
committee also contacted a range of organisations, inviting them to make
submissions. The committee received 184 submissions from individuals and
organisations, listed at Appendix 1, including a large number from Home
Sustainability Assessors involved in the Green Loans Program.
1.8
The committee held a public hearing in Sydney on 29 June 2010. Details
of the hearing are at Appendix 2. The Hansard transcript is available at
www.aph.gov.au/hansard.
1.9
During the committee's public hearing on 29 June 2010, the Department of
Climate Change and Energy Efficiency (DCCEE) took 14 questions on notice. Two
weeks after the hearing, on 14 July 2010, DCCEE was asked to respond to a
further six written questions from Senator Milne. DCCEE was asked to provide
responses to these oral and written questions by 15 and 21 July respectively.
1.10
DCCEE provided responses to 16 of the committee's 20 questions on
10 August 2010, almost four weeks after the committee had requested the
first responses, and six weeks after the public hearing. Responses to the
remaining four questions from DCCEE were received on 22 October, almost four
months after the committee's hearing. The failure by the department to prepare
responses in a timely manner has significantly hindered the work of the
committee.
1.11
Furthermore, many of DCCEE's responses to questions at the hearing
itself were uninformative and unhelpful. On a number of occasions departmental
officers indicated that they did not have sufficient corporate knowledge to
provide responses to the committee's questions.[2]
Many of the issues in question should have been the subject of memos and file
notes as they related to key decisions, and the committee views it as
unacceptable and disconcerting that senior departmental officers claimed not to
have corporate knowledge of such matters.
Report Structure
1.12
Chapter 2 of the report outlines the background to the Green Loans
Program, including its objectives.
1.13
Chapter 3 discusses the issues that emerged with the household
assessments portion of the program. Chapter 4 examines issues related to the
design and administration of the loans aspect of the program.
1.14
Chapter 5 outlines the changes made to the program on 19 February 2010, and
considers the impact of those changes on various stakeholders.
1.15
Chapter 6 explores three key problems which underpinned the failings of
the Green Loans Program: poor planning; the absence of any audit mechanisms;
and a lack of communication and consultation at all stages.
1.16
Chapter 7 concludes the report by outlining the transition to the new
Green Start Program and making specific recommendations to government regarding
its design and implementation.
Acknowledgment
1.17
The committee would like to thank all of the organisations and
individuals who contributed to this inquiry.
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