transcript 3 april 2014 - royal commission into the … · web viewand as the ocg was, as you tell...

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TRANSCRIPT OF PROCEEDINGS

O/N H-358918

MR I. HANGER AM QC, Commissioner

ROYAL COMMISSION INTO THEHOME INSULATION PROGRAM

BRISBANE

9.00 AM, THURSDAY, 3 APRIL 2014

Continued from 2.4.14

DAY 14

MR K.N. WILSON QC appears with MR J.R. HORTON as counsel assistingMR T. HOWE QC appears with MR D. O’DONOVAN for the Commonwealth of AustraliaMR R.A. PERRY QC appears for family of Matthew Fuller and Rueben BarnesMR M. WINDSOR QC appears with MR M. HEATH for Peter Stewart and 72 othersMR T. BRADLEY QC appears with MS A.J. COULTHARD for the State of QueenslandMR S. KEIM QC appears for family of Mitchell SweeneyMR I. HARVEY appears for Mike MrdakMR W.M. POTTS and MR A. HANLON appear for Murray BarnesMR P. BRIDGMAN appears for Kevin KeefeMR S. LLOYD SC appears for Robyn KrukMS C. HUNTER appears for Jessica Wilson on behalf of family of Marcus Wilson

Copyright in Transcript is owned by the Commonwealth of Australia. Apart from any use permitted under the Copyright Act 1968 you are not permitted to reproduce, adapt, re-transmit or distribute the Transcript material in any form or by any means without seeking prior written approval.

3.4.14 P-1753©Commonwealth of Australia

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<ANDREW WILSON, ON FORMER OATH [9.00 am]

<EXAMINATION BY MR HORTON

MR J. R. HORTON: Mr Wilson, when matters finished yesterday we were speaking about paragraph 33 of this statement; about a presentation Mr Cox did after a conversation which occurred in your office.

THE WITNESS: Yes.

MR HORTON: I want to just take you back, again, to that 31 March period. I think you say in your statement you can’t recall whether you were present at the 31 March meeting; is that still your recollection?

THE WITNESS: That is. I am fairly certain that I wasn’t actually at the meeting. There was a couple of issues that I was having to deal with. At that stage I was having weekly blood treatment in the morning of the Tuesday and I was also preparing for a shipping policy advisory group meeting that I was having on 1 April. So, to the best of my recollection, I wasn’t at the meeting, but I can’t say with 100 per cent certainty that I wasn’t.

MR HORTON: Yes. And perhaps for those reasons, as well, that you just mentioned, even if you were there, you don’t seem to have any recollection of what - - -

THE WITNESS: I don’t have any recollection of the meeting which, to me, gives credence to the fact that I wasn’t at the meeting.

MR HORTON: Yes. I would like to ask you about a topic which arose in the examination of Mr Keefe. I think you probably saw the examination of Mr Keefe over the last day or so. Is that correct?

THE WITNESS: I have seen elements of it - - -

MR HORTON: Yes.

THE WITNESS: - - - but not all of it.

MR HORTON: And I wanted to just treat, really, summarily, if I could, a topic that you might have heard him speak about, which was the adequacy of the notice given to him and to Mr Carter about what was to take place at the 31 March meeting. You heard him say – he said various things about it. One of the things he said was that the conduct of the OCG in not giving notice was unseemly; was the word he used. But you also saw, didn’t you, that documents were put to him to the effect that some notice had been given of what was to take place.

3.4.14 P-1754 A. WILSON XN©Commonwealth of Australia MR HORTON

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THE WITNESS: We had had – my recollection is that we had had conversations as a – I guess, as a collective; the OCG, Mr Murdak, myself, Mr Cox, in regards to the brokerage model leading up to 31 March. We had expressed concerns in terms of the timetable, in terms of the capacity to actually rollout the brokerage model on 1 July. I can’t recall if we indicated to Mr Keefe that we would present an alternative model at that meeting, but he had, as I expressed, I think, yesterday – had already commenced work on a hybrid version of the brokerage model. So I can’t indicate whether or not we had alerted Mr Keefe to that we would present an alternative model, but we had had conversations about the challenges of the brokerage model and the need to make potential amendments to it.

MR HORTON: Yes. I also wanted to give you a chance, then, to comment on whether you thought, given the circumstances of which you are aware, you thought the conduct of your office in respect of Mr Keefe in that meeting was unseemly or something approaching it.

THE WITNESS: I probably can’t comment – I can’t comment on the conduct in the meeting given that I don’t recall the meeting and I don’t recall being at the meeting, but my experience with Mr Murdak is that it would be extremely out of character for him to act in anything other than a very professional and very courteous fashion.

MR HORTON: Yes. Now, you have mentioned the – what I will call for a minute the OCG model that you’re developing as a high-level concept that you have referred to in paragraph 33, and you have mentioned – it seems the major imperative for that, in your mind, was the need to have the program rolled out by 1 July - - -

THE WITNESS: Correct.

MR HORTON: - - - and the concerns in your mind that the brokerage model proposed by DEWHA would not reach that deadline.


MR HORTON: To what extent, when your office is formulating this high-level alternative concept is there a tension given to the possible different risks which are involved in the OCG model versus the brokerage model?

THE WITNESS: My understanding of the differences between the two models are that the risks associated with those two different models would be, to all intents and purposes, the same, because the people that would be delivering – that would be actually undertaking the work installing the installation would predominantly be the same individuals that ended up either way. Under the brokerage model, given the significant expansion of the industry to reach the targets that the government had, you would have had a significant increase in the number of installers in the marketplace. They may, under a pure application of what is known as the brokerage model, have been employed as subcontractors or contractors through that model, but it would have ended up with a significant expansion of the numbers. The risks and


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the risk ameliorations would have, of necessity, been the same. You would have still needed to define, through whatever contract you had with the brokers, the technical specifications associated with the product, the training and the compliance regimes that underpinned it. So much of – as far as I understand it, much of the architecture would have been the same.

MR HORTON: And did you see it as not being the role of the OCG to be concerned in any direct sense with the assessment of relative risks of the two models?

THE WITNESS: From my recollection, what the development of the alternative model was doing was providing the Department of Environment with an alternative – with an opportunity to consider an alternative mechanism to deliver the government’s program. The processes once a Minister makes a decision associated with how the program is rolled out or once the executive of the Department of Environment makes that decision, those processes would sit within the Department of Environment. So, from my recollection, the conversation was at a very high level in terms of conceptual models in terms of the benefits and otherwise of either; not to the level of specificity in terms of the risk models that underpinned it. But as I indicated before, my understanding of the differences between the two models are that the risks are comparable.

MR HORTON: Comparable but perhaps different; is that right?

THE WITNESS: Well, it would depend on the contract that you entered into with the broker as to the differences between the risks and who ultimately bore that risk.

MR HORTON: Yes. The contract provided a means by which some risk could be shifted to a large player, the broker.

THE WITNESS: Although it would depend on the detail of that contract. Given the work that had been done by the Department of Environment in consultation with the industry and with the Department of Employment to that date in regards to, I guess, training being a key element to this, it would be fair to think that that would have been a key component of any contract that they left with a broker.

MR HORTON: Now, a meeting takes place on 3 April between Minister Garrett and Senator Arbib and others.

THE WITNESS: Yes. I understand that’s correct.

MR HORTON: Yes. Were you present at the meeting?

THE WITNESS: No.

MR HORTON: And it was at this meeting that the ..... model, to your knowledge, was further discussed.


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THE WITNESS: As far as I’m aware from the email traffic that Mr Hoffman forwarded on.

MR HORTON: Why – do you know why it was necessary for that meeting to take place if all the OCG was doing at the 31 March meeting was offering a potential alternative high-level concept for the delivery model?

THE WITNESS: Because it – I would assume that the rationale for the meeting is because until that point Minister Garrett would have been under the impression that the brokerage model was the model that the Department of Environment would be implementing on his behalf. I assume that therefore there was a need for Minister Garrett to be briefed in regards to the potential – in regards to an alternative model, and that was an opportunity for the Secretary of the Department of Environment to brief her Minister in regards to which – a potential change in delivery mechanism.

MR HORTON: Yes. Are these processes, though, we’re – you’re discussing now going slightly beyond the role of co-ordination?

THE WITNESS: In terms of – do you mean in terms of Mr Hoffman’s attendance at that meeting?

MR HORTON: I mean – I will be more specific about it. A new high-level possible alternate delivery model is devised by the OCG.

THE WITNESS: Yes.

on 3 April. It seems like the OCG is not just offering the model but positively advocating it as the only realistic solution to a 1 July rollout.

THE WITNESS: I think you could – I think you describe it as we were – as – as Mr Hoffman’s role at that meeting would probably have been to explain the difference between the two models. As to how Mr Hoffman put those views, I can’t – I can’t comment.

MR HORTON: You saw, though, no alternative than to adopt the OCG model if a 1 July rollout was to take place?

THE WITNESS: That’s correct.

MR HORTON: Can I take you please to annexure 11. This is really on a different topic but chronologically following, it’s 22 April. The reference, Operator, is AGS.002.008.3526 and it goes back to the issue of training.


MR HORTON: This is occurring in late-April and it’s the email from Kevin Keefe to you and others which is shown there. If you can just scroll down a little bit,


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please, Operator. Two things I want to direct your attention to. One is in the first line, Mr Keefe saying:

We will provide a report to the PCG - - -

THE WITNESS: Mmm.

MR HORTON:

- - - on Thursday regarding training.

And he’s going to – on the next line – he’s going to share something with you at that time.

I would be happy to share that with you at the time.

THE WITNESS: Yes.

MR HORTON: This is the reporting of the kind that we saw earlier to which you responded?

THE WITNESS: This is the report – this is a – an additional request of – for information in regards to – to progress that – that we’ve been – that we’ve asked for from Mr Keefe.

MR HORTON: Yes. But it’s reporting that shows that the Department of Environment is more at ease with this reporting into the OCG. Is that correct?

THE WITNESS: I’m – I’m sorry, it shows that they’re more comfortable with reporting through to the OCG.

MR HORTON: The reason I’m asking that is your response which you’ve probably seen at the top of the page, have you?

THE WITNESS: Yes.

MR HORTON:

We are making friends.

THE WITNESS:

We are making friends.

Yes.


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MR HORTON: Is that in response to a perception by you that this email from Kevin Keefe expresses less angst or less resistance to reporting to your office?

THE WITNESS: No. I – I would consider that my comment is probably a sarcastic comment pointing to the fact that, as I indicate – I think I indicate in my statement that Mr Keefe was not as keen to provide additional information at that stage as – as he could have been.

MR HORTON: As he ought to have been.

THE WITNESS: It’s a – it’s a fine balance between providing information into central agency and undertaking the work that – that’s required. Mr Keefe was making a point that he thought that there was sufficient reporting lines, reporting mechanisms already in place and that the request that Mr Cox had made in regards to additional information went above and beyond the requirements and was, in his view, not necessary for my purposes.

MR HORTON: Yes. I’m not asking you to express a view about his mindset, but did you read this response particularly from Mr Keefe as seeing your role perhaps as going beyond coordination? As trying to be beyond coordination, I should say.

THE WITNESS: No. As trying to go beyond - - -

MR HORTON: Yes.

THE WITNESS: No. I – I would – I would read it as a – an email of irritation with the coordination and monitoring role that we were undertaking and I would – I guess I would do that because Mr Keefe has copied in – in responding to Mr Cox, Mr Keefe has copied in his first assistant secretary, his deputy secretary and two of his – two of his EL2s as well as myself to make it very clear that his level of frustration is spread broadly.

MR HORTON: I see. And that it’s the nuance we should read into that as well?

THE WITNESS: Well, that – that is the nuance that I read in it - - -

MR HORTON: I understand.

THE WITNESS: - - - which is why my somewhat sarcastic comment to Mr Mrdak.

MR HORTON: Yes. And then the final paragraph, he seems to be asking that if you’re going to ask for more, you should do it at the very highest of levels.

THE WITNESS: And that would be the exclamation mark at the end of the – of the – of the message, I would – I would suggest. Yes. He is making it very clear that, in his opinion, additional reporting lines – if there is additional information required, it should be addressed at the highest level.


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MR HORTON: Thank you, Mr Wilson. They’re my questions to this witness, Mr Commissioner.

COMMISSIONER: Thank you. Mr Windsor. Mr Perry.

<EXAMINATION BY MR PERRY [9.15 am]

MR PERRY: You’ve said to Mr Horton a moment ago, Mr Wilson, that at the 31st – or one of the reasons for the 31 March meeting was there was a need to brief Minister Garrett on an alternative model. Do you recall saying that?

THE WITNESS: I think I was referring to the 3 April meeting.

MR PERRY: 3 April, sorry. In whose view did that need exist? Yours?

THE WITNESS: I don’t recall what arrangements were put in place to establish that meeting.

MR PERRY: I gather that. But when you said to us that there was a need to brief Minister Garrett on an alternative model, was that your view that Minister Garrett needed to be briefed?

THE WITNESS: In accordance with the – the way in which the public service and the government works, for the Department of Environment to proceed with an alternative approach to implementation of the government’s program, the minister should be aware - - -

MR PERRY: And sign it off.

THE WITNESS: - - - and sign it off.

MR PERRY: Yes, okay. So after the 31 March meeting in which the OCG model was presented, the next meeting – 3 April I think you said – is in one sense part of the mechanics of them giving it to the relevant minister to sign off.

THE WITNESS: That would be my understanding.

MR PERRY: Right. Thanks. Now, as between the two models, broker and installer – let’s, for ease of reference, call them that. You spoke about the nature of the contracts that might exist between the government and the brokers in the broker model. May the witness please see STA.001.001.0271 and particularly at page 0274. What’s being called up is Ms Wiley-Smith’s statement which she gave to these proceedings. Okay. And the paragraphs are 23 and 24. When you get to that relevant page, read them to yourself.

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THE WITNESS: Okay.

MR PERRY: So 23 and 24, please. Top of the next page. There you go. Read it to yourself, please. Thanks.

THE WITNESS: Yes.

MR PERRY: Right. Have you had experience with the broker model previously yourself?

THE WITNESS: No.

MR PERRY: Right. This is Ms Wiley-Smith, as I said to you, who was one of the architects or the people building up the broker model. You will see how she says workplace health and safety issues would have been addressed in the broker model.


MR PERRY: That’s 23 fundamentally. And then in 24, the advantage of the broker model in having companies – as she has used the expression as has Mr Keefe – “companies who had skin in the game”.


MR PERRY: Right. You have not used the broker model previously.

THE WITNESS: No.

MR PERRY: Are you able to comment as to whether the way in which Ms Wiley-Smith describes the method of ensuring workplace health and safety issues are properly addressed in the broker model is an understanding that you have as to how it would operate as at March 2009, or were you a bit fuzzy about how it will actually work?

THE WITNESS: My – my understanding as of March 2009 based on my reading of the documents that – that have been presented to me and my recollection is that the brokerage model would have involved in the order of 15 contracts with high level companies. There was at that stage no – I had not been presented with – I had not seen those contracts. I had not seen the structure of those contracts. To my knowledge, the tender documentation had not been prepared to a level of detail that would give me any confidence that the issues that Ms Wiley-Smith raises in 23 had been – had been defined to the extent that the expectation as outlined in 23 reads.

MR PERRY: Do I take it from that that your concern about the broker model, albeit you had not had any involvement in such a model previously, was that it was not sufficiently developed in order to meet the July 1 timetable?


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THE WITNESS: That was an underlying - - -

MR PERRY: Yes.

THE WITNESS: - - - problem. Yes.

MR PERRY: Now, assume that 23 and 24 sets out how the brokerage model would have – and for the purposes of this you will have to disregard the 1 July date. Let’s just say the brokerage model would have addressed the issues of workplace health and safety; okay? In terms of the installer model, how did you see workplace health and safety issues being addressed?

THE WITNESS: In the same way, I guess, as the brokerage model, which is defined - - -

MR PERRY: All right. Stop there for a moment. Yes. Stop there for a moment. Just see if you – we’ll work through some propositions.

THE WITNESS: I’m sorry.

MR PERRY: If that is right, did you see, for example, that there would have to be a sufficient contractual relationship in the installer model somewhere involving the imposition of certain obligations with respect to workplace health and safety issues?

THE WITNESS: It would be dealt with through the registration process in terms of the standards that were required to be a registered installer.

MR PERRY: That is, the extent to which workplace health and safety was or was not appropriately addressed in the installer model would, in your view, turn upon the efficacy of the registration process?

THE WITNESS: It would. Yes.

MR PERRY: Thank you. You weren’t thereafter involved in developing any aspect of the registration process, were you?

THE WITNESS: No.

MR PERRY: In the installer model, did you proceed upon the basis that the installers who were registered would themselves subcontract out work to people who may not be registered?

THE WITNESS: I don’t think, during my involvement up until the – til that stage, that the full detail of the rollout of that had been - - -

MR PERRY: Thought through.


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THE WITNESS: - - - considered.

MR PERRY: Yes. I ask that because you did say, with respect to the broker model, that – your understanding of it, albeit relatively rudimentary, as you seem to say, was that you would have the main brokers and then they would subcontract out.


MR PERRY: Right. In the installer model, was there any appreciation given as to whether the registered installers would then subcontract out?

THE WITNESS: As I indicated, up until 31 March and post-then, I am not certain that we had had a level of conversation that led to – that dealt with that level of specificity, but considering back, I think that it would be fair to say that that would be a reasonable assumption to make.

MR PERRY: What the basis, then, if that was a reasonable assumption – what was the basis for the confidence that the installer model could properly be rolled out on and from 1 July?

THE WITNESS: I think, if you look at the architecture of the installer model, as you describe it, it hinges around the standards that would be required to meet the registration processes. As at 31 March, those had not been defined. The intent was, in having the conversation at a very high level, to put forward an alternate model which could then be fully developed over the next three months.

MR PERRY: Yes. I get the difference between concept as at March and detail which had to be developed. I apprehend from that that the point is this: that the rollout on 1 July under the installer model could be achieved depending upon the complexity of the registration requirements.

THE WITNESS: That is one element that would need to be – that would have needed to be developed. Yes. That’s correct.

MR PERRY: Yes. The more complex, or the more onerous, or the more detailed, the impact upon the 1 July time date becomes more significant. The less detailed, the less complex, the less onerous, the achievement of the 1 July timeline becomes more achievable.

THE WITNESS: I don’t necessarily agree with that statement.

MR PERRY: All right. Why don’t you agree?

THE WITNESS: You would – the number of registered installers may not be as great on 1 July if you have a more onerous and more complex registration process - - -


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MR PERRY: Yes.

THE WITNESS: - - - but the program could still commence from 1 July.

MR PERRY: Of course. Anyone can say the program has commenced on 1 July. The point for this program was that on and from 1 July it was meant to incorporate as many installers, and, therefore, unemployed people, as could possibly be achieved.

THE WITNESS: It was designed to commence on 1 July. There was – I don’t believe that there – that it needed to have the full breadth of installers on 1 July, and from my - - -

MR PERRY: No. That’s not – but it’s purpose was - - -

COMMISSIONER: Let him finish.

MR PERRY: Sorry. Go on.

THE WITNESS: From my memory, the number of installers that were registered on 1 July was less than the number of installers that were registered at the completion of the project. So, as I indicated, the number of people that were registered would be dependent upon the complexity of that registration; the complexity and scope of that registration. But the program would still be – would still have commenced from 1 July in terms of - - -

MR PERRY: The purpose – my fault again. I’m sorry.

THE WITNESS: I’m sorry.

MR PERRY: No. No.

THE WITNESS: In terms of the brokerage model, the difference between – OCG’s concern was that that would not commence from 1 July.

MR PERRY: Because you wouldn’t have all of the brokers locked in to the relevant contracts of the kind referred to Ms Wiley-Smith by 1 July.

THE WITNESS: Because the contracts – at that stage, there was no specificity in terms of the contracts. Yes.

MR PERRY: So, in order to commence on 1 July you needed to have a system which, to one extent or another, would have registered installers in place – you don’t know how many were up on 1 July or - - -

THE WITNESS: No.

MR PERRY: - - - 1 August, or anything like that.


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THE WITNESS: No.

MR PERRY: But that’s the difference between the two; isn’t it?

THE WITNESS: But my understanding is that the number that were registered on 1 July grew through the process to a significant number at the end of the program.

MR PERRY: Yes. But that’s the difference between the two; isn’t it? The brokerage model may not be able to commence on 1 July, because you wouldn’t have them all locked in, whereas the installer model would be able to commence on 1 July; the only issue would be how many people you have on deck on that day.


MR PERRY: Right.

THE WITNESS: And there’s a direct relationship between the number of people that you would be able to have on deck and the complexity, scope, breadth – whichever word you choose – of the registration.

MR PERRY: Registration standards. The purpose of the program was to get as many people into the workforce in this particular industry as was possible.

THE WITNESS: I think the purpose of the program was twofold: one was to provide an increase to the energy efficiency of Australian households, and the second was as part of the economic stimulus package to provide employment opportunities across a broad range of the industry including unskilled, semi-skilled, and skilled employees.

MR PERRY: The second of those two was the primary focus; wasn’t it?

THE WITNESS: Given that it was part of the nation building and jobs plan, it was a significant component of it.

MR PERRY: Yes.

THE WITNESS: I can’t say - - -

MR PERRY: You’re not ranking them, but you would give one significance in the way you said?

THE WITNESS: I can’t give that.

MR PERRY: You can’t? Right. Thanks. Would you go to paragraph 9 of your statement, please.

THE WITNESS: Yes.


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MR PERRY: Third-last line: it was part of your job to coordinate with the states and territories to deal with jurisdictional issues. Did that coordination involve workplace health and safety issues or not?

THE WITNESS: In regards to the Housing Installation Program, no.

MR PERRY: Thank you. Then, if not workplace health and safety aspects at all, what were the jurisdictional issues that you were to talk to the states about?

THE WITNESS: The context of my job was across, I believe, six major components of the nation-building package – maybe it’s five: infrastructure, housing installation, the building of the education revolution, public housing investment and the Department of – the defence housing association construction task. Predominantly, my involvement with the states was on - - -

MR PERRY: Those.

THE WITNESS: - - - those, not the Housing Installation Program.

MR PERRY: Thanks. If you go to paragraph 10. You have been, and may still be a director, or the director, of the Maritime Safety Board?

THE WITNESS: I am a director of the Maritime Safety Board.

MR PERRY: Found the plane yet?

THE WITNESS: No. They - - -

MR PERRY: Now, in respect of that position, you were familiar, no doubt, with the notion in terms of workplace health and safety of the importance of identifying risk and addressing risk by eliminating it, as far as practicable, before you let workers onto a construction site or any other workplace.


MR PERRY: Thanks. Go to 22. Are you familiar with what was incorporated in the National Code?

THE WITNESS: It was a – I have a – I had and still have a - - -

MR PERRY: Broad.

THE WITNESS: - - - broad understanding of the National Code.

MR PERRY: Right. You understand that it contains within it quite a raft of provisions with respect to workplace health and safety issues and how they are to be addressed.


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THE WITNESS: I do.

MR PERRY: And those issues in the National Code incorporate just the fundamental provision I asked you about, that is, that in workplace health and safety, where one starts is identifying a risk and addressing it by eliminating it as far as practicable.

THE WITNESS: I – I will take your word for it.

MR PERRY: No, I’m asking about your understanding, so if you don’t know, you don’t know.

THE WITNESS: No, I – as I said, I don’t know.

MR PERRY: Right. But you know that it contains various provisions with respect to workplace health and safety.

THE WITNESS: My understanding is that it would, yes.

MR PERRY: And the way it works is to impose upon contractors who are subject to it not only their own obligations with respect to workplace health and safety but requiring them in entering into any subcontracts to impose upon the subcontractors similar obligations.

THE WITNESS: I’m not aware of that.

MR PERRY: Right. Thank you. But you thought it was a good thing that it didn’t apply to this program because the imposition of the obligations contained in the National Code might be an impediment to the 1 July rollout?

THE WITNESS: As I indicated in my statement, my understanding was that the National Code of Practice was designed in regards to the application to commonwealth projects, extremely large commonwealth projects and extremely large contractors. My understanding at that time was not that it was designed for these types of – what I considered at that stage to be very small operational issues.

MR PERRY: It might be designed for that but, you see, within it, it may well contain aspects of it or provisions which would be particularly useful in addressing the workplace health and safety risks that either the brokerage model, addressing it the way that Ms Wiley-Smith spoke about – or the installer model, it might have provisions which are particularly useful or an assistance in developing the installer model, mightn’t it?

THE WITNESS: And that may very well be the case.

MR PERRY: Right. And as the OCG was, as you tell us, there to help, did anyone look to see whether there were aspects of it that might be of assistance, or simply


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once it was determined on a legal basis that it was not strictly applicable, just to not look at it any further?

THE WITNESS: That’s fair. No, we did not.

MR PERRY: Yes. Thank you.

COMMISSIONER: Mr Wilson, if this had gone down the brokerage line with just, say, 15-odd independent contractors, would the brokerage – would the national plan have applied to that or not?

THE WITNESS: My understanding is, Commissioner, that - - -

COMMISSIONER: Or perhaps you don’t know as well.

THE WITNESS: My understanding, Commissioner, is that it – it wouldn’t have based on the advice that we had received to date at that stage, but we would have – the Department of Environment would have needed to seek - - -

COMMISSIONER: Advice on it.

THE WITNESS: - - - broader advice on that.

COMMISSIONER: Sure.

MR PERRY: And the reason that you don’t think it would have is the definition of “construction work”.

THE WITNESS: Yes.

MR PERRY: But in a brokerage model, bearing in mind the people you are dealing with and bearing in mind Ms Wiley-Smith’s approach in terms of very tight contracts for tier 1 projects, one would expect at least that if the strict terms of the National Code did not apply, many of its provisions would be imported across as being appropriate.

THE WITNESS: You could make that assumption but I – it’s not – it’s - - -

MR PERRY: Not within your field.

THE WITNESS: It’s not within my field.

MR PERRY: Right. Will you go to 27.

THE WITNESS: Yes.


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MR PERRY: About, what, two-thirds of the way down, you will see a sentence starting, “My primary task during the day.”

THE WITNESS: Yes.

MR PERRY: Right. And your primary task at this meeting on or around 12 March was to meet state and territory officials and discuss reporting and information needs of the commonwealth. That is, do I take it from the way you’ve expressed that, that what information the commonwealth should be receiving from the states?

THE WITNESS: Yes. As I – as I finish that sentence, “Across the breadth of the economic stimulus package.”

MR PERRY: Yes. We know your answer about all the other things that you were involved in.

THE WITNESS: And – and the reason for adding that at the end of that statement is the Housing Insulation Program was being predominantly delivered through – through the Department of Environment so the reporting mechanisms would not be from states and territories. Whereas the Public Housing Infrastructure, Building the Education Revolution projects were being delivered by the states on the commonwealth’s behalf, so we had direct relationships with the commonwealth – between the commonwealth and the states. It – you wouldn’t be surprised to know that the states are on occasions somewhat reluctant to provide information through to the commonwealth. My – one of my jobs was to negotiate with them to ensure that the commonwealth had the information necessary to undertake the communications role that we were charged with.

MR PERRY: Is that with respect to the HIP or was it in reality with respect to all the other aspects of the stimulus package apart from the HIP?

THE WITNESS: No, it’s in – in regards to the other – other parts of the package because - - -

MR PERRY: All right. So your discussions did not concern the HIP that you’re talking about in this paragraph?

THE WITNESS: In – no, in – I had two parts of the conversation during the day. One with the energy efficiency coordinators and outside of that was discussing with state and territory officials on other matters in regards to the reporting of other elements of the economic stimulus plan.

MR PERRY: Good. Just concentrate on the HIP. What discussions did you have with state officials with respect to information flow either to the commonwealth or from the commonwealth to the states with respect to that program alone?

THE WITNESS: On that day, I don’t believe any.


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MR PERRY: At any time?

THE WITNESS: In regards to the information that I was charged with obtaining, I don’t believe so.

MR PERRY: Thank you. Can we go to annexure 2 to your statement which is AGS.002.008.0502.

THE WITNESS: Yes.

MR PERRY: Just have to wait till they get it up on the screen.

THE WITNESS: Sorry.

MR PERRY: Thank you. 008.0502. That’s it. Thank you. About halfway down, you will see the – yes, there it is – actual market take-up rate. Do you see that?

THE WITNESS: Yes.

MR PERRY: The last sentence, there is a concern, as I read it, that the – as at February, that the program might not attract, in fact, as much expenditure as was anticipated.


MR PERRY: That is, the program was meant to spend more than 1.3 billion that you refer to towards the end of the second last line.


MR PERRY: And the purpose was to achieve a very – a higher spending figure than that so that the stimulus effect, if any, would be magnified.


MR PERRY: Thank you. And we then go to exhibit 4 – no, sorry ..... Can you go to exhibit 6 which is 002.008.3458. Have you got it? Mr Bentley is where?

THE WITNESS: Mr Bentley was an advisor in Senator Arbib’s office.

MR PERRY: Thank you. It seems to be talking about the National Building Jobs Plan more broadly than just the HIP.


MR PERRY: In terms of Senator Arbib, he was a parliamentary secretary.


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MR PERRY: Was he, for the purposes of the stimulus package and therefore the HIP, therefore part of the reporting line from OCG?

THE WITNESS: Mr – Senator Arbib, sorry – Senator Arbib was – following his appointment, was our direct reporting line.

MR PERRY: Right. So, in a sense, to the extent that the OCG might be considered as some sort of autonomous unit, he was the political head of that autonomous unit?

THE WITNESS: He was the – yes, he was our political representative.

MR PERRY: And, therefore, the political force behind the OCG just as any minister might be the political force behind their respective departments?

THE WITNESS: If you – yes.

MR PERRY: Yes. All right. Now, can you go to exhibit 9 which is 002.008.0642. Got it?

THE WITNESS: Yes.

MR PERRY: All right. The note for the senator is, what, a summary of what had happened at that meeting in the morning?

THE WITNESS: If I go to the attachment, it is what I would describe as a note – a briefing note. Not a formal briefing note but a - - -

MR PERRY: And what was the - - -

THE WITNESS: - - - briefing note.

MR PERRY: What was the Senator’s need?

THE WITNESS: It would appear – and as I wasn’t at the 31 March meeting, and as I indicated previously, I’m unaware of the rationale – the genesis of the meeting on 3 April. But it would appear that this is a briefing note to provide him with information in regards to the 3 April meeting. However, without the – without a specific reference there, that is an assumption.

MR PERRY: That’s a hypothesis, perhaps. All right. Annexure 14, which is 002.008.3140. Now, 14 and 15 cover basically the same sets of emails. My point about this, you seemed to be tasked to obtain certain things from Employment and from Environment but if you go to 3141 – can you scroll down please, Mr Operator – there is an email from you, 18 May. That’s it. Down a bit. If you just scroll a little bit further so we can cover all of the numbers – stop. Right. Now, that 18 May


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email from you is responded, in a sense, from Mr Keefe to you saying your task list is to get the statement of the list of competencies ..... point 1. Okay.


MR PERRY: You weren’t involved, in any sense, in developing those lists of competencies. Your job was to apply the necessary force to the necessary position in order that the list be provided.

THE WITNESS: That’s a harsh way of putting it but my job was - - -

MR PERRY: But an accurate way.

THE WITNESS: My job was to request the information.

MR PERRY: A request.

THE WITNESS: Yes.

MR PERRY: Nicely couched, no doubt. It had to be done “today”. That is, that day, didn’t it?


MR PERRY: Yes. Okay. Thank you. That’s all I have, sir. Thank you.

COMMISSIONER: Thank you. Yes, Mr Windsor.

<EXAMINATION BY MR WINDSOR [9.42 am]

MR WINDSOR: Thank you. Mr Wilson, I appear on behalf of some persons – entities involved in the insulation industry prior to the HIP. Thank you. I want to take you back to February 2009. You attended a meeting on 18 February.


MR WINDSOR: You recall that meeting.


MR WINDSOR: Industry representatives were in attendance.

THE WITNESS: Yes.

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MR WINDSOR: The popularity rating of the Prime Minister at that stage was very high.


MR WINDSOR: Industry representatives – if not one then more than one representative at the meeting indicated that they had a concern about the delivery of the HIP over such a short period of time.

THE WITNESS: My recollection is that the industry indicated – as I – as I put in my recall note of that evening – that industry indicated that it would be a challenge in regards to rolling out the program, that there – and they listed a number of the issues associated with that, and one being the capacity to change from an industry that did between 50 to 100,000 – which I think was the numbers quoted on the day – installations – retrofit installations a year to in the order of 1.1 million.

MR WINDSOR: Do you recall during that meeting saying words to the effect that you couldn’t argue with a Prime Minister who had a particular popularity rating?

THE WITNESS: No, sir. I don’t.

MR WINDSOR: All right. Do you recall whether on that day – subsequent to that meeting on that day – you expressed that view to any of the participants who had been at the meeting?

THE WITNESS: No, sir. I don’t.

MR WINDSOR: All right. Do you recall speaking to Mr Kevin Herbert on that day?

THE WITNESS: No. I assume having reviewed the list of attendees and Mr Kevin Herbert is one of the attendees – I assume that I will have introduced myself and I assume that, given that it was a nine hour meeting, I will have spoken to him either during the meeting or through the – through the breaks during the day.

MR WINDSOR: Thank you, Mr Wilson.

COMMISSIONER: Thank you. Mr Keim.

<EXAMINATION BY MR KEIM [9.45 am]

MR KEIM: Thank you, Commissioner. Mr Wilson, my name is Steven Keim. I appear for Mitchell Sweeney – the family of Mitchell Sweeney. Mitchell was the boy who died on 4 February 2010, shortly before the program was brought to an end.

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I wanted to ask you a question with regard to annexure 2 to your statement, which is AGS.002.008.0502, and it’s the statement in the second last paragraph:

All participants did not support the concept of a brokerage system.

You were asked some questions about this by Mr Horton but am I right in thinking that your explanation to get rid of the ambiguity is in paragraph 22 of your statement where you say:

In my email I recorded that some participants indicated it might be better for customers to deal directly with suppliers and then to get a rebate from the government.

THE WITNESS: Yes.

MR KEIM: And so what you said to Mr Horton, that you thought that it was almost all participants - - -

THE WITNESS: Yes. I think, I – yes, I do recall saying that to Mr Horton and – and that may be at odds with my statement there, yes.

MR KEIM: And the one in your statement is clearly correct, isn’t it?

THE WITNESS: Yes.

MR KEIM: Okay. I also wanted to ask you one other question about the meeting on 18 February. I would ask that you have a look at annexure 1 to your statement, which is AGS.002.023.0926. And I would ask you to go to page 6 of the document - - -

THE WITNESS: I’m sorry, page 6?

MR KEIM: Page 6, yes. It’s the last page before the attendees come up. It’s 0931 for the operators. Have you got it there?

THE WITNESS: Yes.

MR KEIM: Okay. And it’s the second dot point, the one that starts with, “There is the need to develop a mechanism”.

THE WITNESS: Yes.

MR KEIM: Okay. Now, is that – did you report on that aspect of what was said at the meeting to your colleagues in your note or at any other time?

THE WITNESS: If I – if - - -


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MR KEIM: It doesn’t seem to be - - -

THE WITNESS: It – it – it’s - - -

MR KEIM: - - - in your note. In fact - - -

THE WITNESS: - - - not in my note, as far as I can recall.

MR KEIM: - - - if we go to annexure 2, the passage that my learned friend, Mr Perry, took you to, although not directly opposed, does seem to be emphasising the opposite point, that there won’t be enough take up.

THE WITNESS: That – that – that capacity would be – the capability of the industry to – to rapidly ramp up is – was a capacity issue. Yes. Industry indicated that it – it would be a challenge to move from – as I’ve indicated – an industry with 50 to 100,000 installations to 1.1 million over a year.

MR KEIM: Yes. Yes. The point in the second dot point there seems to be that there will be a very high take up in the first few months of stage 1. That’s what the industry consultant - - -

THE WITNESS: I’m sorry, in - - -

MR KEIM: Second dot point on page 6.

THE WITNESS: “There is a need to develop a mechanism to avoid high intake.”

MR KEIM: Yes.

THE WITNESS: There was an expression that there – my recollection is that industry indicated that there needed to be a timed ramp up of the process, yes.

MR KEIM: So, putting it another way, the industry participants who were there were warning the government representatives who were there that beware, a lot of people will want installation in the first few months, you need to develop some mechanism to control that.

THE WITNESS: Yes, and part of the conversation during that day was about the increase in installers into the marketplace already being seen by those that were within the installers’ marketplace at that time.

MR KEIM: My question to you is that warning that’s recorded there in the second dot point, was that a matter that you reported on to your colleagues in the OCG either in your note or at any time?

THE WITNESS: No, I don’t believe I raised it in my note and I’m not certain whether or not it formed part of a conversation that I had post the – post-18 February.


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MR KEIM: And I take it from that that it wasn’t fed into the discussions at all over the next four months before you left on 8 June by you.

THE WITNESS: By me into my discussions within the OCG?

MR KEIM: Yes.

THE WITNESS: I can’t comment – I can’t with any level of certainty say that I raised that specific issue.

MR KEIM: Yes. Yes. You see, Mr Howe, my learned friend who appears for the Commonwealth, has raised questions with various witnesses so far to elicit that as far as those witnesses were concerned that the demand which emerged from 1 July over the next few months was, at least from the point of view of those witnesses, quite unforeseeable. Do you understand what I am saying?

THE WITNESS: Yes.

MR KEIM: Okay. But in your case, you were clearly warned on 18 February that there was a danger of very large demand occurring; is that correct?

THE WITNESS: I think it would be fair to say that all participants in that meeting were aware that there would be a significant ramp up in activity in the first months following the increase in the program.

MR KEIM: Okay. And that was something that you agreed with and you were aware of at all times?

THE WITNESS: That there would be a significant ramp up? Yes.

MR KEIM: Yes. Thank you. I wanted to go to paragraph 36 of your statement, and I wanted to go to that part of 36 which is at the top of page 8 of your statement. And, in fact, the beginning of the sentence stands – in fact, there is only one sentence in the paragraph. But I wanted to ask you about the factors, fragmented nature of the industry, and the different products utilised in the different regions of Australia. Do you see those?

THE WITNESS: Yes.

MR KEIM: If we take them separately, why was the fragmented nature of the industry, as you perceived it, something that could not be accommodated in a head contractor arrangement?

THE WITNESS: My recollection of the industry is that it is an extremely broad, extremely competitive industry with a wide range of products utilised in different parts of the country. The concept of a brokerage model which would be, to my understanding at the time I am referring to there, was 15 head contracts with head


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suppliers or head contractors who would then broker out the sales of the individual tasks. Given the – what you could conceivably say is a highly competitive marketplace – it would be a challenging contracting arrangement to put in place a head contractor who will have to facilitate those arrangements with what, to date, would have been significant competitors. It’s an unusual situation to create a contractual arrangement whereby a major competitor is subcontracting through utilising different products than they would normally use through direct competition.

MR KEIM: But why did that necessarily follow if, for example: one of the brokers who got the quota was Bunnings; presumably Bunnings would supply, in its normal life, all of the different products that people in the market wanted to use?

THE WITNESS: If – Bunnings may, but Bunnings may not as well.

MR KEIM: And Bunnings could join in a consortia with several different manufacturers.

THE WITNESS: Yes. That’s correct.

MR KEIM: So, anyway, that’s the reason why you saw it as a problem.

THE WITNESS: Yes.

MR KEIM: And the second question is why did the different products in different climate zones pose problems for the brokerage model?

THE WITNESS: As I indicated before, the complexity – the contractual arrangements for this model would have been extremely complex. The differentials between products used in different parts of the country and the different – to my understanding, the different competitive tensions in certain regions within the country would have made it more challenging to define in regards to the detail that one – that the Commonwealth would put into a contract.

MR KEIM: Wouldn’t the contract in principle just say: in this particular region, you supply $1600 worth of insulation as people demand it, and you make sure that it is delivered safely, and it is delivered in accordance with the appropriate quality standards.

THE WITNESS: My experience of Commonwealth contracts are that they are far more complex than that.

MR KEIM: But there’s no requirement to say you, Mr Broker, have to make sure that all of the stuff you supply is foil, and you – this other broker over here, you have to supply cellulose.

THE WITNESS: No. What you would need to be doing is replicating in a contract the capacity to operate a marketplace, because the consumer would want to be able to


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– I would assume the consumer would want to be able to choose the product that was being placed into their house. The contract would need to have been significantly more than: you will do this at $1600 and do it safely.

MR KEIM: You have given your explanation; I will leave it at that. But I just wanted to, on the same point, take you to annexure AW10, which is AGS.002.008.3542. This is part of some emails that went on 6 April 2006.

THE WITNESS: Yes.

MR KEIM: And it really – this is a document annexed to your affidavit, but it also reflects the emails that went back and forth, particularly from Mr Hoffman on 26 March. You’re probably familiar with those emails as well.

THE WITNESS: Yes.

MR KEIM: The - - -

THE WITNESS: Excuse me. I understand that they have been discussed. I have not seen the documents of 26 March since probably around 26 March 2009.

MR KEIM: Which is why I am taking you to this one which is annexed to your affidavit.

THE WITNESS: Okay. Thank you.

MR KEIM: It’s the one in the middle of the page which is from Mr Hoffman. It’s to Mr Keefe, and you’re one of the people copied in. It’s the third paragraph which starts:

Continued focus that the program must allow small players and new entrants who meet minimum standards to participate from that start.

I just wanted to put this proposition to you: the program envisaged that the amount of insulation would be ramped up by a factor of 24. I think Mr Murdak gave that evidence. The brokerage model would provide as much work to small operators as the model that was eventually chosen just simply because there was so much going to be available, small operators would be able to obtain work and quote for work as subcontractors to the brokers. Isn’t that correct?


MR KEIM: And I think you have said as much as that in your evidence already, but to this concern that Mr Hoffman has expressed there, that in some way the brokerage model would disadvantage small players and new entrants, it’s really a furphy; isn’t it?


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THE WITNESS: In terms of the differential between the two models to be pursued?

MR KEIM: Yes.

THE WITNESS: As I indicated, it’s my understanding that under either model small to medium players would – small players and new entrants would have been required to participate in the program. Yes.

MR KEIM: Yes. I wanted to take you to AW13 and AW14, which are those discussions. AW13 is AGS.002.008.3362. That’s some emails from 23 April about training. Particularly if you go to the second page of that, you can see Mr Hoffman’s concerns expressed to Mr Carter and Mr Keefe.

THE WITNESS: Yes.

MR KEIM: Paragraphs 2 and 3 on that page; you’re – we’re familiar with the contents of those?

THE WITNESS: I’m aware of them, having read them - - -

MR KEIM: Yes.

THE WITNESS: - - - in preparing for today.

MR KEIM: And then a month later on 18 May we have some more emails following up on that. In fact, I think the second page of annexure 14 AGS.002.008.3140 is the first page of the email that we have just seen.

THE WITNESS: Yes.

MR KEIM: Are you familiar with that one as well?

THE WITNESS: Yes. I am.

MR KEIM: The proposition I wanted to put to you was it was quite clear even by the April date but certainly by the May date that training was not going to be available in large amounts by 1 June or even 1 July; isn’t that correct?

THE WITNESS: Having read the document in preparing for this - - -

MR KEIM: Yes.

THE WITNESS: - - - I am aware of the fact that training was going to be staged and delivered on an increasing basis. Yes.

MR KEIM: So at any time before you left on 8 June, did you hold any concern that these new entrants would be seeking to come into the market and employ new


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entrants in the market or subcontract to new entrants in the market, and a lot of them would simply not be trained or not be able to be trained?

THE WITNESS: I think, sir, as I indicated, from about the end of March Mr Hoffman took responsibility at a senior level for the interface between the Office of Co-ordinator General and the Department of Environment. My focus had moved to issues associated with the broader range of the national building plan, so I did not turn my mind to the contents or otherwise of the training arrangements required in the housing installation program.

MR KEIM: Okay. And – I will paraphrase that by saying you were certainly not on top of the training detail at that stage.

THE WITNESS: No.

MR KEIM: Excuse me. After that date in March?

THE WITNESS: No.

MR KEIM: Okay. And I suppose the same thing would apply with regard to auditing and compliance arrangements.

THE WITNESS: No. I had no involvement in the development of the auditing compliance arrangements associated with the program.

MR KEIM: Thank you, Mr Wilson.

THE WITNESS: Thank you.

MR KEIM: Thank you, Commissioner.

COMMISSIONER: Thank you. Yes, Mr Bradley.

<EXAMINATION BY MR BRADLEY [10.02 am]

MR T. BRADLEY QC: Thank you, Commissioner.

Mr Wilson, you were asked some questions by my learned friend, Mr Horton, and also by my learned friend, Mr Keim, just now, about the significant extension of the industry to reach the targets the government had set for the HIP.

THE WITNESS: Yes.

MR BRADLEY: And, I think, on a very simplistic analysis, to reach that target every experienced person who had worked in the industry prior to the HIP would be,

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say, supervising 20-odd people who had not worked or had come into the industry not having been working in it before the commencement of the HIP.

THE WITNESS: I hadn’t done sums to that extent. My analysis of it was that if the industry was somewhere between 50 and 100,000 installations a year, you would be multiplying the process by a factor of 10 to 20.

MR BRADLEY: Well, we can work with those numbers. I think your evidence was that from the industry consultation you thought the industry was doing between 50 and 70,000 at that time.

THE WITNESS: Well, my recollection was 100,000, but 70,000 may be the number I used.

MR BRADLEY: In any event, did you get any – or did your office, in the time you were responsible for this area, get any labour market advice about how many people with appropriate trade or building qualifications could be drawn into the industry in that period of time?

THE WITNESS: No. I don’t believe we did. I am unaware if the Department of Environment did.

MR BRADLEY: Did you get any advice as to how many people could be trained to enter the industry in that period of time?

THE WITNESS: I don’t recall receiving anything within the Office of Coordinator-General in regards to that.

MR BRADLEY: Your responsibilities within the Office also extended to some aspects of the other stimulus matters.


MR BRADLEY: And they were quite large programs: the building the education revolution program, I think, is at the order of $14 billion.

THE WITNESS: The – I believe that would be a number. I haven’t gone back and reminded myself of those numbers. I think, all up, the economic stimulus package was in the order of $42 billion investment over a five-year period.

MR BRADLEY: And the social housing, or, as I think you have described it, the public housing program, is also quite a large component.

THE WITNESS: Public housing component was a large construction program of new and maintenance projects associated in all of the States and territories. Yes.


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MR BRADLEY: And those two components of the program were delivered by the Commonwealth funding the States and the States taking responsibility for the construction and work involved in both the education revolution aspect and the social housing aspect.


MR BRADLEY: And there was quite a detail reporting mechanism to come back to the Commonwealth about those programs.

THE WITNESS: Yes.

MR BRADLEY: And you’re aware how those two large programs were delivered?

THE WITNESS: They were delivered through – my recollection is that they were delivered through the states through contractual arrangements between the commonwealth and the states.

MR BRADLEY: Are you aware that they were delivered by the states contracting with large, established players in the building and construction industry?

THE WITNESS: No. I’m – to be honest, I don’t – I don’t actually recall the detail.

MR BRADLEY: For instance, you would recall that they weren’t delivered by having individual schools or individual public housing occupants contract with a builder of their choice to do a matter.

THE WITNESS: No, that’s – that’s correct. In terms of the schools, there was a differential between public schooling and private schooling and my recollection is that private schooling, the individual private schools did some of the contracting arrangements but in the – in public schooling, it was – it was managed through the state education departments.

MR BRADLEY: And even the private school construction program was managed by the states and they were paid a percentage of the cost program to administer that aspect.

THE WITNESS: I believe there were – there were costs associated with the delivery of the programs agreed through the National Partnership Agreements.

MR BRADLEY: But it wasn’t an aspect of either of those programs to seek to bring people who were not in the building and construction industry in to perform that work, new entrants and new operators?

THE WITNESS: I have a feeling that underlying the whole of the Nation Building Program, there was a – a general assumption that it would require additional employment within the industry at a time when employment was – at a time of


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economic uncertainty, there was a likelihood that people would move from one industry to another. The construction industry being the industry that the commonwealth had sought to invest in.

MR BRADLEY: But not in the sense of new construction companies being formed by people not at that time in the construction industry.

THE WITNESS: I think – I’m not necessarily certain that that’s a theory that I could – I could agree with.

MR BRADLEY: But it wasn’t a concern on the part of your office that this work might be undertaken effectively by large, established construction industry companies - - -

THE WITNESS: There’s - - -

MR BRADLEY: - - - rather than by new entrants to the industry.

THE WITNESS: There wasn’t a concern, no.

MR BRADLEY: In your statement, you refer to the documents that are exhibit AW4. That’s the email trail to do with the National Code of Practice for the construction industry. For the operator’s benefit, that’s document AGS.002.008.3583.

THE WITNESS: Yes.

MR BRADLEY: I want to ask you some questions about that, but perhaps in order to do that I might ask you to have a look at a couple of documents. We should have copies for the operator. Mr Wilson, you’re aware of this – an organisation called Safe Work Australia?

THE WITNESS: Yes.

MR BRADLEY: And you’re aware that it’s an agency established by the commonwealth under a commonwealth Act?

THE WITNESS: Yes.

MR BRADLEY: Are you aware that it’s established by the commonwealth pursuant to an intergovernmental agreement, a COAG agreement?

THE WITNESS: I’m not but that’s probably correct.

MR BRADLEY: I’ve given you, I think, a copy of the relevant piece of commonwealth legislation, the Safe Work Australia Act 2008.


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THE WITNESS: Yes.

MR BRADLEY: And I think I’ve given you a copy of the intergovernmental agreement.

THE WITNESS: Yes.

MR BRADLEY: Can I ask the operator to just turn up for us clause 6 of the Work Safe Australia Act 2008 which I think – section 6 which sets out the functions. Have you got – you might find that in the hard copy as well if that’s – if you find that easier to read. The screen copy seems to be ..... at the moment. I’m interested there in the description of the functions, in particular function number 3 which is model OH&S codes of practice. I would ask you just to read what that describes that function as being.

THE WITNESS: Yes, I’ve read it.

MR BRADLEY: At the time in the first few months of 2009 when you were involved in this aspect of the Nation Building and Jobs Plan, were you aware of this role that Safe Work Australia played in developing model codes of practice?

THE WITNESS: No, I wasn’t.

MR BRADLEY: Because I want to suggest to you that the whole purpose of Work Safe Australia is to, in this cooperative way, bring about model or uniform practice in respect of occupational health and safety.

THE WITNESS: Yes, that would be – that would certainly be the intent as read there.

MR BRADLEY: And it would follow that if the model code of practice for the construction industry didn’t apply to this program, then any state or territory code of practice modelled on the model would also not apply.

MR HARVEY: Well, I object to this line of questioning. This is asking this witness having expressed that he doesn’t have any basis of knowledge in the legislation itself, it not having been raised in his statement and these are, with respect, submissions. My learned friend have undoubtedly made those submissions - - -

COMMISSIONER: I think that’s a fair comment, Mr Bradley. I think, for a start, you’re asking him about a matter he doesn’t know much about.

MR BRADLEY: I will put the question this way - - -

MR HOWE: Well, I would also note that pursuant to the commencement provision, section 3 to 73 didn’t even commence operation until 1 November 2009. We really


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are in very attenuated terrain, with respect, and item 2 refers not to a code of practice but to OH&S laws which - - -

COMMISSIONER: Well - - -

MR HOWE: - - - are more directly applicable.

COMMISSIONER: Again, you’re addressing as well as – you’re all addressing. Mr Bradley, can you take that anywhere? It’s a matter of law, isn’t it?

MR BRADLEY: I want to ask this witness whether it was any part of the consideration by him - - -

COMMISSIONER: Well, you can do that.

MR BRADLEY: - - - or those who worked under his supervision in respect of this program.

COMMISSIONER: Okay. Well, confine it to that.

MR BRADLEY: Was it any part of your consideration or concern that the work to be undertaken in the Home Insulation Program might be able to be undertaken unregulated by a code of practice relating to the construction industry which might more stringently apply to the work to be undertaken in the program?

THE WITNESS: I’m not 100 per cent certain that I understand the question that you’re – that you’re asking me.

MR BRADLEY: Well, perhaps I will put it this way: the inquiry that was made about whether the National Code of Practice for the Construction Industry would apply to this work was an inquiry made because of a concern on the part of the persons in your office and perhaps yourself that if it did apply, there might be more stringent controls on the persons who could work in the implementation of the program?

THE WITNESS: No. If I – if I can correct – if I can correct that – that assumption, the reason that the National Code of Practice that the Office of the Coordinator-General has asked that – in fact, checked whether or not the National Code of Practice would apply in this instance was that it was an issue raised not by the Office of the Coordinator-General in the context of the 18 February meeting, but by the industry themselves on the 18 February meeting. My understanding, as I’ve outlined in my statement, is that the code of practice was a document – was a code that the commonwealth had developed to apply to very large construction projects involving very large contractors. There was a concern expressed within the meeting, my recollection is, that if that code were to apply to the program, then the program would not be able to be facilitated. So my - - -


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MR BRADLEY: And that concern was because?

THE WITNESS: Because the – as to – my understanding at that time was that the requirements under the code were better suited to very large construction companies operating on very large construction projects, not on small – small building sites.

MR BRADLEY: And those constraints were all matters to do with occupational health and safety. Is that right?

THE WITNESS: Not – that – that is not as I had read it.

MR BRADLEY: Did you think the Code of Practice was about something else?

THE WITNESS: My understanding of it was very rudimentary but it was to do with the overall operations of the construction industry, as – as the title said. And occupational health and safety would have been one of the elements involved in that.

MR BRADLEY: And it was a concern that if those provisions applied to the program, the program might not be able to be delivered.

THE WITNESS: If the Code of practice in totality were to apply, not those – nobody mentioned – I don’t recall any individual mentioning specific provisions. It was a conversation about the document in whole.

MR BRADLEY: And did - - -

COMMISSIONER: So you understand the National Code of Practice applied to big contracts. If it applied to this then the program couldn’t be rolled out in time but you don’t know why that is the case.


COMMISSIONER: Is that right?

THE WITNESS: That’s correct, Commissioner.

MR BRADLEY: The advice that you received that’s shown in annexure 4 to your statement – I think it’s at the foot of that first page. There’s an email from Sharon Souter to Mr Cox. Do you see in the third paragraph and do you know what the explanation is?

THE WITNESS: “There is nothing in the guidelines to indicate”.

MR BRADLEY:

Installation of insulation is not construction and maintenance.


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THE WITNESS: Yes, I’ve read that.

MR BRADLEY: So it’s – the advice isn’t it doesn’t apply because this isn’t a big project, the advice seem to be it doesn’t apply because this is not construction and maintenance.


MR BRADLEY: So it’s a definitional question.


MR BRADLEY: And then finally I wanted to ask you about this. You gave some evidence about the standards of registration for installers and the importance of those. Can I suggest to you that in designing those standards for registration as you described them, that was actually the requirement to register for a business that was going to claim a payment under the scheme. That’s correct - - -

THE WITNESS: I understand that’s correct, yes.

MR BRADLEY: It wasn’t a provision for registering persons who would be working in the industry.

THE WITNESS: I understand that’s correct, yes.

MR BRADLEY: And so in that exercise, you understood you were setting the standards for registration of the businesses that would make a claim for financial reimbursement.

THE WITNESS: No, at no stage was I setting the standards in regards to the Housing Insulation Program.

MR BRADLEY: I’m sorry, perhaps my question was badly put. In being concerned about the standards for registration, that concern was about setting standards by whoever was going to set them – presumably the Department of Environment – under the guidelines but that was a concern about the setting of standards for the businesses who were to be paid under the program.

THE WITNESS: Again, sir, I’m not certain what – what the question that you’re asking me is.

MR BRADLEY: You gave some evidence that you thought there was some significance in the setting of standards for registration under this program.

THE WITNESS: I – I think my evidence was that – if we’re talking about the conversation that I had with Mr Horton in regards to the differences between the two models, I think my evidence was that the standards – that the minimum standards or


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the standards associated with training and competencies would be an important component of the – of the program design, yes.

MR BRADLEY: So in consideration of the model promoted by your office, it was an important consideration that there would be standards set for registration.

THE WITNESS: Correct, and I believe that that’s clearly specified in the potential model that we put forward.

MR BRADLEY: But you and your office understood at all times that what you were doing or what would be done by setting those standards would be to set a standard for the registration of a business that would be entitled to claim a payment.

THE WITNESS: I think you would be ascribing more involvement to myself than I had in terms of the standards that were being set. The work, as I indicated, from about the end of March onwards – my responsibilities were elsewhere in the nation building package. The work undertaken by the Department of Environment in consultation with the Department of Employment, with the industry – with the Industry Skills Council, with representatives from the Office of Coordinator-General and their own internal processes were the processes associated with the development of the actual specifics that then came into play. Your question appeared to be, to me, as to what I was ascribing. That’s not – was not my role.

MR BRADLEY: Well, just so we can be very clear about this, the involvement of the people in the Department of Employment – if I can call it that for short - - -

THE WITNESS: Yes.

MR BRADLEY: - - - and the Industry Skills Council - - -

THE WITNESS: Yes.

MR BRADLEY: - - - they were involvements concerning the training package, were they not?

THE WITNESS: Correct, as far as I – as far as I recall.

MR BRADLEY: And I’m trying to ask you a question about the registration under the guidelines for this program.

THE WITNESS: Okay. Thank you.

MR BRADLEY: Do you understand?

THE WITNESS: Yes. Yes.


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MR BRADLEY: And the registration process was for registering businesses who would then be entitled to claim a payment from the Commonwealth under the program.

THE WITNESS: That is what, I believe, the end result was, yes.

MR BRADLEY: But that was the model that was being promoted by the Office of Coordinator-General - - -

THE WITNESS: If I can, I will just - - -

MR BRADLEY: - - - a model under which businesses would register to claim a payment under the program.

THE WITNESS: If I might, I will just refresh my mind in looking at the document that was prepared. Whilst I can – if I – if I draw your attention to AGS.002.008.0652, whilst I can understand that you could - - -

MR BRADLEY: Could I ask you which attachment that is to your - - -

THE WITNESS: I’m sorry. It’s attachment 2 to the – to my annexure 8.

MR BRADLEY: I’m afraid, though, I only have your annexure 8 and that seems to just be a single page email at the moment. But can you tell me what your answer is?

THE WITNESS: I’m sorry. Authorised installers – whilst I can understand your point being that, at the end of the day, the registration scheme involved businesses registering, the original document that was presented on 31 March indicated that:

Prior to the commencement of the full rollout the Department of Environment in conjunction with states and territories and the contracted processing centre will compile a list of installers who are authorised to install insulation under this scheme.

I can understand that that then developed into a business being the registration but as it was presented there, it could be taken at the broader level.

MR BRADLEY: So your understanding was not that the difference between the two models was that under the brokerage model the Department would select certain large, established players to contract with to deliver the program and a OGC model under which the individual householders would contract with a business and the business would be registered to be entitled to receive a rebate. That wasn’t your understanding of the difference.

THE WITNESS: No, it was – my understanding was – and – that it would be the installers – small, medium and large installers. So I was aware that at that stage there


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were companies that were as small as one and two operators but they were the – they were the defined smallest component of it.

MR BRADLEY: But it was not your understanding at any stage that the individual workers installing insulation under the program would be registered with the Department.

THE WITNESS: No, that is correct. That’s correct, yes.

MR BRADLEY: It would be the businesses - - -

THE WITNESS: Yes.

MR BRADLEY: - - - who were seeking to claim - - -

THE WITNESS: Yes, that’s correct.

MR BRADLEY: - - - a payment who would be registered.


MR BRADLEY: Thank you.

COMMISSIONER: Thank you. Yes, Mr Harvey?

MR HARVEY: I have no questions. Thank you.

COMMISSIONER: Mr Barrow?

MR D. BARROW: I have no questions. Thank you.

COMMISSIONER: Mr Hanlon?

MR A. HANLON: I have no questions. Thank you.

COMMISSIONER: We are doing well. Mr Howe, I think you’re next.

<EXAMINATION BY MR HOWE [10.26 am]

MR HOWE: I’m so sorry to disappoint you, but - - -

COMMISSIONER: Not at all.

MR HOWE: - - - I have a couple of questions only.

3.4.14 P-1790 A. WILSON XN©Commonwealth of Australia MR HOWE

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Sir, are you aware of the fact that there was a technical workshop meeting conducted on 3 April?

THE WITNESS: I am; only through transcript, sir.

MR HOWE: Right. Did the OCG receive minutes of those meetings?

THE WITNESS: I’m unaware if we received minutes of the 3 April meeting.

MR HOWE: Yes. If the document could, perhaps, be brought up. It is, I think, AGS.002.014.1432. My screen has gone dead, Commissioner. I’m not really trying to get close to Mr Donovan. Now, if you could just scroll down slowly, you will see the title of the document. If you could scroll up to the top, please, operator, and I will take you to the industry attendees at attachment B in a little while, but there’s just a reference to one action item in this document that I wanted to ask you about. If you could scroll down, please, to agenda item 2: safety.

THE WITNESS: Yes. I have it in front of me now.

MR HOWE: And, I guess, in the first bullet dot point an important matter is noted. And then in the second dot point it seems, as a natural reading, that what is noted in the first bullet dot point would be addressed or accommodated by what is stated in the second bullet dot point. You see that?

THE WITNESS: Yes. That’s a – I would take that a reasonable reading of those two dot points together.

MR HOWE: Now, that’s drilling down to actually assess the risks of the installation process itself; do you see that?

THE WITNESS: That is what it would appear to me. Yes.

MR HOWE: Do you ever recall seeing such a risk assessment?

THE WITNESS: No, sir.

MR HOWE: And then if the operator could drill down to the top of the next page, I think it is, where there is a reference to an action item which again reflects what I have just taken you to, but it’s even a little more specific in talking about OH&S referable to dangers existing in old buildings, hazardous material, fire, and, separately, electrical risks.

THE WITNESS: Yes.

MR HOWE: Or electrical issues. Do you see that?

THE WITNESS: I do.


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MR HOWE: Including roof types and insulation in use; do you see that?

THE WITNESS: I do.

MR HOWE: And do you recall, again, anything in relation to follow-up or otherwise with respect to such an action item?

THE WITNESS: I do not.

MR HOWE: It does seem, in retrospect, as though fulfilment of that action might have shed some worthwhile light on matters that are now the subject of the Commissioner’s concern; would you agree?

THE WITNESS: Yes.

MR HOWE: Now, you were asked some questions about the participation of subcontractors in the HIP, and also some questions about the setting of standards being referable to the business registrants - - -

THE WITNESS: Yes.

MR HOWE: - - - as a condition for payment. Do you recall those questions?

THE WITNESS: Yes.

MR HOWE: And it was put to you, and you agreed, that individuals who did the work didn’t necessarily need to be registered.

THE WITNESS: That’s correct, as far as I understand it.

MR HOWE: All right. Could we bring up very quickly, and this is my second last topic, Commissioner, the framework that was ultimately the subject of development and then submitted to the Minister for approval and actually approved, and that consists of the terms, conditions and the training competencies. The document, operator, is 002.008.1996. Keep – yes. If you could go down, please. We might just have to wait for another number. While we’re waiting for that number, do you recall it was put to you that I had canvassed with other witnesses the proposition that an increase in participation rates was unforeseeable; do you recall that being canvassed with you?

THE WITNESS: Yes. I do.

MR HOWE: I think the proposition I canvassed was different; namely, that whilst an increase in participation rates was both foreseeable and foreseen, the actual level of participation rates exceeded expectations. Now, do you have anything to offer in that regard? Do you know whether the actual participation rates did exceed any expectation you had, or that government had generally?


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THE WITNESS: I – my recollection was that there was an expectation of a significant ramp-up in installation activity given the number of houses to be insulated. We had a reasonable expectation of a factor of 10 increase. My recollection is that there were somewhere in the order of 1.1 million houses installed between the commencement of the program in July of 2009 and then end of February 2010. That being over half the number of installations that were expected, that’s significantly more than would have been anticipated, I would have thought.

MR HOWE: Yes. And can I ask you about what has been referred to in these proceedings as the New Zealand experience.

THE WITNESS: Yes.

MR HOWE: And then the New Zealand Government model. Now, were you aware of the fact that there had been deaths – two installers – arising out of the installation of foil insulation by, largely, do-it-yourself people, albeit under floor insulation?

THE WITNESS: No. I wasn’t.

MR HOWE: You weren’t aware of that?

THE WITNESS: No.

MR HOWE: Were you aware at the time of the rollout of the HIP or any time during its actual operation of a counterpart model that had been developed and rolled out by the New Zealanders?

THE WITNESS: No. I was not.

MR HOWE: When did you first become aware of that?

THE WITNESS: In preparing for appearing before the Commission.

MR HOWE: And, very briefly, are you now aware that under that model the New Zealand Government selected the brokers, subjected them to significant preregistration checks, required that they utilise a competent trained workforce, and even within that framework took the additional step of banning the use of foil insulation?

THE WITNESS: I’m only aware of it because you have now explained it to me, sir.

MR HOWE: All right. I am just wondering, and I know it’s difficult to cast your mind back and answer questions of this kind, but doing the best you can, had you been aware that the New Zealand Government was going to or had rolled out a rebate insulation scheme with effect from the same date as this scheme, 1 July 2009, but with the features I just described to you? Might that have rung alarm bells in your


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mind as to whether perhaps the Australian Government should be looking at doing something in relation to utilisation of foil insulation?

THE WITNESS: It’s a very hypothetical question but it may have. It would have depended on – in terms of the context that I would have seen the information and the completeness of the information that I had at the time. With all of the information in front of me, as an independent person who was in charge of an area of responsibility, I may have worked my way through all of those issues and come to an agreement that the New Zealand model was the appropriate model to choose.

MR HOWE: Yes.

THE WITNESS: But that’s a very hypothetical question.

MR HOWE: Well, bearing in mind that, in your role on the OCG, you didn’t have primary, or, perhaps, even secondary responsibility for actual risk assessments, perhaps I could ask you a different question. Would you expect that what I have described to you might have rung an alarm bell on the part of those in the Department of Environment who were working up a risk assessment of this program?

THE WITNESS: If they were aware of all of the material and the reasons behind the decisions, then, yes, it would have fed into – I would have thought it would feed into their considerations.

MR HOWE: Yes. And just on this question of the rollout date of 1 July 2009, if it had emerged that that was not achievable in a way that satisfactorily accommodated a risk of injury or death, it would have been the responsibility of a number of senior public servants to have drawn that fact to the attention of relevant Ministers; wouldn’t it?

THE WITNESS: It would have been the responsibility of the Department of Environment to draw it to the attention of their Minister, but it would also have been the responsibility of the Department to draw it to the broader public service community, ourselves included in the Office of the Coordinator General, because if you got to a situation where, as the responsible area, you felt that you were not going to be able to deliver a key plank of the government’s economic stimulus package, it would have flow-on effects to the Department of Finance and the Department of – and the Treasury, so you would need to inform a broad range of people within the bureaucracy, but the first port – the first point of call would be your Minister, to inform them that it is not possible to – these are the issues that we face, these are the risks that we face, we need to discuss and analyse whether or not you can actually achieve the date that the government has given you.

MR HOWE: And it might seem obvious, but, in fact, Minister Garrett, Parliamentary Secretary Arbib, and the Prime Minister would have needed to have been informed.


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THE WITNESS: That’s correct. Yes.

MR HOWE: Firstly could we bring up the terms and conditions which I think is AGS.002.008.2000. This is the last topic, Commissioner. Well, I think the document was attached to the briefing to Minister Garrett that he approved, I think, on 8 May. So if we could bring up that briefing document and the attachments. Could we try, please, 002.012.1230, and the terms, conditions, and the competencies should be an attachment to that document, I think.

COMMISSIONER: Mr Howe, would you like a couple of minutes to find that and perhaps Mr Faulkner would be prepared to ask any questions and you would be prepared to continue and then we come back to you.

MR HOWE: Yes, I’m happy to do it that way.

COMMISSIONER: Okay. Mr Faulkner, are there questions from you?

<EXAMINATION BY MR FAULKNER [10.42 am]

MR FAULKNER: Mr Wilson, you were asked some questions, I think, by Mr Perry about annexure AW9 to your witness statement. And you will see in the middle of the page, there, that’s an email from Mr Hoffmann to you and others on 31 March 2009.

THE WITNESS: Yes.

MR FAULKNER: And it says in the first sentence:

Here is the note I believe the Senator needs.

Now, you said something in your answer by reference to the attachment to that email. Do you have a copy of the attachment with you there?

THE WITNESS: I do.

MR FAULKNER: I think, through administrative error the attachment has been omitted from your statement and it may assist the Commission to know exactly what that document is.

COMMISSIONER: Yes, please.

MR FAULKNER: Is there - - -

COMMISSIONER: No, no. What is – is there a reference?

3.4.14 P-1795 A. WILSON XN©Commonwealth of Australia MR FAULKNER

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MR FAULKNER: Is there a reference number on the attachment in the top right-hand corner?

THE WITNESS: AGS.002.008.0643.

MR FAULKNER: And that’s a two page document.

THE WITNESS: I believe it’s a two page document entitled “Note energy efficient homes package delivery model”.

MR FAULKNER: And you were also asked a question about attachment AW8 to your statement which suffers from the same administrative error. This is - - -

COMMISSIONER: I’m not sure it is an administrative error. You will have to ask the other side of the table as to whether that’s in issue but - - -

MR FAULKNER: Well, I think it would assist the Commission to know and - - -

COMMISSIONER: Yes, it would. Yes. It would be helpful.

MR FAULKNER: That’s an email from Simon Cox to Kevin Keefe on 31 March which refers to two attachments.

THE WITNESS: Yes.

MR FAULKNER: And do you have a copy of those two attachments with you there?

THE WITNESS: I do.

MR FAULKNER: And can you please tell the Commissioner the number that appears in the top right-hand corner of those two documents.

THE WITNESS: AGS.002.008.0646 and document AGS.002.008.0651.

MR FAULKNER: Thank you. I have no further questions, Commissioner.

COMMISSIONER: So you were just completing the record there?

MR FAULKNER: Yes. Well, the witness referred to those documents in his answers.

COMMISSIONER: Thank you very much. Mr Horton, anything - - -

MR HORTON: No questions, Commissioner.

COMMISSIONER: Anything - - -

3.4.14 P-1796 A. WILSON XN©Commonwealth of Australia MR FAULKNER

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MR HOWE: I think we’ve located the document. The terms and conditions, I think, are AGS.002.012.1232.

<EXAMINATION BY MR HOWE [10.46 am]

MR HOWE: Now, if you could just familiarise yourself with that document. Commences, “To be included on the register you must agree to” and there’s reference to A, “complying with skills, experience and training competencies” which we will come to in a moment.

THE WITNESS: Yes.

MR HOWE: And then if the operator could scroll down to general requirement N, and that requires compliance with guidelines for the program “as updated from time to time and all relevant Commonwealth, state, territory and local government laws”. Do you see that?

THE WITNESS: Yes, I do.

MR HOWE: And then if the operator could scroll down to general requirement R:

Comply with all of these terms and conditions notwithstanding that you may have subcontracted all or any part of the installation work.

THE WITNESS: Yes.

MR HOWE: And then, if you could just scroll down further, operator, just to make sure. And is that the end of the document? All right.

COMMISSIONER: Could I just see the last three paragraphs? There – just stop there. And is that – that’s what gets you registered?

MR HOWE: That pretty much gets you registered in combination with the competencies which we will now come to. If the operator could bring up AGS.002.012.1235. There were other conditions and requirements, Commissioner. I’m just going to the ones relevant to - - -

COMMISSIONER: I was just interested there in passing. I don’t want to distract you but the first one said “you agree that you will comply” with the things – you know, that – it didn’t say “you have been trained” or anything like that. It just says “you agree that you - - -

MR HOWE: Yes.

COMMISSIONER: Did you see that first sentence?


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MR HOWE: That’s more to be found here.

COMMISSIONER: Right.

MR HOWE: So these are the competency requirements for registration. So installer registrants agree, as it were, to comply with these competency requirements. Is that your understanding, sir?

THE WITNESS: That’s my understanding of having read the document that you’ve just shown me, yes.

MR HOWE: Yes. And I think a version of this is attached to your statement as well.

THE WITNESS: It is, yes.

MR HOWE: And I want to just take you to the very first paragraph which applies to organizations and individuals on the installer provider register.

…must ensure that they -

THE WITNESS: Yes.

MR HOWE:

…(if an individual) and each individual they engage (whether employed or through a subcontracting arrangement) to install ceiling insulation either have the competencies themselves -

Can you see that?

THE WITNESS: Yes.

MR HOWE: Or basically are supervised by someone who has those competencies.

THE WITNESS: Correct, yes.

MR HOWE: So do you agree that there is, as part of the architecture of the regime, a requirement that the installer must either directly him or herself be someone who possesses the competencies - - -

THE WITNESS: Yes.

MR HOWE: - - - or if they’re going to give the work to an employee or a subcontractor they must ensure that those people have the competencies or are going to be supervised by someone who has the competencies. Do you see that?


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THE WITNESS: Yes.

MR HOWE: So the scheme, as it were, piggybacks on the proposition one arrives at that everyone in a roof cavity space will either be trained and competent or supervised by someone who is trained and competent. Do you agree with that?

THE WITNESS: Yes.

MR HOWE: And I’m just wondering, you’ve given some evidence that you have a broad familiarity with OH&S obligations on workplace participants.

THE WITNESS: Yes.

MR HOWE: I take it you don’t have a depth of understanding about the particular provisions under Queensland law.

THE WITNESS: No.

MR HOWE: All right, but you would be aware that as a general proposition, OH&S laws right throughout Australia mandate controlling participants in workplaces to provide, maintain and ensure safe systems of work including through training and supervision?

THE WITNESS: That would be my assumption, yes.

MR HOWE: So provide, maintain and ensure a safe system of work.

THE WITNESS: Yes.

MR HOWE: Now, in the case of a very unskilled apprentice type person who is sent up into a roof cavity by either an installer or the subcontractor of an installer, pursuant to this regime can you think of any way that they could discharge their OH&S obligations in respect of that complete novice by allowing him to go up and be 20 kilometres away on some other work site?

THE WITNESS: Well, without being an expert on – in building and construction, it would – it would appear to be a fairly loose interpretation of a duty of care to your employee. It would be – it would be my assumption that you would be – you would supervise on the site rather than off the site.

MR HOWE: Yes. So if your obligation is to provide, maintain and ensure a safe workplace and you have control over a complete novice who has been sent up into a workspace, it would be – I suggest – impossible to discharge that offsite by allowing the novice to scramble up and make their own way around a dark space with little knowledge. Do you agree?

THE WITNESS: It’s – yes.


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MR HOWE: We’re not stretching the bounds of common sense here, are we?

THE WITNESS: No.

MR HOWE: No further questions.

COMMISSIONER: I don’t think anyone will argue with that proposition but, I mean, my recollection is that people who were going to be included on the list that didn’t need training are full maintenance people, plasterers. Would you expect any of them to have knowledge of working in ceilings?

THE WITNESS: I would expect a plasterer to have knowledge of working with – working with electrical materials in that – in that when plastering, they – they put staples through – through timber. I would expect the building trade to have a reasonable knowledge of - - -

COMMISSIONER: I wasn’t thinking building trades. I was thinking of a few odd people on the list. Who were they, Mr Horton? Who was on the list?

MR HORTON: Licensed builders, electricians, carpenters, bricklayers, plasterers, painters or plumbers.

COMMISSIONER: Bricklayers. Painters.

THE WITNESS: My experience with – my experience with – with bricklayers is probably not that – that they may not in regards to working in confined spaces, but the others potentially, yes.

COMMISSIONER: Okay. I guess you and I aren’t really experts on that anyway.

THE WITNESS: All right.

COMMISSIONER: Okay. There’s nothing else then?

MR HORTON: No. Might Mr Wilson be stood down.

COMMISSIONER: Yes, would you – thank you for giving - - -

MR FAULKNER: Might I be excused?

COMMISSIONER: Yes, you might be excused. Thank you for giving evidence and you’re stood down.

THE WITNESS: Thank you, Commissioner.

<THE WITNESS WITHDREW [10.55 am]

3.4.14 P-1800 ©Commonwealth of Australia

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COMMISSIONER: We will stop for a break and who’s the next - - -

MR HORTON: Yes. Mr Forbes.

COMMISSIONER: Mr Forbes, yes. Adjourn for 15 minutes.

ADJOURNED [10.55 am]

RESUMED [11.15 am]

COMMISSIONER: Yes. Swear the next witness.

MR HORTON: Commissioner, the next witness is Malcolm Andrew Forbes.

MR M. T. HICKEY: If it pleases the Commissioner, Hickey, initials MT. I appear for Mr Forbes.

COMMISSIONER: Mr Hickey, thank you.

<MALCOLM ANDREW FORBES, AFFIRMED [11.16 am]

<EXAMINATION-IN-CHIEF BY MR HORTON

MR HORTON: You’re Malcolm Forbes; is that correct?

THE WITNESS: Yes.

MR HORTON: And you have prepared a statement dated 28 March 2014 for the Commission?

THE WITNESS: Yes.

MR HORTON: Thank you. Now, Mr Forbes, you had two particular roles in respect of the Home Insulation Program. One was you were its project sponsor.

THE WITNESS: Yes.

MR HORTON: And you describe that, I think, in your statement as being a role which entailed you having overall responsibility for the HIP’s delivery.

THE WITNESS: Yes.

3.4.14 P-1801 M.A. FORBES XN©Commonwealth of Australia MR HORTON

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MR HORTON: And you were chair from April, when the body came into existence, of the project control group.

THE WITNESS: Yes.

MR HORTON: And I think you describe it, or it is described as the primary governance mechanism for the period it existed for the HIP.

THE WITNESS: Up until, I think, the project control group disbanded; I think, some time in November 2009, as I recollect.

MR HORTON: Yes. It seems to have existed between – it seems to have been established in April and ceased in November 2009.

THE WITNESS: Yes. Sometime around November.

MR HORTON: Yes. And you were its chair for the whole period?

THE WITNESS: Yes. There were some meetings that I don’t think I made, but I was chair for the whole period.

MR HORTON: Yes. And you say, in terms of your retirement, that you retired from the Department of Environment September 2010, but you’re, in effect, taking leave from 1 July 2010.


MR HORTON: I understand. Now, could I take you, please, to a document in connection with the PCG. It’s document 002 – AGS.002.007.1863. This is the terms of reference for the project control group. Now, these, Mr Forbes, are dated 20 April 2009 and are in a draft form. But I will just ask you to confirm whether they look like they are in a form which was final or similar to the final version if there was one.

THE WITNESS: Yes. This appears to be a document which, I think, was close to final or final.

MR HORTON: Okay. And just down a little bit, if you would, operator, to the heading Responsibilities of Control Group Members. And, Mr Forbes, it’s just those first two dot points in particular I direct your attention to: providing oversight and strategic direction; ensure high standards of governance are met, and the second - - -

THE WITNESS: Yes.

MR HORTON: Oversight ..... managing risks. So they were the terms of reference which applied to the project control group’s operations.

THE WITNESS: Yes.


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MR HORTON: Yes. Now, you seem to have a background – an expertise in project management; is that correct?

THE WITNESS: I wouldn’t say I have an expertise in project management. My expertise was probably more in relationship to intersections between policy and science and the delivery of government programs in those areas, which included the use of project management in the delivery of those programs.

MR HORTON: Okay. Now, I think you state in your statement – I won’t take you to it unless you need me to – that the Department of Environment lacked skills in the field of project management.

THE WITNESS: I think at that time, I think the generality is yes.

MR HORTON: ..... in order to rollout the HIP in whatever form, need to acquire those skills?

THE WITNESS: Yes.

MR HORTON: And if I can take you to a document, please: MIN.002.001.3517. This is the tier 1 project plan, Mr Forbes, and it’s page 8 I ask you to go to, please, operator. Now, it’s there, where it mentions your name. Project Sponsor, Mr Malcolm Forbes. Deputy Secretary – it’s describing the structure and governance. It’s your responsibilities that I’m interested in there. You approve the project plan, and you assure the project is appropriately resourced, and so forth. Is that a correct statement of your responsibilities as sponsor.

THE WITNESS: Yes. I think that’s a good general statement of my responsibilities.

MR HORTON: Yes. So you seem to have identified it as a risk upfront to the delivery of this program that you did not have yet the requisite project management skills within it?

THE WITNESS: Yes.

MR HORTON: And I think senior officers beneath you, Mr Keefe is one of them, who raised with you concerns of this kind that the Department lacked sufficient resources and there was a lack of organisational agility; do you remember concerns of that kind being raised with you?

THE WITNESS: Yes. I remember discussions to that effect.

MR HORTON: Yes. And so what did you do as a result of having identified those difficulties to appropriately resource the program?


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THE WITNESS: Well, as I recollect, we brought in expertise from outside and moved people internally from whatever Department who had expertise who could assist in that space, and the areas identified where we need extra skill and resourcing.

MR HORTON: Yes. And Ms Kruk, as secretary, I think, instituted a review and restructure process as part of that; is that correct?

THE WITNESS: Yes. I think that was more towards the end of 2009 rather than at the beginning, although there was some restructures in the Department, as I recollect, in the middle of the year, because I had responsibilities, as I recollect, for about six divisions at that time, when it was brought into – under my responsibilities.

MR HORTON: And so to what degree had the requisite expertise in project management been introduced to the Department by 1 July 2009?

THE WITNESS: On 1 July? Prior to 1 July?

MR HORTON: Yes. Prior to.

THE WITNESS: The Department had pre-existing – I think they had a pre-existing project management office which had provided guidelines for project management in the Department, and that included classifications like this document, I think, which had – was a tier 1 document, or a tier 1 project, or a tier 2. And insulation was classified as a tier 1 document under those guidelines which are produced by the Department. But even recognising that the Department had those general guidelines, it was recognised that we needed to bring in specific expertise to assist us to deliver the Home Insulation Program.

MR HORTON: And had the requisite expertise, in your view, been obtained within the Department or by external means by 1 July 2009 to rollout the HIP?

THE WITNESS: We had brought in expertise who had been quite helpful to us in getting the project management up and running.

MR HORTON: Yes. My question was, though, was it, in your view, sufficient expertise that had been obtained before 1 July to rollout the HIP?

THE WITNESS: Well, as I recall, at that time, I was satisfied with the level of support we were getting in terms of project management.

MR HORTON: And you say, though, in paragraph 30 of your statement, in hindsight the Department of Environment could have resourced the HIP differently. Paragraph 30, operator, of the statement.

THE WITNESS: Yes. I said that because later on in the program, as experience – as our experience was developing, it became clear that we were under-resourcing, we were playing catch-up continually, and that we needed to continue to put in more and


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more resources as we progressed, and that in the end we established a taskforce in November which was dedicated to the Home Insulation Program and that included a deputy secretary with sole responsibility in that space as well as first assistant secretary and a number of assistant secretaries rather than just a first assistant secretary with a number of responsibilities and an assistant secretary with a number of responsibilities as well.

MR HORTON: Now, you use the word differently in paragraph 30; you don’t use better and you don’t mean better?

THE WITNESS: What line is that on, again?

MR HORTON: First line of paragraph 30 of your statement.

THE WITNESS: I think you probably could say better, not just differently.

MR HORTON: I ask because in much of the material before the Commission there is reference to a 1 July rollout being a very difficult thing for your Department to achieve. You’re familiar with that material?

THE WITNESS: Yes.

MR HORTON: And that difficulty must, in part, be attributable to the way in which the Department is resourced; correct?

THE WITNESS: Well, not only resourcing, but I actually think the actual timeline itself was a very compressed timeline, and there is always a – difficulties when you actually have a compressed timeline. It doesn’t matter how many resources you throw at it; there’s going to be some challenges.

MR HORTON: Well, focusing for a moment on the resourcing aspect of what you just spoke about: we have talked about project management expertise; what other resourcing besides project management expertise was it necessary to obtain for the Department?

THE WITNESS: Risk management expertise, as I recall. We brought in compliance expertise, which related to fraud, as I recollect. I think we also had advise in relationship to outsourcing arrangements which could be possible under different business models, and there may have been others as well which I can’t recollect just now.

MR HORTON: But you’re satisfied, are you, by 1 July 2009, that the Department is appropriately resourced to rollout the HIP for a commencement on 1 July 2009?

THE WITNESS: I think the answer to that is yes, at that time, because we had managed to meet that 1 July timeline, which I think was a huge milestone, and at the time I think I was relieved that we had managed to get there.


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MR HORTON: Well, you met it, but you met it without, for example, an audit and compliance regime being in place.

THE WITNESS: That’s right. So there was still some outstanding issues.

MR HORTON: Yes. So we will come to that. But taking matters such as that into account, were you satisfied the Department was appropriately resourced as at 1 July 2009 to rollout the HIP in a satisfactory manner?

THE WITNESS: Well, resourcing is always a – I’m not trying to avoid the question, but resourcing is always a dynamic thing. You actually put more resources in as you progress and you feel as though there are shortfalls. At the time of – as I recollect, by the time we were at 1 July, we felt we had the appropriate resources, but I still, as I recollect – I was disappointed that we hadn’t had the fraud and control – sorry – compliance and audit program in place by 1 July, because I saw that as a significant shortfall in our implementation, and that was partly related to a resourcing question.

MR HORTON: So, so far as audit and compliance was concerned, there were concerns in your mind as at 1 July 2009 the department was not adequately resourced or can not be adequately resourced?

THE WITNESS: Well, I think the answer to that is we weren’t adequately resourced but in a – in a way, we – I think the answer is “yes” but there’s always this caveat that we could always put more in but the question was, “Would more resources actually fix the – the compressed timeline?” That was always going to be a challenge for us, that compressed timeline and some of the procurement arrangements which were required which have set timelines which you have to abide by to ensure you’ve got a – a competitive process for some of those purchases, procurements.

MR HORTON: You say you’ve been in this portfolio for about, I think, 33 years?

THE WITNESS: Somewhere around that, yes.

MR HORTON: Have you ever experienced a program of this scale and significance as the HIP in the Department of Environment’s involvement in your 33 years?

THE WITNESS: No.

MR HORTON: And have you ever experienced in that time a program of any size which is under a model such as this where there was direct contact between the householder and the service provider but with the commonwealth funding?

THE WITNESS: No.


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MR HORTON: The department had some experience historically, as I understand it, with programs in which there was a brokerage style system and large contractors in a procurement sort of model where they would contract with and they would provide services to individual households. Is that correct?

THE WITNESS: I can’t remember the specifics of that but I think that’s – that’s right.

MR HORTON: Now, you mentioned this project, the HIP project being a tier 1 project.

THE WITNESS: Yes.

MR HORTON: And I think you say it’s a project of high significance.

THE WITNESS: Yes.

MR HORTON: Is that right? Have you been in other tier 1 projects – been involved in other tier 1 projects in your time in the portfolio?

THE WITNESS: Yes. I was involved with the water reform initiatives of the Howard government and the Rudd government of the Murray-Darling Basin where there was – I think under the Howard government there was 10 billion allocated and under the Rudd government, they increased it to 12 billion, as I recollect. Clearly, those projects associated with that were tier 1 projects.

MR HORTON: .....can I turn to the delivery model for a moment which I embarked on a moment ago. I think you say you weren’t involved in the formulation of the Home Insulation Program policy.

THE WITNESS: No.

MR HORTON: But you were involved shortly after its commencement in – announcement on 3 February.

THE WITNESS: That’s right.

MR HORTON: Yes. Now, you were aware, I think, at the time, you say in your statement, that your department had a preferred model for delivery of the HIP.

THE WITNESS: That’s right. It was being developed by the department, yes, which was a – as I recollect, a brokerage style model.

MR HORTON: Yes. Am I correct in saying brokerage means engagement of larger providers for them to provide the services to householders either directly or through subcontractors and so forth?


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MR HORTON: And do you know why the department had a preference for a model of that kind?

THE WITNESS: I think it was related to trying to distance the commonwealth as much as possible from that direct intersection with householders because that was going to be a – as we perceived it, as a – a difficulty for us because we didn’t have the skill base to actually have that intersection directly. We – we’re going to rely on other expertise to actually utilise that interface – utilise their skill and that interface.

MR HORTON: Yes. With what strength, do you know, did your department – senior people in your department hold the preference for that model?

THE WITNESS: Well, I think the strength we thought it had – it was a robust model but there were problems with it because of the timeline issues.

MR HORTON: And the time issue, you mean 1 July?

THE WITNESS: 1 July.

MR HORTON: And did you regard that 1 July commencement as having been set for your department as being a non-negotiable date?

THE WITNESS: It was non-negotiable, as far as I recollect.

MR HORTON: Yes. If it had posed a particular problem, what could have been done, if anything, to shift the date in your mind?

THE WITNESS: Sorry, could you repeat the question. Are you asking me what could have I done or - - -

MR HORTON: Yes. Is there anything you could have done if you had formed the view that the 1 July date was unachievable to - - -

THE WITNESS: Well, I think we would have discussed it with Prime Minister and Cabinet or the Office of the Coordinator-General, I think, which was Mike Mrdak and I think there were discussions as I recollect with Mr Mrdak about some of those difficulties of actually meeting the 1 July timeline. We would have probably raised it with the minister as well about some of those timelines, so I think we were flagging early that this was a significant challenge to us.

MR HORTON: And were you involved in those discussions with Mr Mrdak or the minister?

THE WITNESS: Well, I certainly recollect discussions with Mr Mrdak and with the minister early on about the 1 July rollout date and the challenge that was going to be


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for us. So they were both very focused on the 1 July so I knew that it was an immutable date.

MR HORTON: And what was the effect of the concerns that you communicated to those men?

THE WITNESS: Sorry, the effect to whom?

MR HORTON: Mr Mrdak and the minister with respect to a 1 July commencement date.

THE WITNESS: Right. Well, my recollection was that they were suggesting that the 1 July was going to be met and that it was up to me to – and the department to ensure that we got there.

MR HORTON: Did you tell them that if a 1 July date was to remain, that there was a real risk that an audit and compliance regime would not be rolled out at or about the time of its commencement?

THE WITNESS: I think – I don’t think I spoke to them verbally about that but I think, as I recollect, there might have been a brief to the minister indicating about we didn’t have a – a compliance – an audit regime in place by 1 July. I think there was a brief to the minister to that effect but I don’t recall briefing the minister or Mr Mrdak verbally that that wouldn’t be in place.

MR HORTON: Okay. So we might find it in a briefing note. I will take you to those in a moment.

THE WITNESS: Yes.

MR HORTON: But in fact, the audit and compliance regime wasn’t in place until September ’09, was it?

THE WITNESS: That’s right. There were interim arrangements in place though where we used our internal audit and some of the internal data coming from Medicare and some of our compliance people to actually analyse some of that data to have some interim arrangements in place, but it wasn’t the full compliance and audit regime which we wanted.

MR HORTON: And there was no one checking until October ’09 whether the installations that were occurring were occurring in accordance with the guidelines and other associated documents?

THE WITNESS: Well, I think in the interim arrangements, there were some targeted roof inspections but I don’t think there was many, but there were some targeted ones which were organised – I can’t remember how – who actually did them but, as I recollect, there were some small scale audit activities which included roof


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inspections but they were highly targeted, as I recollect, based on some of the data coming from Medicare.

MR HORTON: And targeted based, it’s motivated primarily by a desire to detect fraud, that is, whether the installation had actually been done rather than to check its quality.

THE WITNESS: I think in that – the interim arrangement was around fraud not – not about quality.

MR HORTON: And was the impossibility of a 1 July state date with an audit ..... and compliance regime in place something which caused you concern?

THE WITNESS: Yes.

MR HORTON: And, in your view, was that concern enough to warrant the start date being later than 1 July?

THE WITNESS: Well, it would have been preferable to have it later than 1 July but I don’t think we had that as an option. We tried to put the audit and compliance regime in place as soon as we could.

MR HORTON: Now, in late March, there was discussions with the Office of Coordinator-General and officers from your department about the delivery model by which the HIP would be rolled out. Is that correct?

THE WITNESS: There was discussions that I recollect, yes.

MR HORTON: Yes. And it seems that on 31 March there was a meeting with Mr Carter and Mr Keefe with members of the Office of Coordinator-General which you didn’t attend – about that delivery model.

THE WITNESS: I am conscious of that meeting, yes.

MR HORTON: Yes. And as at – the time that meeting occurs, do you have any knowledge of the Office of Coordinator-General having, in its collective mind, the possibility of a different delivery model from the DEWHA preferred model?

THE WITNESS: No.

MR HORTON: And no one from the Office of Coordinator-General spoke to you or emailed you before 31 March about the possibility of a different model?

THE WITNESS: Not that I recollect.


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MR HORTON: Now, the 31 March meeting occurs. Did Mr Keefe or Mr Carter come and see you immediately after that meeting or have any communication with you about what took place?

THE WITNESS: I think they did but I can’t recall an actual meeting, but I think they did because I have it in my mind that I was aware that the meeting had taken place and that there was an alternative model on the table and that discussions were to take place with Medicare and Centrelink soon thereafter.

MR HORTON: Do you recall them ever expressing any displeasure or discontentment with what had occurred on 31 March with their meeting with the OCG?

THE WITNESS: I think – I think Kevin Keefe was upset by the meeting, feeling that he had been – well, I’m not quite sure of the expression but he had been given no prior notice and because – as I recollect it – I think that meeting included Senator Arbib. I think he felt maybe embarrassed that he wasn’t aware that there was an alternate arrangement being proposed.

MR HORTON: And did you have a view, from what he told you, about the appropriateness of what had occurred? I mean in an administrative or organisational sense rather than in a substantive sense.

THE WITNESS: Well, I don’t – I don’t recall. My recollection is that there was an opportunity for another model to be looked at to try and make the 1 July timeline and I had an open mind to actually find that as a solution.

MR HORTON: Yes. But did you think the process – from what you knew, recognising you weren’t there – the process as reported to you that had occurred at the 31 March meeting was one which was appropriate in an administrative sense? By that I mean by presenting a model - - -

THE WITNESS: Well, I wasn’t there so I’m not – I don’t know if I could comment on its appropriateness or not.

MR HORTON: Well, you raised – you raised that Senator Arbib was there. Was that something that surprised you?

THE WITNESS: Well, not necessarily. Sometimes parliamentary secretaries turn up in meetings which, when you arrive you go “Oh” but those things can happen.

MR HORTON: Yes, but happened rarely. Is that right?

THE WITNESS: It’s not common but it happens.

MR HORTON: Yes. It’s just that you raised it, it seems, as something which was unusual about the meeting.


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THE WITNESS: Well, I don’t think we had intersected with Senator Arbib at that point before.

MR HORTON: I see. So it was more that he made his first appearance, is it, at that meeting and not - - -

THE WITNESS: Well, that’s – that’s my recollection of it.

MR HORTON: Yes. Okay. And in terms of the business model which you understood the OCG to be offering, how did you understand it to be different from the brokerage model?

THE WITNESS: Well, I think, as I recollect, it provided a national rollout with a significant IT support base and business arrangements which would be beneficial to the program. In terms of the difference, it meant that the Commonwealth was intersecting directly with installers rather than indirectly.

MR HORTON: Yes. Now you mentioned earlier that as being something which the brokerage model avoided.

THE WITNESS: Well, it avoided theoretically but, of course, the Commonwealth was still responsible nonetheless.

MR HORTON: Quite. But the contact with the householder under the OCG proposed model was closer than with the DEWHA proposed model.


MR HORTON: Now you’ve mentioned that – I think when I asked you earlier about that – as being something that was relevant because of DEWHA’s capacity and experience. Is that right?

THE WITNESS: Could you repeat the question?

MR HORTON: I understood you – earlier, when I was asking you about this question – to have said that was desired because the Department – your department – didn’t have great experience in dealing directly with householders and so forth.

THE WITNESS: Well, we had no experience in dealing directly with householders.

MR HORTON: So when you’re confronted with a possible alternative model which involves the Department more closely with householders, what is your reaction from an organisational point of view to that possibility?

THE WITNESS: Well, it was – I think I was more concerned to – about – I think the intersection would have been through Medicare and that Medicare and Centrelink


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had a lot of experience in that space. So I was relying, in a way, on their ability to intersect with businesses and households.

MR HORTON: How do you think it changed the risk at the time? How did you think it might change the risk for the Commonwealth, that your department having had no experience in that direct contact was now going to have closer contact?

THE WITNESS: Risk in what sense?

MR HORTON: Risk in the sense of exposure to potential problems.

THE WITNESS: Well, we still had exposures so I don’t know if it actually changed that exposure between the brokerage model and the Medicare model. I still think we had some issues we had to deal with nonetheless.

MR HORTON: So you think there was no material difference in risk?

THE WITNESS: I think there was a material difference because we were closer and, as a result, when you’re closer your exposure or risk is more profound than if you were are slightly more at arm’s length.

MR HORTON: Well, you have - - -

THE WITNESS: Even though you still have a responsibility.

MR HORTON: On the brokerage model you had between the Department or the Commonwealth and the householder a large, presumably experienced, corporate provider. Correct?

THE WITNESS: Yes.

MR HORTON: And you had the capacity and contract with that large provider to impose requirements of health and safety and so forth.

THE WITNESS: Yes.

MR HORTON: In addition to what might have existed in the general law.

THE WITNESS: Yes.

MR HORTON: So did that strike you as one difference between the two alternative models that – from the OCG model – you wouldn’t have that contractual connection?

THE WITNESS: At the time, whether I felt that, I’m not sure but certainly from the perspective now, I think that’s quite true.


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MR HORTON: And how did that factor in, then, to your assessment of the risks in a comparative sense between the DEWHA preferred model and the OCG model?

THE WITNESS: Well, I was relying at that time on the analysis which is being done by staff within REED and our contractors, and them providing us advice on what were the residual risk issues which we had. I wasn’t making a distinction, as I recollect, between comparing one and the other as we transition from one to the – if you like, the OCG model through Medicare – excuse me. I was expecting those risks to be analysed and picked up.

MR HORTON: We’ll come to the risk process in a minute for Ms Coaldrake and so forth. All that’s filtering, though, isn’t it, to a point, and that is ultimately to the project control group, is that correct, as from April?

THE WITNESS: Yes.

MR HORTON: And with you as the chair of the group.

THE WITNESS: Yes.

MR HORTON: So you might receive all the advice in the world, but in the end you would accept, wouldn’t you, that decisions of this difficult kind come to your group of which you are chair?


MR HORTON: Now, if I can take you to paragraph 33 of your statement, please. You’re really addressing it in a very general sense here; a topic of risk, I think.

THE WITNESS: Sorry. I didn’t hear what you have said.

MR HORTON: Paragraph 33 you address the topic of risk. I think you’re doing it in a very general sense, at first, here. You say:

In relation to the new business model –

I think, by that, you mean the OCG model.

THE WITNESS: Yes.

MR HORTON:

…taking account of risks around fraud, complaints, and installer and household safety were taken up guidelines, registration process, data management, compliance and audit functions and training.


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Can you just pause on that for a minute. I mean, as at 1 July, I think you would accept that there is no compliance and audit function yet in place.

THE WITNESS: Well, apart from that interim arrangement which we had which was skeletal rather than in depth.

MR HORTON: And you say that was in place in July 2009?

THE WITNESS: Yes.

MR HORTON: And then the registration process: how did risk feature into the registration – how is it dealt with in the registration process?

THE WITNESS: Well, I think that was in relationship to the requirements on installers, as I recollect.

MR HORTON: Yes. And what requirements were they?

THE WITNESS: I don’t know if I have got them in my statement, but as I recollect they were around holding a white card, previous experience in the sector, and training if they had not been.

MR HORTON: Yes.

THE WITNESS: There may have been others, but I think they’re the gist, as I recollect.

MR HORTON: Yes. And we will come back to the issue of training, but you are aware by the time the project is commencing that a new entrant installer might have done nothing more than obtain their OH&S white card, provided they are supervised by someone who has satisfied the necessary competencies.


MR HORTON: And then fraud complaints and installer household safety; how were they dealt with, do you say, in the guidelines and so forth?

THE WITNESS: Sorry. Could you repeat the question again?

MR HORTON: You say – I will focus on the risk of installer household safety. So you were mindful, were you, as at the commencement of the HIP on 1 July that there was a risk of – in terms of installer and household safety.

THE WITNESS: Yes.

MR HORTON: And how in particular do you say that was dealt with in the other matters to which you have referred in paragraph 33 of your statement?


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THE WITNESS: Well, I think, as I recollect, there was a reliance in terms of the installer and household safety on the State OH&S regulations.

MR HORTON: Yes. And is that the extent to which installer and household safety was taken account of?

THE WITNESS: Well, I think it was coupled with a desire, at least from my perspective – a desire to have a comprehensive compliance and audit program in place which would act as a deterrent. That was one reason why I was frustrated at 1 July that it wasn’t in place, but – so from the perspective of 1 July, I think the answer is I probably relied on what was there, but I was also wanting to rely on a far more comprehensive compliance and audit regime.

MR HORTON: And what was there in terms of audit and compliance as at and immediately after 1 July 2009 was woefully deficient.

THE WITNESS: Well, I don’t know if you would say woefully deficient. It was deficient. We had an interim arrangement in place, and as I – I think we mentioned before, the concentration was on ..... rather than quality.

MR HORTON: Yes. So that the guidelines and terms and conditions could say all they wished about how one was to go about installing, but as at and immediately after 1 July 2009, it was highly unlikely that it would ever come to anyone’s attention if an installation was being done badly and unsafely.

THE WITNESS: No. We had a complaints register, and, as I recollect, through the complaints register a number of quality issues arose because of that.

MR HORTON: So that was - - -

THE WITNESS: That was prior to the full implementation of the compliance and audit regime. But some of those, as I recollect, fed into the interim arrangement, which led to targeted roof inspections.

MR HORTON: So the primary mechanism, at least, you say, is a householder phoning and complaining about the quality of an insulation installation; is that correct?

THE WITNESS: Could you repeat the question? I find you very hard to hear.

MR HORTON: Mutually.

THE WITNESS: Sorry.

MR HORTON: The primary mechanism, you say, as at 1 July and immediately after, by which a deficient sub-quality installation had occurred was by a householder phoning and complaining.


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THE WITNESS: Yes.

MR HORTON: That would require a householder, wouldn’t it, to get into the ceiling and assess whether the installation had been done properly?

THE WITNESS: Well, I think, in a practical sense I think the answer to that is yes.

MR HORTON: Not something, surely, you were seeking to encourage or rely upon at the time?

THE WITNESS: Well, we were encouraging the intersection – of the normal intersection which had operated prior to HIP of the intersection between an installer and a household. And we were expecting, as I recollect, that formal intersection between a household and installer to remain. We weren’t wanting the householder to not have any responsibility, and I’m sure most householders wouldn’t have given away their responsibility about what was happening inside their houses.

MR HORTON: But, with respect, you weren’t, because you wanted an audit and compliance and regime.

THE WITNESS: Well, I wanted it backed up with an audit and compliance regime.

MR HORTON: And that, as you said, except in a very rudimentary sense, was just not in place at 1 July or immediately afterwards?

THE WITNESS: It was an interim sense. I didn’t say rudimentary; I think you said rudimentary. It was an interim arrangement.

MR HORTON: But I think you agree with me: it was focused on fraud only.

THE WITNESS: Yes. Yes. I understand that.

MR HORTON: You said there were very few roof inspections undertaken; correct?

THE WITNESS: Yes.

MR HORTON: And just tell us, who was doing all that?

THE WITNESS: Well, I can’t recall who was doing it, but we were – that was on the contractor as I recollect.

MR HORTON: It’s pretty important information, isn’t it, and information for you to have known then who was doing this audit and compliance regime that you thought so important as at 1 July.

THE WITNESS: Well, it was certainly – our internal audit, as I understood it, which was ..... There was a compliance committee which involved compliance


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people then – DEWHA staff, and I think there were some contracts outside, and I don’t know who those contractors were who were undertaking those desktop orders and roof inspections. And I think there was also discussions with the Australian Federal Police, as I recollect.

COMMISSIONER: What was it actually happening? I mean, you talk about committees and so on. Was somebody actually getting up into a roof a from 1 July - - -

THE WITNESS: From my understanding - - -

MR HORTON: - - - and inspecting someone’s roof?

THE WITNESS: My understanding, Commissioner, is that some were re-inspected.

COMMISSIONER: What percentage; any idea?

THE WITNESS: I think it was a very low percentage. And, as I said, they were targeted, and I think they were targeted around potential fraud rather than safety-related issues, although some may have been depending on the complaints register which came through.

COMMISSIONER: Just while I’m talking to him, isn’t there a psychological problem in rolling out something like this in so far as people are getting it for nothing so do they not, sort of, say, “Well, that’s terrific.” You know, “Install stuff in my room. I don’t really care very much what it is. I won’t have a look at it. The government’s paying for it anyway. I can’t lose.”

THE WITNESS: I think some people would interpret it like that, but not all, because when you have activities in your own home, there’s always issues about making sure you get what you want.

COMMISSIONER: Even if somebody rings up and says, “Hey, there’s this new insulation scheme. The government’s paying for it. I have got a deal for you. I can put it in free tomorrow.” You think people - - -

THE WITNESS: I think there’s always going to be an issue like - - -

COMMISSIONER: - - - are going to be generally concerned about making sure that it happens right?

THE WITNESS: Well, I think your first interpretation, there’s probably a significant element of that, but I wouldn’t say that it’s in totality.

COMMISSIONER: Okay.


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MR HORTON: And I want to take you, Mr Forbes, to some of the briefing notes. I think you mentioned them earlier; about the change or possible change to delivery model. And the first one, operator, is the briefing note of 2 April 2009, which you should have a copy of yet, but which I don’t think yet has a system number. I’m going to take you to four briefings, Mr Forbes. Each of them seems to have – has been copied to you.

THE WITNESS: Right.

MR HORTON: Now, this first one, Mr Forbes, was prepared by Mr Keefe on or about 2 April 2009. You’re not seeing a signed version; it’s a draft which Mr Keefe provided. Just have a look at it, would you, and tell me whether you recollect having seen it on or about 2 April 2009? And the operator will move down if you want to see the main parts of the document.

THE WITNESS: So, what, is there any particular thing you wanted me to look at?

MR HORTON: There is. But, first of all, do you recall the document?

THE WITNESS: Yes. I think I recall this. Yes.

MR HORTON: And documents like this regularly came through you because of your position in the Department?

THE WITNESS: Yes.

MR HORTON: From Mr Keefe; is that right?

THE WITNESS: From Mr Keefe.

MR HORTON: Yes. And would you have any input, usually, into briefings of this kind, either before they’re written or as part of the drafting process?

THE WITNESS: Well, it would depend on the particular brief. I think if there was confirmation, if you like, of seeking the Minister’s approval for something and it arose out of the project control group, I would expect those decisions from the project control group to be included within the general gist of these briefs, and I would expect Kevin Keefe to faithfully pick those up and - - -

MR HORTON: Yes.

THE WITNESS: - - - take them forward. But I wasn’t involved in the drafting of these briefs.

MR HORTON: I understand. Would you go, operator, please, to the bottom of the first page. There’s a heading, Managing Risks, and over to the second, which is the continuation of the same paragraph. I note – that’s it. If you can show – that’s


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perfect. This is the bit I want to direct your attention to, Mr Forbes. Just read that paragraph to yourself.

THE WITNESS: Yes. I have read the paragraph.

MR HORTON: It’s just that paragraph I want you to read for the minute: Managing Risks.

THE WITNESS: Yes.

MR HORTON: That’s an example, is it, of a briefing drawing attention to the difficulty of achieving 1 July 2009?

THE WITNESS: Yes.

MR HORTON: I don’t think you there raise the problem of audit and compliance as being one of the things which may not be able to be fully implemented by that date.

THE WITNESS: No. I think it occurred later than this.

MR HORTON: Yes. And this is occurring on or about the time there is a meeting, I think, between your Minister and Senator Arbib in Sydney.

THE WITNESS: So what date was that? I just - - -

MR HORTON: The meeting occurs, I think, on 3 April.

THE WITNESS: Okay.

MR HORTON: And this briefing seems to be before that, but - - -

THE WITNESS: Right. Okay. Yes.

MR HORTON: Yes. Now, by this stage, just thinking more generally, you have commissioned Minter Ellison to prepare a risk assessment; Ms Coaldrake.

THE WITNESS: Yes, I think that was done prior to this date, yes.

MR HORTON: Yes, I think in March. And I think you’ve already received by this time – by 2 April, you’ve already begun to receive from Minter Ellison the draft of the risk registers.

THE WITNESS: Well, yes, but I don’t know if I saw them at that particular point in time – but yes.


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MR HORTON: No, well, I will come back to ask you specifically about what you did soon but you were aware, generally, that by this time you – your department has started to see some output from Ms Coaldrake about risk.

THE WITNESS: Well, it’s mentioned here. Yes.

MR HORTON: And the next briefing, please, is one dated – it looks the same, operator. It’s also one that doesn’t yet appear to be on the system. Now, Mr Forbes, this has a similar providence to the first one. It’s a draft. It’s provided by Mr Keefe and dated by him to be 5 April as a draft - - -

THE WITNESS: Right.

MR HORTON: - - - only.

THE WITNESS: Did these have status? I just don’t understand what you’re saying.

MR HORTON: What I’m really saying is this, I’m not representing this to have definitely gone to the Minister. I’m representing it as being provided by Mr Keefe as, in effect, probably having gone but we don’t have for you the signed version to show it definitely went - - -

THE WITNESS: Okay.

MR HORTON: - - - to you or to the Minister – which is why I’m asking you whether you recall it first.

THE WITNESS: Okay. All right.

MR HORTON: Yes. In this case, it case it goes to Ms Kruk, the secretary, but it goes – it seems – through you and Mr Carter.

THE WITNESS: Yes.

MR HOWE: With respect, I don’t think there’s any real evidence that it actually went.

MR HORTON: I’m going to ask whether it did. Do you recall seeing this document? And again, ask the operator to scroll if you want to see more of it.

THE WITNESS: Could you scroll down further? Well, I think something like this would have been provided to the Secretary because I went – as I recollect, I did go to a meeting with the Secretary, with Centrelink and Medicare, and I don’t know whether this is the briefing for the Secretary before that meeting. It looks like it is.

MR HORTON: Yes, so you can’t recall this specific document but you recall seeing something along these lines about this time.


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THE WITNESS: Well, I would have expected that the Secretary would have received a briefing along these sorts of lines - - -

MR HORTON: Yes.

THE WITNESS: - - - from – is this from Mr Keefe, you said?

MR HORTON: This one purports to be from Mr Keefe and is dated 5 April - - -

THE WITNESS: Yes, I would have thought Mr Keefe would have done something like this.

MR HORTON: Yes. And then if you just go to the bottom of the first page, please operator. “Business models” is the paragraph I would like to draw your attention to, Mr Forbes.

THE WITNESS: Yes. Go over the page.

MR HORTON: And does that, in your mind, adequate summarise the risks as they then stood so far as you were aware of them?

THE WITNESS: Which risks are you talking about? The business models or - - -

MR HORTON: Yes.

THE WITNESS: - - - the issues, sensitivities?

MR HORTON: The business models.

THE WITNESS: I think that is a reflection of what it was – what was being considered at that time, yes.

MR HORTON: Yes. At this time - - -

THE WITNESS: And this was – you were saying – around the beginning of April, wasn’t it? By 9 April, yes.

MR HORTON: 5 April. Yes, but you’re seeing the word 9 April there, aren’t you, which is - - -

THE WITNESS: Well, I’m seeing the word 9 April in the paragraph.

MR HORTON: Yes. That is, it’s got to be – in effect, decisions required by 9 April.

THE WITNESS: Yes.


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MR HORTON: Now, 9 April is the same day, isn’t it, that Ms Coaldrake provides to your department the risk register?

THE WITNESS: Well, if I – as I recollect, I think that’s the same date, yes.

MR HORTON: Yes. How, then, in your mind are these changes which are taking place, or potentially changes taking place, being filtered back through to Ms Coaldrake to be taken into account as part of her process?

THE WITNESS: Well, I don’t know the mechanics of that but I would have assumed that staff within REED, in Kevin Keefe’s branch, and Ms Coaldrake were discussing the progression of these models. When was the – the PM&C one came on 31 March, wasn’t it?

MR HORTON: The meeting I’ve asked you about - - -


MR HORTON: - - - was 31 March. The meeting with Senator Arbib was – the meeting in Sydney with Senator Arbib was 3 April.

THE WITNESS: So I would have thought that as these were evolving that Minter Ellison through Ms Coaldrake was being kept informed of those.

MR HORTON: Yes.

THE WITNESS: That’s an assumption I’ve made. I don’t – I wasn’t actively involved so - - -

MR HORTON: Yes. You yourself are not filtering it - - -

THE WITNESS: - - - I can’t tell you the mechanics.

MR HORTON: I’m sorry, I interrupted you. You yourself were not filtering it through to Ms Coaldrake. It’s not your role at this stage to do so.

THE WITNESS: No.

MR HORTON: And - - -

THE WITNESS: I don’t think I had met Ms Coaldrake at that – at this point.

MR HORTON: Yes. And the PCG hasn’t yet commenced in a substantive way.

THE WITNESS: Well, it was about to commence I think around this date.


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MR HORTON: Yes. But you assume but don’t know that changes of the kind revealed in these briefing notes are being filtered through to Ms Coaldrake to take into account in her risk assessment.

THE WITNESS: Well, I’m assuming that they were.

MR HORTON: Yes. It would be necessary for them to be – is that right – for the risk assessment to be worthwhile?

THE WITNESS: Well, good practice would suggest that they should be.

MR HORTON: I take – just two more briefing notes to take you to, Mr Forbes. The next one is AGS.002.005.0719. Now, this one is dated 9 April, Mr Forbes. It’s not signed but we do have elsewhere a signed version.

THE WITNESS: I’m sorry, did you say this one isn’t signed, though?

MR HORTON: Yes, we – the one you will be shown is not signed but one in identical form exists - - -

THE WITNESS: Okay.

MR HORTON: - - - in signed form. Now, one of the recommendations at the end of the note on page 2, Mr Forbes, is ..... a note, “This briefing and the proposed business model”.

THE WITNESS: Yes.

MR HORTON: So by this stage it seems the delivery model is ..... and if you just go back up to the first page, please operator. And to the second last dot point of the page please, in particular, unless the witness needs to see some – do you recall seeing this briefing note or one like it?

THE WITNESS: I see – I recall seeing one like this, yes.

MR HORTON: And then I just draw your attention to the second last paragraph, saying residual risk - - -

THE WITNESS: Yes, I see that. Yes.

MR HORTON: - - - around ..... complaints and ..... householder safety – household safety will remain. And the strategies for managing these were built into the business model wherever possible or dealt with on an ongoing basis after it has been placed. And if you just look up to two dot points above that, please, Mr Forbes. The one beginning with ..... provide a policy direction, and audit and compliance is there mentioned. Now, apart from that reference to audit and compliance, there doesn’t seem to be any specific advice here saying, look, we’re going to have difficulty


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getting an order of compliance regime of any substance up and running by 1 July 2009.

THE WITNESS: That’s right but I think, as I recollect, my concern around the ability to deliver audit and compliance arose closer to – after this date. That – as we were progressing towards the 1 July, as we were monitoring – as the PCG was monitoring the Gantt charts about what was required to get everything in place, the ordinate compliance regime started to fall away and I think that started to happen, in my mind, some time in May but I may be mistaken.

MR HORTON: And why did it fall away?

THE WITNESS: I think it was a resource question but I think it was also the ability to – for Medicare to accommodate larger changes to their IT systems to accommodate new regimes associated with the compliance and audit function. Now, that’s as I recollect it. I think there’s also an issue about whether the Department could define carefully what it actually required for its compliance and audit requirements of Medicare. So, like all IT systems, if you don’t define it clearly, you won’t get what you want, and I think that was the struggle which the Department had; was defining clearly what was required of the Medicare system in the compliance and audit side.

MR HORTON: Now, before we leave this – I’m sorry.

THE WITNESS: Yes. No. I think I had finished.

MR HORTON: Before we leave this briefing note, you seem to have been mindful at this stage, or it has been drawn to your attention, of the risk attached to installer and household safety; is that right? Do you remember seeing that in this briefing note?

THE WITNESS: Yes. I think – it’s certainly there, so I would have seen it.

MR HORTON: Yes. And is it something you can remember now as being in your mind then?

THE WITNESS: I think I was – in my mind now I think about it all the time, but in my mind back in April I think I had in my mind issues related to trying to get to 1 July, and that was the key strategic issue for me, not the – at that time, subsidiary issues associated with fraud, complaints, and installer/household safety. I was more concerned about making sure we got to the 1 July. So that was my strategic focus at the time.

MR HORTON: And you’re identifying, aren’t you, this tension, by saying that you have the non-negotiable start date of 1 July, which you seem to have said you didn’t feel you had the reasonable possibility of changing, and as against that, you have –


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and you used the word – I know not in a pejorative manner, but you used the word subsidiary.

THE WITNESS: Yes.

MR HORTON: You had other issues to deal with but which seemed to have been - - -

THE WITNESS: They weren’t first-order, might be the better expression.

MR HORTON: All right. I will give you a chance to ..... you have these other issues to deal with, but which in terms of priority were demoted below the absolute imperative: a 1 July ’09 start.

THE WITNESS: Yes. I think that’s a fair assessment.

MR HORTON: Now, you wish to change the word ..... subsidiary to what did you say?

THE WITNESS: Well, I said first-order which is – equates to priority.

MR HORTON: Yes. Yes. That is, you confronted something with something you can’t change, the start date, with the others which will just have to come when they can.

THE WITNESS: Well, we would have to deal with them as we were progressing.

MR HORTON: Now, can I take you to the final briefing note: AGS.002.012.1240. You will be glad to know this is signed and stamped, so it seems to be one that did progress through the system, at least to the Minister.

THE WITNESS: Just as a comment - - -

MR HORTON: Yes.

THE WITNESS: - - - I understand why something may not have gone through the system, because of the rush of getting things through and making sure the Minister and the Minister’s office was informed. Now, I don’t know why Kevin Keefe didn’t register them, but one would have thought they should have been.

MR HORTON: Yes. Now, look, he may have. I don’t think .....

THE WITNESS: Well, he might have, but in some instances he may not have.

MR HORTON: No. But I think it’s fair to say in respect of at least the 2 April one, Mr Keefe said, “I may never have formalised it because of the urgency; the meetings the next day. So I may have briefed by email.”


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THE WITNESS: Yes.

MR HORTON: Yes. And this last one is dated. Mr Keefe signed it on – or put the stamp on it on 11 May, and the Minister seems to have signed it on 13 May 2009. And this seems to be another briefing note about the delivery model which comes – seems to – do you remember seeing it?

THE WITNESS: Well, I recall – I must – I would have seen all of these briefs.

MR HORTON: Yes. And then, by all means, familiarise yourself with it through the operator, but it’s the second page I would like to draw your attention to and the heading, Issues or Sensitivities. Now, I think you said, albeit guardedly, by May the issue audit and compliance was more in your mind because 1 July was coming closer. Do you recall it being raised in this briefing or at anywhere else those concerns you had about the Department’s capacity to have in place a full audit and compliance regime by 1 July 2009?

THE WITNESS: I don’t see it here, I don’t think. Unless you can draw it to my attention, but I presume you’re drawing it to my attention because it isn’t here.

MR HORTON: I think so.


MR HORTON: Now, that’s not to suggest you didn’t do it elsewhere. I’m just really asking you do you recall doing it elsewhere, and if so - - -

THE WITNESS: What date was this?

MR HORTON: This is signed by the Minister on 13 May but prepared by Mr Keefe on 11 May.

THE WITNESS: I think – I don’t have a recollection of raising it around this time, but it would have been in my mind because of – at the PCG, we would have been looking at the Gantt charts and our progress against it. Now, I’m not sure at this particular point what the Gantt charts were saying.

MR HORTON: Now, finally, on the audit inspection point, does it sound correct to you that as at October 2009 there may have only been 172 roof inspections when 400,000 installations have occurred?

THE WITNESS: October?

MR HORTON: 2009.

THE WITNESS: I’m sorry. I thought you said 2001. What was the figure again?


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MR HORTON: So 172 roof inspections done as at October 2009, with 400,000 installations by then having been effected.

THE WITNESS: That would have been interim arrangements prior to PWC coming on as full contract. I think it’s – I can’t recall a figure, but it may well be something like that, and I know it was low, and they were targeted, and I recall being frustrated at that as well.

MR HORTON: Well, the point I am really wishing to suggest to you is not only is that there weren’t – is that: (1) they were very late, very many months after 1 July; and (2) - - -

THE WITNESS: Well, it depends. What did you say, 182 or something?

MR HORTON: 172.

THE WITNESS: 172. Well, it depends on when they were done when you say it was late after 1 July. Some of them may well have been done in early August.

MR HORTON: Yes. Well, if there’s 172 and there has been 400 installations (sic), it’s a very low inspection rate.

THE WITNESS: A very low inspection rate; I quite agree.

MR HORTON: And yet there has been July, August, September. There has been four months in which to have the system up and running and inspections taking place after 1 July.

THE WITNESS: Well, that’s three months; that’s not four months, if my arithmetic is right. July, August, September.

MR HORTON: Yes. At least three months.

THE WITNESS: It’s a big number, and it’s a very small percentage.

MR HORTON: Yes. That inspection regime begins as one, it seems of – I think you have accepted – focused on fraud. At some stage, does material come back from the inspectors saying fraud shouldn’t be your only worry when you are dealing with this program, and you should be worried, too, about safety and compliance.

THE WITNESS: It’s sometime between – well, certainly after July, and I think it was during August that we had issues about safety in addition to fraud coming through the complaints register, and also I can’t remember when the first fire was reported. I think that was sometime in August as well, but it might have been early September. I can’t recall the exact date.


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MR HORTON: But, yet, the inspections continue to focus, it seems, primarily on fraud, at least for some months. Is that right?

THE WITNESS: Well, I think that was because that was dependent on the capacity of who was actually doing those inspections for us, and, as you asked me before, I can’t recall who was doing those. But it was associated with the interim compliance regime.

MR HORTON: Do you recall, though, at one stage, in about October 2009, things changing in terms – came back from the inspection people that you had a real concern – ought to be very concerned about safety and not just fraud.

THE WITNESS: Well, as soon as we started to get those first reports from PWC, because I think we actually asked them to be looking carefully at safety issues, that it was clear in our minds then that we had significant issues around safety.

MR HORTON: Now, do you remember who it was from PWC that might have raised that with you and the terms in which they did and when?

THE WITNESS: Look, I think we had PWC at PCG meetings, I think, and I think they reported there, but I think it was also reported through – they would have been reporting to the compliance committee, which I recollect also reported to the PCG. And that would have been around that time.

MR HORTON: About October 2009?

THE WITNESS: Around – about October. But we might have even had some early indications in September, but I can’t - - -

MR HORTON: Yes.

THE WITNESS: - - - get the exact date in my head. But, certainly, around October is a good general time.

MR HORTON: Yes. And PWC started, I think, the process in September 2009.

THE WITNESS: Peter?

MR HORTON: PWC started its inspection process in 2009; September 2009.

THE WITNESS: Well, certainly around that time. I think it took them a while to ..... as I recollect.

MR HORTON: Yes. And did PWC suggest that the audit and inspection regime be changed so as to change the focus or incorporate safety within it?


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THE WITNESS: No. I think that came from ourselves, I think, but I stand to be corrected. I certainly remember safety was certainly our concern and we wanted roof inspections to include safety issues. Because, I think, around that time there was also the fires, and so we were very concerned about those, and that was prior to the end of September. As I said, I thought some of the first fires were in August. I can’t remember exactly. So safety was very much in our mind from then.

COMMISSIONER: Mr Forbes, earlier in the day, one of the documents you were shown – I saw at the bottom of the page that the combustibility of materials should be – of the insulation materials should be checked. Was that ever done?

THE WITNESS: I don’t recall, Commissioner. It may have been in – by the technical people early on, but - - -

COMMISSIONER: You don’t know?

THE WITNESS: - - - I don’t recollect anything about that.

MR HORTON: And I would like to talk to you about risk management in more detail. You commenced that discussion, I think, in paragraph 34 of your statement under the heading, Risk Management.

THE WITNESS: Yes.

MR HORTON: You engaged Minter Ellison in about March. Do you say you didn’t ever meet with Ms Coaldrake, at least in the early days?

THE WITNESS: I think I met Ms Coaldrake. At PCG was the first time I met her.

MR HORTON: Yes. Which would be in April, after she has delivered the risk register; is that correct?

THE WITNESS: Well, whenever the first PCG meeting was, and the report from Minter Ellison.

MR HORTON: Now, Ms Coaldrake seems to deliver on 27 March a draft or early version of the risk register. Do you remember that happening?

THE WITNESS: No. I don’t recall that.

MR HORTON: And you don’t remember her discussing – well, it’s not possible that you attended a meeting on or about 27 March present with Mr Keefe and the Coordinator-General with Ms Coaldrake to discuss risks with Ms – with her?

THE WITNESS: Well, I don’t recall being there, but, look, I may have.


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MR HORTON: I might show you a document to see whether you do recall. Could you please bring up, operator, MIN.002.001.3921. If you just scroll down, would you, please, operator, so we can more familiarise ourselves with the document. Now, no mention of your presence, but I think Ms Coaldrake has a recollection that you were present with Mr Keefe and the Coordinator-General as possibly being other participants; she says may have been participants. Do you have recollection of being there?

THE WITNESS: Look, I don’t recall it, but I may well have been.

MR HORTON: Yes. I might ask you to be shown the risk register as at 27 March as well. Just see if that prompts any recollection. Could the witness be shown the hard-copy risk register. Tab 1, please. Tab 1. Now, this is understood to be, Mr Forbes, the risk register as at 27 March; you will see the notation there on the top right-hand corner of the page.

THE WITNESS: I notice it’s highlighted here. Is that what you’re wanting me to concentrate on?

MR HORTON: I’m sorry, is there something highlighted?

THE WITNESS: Yes, row 4.

MR HORTON: Right. Now, you can – we will ignore that for the moment. I mean, we note it but it’s not specifically going to be referred to at the moment. The think the dark boxes – this would have been in colour perhaps originally. The dark boxes, I think, are probably red. The darkest boxes are probably red. Is that correct?

THE WITNESS: Well, a dark – it has got an “E”, I think seen through so – which I presume means “extreme”.

MR HORTON: Yes. So do you recall seeing this document? Does it prompt any memory about having attended a meeting perhaps on that day with Ms Coaldrake?

THE WITNESS: Well, I’ve seen documents like this because these were the sorts of registers which came to the PCG but I can’t recall seeing this specific document. I may have but I – I just cannot recall.

MR HORTON: And you don’t recall Ms Coaldrake saying at the time that she had never seen such a red risk register as this one?

THE WITNESS: Look, I don’t recall but there’s no doubt that it’s pretty red. If – where all the extremes are.

MR HORTON: And do you recall yourself, whether through Ms Coaldrake or otherwise, on or about 27 March, seeing a document of this kind?


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THE WITNESS: Well, I’ve seen documents of this kind but I can’t place myself on the 27th. Look, I may well have been there but I – I just cannot recall.

MR HORTON: Sure. So while on the topic of risks, you’ve already seen the briefing note that you – it was mentioned in there that there was a – one of the risks was installer and household safety.

THE WITNESS: Yes.

MR HORTON: You say, I think, in your statement, you’re not sure that the New Zealand comment made by Mr Ruz at the 18 February 2009 industry consultation meeting was ever drawn to your attention.

THE WITNESS: I certainly don’t recall it.

MR HORTON: Can I go to that paragraph of your statement. It’s paragraph 39. You become aware of from an oral briefing from REED staff, but the second sentence, you recall it being raised with you following the first tragic death. The sentence I wanted to ask you about is the last sentence on that page that begins:

I have a recollection that when it was raised, I was advised it was different from the HIP.

THE WITNESS: Yes.

MR HORTON: Now, are you talking about the same point in time. That is, you’re saying that when it was raised was following the first fatality.

THE WITNESS: As I recollect, it was at that time but I may have been told earlier but I can have no recollection of an earlier briefing regarding the New Zealand experience.

MR HORTON: If it – accepting your lack of – you know, your recollection or no recollection for the minute, it’s likely, isn’t it, that risks of this kind which had been identified early on in the HIPs development would have been somehow drawn to your attention in some document or another.

THE WITNESS: Well, I would have thought it would have been drawn in the – in the risk assessment.

MR HORTON: Yes. And - - -

THE WITNESS: Whether it would have specifically say the New Zealand experience, I – I can’t recall that.

MR HORTON: Yes. And you haven’t since gone and found out what the New Zealand experience was?


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THE WITNESS: No.

MR HORTON: And - - -

THE WITNESS: So it’s only recollection of what was said to me.

MR HORTON: Yes. And so nothing that has occurred has prompted you to go back and learn since what the New Zealand experience is that might be being referred to?

THE WITNESS: No.

MR HORTON: Is it possible it was drawn to your attention and you had the same reaction then, that is, not important for the HIP?

THE WITNESS: Well, from this point in time, I think it was important but at that particular point in time, certainly when I was aware it related to October 2009, it was relevant. Now, if I was aware of it prior to that, I cannot recall. So I – it’s very hard for me to place myself prior to October two thousand and – 2009 and indicate its relevance or not to where we were in the development of the program from April through to 1 July, which I think is what you’re trying to ask me about but I don’t recall it in that context.

MR HORTON: And we would see it in a briefing note where installer/household safety is being mentioned to you, did that make you inquire what that particular risk entailed or how it had come about?

THE WITNESS: Well, I’ve been into my own roof so I’m just conscious that when you go into your own roof, there’s some – a lot of difficulties.

MR HORTON: Yes. And from that experience, what sort of difficulties are you referring to?

THE WITNESS: Well, I’m referring to – well, I don’t know about other people’s roofs, but mine was an absolute mess. It had batts around all over the place rather than in place and so I was just conscious that it was a – that space is not an easy space to be – to be in because at one point, I was contemplating putting my own in but this was prior to this program – well prior to this program when I was in a roof.

MR HORTON: And part of that experience tells you also that there might be electrical risks in your roof, in your ceiling board?

THE WITNESS: Yes. Because my father and I was a – an electrician.

MR HORTON: Sir, can I take you to paragraph 36 of your statement, please.

THE WITNESS: Sorry?


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COMMISSIONER: Before you go to that – please, if you don’t mind – while you’re on 39, I’m interested in the last phrase there and that banning foil in that context would not have the same ramifications as it would in Australia. What did you mean by that?

THE WITNESS: I think I was – I think I had in my mind when I wrote that that there was a meeting, as I recollect, in parliament house after the first tragic death in Queensland which the minister hosted and it was with a range of experts and, as I recollect, there was discussions about the banning of foil and I think I wrote it in that context.

COMMISSIONER: But, I mean, the impression I get from that is that there’s some pressure there not related to safety and that it might have financial ramifications for a big company or something like that. Am I misinterpreting what you say because you don’t say it clearly but the word “ramifications” is interesting?

THE WITNESS: Well, I may have been – I’m not trying to be obtuse here. I think I – but it may have – may have been related also to economic consequences of banning foil as an option for construction but I don’t think it was my prime motivation in putting it in.

COMMISSIONER: All right. COMMISSIONER: Perhaps there’s not enough foil – perhaps there’s not enough insulation material to satisfy the need at that time.

THE WITNESS: Look, I can’t – I can’t recall, Commissioner.

MR HORTON: Paragraph 36 of your statement, you say – towards the middle of it:

I do not recall being advised specifically of fire and electrical risks.

Do you see that - - -

THE WITNESS: Yes, I do. Yes.

MR HORTON: But you didn’t need to be advised of that because, on the evidence you just gave, this was something that was already in your mind – no?

THE WITNESS: I don’t know about fire but certainly electrical was.

MR HORTON: So why – why do you wish to say there that you weren’t advised of these things?

THE WITNESS: Well, I don’t remember being actively taken through all the different risks around safety, and that’s probably from my perspective now. But – so that’s why I think it’s there, from my perspective now rather than actually at that point in time when I was – back in 2009.


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MR HORTON: It astounds, though, doesn’t it that you weren’t, for one of two reasons. One, people below you conducting sessions with industry and so forth ought to have taken you through issues like that fairly comprehensively, yes?

THE WITNESS: Well, not necessarily. One would hope that – I would have hoped that that would be reflected in the risk registers and it didn’t necessarily had to be specific. It had to be made strategic and so I was in a – in a position to be able to make judgments across the board rather than necessarily specific on each individual risk element.

MR HORTON: And second – the second reason is you’re not an empty vessel. You know about at least electrical risks from your own experience or are attuned to that possibility so why don’t you call for people to take you through the risks more comprehensively than they did?

THE WITNESS: Well, I think the answer was, tragically, I was focussed on the 1 July rollout rather than what we discussed before, the higher priority issues.

MR HORTON: Yes.

THE WITNESS: That was the priority. These ones weren’t.

MR HORTON: And that tended to swamp.

THE WITNESS: Yes.

MR HORTON: At least until those other matters were dealt with – the program’s consideration.

THE WITNESS: Yes.

MR HORTON: And so had there been more time allowed before the commencement of the project, it’s likely – you think – that questions of risk, particularly electrical risk, might have been given more and better attention.

THE WITNESS: Well, with more time you end up with more ability to have your hands on. Now, I didn’t have that time so I think the answer to your question is that time if time was not such a key priority, other considerations would have come to a higher priority.

MR HORTON: Now, I want to take you to a couple of documents to see if matters of this kind were ever raised with you at or about this early April time. Could the witness please be shown AGS.002.029.0929. Now, a technical workshop seems to have taken place on 3 April, Mr Forbes. It’s not suggested from this document you were in attendance. But if you would scroll down please, operator, a little bit when the witness is ready. I just want to direct your attention to safety issues, the heading, and the second dot point. Do you recall nothing come to you at or about this time, 3


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April, from bodies like this or people below you saying please be aware or remember we’ve got issues being identified by people lower than you but it’s really being very serious issues, catastrophic consequences, death, serious injury. And could you just be mindful of those when you’re considering these matters.

THE WITNESS: I don’t recall it at all.

MR HORTON: Yes. Are they - - -

THE WITNESS: I don’t recall even seeing this document.

MR HORTON: With the systems working well, how should issues of this kind – safety issues with catastrophic consequences – be drawn to your attention?

THE WITNESS: Well, there’s probably a number of mechanisms, the way it could have been done. It could have been done verbally. It could have been done in briefings to the PCG about particular risks. It could have been done in a formal brief to me as well.

MR HORTON: Can I show you a document and suggest to you it might be one example of it. MIN.002.001.5875, which is an email from Ms Coaldrake on or about 24 March, not to you but people who you would be familiar with, I think – Ms Marconi, Ms Reardon, Mr Kimber and others – with an attached project meeting agenda and then a revised project plan. Are you familiar with types of documents? Did you ever see these?

THE WITNESS: Well, not of this sort. I mean, I’ve seen reports in meetings but I don’t remember seeing – could you just scroll back to the top?

MR HORTON: And Ms Coaldrake is an apology but I think her offsider might be Mr Chalmers at the time.

THE WITNESS: Right. I don’t remember seeing this document.

MR HORTON: The page I would like to take you to is page 4 of the document, I think. It might be a bit further than that, six or eight. It’s point 15 I’m looking for, operator. A bit further down. That’s it. “Outcomes of risk identification workshop”, you see there, Mr Forbes, is the heading of this part of the document. And then it’s item 15 I would like to take you to. Further down. Now, item 15, if you would just familiarise yourself with that.

THE WITNESS: Yes.

MR HORTON: You see installer injuries mentioned there, the second last dot point.

THE WITNESS: Yes. With an asterisk.


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MR HORTON: And then to the right is, “The likelihood is likely. The consequence is major.”

THE WITNESS: Yes.

MR HORTON: So is this one way that the risk of installer and household safety is being gleaned from those who might have specific knowledge?

THE WITNESS: Yes. I agree.

MR HORTON: And then this ought to find itself, should it, incorporating into the risk register which comes to the PCG?

THE WITNESS: Yes.

MR HORTON: Now, can we go to that risk register again, please. I think you’ve got the big folder there, Mr Forbes, perhaps. Now, I want to take you to a version which is 9 April which, you might recall, is the first – in inverted commas – “final version” that Ms Coaldrake delivers - - -

THE WITNESS: Yes.

MR HORTON: - - - even though, of course, it’s revised on an ongoing basis in the future.

THE WITNESS: Yes.

COURT OFFICER: Tab 4, Mr Horton?

MR HORTON: Tab 4 please. That’s the 9 April, it seems. Now this came to you, didn’t it, Mr Forbes, on 9 April?

THE WITNESS: Yes, I’ve seen this before. Yes.

MR HORTON: Good. And you’re familiar with it?

THE WITNESS: Well, I was familiar with it at that point. I don’t know whether I’m familiar with it now but certainly then.

MR HORTON: Have you seen it since that time?

THE WITNESS: I remember seeing – seeing it again when I were reviewing these documents before going to the senate inquiry but I haven’t reviewed it since then.

MR HORTON: Yes. So look at page 1 and when you’re finished, it’s page 2 that I would like to take you to, the second sheet.


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THE WITNESS: Right.

MR HORTON: Now, correct me if I’m wrong, but it would seem from item 15 we’ve just seen that the comparable item here is item 4, “installation quality and compliance”, which is similar in terms.

THE WITNESS: Yes.

MR HORTON: Now, is this the place that one would expect to find such are those risks as have been identified in the risk identification workshop?

THE WITNESS: Yes.

MR HORTON: Yes. And just look at item 4 there and note the other columns across from it. So how, in your mind at the time, were those issues taken account of?

THE WITNESS: Are you talking about those four dot points under 4 on the left-hand column as identified or the – the ones on the right-hand side?

MR HORTON: Yes, I am. We will start with the left which is – for the moment, just look at identification. We will come to the others in due course. Safety is mentioned. House fire/damage. Poor quality insulation. But not installer injury specifically.

THE WITNESS: No.

MR HORTON: Now - - -

THE WITNESS: But house fires and damages, yes.

MR HORTON: Yes. And safety. Was there any discussion when you received it about the extent to which those four dot points included risks associated with installer safety and injury?

THE WITNESS: As I recollect – I can’t exact discussions about safety, house fire and damage but I do recollect issues around trying to come to terms with the importance of trying to have a registration process and training which would try and overcome some of these risks.

MR HORTON: Yes. Well, those things are mentioned under “management plan”, for example and - - -

THE WITNESS: Right.

MR HORTON: To the left. The need for assessing training requirements, discussing the DEWHA early installation guidelines, but was that a specific


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discussion? Were there discussions about these things dealing specifically with installer injury or was installer injury not expressly mentioned?

THE WITNESS: I don’t recall a discussion about installer injury. No, I don’t recall such a discussion at that – at this point in time, which is 9 April, isn’t it?

MR HORTON: Yes. Which is also the date on which that briefing note was prepared which mentioned – I took you to it – the installer and household safety.

THE WITNESS: Yes.

MR HORTON: And did you think, then, on 9 April that the identification of installer and household safety should be clearer or differently put from the way it is in item 4?

THE WITNESS: I don’t think I made those connections.

MR HORTON: Did anyone that you know of made those connections at or about 9 April when the risk register was received in this first final form?

THE WITNESS: I can’t recall. Mr Keefe may have and some of his staff but, look, I – I can’t recall if someone made those connections and drew it to my attention. I certainly don’t recall it being brought to my attention.

MR HORTON: To what extent do you think you ought to have at the time made that connection?

THE WITNESS: Well, in hindsight, I think I should have. At the time, on 9 April, I think I was – as we discussed before, I was concentrating in – at the top end at the 1 July rollout. I don’t think I was embedded in this detail.

MR HORTON: Is one – did you ever discuss with Ms Coaldrake the way in which she was approaching the question of safety to people doing actual installations?

THE WITNESS: I can’t recall. I may well have later on but I don’t recall it around this time.

MR HORTON: Did she ever say to you words to the effect of that she thought that safety to people doing the work was not a risk to the commonwealth’s implementation of the HIP because the commonwealth was not responsible for that safety and could not control that risk?

THE WITNESS: Could you repeat that again. Was that what I said or is that what Ms Coaldrake said?

MR HORTON: This is a view expressed by Ms Coaldrake.


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THE WITNESS: Right.

MR HORTON: Paragraph 117 of her statement is the source of it, but I will read it to you – I can show it to you if it’s not clear enough from what I’m saying.

THE WITNESS: No, read it. It’s fine.

MR HORTON:

The safety to people doing the work was not a risk to the commonwealth’s implementation of the HIP itself as the commonwealth was not responsible for that safety and could not control that risk. It was a risk to the people doing the work and the company they were working for and was a risk that they had to control.

THE WITNESS: Well, I think that – I can’t remember that expression, but it does accord with my notion that the state’s occupational health and safety regime and the obligations on employers was quite important in our overall consideration of these issues.

MR HORTON: The proper approach to that issue would still be one identifies it on the risk register as a risk but there’s just a treatment or management plan or way of dealing with it which might reduce the risk or ameliorate it or expunge it in terms of the commonwealth. Is that correct?

THE WITNESS: Well, it – it would – it’s one of the mitigation issues which would lower the – the final risk.

MR HORTON: Was that the way in which you were approaching the question of safety of people doing the work in the way that I’ve just told you that Ms Coaldrake approached it?

THE WITNESS: Well, I can’t recall exactly what was in my mind back in 2009 but – nor can I recall exactly what Ms Coaldrake said as you expressed it, but I think it accords with my feeling I think I had at the time that the commonwealth could concentrate or I could concentrate at least on trying to get the priority in for 1 July, not the safety issues and that’s I think what I’ve been saying and we’ve been intersecting on over the last hour or so. Yes.

MR HORTON: Thank you. Is that a convenient time, Commissioner?

COMMISSIONER: Yes. And, Mr Wilson and Mr Howe, before the ..... this afternoon, I will ask you about sitting hours tomorrow. I will invite your input on those – obviously, Mr Wilson wants to get to a certain point and various people have got to get back to other states. So I will work in with what you two agree.

MR HOWE: Yes. I won’t be here tomorrow but Mr - - -


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COMMISSIONER: Well, your learned - - -

MR HOWE: - - - O’Donovan will ..... input into that.

COMMISSIONER: Thank you. Adjourn till 2.15.

ADJOURNED [1.01 pm]

RESUMED [2.15 pm]

MR HORTON: Mr Forbes, I think we were speaking about the risk register and related topics before the luncheon adjournment.

THE WITNESS: Yes.

MR HORTON: I want to just ask you a few more questions to finish off that topic. Ms Coaldrake delivers her risk register in the first final form on about April. Is that correct?

THE WITNESS: Well, I remember it being 9 April but - - -

MR HORTON: Yes.

THE WITNESS: Yes.

MR HORTON: And then you phone her, I think, after that and ask her to stay on to advise the PCG in its consideration of risk going forward.

THE WITNESS: Well, I don’t recall calling her but I certainly remember wanting her to continue on. Whether I called her or not, I cannot recall.

MR HORTON: Okay. And what was the need, in your mind, for her continuing involvement?

THE WITNESS: Well, it would have been about continuity, I would have thought, and the importance of someone with deep knowledge of all the development of that risk register to continue on so that we had the access – we had access to her expertise.

MR HORTON: Yes. And what view – did you have a view at the time that the parameters in terms of the program design weren’t sufficiently final to have a final view about risk at that stage?


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THE WITNESS: Well, I think I would probably put it in terms of the issue of risk was still developing. I don’t think it was in its final form because we – at that time, there was the new model which was being considered and all that needed to be worked through.

MR HORTON: Yes. So after 9 April there remained, did there, questions of risks yet to be taken into account related at least in part to the development of the new delivery model?

THE WITNESS: I would have thought so at that time, yes.

MR HORTON: And do you recall for how long after that the issues to do with the new delivery model were still being taken into account?

THE WITNESS: No, I don’t recall. But I do – well, no, I don’t. I don’t – I don’t have the detail in my head. I think I would just end up speculating.

MR HORTON: Can we project forward somewhat into October 2009 and to annexure 2 to your statement, which if you need the reference for operator is CLA.002.001.1133. Now, Mr Keefe[sic], you will see in the subject it says “Outcomes of risk committee meeting one”. Was there a risk committee as such or is that an accurate .....

THE WITNESS: I think towards the end of the – my involvement we decided to develop a – have it’s own separate risk committee because, at that point, I think I was – I don’t know whether it was me or others or all of us – probably collectively rather than just me singularly – that we didn’t have a total appreciation of all the risks and their mitigation strategies as we would have liked despite us considering those issues during the PCG meetings from July onwards. So I think – and I don’t know whether it was my instigation, as I said, or a collective to actually start holding separate risk meetings to ensure we had covered issues off adequately.

MR HORTON: It would have been of great concern to you that so many months after 1 July 2009 – commencement of the project – that you still hadn’t yet got a full appreciation of the risks it brought with it.

THE WITNESS: Well, I think that’s a fair summary because, at that point, I think issues were escalating throughout that period from – when ..... commenced in – I think, as I said, before – I recall it – in late August or early September, and so it was a response, I think, to trying to get a better handle on those issues so we could respond better and I think it’s – it was a reasonable thing to try and do given that unease which I felt at the time.

MR HORTON: And the process just – the risk identification process just failed, didn’t it, not to have by 1 July identified in a full sense all the risks that were associated with this program?


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THE WITNESS: Well, I think they may well have been identified but I don’t think the PCG was considering them in the depth which perhaps they should have been, and that some of these issues which arose, they weren’t in the forefront of my mind. I think before lunch we were talking about what was the priority in my mind and my priority in my mind prior to 1 July was not these issues but others and that, clearly, from 1 July on these became quite significant issues to me and to the PCG.

MR HORTON: Now, who comprised the risk committee which was established?

THE WITNESS: Well, look, I – I can’t recall but I suspect those which are on this email list.

MR HORTON: Yes. You, Mr Forbes, Ms Kent, Ms Kingston and Mr Williams.

THE WITNESS: Yes, I think so.

COMMISSIONER: Mr Horton, would you mind keeping your voice up so that people in the back of the court as well as myself can hear you? Thanks.

MR HORTON: I will. I’m sorry, Commissioner. Could you scroll down, operator, a little. I would like to just take you down a little bit – that’s right. Mr Forbes, just look – would you – where it says 4.2 on the left-hand side of the page, forward slash 1.5. Just look at those few lines under there, please. Now, the 4.2 1.5 is a reference to the risk register as then developed, is that correct?

THE WITNESS: Yes, I would think so.

MR HORTON: Good. And just - - -

THE WITNESS: Although I don’t have the risk register next to me but I think that’s probably related to it.

MR HORTON: And just assume for me for present purposes that 1.5 at the relevant time dealt with installation and quality by installers is poor and 4.2 concerned government program loses credibility because insulation material is not available, lack of supply.

THE WITNESS: Right.

MR HORTON: Now, I think you say in your statement you don’t recall having received this email.

THE WITNESS: No, I don’t recall receiving it.

MR HORTON: But you accept you must have received it.

THE WITNESS: Yes, I accept that I must have received it.


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MR HORTON: Yes. And Ms Coaldrake is recommending to you and to others that you should consider commissioning an independent study on safety of insulation practices for the various types of products.

THE WITNESS: Yes.

MR HORTON: Now, accepting for the minute you can’t recall having received the email, do you recall at the time there being concern between you and your colleagues who were concerned with risk – sorry, who were involved in the risk committee about the risk in terms of safety for – of insulation practices?

THE WITNESS: Yes.

MR HORTON: And in what context had that arisen?

THE WITNESS: Well, I think as I indicated before, that once fires started to become into our domain, I became more and more concerned that we didn’t have a handle on all the risks and I think I said that that probably led to the establishment of a separate risk committee, and that as a result of that these issues needed to be considered in more detail.

MR HORTON: But he also mentions here deaths and injury – this email – in a way that suggests it’s separate from fires. Is that your understanding, that two issues were emerging, fires and deaths/injury?

THE WITNESS: Well, I can’t recall when the first death occurred under the program, the thermal one, whether – that might have been December in New South Wales. I can’t recall now. But clearly, we were being warned against the potential of death as a key risk at that point because it’s mentioned in here.

MR HORTON: And you appreciate the timing of this email is important because it’s three days until the first fatality is to occur.


MR HORTON: And the question might be asked then – I guess you’ve answered it but why wasn’t the analysis around deaths and injury and an independent report not commissioned on safety much before now?

THE WITNESS: Well, I think – so this was 11 October; was it? I think, as I recollect, the top of the - - -

MR HORTON: Yes. This email is 11 October.

THE WITNESS: Yes. I think, at that stage, we were heavily reliant on the PWC inspections, which included issues relating to safety, and associated with those – that compliance component of our program, we were hoping to get an independent


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evaluation of safety in that context; whether they were being – whether the insulation which was being put in was put in in terms of a quality and safety.

MR HORTON: Yes. That, with respect, seems to be a very passive approach to risk; that is, waiting for someone to identify to you a problem rather than you proactively identifying it in advance as a risk assessment process is supposed to.

THE WITNESS: Well, I think contrary to that. I think by wanting to put in place a sophisticated compliance and audit program, that is actually a proactive approach. It does have a reactive element to it, because part of the compliance program involves targeting depending on what some of the consequences of some of the investigations you carry out, but part of it is also gathering information to ensure that what you’re hoping is happening is in fact happening.

MR HORTON: Yes. But the risk – the audit and compliance in this first instance identifies a problem having happened. That is, an installation, for example, being below standard.

THE WITNESS: Yes. But that allows you then to make some decisions in regard to the extra things you may need to put in place - - -

MR HORTON: Yes. Yes.

THE WITNESS: - - - either by changing guidelines or those sorts of issues.

MR HORTON: I understand. Now, can I ask you questions, please, now, about the question of training?

THE WITNESS: Yes.

MR HORTON: The question of training came to the project control group as part of the approving, if you like, the terms and conditions and so forth of the program.

THE WITNESS: Yes.

MR HORTON: And until at least 1 May it seems to be the case of the documents at least that the competencies that were agreed with DEWHA and so forth were things which each installer had to meet unless they were supervised by someone who met them.


MR HORTON: Now, can I take you to the 1 May project control group meeting minutes, which you attended and chaired, I think, and it’s document AGS.002.015.1200. While that’s coming up I will correct something I said, Mr Forbes. As at – at least immediately before 1 May, the position is, at least superficially, each installer has to be trained.


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THE WITNESS: Yes.

MR HORTON: The matter is yet to be decided formally, but the documents seem to suggest that at this stage in everyone’s contemplation is the idea that each installer under the program will, himself or herself, need to satisfy the competencies. Is that your understanding?

THE WITNESS: That’s my understanding. Yes.

MR HORTON: Yes. And so at 1 May, the issue – at the 1 May meeting, the issue seems to be raised, and I will take you to page 2, item – agenda item 4. And just there, operator. Can you see there the dot point: agenda paper 4A, attachment B, Competency Requirements for Registration on the Installer Provider Register.

THE WITNESS: Yes.

MR HORTON: And then there’s OH&S plus some substantive things that have to be done; some technical training.

THE WITNESS: Yes.

MR HORTON: Now, if you just go down a little bit further, please, operator; see the bold type there: Supervisory Role?

THE WITNESS: Yes.

MR HORTON: PCG members agreed that installers supervising installation must have a valid OH&S card.

THE WITNESS: Yes.

MR HORTON: So the issue of supervision seems to have arisen in some context at this meeting; is that right?

THE WITNESS: Yes. I would think so, given the record.

MR HORTON: Yes. And in what context did it arise as in relation to the competencies?

THE WITNESS: This is the competencies for training or the competencies for registration; just to remind me.

MR HORTON: Well – yes. Well, you will see under – it appears under a dot point dealing with conditions for inclusion on the installer provider register.

THE WITNESS: Right. Yes. Okay.


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MR HORTON: But what I’m really asking is did this question of supervision arise more generally in the context of competencies also? That is, who, as between the installer and the supervisor, might be required to meet the competencies?

THE WITNESS: Yes. I think there was a discussion, as I recollect, about supervisors and their role. And I think in my statement I make mention of the fact that I think or I recall that there may be assumption that supervision or supervisors would, in fact, be on site, but that proved not to be the reality.

MR HORTON: But are you having that consideration in this meeting in relation to the competencies, or just the installer provider register?

THE WITNESS: Look, I can’t recall but I suspect both.

MR HORTON: Yes.

THE WITNESS: But I’m not – I can’t recall.

MR HORTON: Yes. Now, the matter is more squarely raised at the 8 May meeting, which you don’t attend.

THE WITNESS: Right.

MR HORTON: The matter is there squarely dealt with, and it is decided there that the competencies need only be met by a supervisor, if there’s a supervisor; the installer himself or herself need only do the OH&S component. But is it your understanding - - -

THE WITNESS: I certainly recall discussions where all those who were going to be in the roofs had to be supervised. I don’t know if that helps in trying to tease out the issue.

MR HORTON: Yes. I’m asking it a little bit differently. I’m really saying, at the end of the Monday meeting, is it your understanding that each installer regardless of supervision is to meet those competencies?

THE WITNESS: Well, I think if it’s recorded in the meetings, I think that would have been my expectation.

MR HORTON: And are you – things seem to change on 8 May. Are you aware of that change that occurred on 8 May?

THE WITNESS: I was told about it subsequently, as I recall.

MR HORTON: What did you know, if anything, between 1 May and 8 May about the impending change?


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THE WITNESS: I don’t recall anything in regard to an impending change between the 1st and the – between this meeting which you have on the screen and the next meeting.

MR HORTON: Yes. And did anyone raise with you the possibility that that condition for fulfilment of the competencies might be changed.

THE WITNESS: Not that I recall, though, I remember discussions about barriers and hurdles, and that the more barriers we put in place, the more difficult it would be for people to register, and the time that would be taken to actually get people registered and work under way.

MR HORTON: And was it suggested to you that needing both – needing the installer to meet the competencies in every case might be an unnecessary barrier?

THE WITNESS: For installers to meet all criteria may be an unnecessary barrier.

MR HORTON: And do you remember who said that to you?

THE WITNESS: Well, I recollect there was a discussion – I can’t remember who mentioned this to me, but I think there was a discussion where people had indicated that to me that Martin Hoffman, in particular, was wanting to lower barriers. And that was after the next meeting, I think.

MR HORTON: Yes. And do you remember – you don’t remember who told you about Mr Hoffman’s alleged desire?

THE WITNESS: No. I can’t. But I presume it was either Ross Carter or Kevin Keefe, because they’re the prime people I was intersecting with.

MR HORTON: Yes. Is it possible that Mr Keefe told you, in fact, after the 8 May meeting at some stage to inform you that the change had been made?

THE WITNESS: Well, it’s quite possible.

MR HORTON: Yes. And what was your reaction so far as you can recall it?

THE WITNESS: Well, as I recollect it was, you know, clearly an emphasis – you know, there was – the programming was narrowing very much into an employment stimulus program, and that was its sole primary objective, rather than also a broader environment one.

MR HORTON: Yes.

THE WITNESS: Now, I don’t know whether that sort of view, as I was – it was evolving in my mind was at the point or after or before or around this time, but I think it was around this time that - - -


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MR HORTON: Yes.

THE WITNESS: - - - when I heard those types of views, that it started to crystallise in my mind that we were very much into an employment program, which I knew anyway, but it was a much narrow focus.

MR HORTON: Yes. Mr Keefe, I think, described your reaction as sympathetic but not active; is that a fair comment?

THE WITNESS: Sympathetic but not active? Possibly.

MR HOWE: Yes. Can I just say there’s a difficulty with that evidence because it was given by Mr Keefe at a point in time where his version was that this change had been prompted by OCG, but he subsequently, under cross-examination from Mr Harvey, accepted on the strength of contemporaneous documents that he was quite wrong about that. He retracted the proposition in 114 and 115 of his statement and accepted that the change came from within the PCG.

COMMISSIONER: I thought he retracted the retractions as well, but don’t you remember- - -

MR HOWE: He did retract some retractions, but not that. That was left clearly as his version, as I understand.

MR HORTON: I don’t need to press it, Commissioner. The witness has answered anyway what he recalls.

MR HOWE: Well, he shouldn’t have answered on the basis of the proposition about the evidence of Mr Keefe that he resiled from, because then to have done so misleads the witness.

COMMISSIONER: Well, the transcript shows that.

MR HORTON: I’m not certain he did resile from it, but whatever the transcript shows; the transcript shows.

Mr Forbes, what was your view, then, about the – you have mentioned it’s clear in your mind that it has become primarily an employment stimulus program. How does that then change the risk of the HIP now that you have reached this realisation about its primary objective?

THE WITNESS: Well, with lower hurdles for installers, that meant you ended up with less checks and balances, and less checks and balances means the risk levels are higher.

MR HORTON: And was that then reflected in the risk register?


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THE WITNESS: I’m not sure, but one would have thought that it would have been.

MR HORTON: And how was it to be reflected?

THE WITNESS: Well, I would have thought it would have been picked up in one of the identification markers in the first column.

MR HORTON: Yes.

THE WITNESS: Somewhere in there.

MR HORTON: And one risk might be: well, installers may not, in fact, be supervised. There might be deficiencies in the supervision.

THE WITNESS: Yes.

MR HORTON: And that’s a risk that occurred to you at the time of the change on or about 8 May?

THE WITNESS: No. I think it occurred later than that, because I think it was in my mind at that time that – my expectation was that supervisors would be on-site, and then approval otherwise down the track. But they were not on-site, or mostly not on-site.

MR HORTON: Excuse me one minute, Mr Forbes. Mr Forbes, as part of the registration process under the scheme, there were various terms and conditions that had to be met. You have – are you familiar with those?

THE WITNESS: I’m conscious of them. Yes.

MR HORTON: And the applicant had to confirm that certain things were the case.

THE WITNESS: Yes.

MR HORTON: And they met certain competencies and so forth; do you recall that?

THE WITNESS: Yes. It was part of the registration process through Medicare.

MR HORTON: Yes. Yes. Can I understand better the way in which that operated. To whom were those forms submitted?

THE WITNESS: Well, my understanding is they were submitted to Medicare and – and I think it was online, as I recollect, and that it was up to Medicare to check them off and if they were checked off appropriately, they would then be registered by Medicare.


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MR HORTON: And so if I, as an applicant, ticked the relevant boxes or filled in the relevant forms and submitted it to Medicare, would I need to verify in any way what I was saying has been truthful?

THE WITNESS: I can’t remember the form which Medicare had for them to fill in and what the verification process was.

MR HORTON: And was any checking, to your knowledge, done of – by Medicare or anyone else as to the accuracy of what had been said on those forms?

THE WITNESS: Well, I think it would have been part of the compliance regime that there would be desktop audits associated with that.

MR HORTON: And what was the rate, if you’re aware of it, of invalid or deficient registration forms?

THE WITNESS: I – look, I don’t recall that rate.

MR HORTON: Right. And you mentioned that already there had been some concern, I think, early in the program or some attention given to the question of fraud in connection with the scheme? How was the question of valid registration, if you like, taken into account as part of that process?

THE WITNESS: Look, I’m not sure how that was done but there was a compliance committee, as I recollect, which actually attempted to try and bring together the Medicare data with other information to try and meld that to make sure that people were complying with the registration process. Now, I don’t know how that worked and my understanding was there were – the compliance committee addressed that issue.

COMMISSIONER: What I’m interested in knowing is people fill in this form and they say, “I’m a painter therefore I’m qualified.” Okay. What checks, if any, were made before they became registered? I think the answer you’ve given is “no”.

THE WITNESS: Well, “I don’t know,” I think is the answer, Commissioner.

COMMISSIONER: You don’t. Okay. All right. We can ask someone else then.

THE WITNESS: Yes.

COMMISSIONER: Okay. And you think that probably a check occurred – or the idea was that the compliance people would, at a later point in time, make sure that the people were who they said they were in terms of qualifications.

THE WITNESS: That’s right. The compliance and audit regime should have picked that – that up as an issue.


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COMMISSIONER: Okay. All right. So okay, we don’t know whether there was any check at the time when they became registered, and we find that out from somebody else - - -

THE WITNESS: No, I don’t know but I would have thought that there should be.

COMMISSIONER: There should be, shouldn’t there?

THE WITNESS: Yes.

COMMISSIONER: Yes. I would have thought so.

THE WITNESS: But I – I can’t recall what happened and who did it.

COMMISSIONER: Okay. I can’t take that any further, I suppose. Yes.

MR HORTON: They’re my questions, Mr Commissioner. It’s the end of my questions.

COMMISSIONER: That’s it?

MR HORTON: It is. That’s it.

COMMISSIONER: Yes.

MR WINDSOR: I’ve been asked to perhaps lead on, Commissioner.

COMMISSIONER: Yes. It has been suggested to me that the people representing the families might all question one after the other, so Mr Perry will come later on - - -

MR WINDSOR: Thank you.

COMMISSIONER: Okay.

<EXAMINATION BY MR WINDSOR [2.44 pm]

MR WINDSOR: Mr Forbes, two subject matters I wish to address or ask you some questions about. My name is Windsor. I act on behalf of some entities that were in the insulation industry prior to the commencement of the HIP. Could I ask you to go to paragraph 15 of your statement, please. Do you have that?

THE WITNESS: Yes.

3.4.14 P-1852 M.A. FORBES XN©Commonwealth of Australia MR WINDSOR

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MR WINDSOR: Would you just refresh your memory by reading it to yourself, please.

THE WITNESS: Yes.

MR WINDSOR: Who was it that saw the insulation as a low-hanging fruit for energy savings?

THE WITNESS: As I recollect, it was the policy people within REED.

MR WINDSOR: Within?

THE WITNESS: Within the division REED, renewable and - - -

MR WINDSOR: Thank you. And when was it that they – such persons had that belief or had that view?

THE WITNESS: As I recollect, it was late in 2008 because it was all part of discussions and I don’t know the details of this, but discussions in COAG. There’s a COAG working group, as I recollect.

MR WINDSOR: Did you understand that it continued to be the view of that group or persons within that group in 2009?

THE WITNESS: To my recollection, yes.

MR WINDSOR: Did you understand whether that view was one that was maintained throughout 2009?

THE WITNESS: I don’t think it was ever discussed but I think – my recollection is that it was seen as such.

MR WINDSOR: I’m sorry, it was?

THE WITNESS: It was seen as low-hanging fruit and that a Home Insulation Program could assist in trying to create energy efficiencies.

MR WINDSOR: I appreciate that. But my question is directed to whether it was seen as that throughout 2009?

THE WITNESS: I don’t know if I can comment apart from saying that it was an underpinning foundation to this program.

MR WINDSOR: Thank you. Could I ask you then to go to page 10 but paragraph 50. Do you have that?

THE WITNESS: Yes.


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MR WINDSOR: I would just ask you to refresh your memory as to the content of paragraph 50, please.

THE WITNESS: Yes.

MR WINDSOR: You make reference there about halfway down to “internal auditors”. Do you see that?

THE WITNESS: Yes.

MR WINDSOR: And then there’s a name of an entity that appears immediately after those words. Was that an entity within the Commonwealth Government or was it a private entity?

THE WITNESS: No, it’s a private entity.

MR WINDSOR: What was the nature of the work that that private entity which I think is Protiviti - - -

THE WITNESS: Protiviti.

MR WINDSOR: - - - did? You explained something about it in your statement by saying it was “analysing data from both Medicare and DEWHA” but what was it doing?

THE WITNESS: As I recollect, they had a – some formulations on thresholds in regard to payments to particular companies which would then signal that perhaps those companies should be looked at closely. So it was an audit related threshold to highlight potential compliance issues which we needed to address and these were – these were associated with – you may recall earlier in my evidence, I talked about interim audit compliance arrangments and this was part of that.

MR WINDSOR: Are you talking about compliance about fraud and/or over-servicing or are you talking about compliance for other pruposes as well?

THE WITNESS: Well, I think I was talking about for fraud and over-service.

MR WINDSOR: And did that organisation prepare reports and – a report or reports which you reviewed?

THE WITNESS: I don’t recall Protiviti reports. I think those – they reported through the compliance committee and they – and the compliance committee would then report to PCG.

MR WINDSOR: Thank you. Could I ask you to go down a few lines. You make reference to the PricewaterhouseCoopers organisation.


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THE WITNESS: Yes.

MR WINDSOR: What particular activity did you have in mind when you made reference to them in – that organisation – paragraph 50?

THE WITNESS: Well, they were – it was a very large-scale contract for audit and compliance work which included significant field inspections and site audits, including roof inspections which were to look at quality and safety issues.

MR WINDSOR: Did you understand that PricewaterhouseCoopers were arranging for contractors and/or subcontractors to do that work of site inspections?

THE WITNESS: Yes.

MR WINDSOR: Thank you. Nothing further, Commissioner.

COMMISSIONER: Thank you.

MR PERRY: It’s probably me. .....

COMMISSIONER: Ms Coulthard or - - -

<EXAMINATION BY MR PERRY [2.50 pm]

MR PERRY: It’s probably me. Are we going to .....

MR ……….: .....

MR PERRY: ..... go next. I don’t mind. Can the witness be shown AGS.002.020.0322. Now, for the operator’s benefit, this is quite a large document in terms of – it’s about an A3 page so it may be necessary to blow some of these things up so the witness can read it. While it’s being turned up, Mr Forbes, what these are are versions of the Gantt chart, this is the program chart that you’ve been supplied by the Department. I’m going to show you one which says its project status as at Wednesday, 12 August ’09. Right. It has come from the Department and is purporting to set out what the stage of the project was at any particular date and we have a sequence, and this seems to be the last one that I can find. Okay. Now, see how we go. Thank you. Now, do you see under “major deliveries” at the top? Stop there please.

THE WITNESS: Yes.

MR PERRY: Right. About four down, “Insulation auditor engagement”.

THE WITNESS: Yes.

3.4.14 P-1855 M.A. FORBES XN©Commonwealth of Australia MR PERRY

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MR PERRY: As at 12 August, zero per cent, because it’s not going to happen until 28 September. Do you see that?

THE WITNESS: What date is this document?

MR PERRY: 12 August. And you will see start and finish under “Insulation auditor engagement”. The engagement looks like it’s going to happen on Monday, 28 September. So as at 12 August, obviously zero per cent.

THE WITNESS: Yes.

MR PERRY: All right. Slide down please.

THE WITNESS: This – just wait a second, though. This is – that’s major deliverables. Yes, but - - -

MR PERRY: Right?

THE WITNESS: - - - yes.

MR PERRY: Slide down. Now you will see – stop there. Under fraud, there’s a lot of things that seem to have been achieved in terms of the financial aspect, that is the fraud. And you can see the completion dates in the second column to the right.

THE WITNESS: Yes.

MR PERRY: Right, then go a bit further down. You see the heading “Installation compliance capability”. Right?

THE WITNESS: Yes.

MR PERRY: Now, the third last one, for example, there’s a compliance and audit manual which is 50 per cent because it’s not going to be completed until 28 August and some other aspects are 100 per cent. Right?

THE WITNESS: Yes.

MR PERRY: Keep going down. Mainstream audit. Right. Now, you will see that there are four zero per cents towards the bottom. Now, what happened is an audit tender has been issued – you will see, 4 August. That’s it, that one.

THE WITNESS: Yes.

MR PERRY: So that’s been issued but then, because the tenders – the tender process, it would appear. Evaluated tender, 2 September through to the 10th. Contract negotiations, 14 September through to the 25th. Chief project auditor appointed, 28 September.


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THE WITNESS: Yes.

MR PERRY: Now that keys in with the – if you want to, go up to the top again – the major deliverables but it keys in with the structure.

THE WITNESS: Yes.

MR PERRY: Right. So to the extent that the audit and compliance project was meant to act as a deterrent, from this project status report it would appear that that program is not even on this proposal to be in place until the – almost the very end of September. Would that resonate with your recollection of how the compliance and audit development was going?

THE WITNESS: In terms of the contract with – which ended up with PWC, that accords with - - -

MR PERRY: Yes.

THE WITNESS: - - - with that.

MR PERRY: Is your recollection that PWC were appointed auditor about the end of September? Is that how it turned out?

THE WITNESS: Well, it was around that time.

MR PERRY: Yes. Okay. So this is a snapshot of where the project stood as at 12 August - - -


MR PERRY: - - - and that snapshot seems to marry with your broad recollection of how things were still being developed through August and into September.


MR PERRY: Okay. You go back the document that Mr Horton took you to, 002.001.1133. I should add, witness, if you want a break at any time just hold your hand up. I’m sure it will be given.

THE WITNESS: No, I’m fine.

MR PERRY: Good. Now, down a bit. Keep going. A little further. Little more. Thank you. Now, do you see those additional treatments that Mr Horton was asking you questions about?

THE WITNESS: 4.2 stroke 1.5?


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MR PERRY: That sort of thing, yes.

THE WITNESS: Yes.

MR PERRY: Now, he asked you about an independent study on safety. Was that PWC or was that someone else? It’s the last of those lines before para numbered 5.

THE WITNESS: I think this was – as I recollect – this came from a risk assessment committee and I think in my statement I say well, I think that was picked up by the PWC contract.

MR PERRY: Right. So that suggestion – because it says consider provision so a suggestion – that suggestion to your recollection came out of a risk assessment committee at about this time?

THE WITNESS: Given the date of this document, yes.

MR PERRY: Right. Just scroll to the top, if you would please, operator. Thanks. The date is 11 October and it’s called “Outcomes of risk committee meeting number 1”. Is that the risk assessment committee that you speak of, namely the risk committee?

THE WITNESS: That’s what I’m speaking of, yes.

MR PERRY: Yes. So – and one might assume that this is the 11th, the meeting occurred some time shortly prior to the 11th because Ms Coaldrake is setting out basically a minute or an action plan arising out of that meeting?

THE WITNESS: She was very efficient so I suspect that’s right.

MR PERRY: Yes. All right. Back down to where we were. So some time shortly prior to 11 October there’s this risk committee meeting. Where did that risk committee come out of .....

THE WITNESS: Well, I think – I think I gave evidence earlier to say that the PCG had been considering risk but as time progressed we became more and more concerned that we weren’t considering it in enough detail, and that’s why the risk committee, I think, was established in this way.

MR PERRY: You will forgive me if I ask you a couple of questions about things you might have given evidence about because - - -

THE WITNESS: Yes.

MR PERRY: - - - I was having a lot of trouble picking you up at times, you see – hearing you. All right. So there would be a PCG minute, you would think, or a note or document some time prior to 11 October, obviously, where the establishment of


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this risk committee would have been canvassed either expressly or by necessary implication?

THE WITNESS: Well, not necessarily. If this was something which the Department was concerned about, we wouldn’t necessarily go to the PCG because this was clearly an issue which the Department was concerned about and the members of the PCG are – members of that risk committee are all DEWHA staff - - -

MR PERRY: Yes.

THE WITNESS: - - - Department of Environment staff.

MR PERRY: I had asked you and I ..... time was that this risk committee probably came out of a realisation in the PCG that risk needed to be more effectively or more comprehensively looked at. I’m just trying to track down something, some time frame or some document where the Commissioner might be able to find out what matters led to a suggestion, and ultimate adoption of that suggestion, that this committee formed. Do you see? I’m trying to find something we can – something hard we can actually look at. Is it a PCG initiative or is it a department one or perhaps a bit of both.

THE WITNESS: Look, I suspect it’s a bit of both.

MR PERRY: Right. Now, in terms of the PCG, to the extent that they have some role in the initiative to establish this committee, you would be looking at a PCG minute, you would think – or a report, if one doesn’t call it strictly a minute.

THE WITNESS: You – well, if it was a specific decision of the PCG, one would assume that it’s actually recorded in the minutes. But it might have been an underlying discussion which required the Department to pick it up and run with it outside of PCG. So that’s why it may be both.

MR PERRY: And if the Department picked it up and ran with it outside of PCG – to use your words – you would expect in the relevant departmental committee or subcommittee, that there would be some note of that as well.

THE WITNESS: Well, there’s a note – well, in the sense of the formation of the committee?

MR PERRY: Yes, and issues for, etcetera. Because this is after the first meeting. What I’m trying to lead up to is what led to that first meeting, you see.

THE WITNESS: Well, I understand that but it might just have been a phone call. It doesn’t necessarily require a formal minute per se but it may have.

MR PERRY: Yes.


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THE WITNESS: But I can’t recall.

MR PERRY: One task might be – or course might be to go to the records held by each of those offices, for example, that are enumerated at the top of this thing and see whether the suggestion emanated from one or more of them.

THE WITNESS: Possibly.

MR PERRY: Right. Now, the last one in those – sorry, the second last one in those paragraphs back on the document – consider again whether it would make sense to accredit a product. Now, I will leave the word “again” for a moment. So one of the tasks raised by the committee at its first meeting is this question of accrediting product, by which you would understand that the department or the government would release a list of accredited or approved products. That’s what we’re talking about, aren’t we?

THE WITNESS: Yes.

MR PERRY: All right. Now, consider again, do you recall it being considered once and not proceeded with?

THE WITNESS: Accrediting products, you mean.

MR PERRY: Yes.

THE WITNESS: I think there was always an ongoing discussion about that, primarily because there was a lot of issues in regard to imports, whether they actually met standards or not.

MR PERRY: And some issues about whether some forms of insulation actually met the criteria in terms of R-value or, indeed, met the criteria in terms of safety.

THE WITNESS: Maybe all of those - - -

MR PERRY: Yes. Do you know if it ever did happen that there was an accredited list of products?

THE WITNESS: I can’t recall one.

MR PERRY: All right. Such a list, if developed, you would assume from the perspective of the department, would also include in some respects how that product should be installed and installed safely.

THE WITNESS: I think the department would have relied heavily on existing standards, rather than creating new standards.


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MR PERRY: One of the problems with roll-out foil – has caused the death of Matthew Fuller – is that it may not be at all clear that there’s actually any Australian standard which reflects its safe use. When you say, therefore, “rely on existing standards”, what if there isn’t a standard? What happens then?

THE WITNESS: What was the last part of your question?

MR PERRY: What happens if there isn’t an Australian standard with respect to the use of roll-out foil and, in particular, its installation by stapling into roof joists?

THE WITNESS: Well, that would need to be considered carefully.

MR PERRY: Yes.

THE WITNESS: Now, whether it was, I can’t recall. Certainly was after - - -

MR PERRY: After his death - - -

THE WITNESS: - - - his death.

MR PERRY: Yes. Okay. Considered carefully – all right. Now, you did say, Mr Horton, that prior to 1 July – leave that document up, if you would. Prior to 1 July, there ..... great consideration to these issues. And you said that when you were looking at this document. All right. So these issues, in terms of safety, as I apprehend it, but others – you recall saying that?

THE WITNESS: What’s this document again?

MR PERRY: This is the minute by Ms Coaldrake of this risk committee.

THE WITNESS: Right. Now, could you go back to your - - -

MR PERRY: What I apprehended you said to Mr Horton is that, prior to 1 July, you weren’t focusing on these issues, by which I understood you to mean the issues comprehended in this document, but others. After 1 July attention started to be turned to these issues.

THE WITNESS: Yes.

MR PERRY: All right. Now, firstly, what were the other issues, prior to 1 July, that attended the – was a departmental focus, rather than these issues of risk and safety?

THE WITNESS: Well, as I recollect, what I was saying earlier in the day was that the issues we were focusing on was trying to meet the deadline of 1 July. And in terms of the priority, we were trying to get the administrative arrangements in place for that 1 July rollout.


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MR PERRY: And after 1 July is when focus was then, perhaps, turned to issues such as those canvassed in this minute - - -


MR PERRY: - - - and, in particular, OH&S issues.

THE WITNESS: Yes.

MR PERRY: Now, in terms of those OH&S issues, could I take you to your statement, please, and to paragraph 25.

THE WITNESS: 25, did you say?

MR PERRY: 25 – yes. Now, you might want to read 24 with it, to put yourself into the frame. And just tell me when you’ve read them both, would you, please.

THE WITNESS: Yes.

MR PERRY: Now, a tier 1 project was this project.

THE WITNESS: Yes.

MR PERRY: And it has, within at least your department, perhaps others, some necessary consequences of being assigned tier 1 project status.


MR PERRY: And, as you say in 25:

For tier 1 projects, it is important that the project management framework adopted by DEEWR be worked through very carefully.

All right. Tell me, in terms of the priority that you’ve spoken about, the 1 July rollout, how carefully was the project management framework adopted by DEEWR worked through, prior to 1 July?

THE WITNESS: Well, what I’m referring to there is, in terms of tier 1 projects, the guidelines which would have been issued by DEEWR, in terms of what needed to be taken into account. There would have been a checklist of some form, which would have allowed those responsible for developing a tier 1 project to actually cross-reference to that checklist.

MR PERRY: Do you know if such a checklist was, in fact, developed prior to 1 July?


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THE WITNESS: Well, I think the guidelines developed by the department had a checklist.

MR PERRY: All right. Now, do you know how carefully the project management framework, therefore, was worked through by 1 July, to use the words in your statement?

THE WITNESS: Well, I think, to the best of people’s ability, they were worked through.

MR PERRY: Rather than, perhaps, thinking about how hard the departmental officers may have tried to do it, what was the end result? From your perspective, as a senior officer looking at it now, was it worked through carefully prior to 1 July or not?

THE WITNESS: Well, I think the answer to that is yes, apart from not having the compliance and audit framework in place. That’s what I was - - -

MR PERRY: And not giving sufficient attention to the sorts of risks that ended up resulting in the deaths of Matthew Fuller and Reuben Barnes.

THE WITNESS: Yes.

MR PERRY: Now, the next sentence:

The project management framework is designed to try to make sure that the right questions are asked.

Tell me, who, to your knowledge, asked questions about the safety of using roll-out foil mixed with metal staples to the roof joists?

THE WITNESS: Well, I didn’t ask those questions until - - -

MR PERRY: After Matthew’s death - - -

THE WITNESS: - - - after Matthew’s death. As to others who asked that question, I don’t think I’m in a position to say, because I don’t know.

MR PERRY: But that is just the sort of right question that a carefully worked through program would allow, isn’t it?

THE WITNESS: I agree.

MR PERRY: That is, you would look at the types of insulation. You would look at how they should or should not be installed. You would look at the risks consequent upon particular methods of insulation and their installation. They’re the sorts of right questions which a properly developed program would ask, aren’t they?


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THE WITNESS: They are.

MR PERRY: So you would look at each type and you would take into account information gleaned from industry, for example.

THE WITNESS: Yes.

MR PERRY: A nod doesn’t come over the microphone, you see.

THE WITNESS: Okay. Sorry.

MR PERRY: That’s all right. You would consider the nature of the insulation itself, that is, what product it is – ask some questions about that.

THE WITNESS: Yes.

MR PERRY: And, of course, reflective foil, as you knew and assumed everyone knew, is electrically conductive.

THE WITNESS: Well, yes, but I wasn’t asking those – asking those questions.

MR PERRY: Asking the questions – no, but I’m asking you about what sort of questions should be asked when one is looking at these things, you see.

THE WITNESS: Yes. And that’s .....

MR PERRY: So you’re looking at an electrically conductive form of insulation.

THE WITNESS: But I’m - - -

MR PERRY: Wait till I finish, please – to be put into roof spaces of houses of indeterminate age. And the right questions would include questions relating to the safety of that sort of prospect, would they not?

THE WITNESS: Well, yes, and I would have thought those discussions with industry and experts would have drawn those issues out.

MR PERRY: Right. You see, on 18 February, Mr Ruz told a meeting of industry experts that there had been experience of electrocution in New Zealand. You have subsequently become aware of that.

THE WITNESS: Yes.

MR PERRY: On 19 February, Mr Ruz sent Beth Brunoro an email specifically adverting to a potential consequence which, extraordinarily, previewed almost exactly the mechanism that ended up in Matthew Fuller’s death. You would expect, if your Department was following through the process that you refer to, that is,


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asking the right questions – you would expect that information from industry to be given a very particular and high priority; wouldn’t you?

THE WITNESS: Yes.

MR PERRY: We know that Mr Keefe was made aware of Mr Ruz’s comment. You would expect him to either himself or to direct his staff to look at an issue of such catastrophic consequence, namely, death, to be looked at very carefully, completely, and comprehensively?

THE WITNESS: Yes.

MR PERRY: And for that information to be funnelled into the risk assessment.

THE WITNESS: Yes.

MR PERRY: And for that information to be brought to the attention of, ultimately, the PCG.

THE WITNESS: Yes.

MR PERRY: And for that information to guide the accrediting or approval of the use of electrically-conductive foil in circumstances where it is stapled to roof joists.

THE WITNESS: Yes. On the proviso that PCG was conscious of that.

MR PERRY: As I said, someone has to bring it to their attention. The problem here, you see, is potentially – the matter for the Commissioner ultimately – to address what, on one particular factual scenario, may be a catastrophic, systematic or systemic failure, such that it would appear that the information, for example, provided to Ms Brunoro may not have been brought to people’s attention. You see? If that is the case, that that information provided by Mr Ruz firstly on the 18th and then more particularly on the 19th did not go up the chain, that would really make a mockery of the notion of making sure the right questions are asked; wouldn’t it?

THE WITNESS: I can’t understand that conclusion. Yes

MR PERRY: You would agree with that conclusion, not just understand it?

THE WITNESS: Yes.

MR PERRY: Now, the right questions. It would appear from what you have told us that after 1 July people’s focus and attention really did then turn to questions of workplace health and safety, compliance, et cetera.

THE WITNESS: Yes.


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MR PERRY: Because prior to 1 July, I’m not for the moment necessarily being critically of you – prior to 1 July, the overriding imperative was getting the thing started on 1 July.


MR PERRY: Now, after 1 July, when people’s attention, as I understand your evidence, then turns to questions of workplace health and safety, what did you do as head of the PCG to address those issues?

THE WITNESS: Well, I think I was urging to get that audit and compliance contract into place as quickly as we could, and that the interim arrangements which we had in place were expanded as quickly and as comprehensively as we could, but there was limitations to that, because of who we had available to actually do that work.

MR PERRY: Yes. And, indeed, it would appear from the timing I asked you – the PWC didn’t come on until about the latter half, or latter part, of September.


MR PERRY: So two months into the project the compliance auditor is appointed, and you would agree, and I think you said to Mr Horton, compliance and auditing is all very well, but it is reactive, not proactive.

THE WITNESS: I think I said it has both.

MR PERRY: Has both elements?

THE WITNESS: Yes.

MR PERRY: What’s the proactive element of it, such that might have prevented the death of Matthew Fuller by removing the risk, namely, stapling electrically-conductive foil to roof joists with metal staples?

THE WITNESS: Well, if, for example, and I don’t know whether this was found, that there was electrical foil which was alive but there were to be no injuries, but the auditors found that to be the case, it would clearly be a safety question which would then need to be fed back into the system to actually address that failure.

MR PERRY: But this program didn’t comprehend isolated incidents of electrical failure in a roof; it comprehended the installation of insulation by essentially untrained and unskilled people across the whole range of roof spaces in this country: new, old, and very old.

THE WITNESS: Correct and .....


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MR PERRY: And that range of potential work spaces or work places necessarily carried with it, because of the unknown nature of the workplace itself, the very real risk of electrocution; didn’t it?

THE WITNESS: I think the answer to that is yes.

MR PERRY: All right. Well, if that’s right, and everyone I appear on the PCG understood that people were going to go up into roof spaces of a whole lot of different houses with this very high risk of electrical safety, if that’s right, what was done proactively from the perspective of the PCG to address it?

THE WITNESS: I think it was through the compliance and audit program.

MR PERRY: But that’s - - -

THE WITNESS: And the issue associated with trying to ensure that the States’ ..... occupational health and safety requirements were in place too,

MR PERRY: As to the compliance and audit, there is some evidence of how many inspections were actually undertaken by the time of Matthew’s death in October, bearing in mind that PWC aren’t appointed to appear until about late September. All right. So the compliance and audit that you say is a proactive step firstly commenced a significant time into the life of the project anyway; didn’t it?

THE WITNESS: Yes.

MR PERRY: Right. And, secondly, Mr Fuller dying on 14 October, necessarily the compliance and audit had not rolled out really very far at all by the time Mr Fuller’s death occurred.


MR PERRY: Right. And, thirdly, of course, everyone can take – or not take, in this case – steps after Mr Fuller’s death. What I’m asking about is things to stop it happening; all right? So other than compliance and audit, is it in reality a reliance that the State regulatory regimes will save the day?

THE WITNESS: I think that was an assumption, and - - -

MR PERRY: And that was – sorry.

THE WITNESS: - - - also that supervisors were going to be on-site.

MR PERRY: Well, let’s go to the first: the assumption was that the State regulators would save the day once the program rolled out on 1 July, because your own internal audit and compliance program wasn’t up for a couple of months; was it?


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THE WITNESS: Well, you’re using, you know, save the day language. I’m not sure that’s the right language to use.

MR PERRY: Isn’t it? All right. Then how about save a life?

THE WITNESS: Well, let me say that the compliance regime was not in place as you say, and that that created difficulties and the reliance on the states regulatory regime was perhaps too optimistic.

MR PERRY: Did you take any steps yourself in your position either in the Department itself or on the PCG to see whether the States, and in this instance, Queensland, were aware of the scope of the HIP, firstly, so as to look at their own regulatory resources?

THE WITNESS: I was conscious that we were in discussions with the States. I’m not sure that, on reflection, that it actually involved necessarily the right people in the States. This is as I recollect: we spent a fair bit of time with the Fair Trading side of the States rather than necessarily the occupation health and safety. I had been involved in previous programs with Commonwealth-State intersections, and to me that was a pretty important component to those previous programs. And I was expecting States to come forward to request resourcing, but they never did.

MR PERRY: But, you see, you’re the people who are instigating the program; correct? That is, your Department, or the Commonwealth, if you want to use a different language.

THE WITNESS: Yes.

MR PERRY: You’re the people who are spending billions of dollars in order to get people out into the program.

THE WITNESS: Yes.

MR PERRY: You’re the people who are instigating a program which, on any view, constituted a massive increase in the number of installations of insulation to be undertaken in any one month.

THE WITNESS: Yes.

MR PERRY: You’re the people who were targeting the program towards those who were otherwise untrained, inexperienced, and unskilled in precisely this endeavour.

THE WITNESS: As part, yes.

MR PERRY: You were relying, you said, on the State OH&S authorities to really play the proactive role in preventing catastrophes such as Matthew Fuller and Reuben Barnes’ death.


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THE WITNESS: We were reliant on that; yes. That they - - -

MR PERRY: So - - -

THE WITNESS: - - - would have a proactive compliance and audit strategy in place for their regulatory regime.

MR PERRY: Would it not have been apparent that the appropriate course, then, was for the Commonwealth to seek out the relevant and appropriate state bodies and speak to them, so that the assumption about state responsibility might have some substance, rather than simply hope?

THE WITNESS: I don’t think it was hope. I think there was an existing regime, and there was an assumption made it was effective.

MR PERRY: But did anyone, to your knowledge or at your direction, take steps to talk to the workplace health and safety people in Queensland or the Electrical Safety Office, which is a component of it, rather than fair trading? Did anyone turn their mind to the notion that it might be a good idea to contact those people, so that this assumption about the regulatory effectiveness of the Queensland bodies could be gauged, to see whether it actually had substance?

THE WITNESS: I can’t recall people turning their mind to it, but I’m conscious, though, that there may have been contact. But who they were – who they contacted, I’m not sure.

MR PERRY: You don’t know, because it was never brought to your attention, I gather.


MR PERRY: Is that right?

THE WITNESS: That’s right, because I was expecting – I was expecting states to actually come to us, asking for resourcing .....

MR PERRY: But when they didn’t – let’s assume that that expectation had some basis, anyway. When they didn’t come to you, bearing in mind the reliance you speak of, why on Earth didn’t the Commonwealth or your department or your section take the initiative and, themselves, do something about it?

THE WITNESS: I don’t recall why we didn’t.

MR PERRY: So we’re left with this. You people were relying upon the assumption about the effectiveness of the state regulatory regimes. You had an assumption that, notwithstanding it’s a Commonwealth program, they come to you first. When they didn’t come to you at all, as the months rolled by, the Commonwealth didn’t take the


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initiative and go to them, and you can’t explain why that might have been the situation.

THE WITNESS: No, although we certainly did, once ..... were in New South Wales. And I don’t know why we didn’t then extend that to other states.

MR PERRY: But that’s in about August/September, isn’t it?

THE WITNESS: That’s right. August - - -

MR PERRY: What about the preceding months from March – six months, March to September? Through that time, even if your assumption about ..... the states would come to, even if that had some currency, as the silence from the states grows and the notion of reliance upon the states becomes more focused, why didn’t the PCG or anyone on it or you contemplate that, perhaps, it might be a good idea to contact Queensland or their state equivalents, so this assumption might be tested?

THE WITNESS: I don’t know why.

MR PERRY: No. But you and the PCG proceed upon the assumption that all will be all right, in terms of WH&S, because the states have all these powers.

THE WITNESS: We’re aware that they have the powers, yes .....

MR PERRY: Yes, and you relied upon the exercise of those powers as a fundamental pillar in satisfying workplace health and safety issues.

THE WITNESS: Yes, because that was a state responsibility.

MR PERRY: Okay. Can you go back to your statement, please, to para 2.

THE WITNESS: Para - - -

MR PERRY: 2 - - -

THE WITNESS: 2 – yes.

MR PERRY: You are, from that, a particularly experienced bureaucrat – and I don’t use that term pejoratively – in the environmental area.

THE WITNESS: Yes.

MR PERRY: You’re aware of your counterparts in New Zealand?

THE WITNESS: I’m aware of them but I didn’t intersect with them much apart from in international projects I was involved with.


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MR PERRY: There’s a body in New Zealand called EECA, E-E-C-A, who we gather from some traffic between Mr Speranski of that body and your Ms Kaminski after Matthew Fuller’s death. We gather that they – that’s EECA – banned the use of rollout foil in insulation projects certainly in about 2008 and in a government program which commenced over there also on 1 July 2009. Right?

THE WITNESS: No, I wasn’t aware that the – the other New Zealand – what did you say? The 2009?

MR PERRY: Yes.

THE WITNESS: Okay. I accept that but I don’t recall that.

MR PERRY: No. But, you see, it’s that very fact which is troubling, isn’t it? That you, as head of the PCG and the position you take in the department, were not aware of the steps taken by New Zealand with respect to the banning of rollout foil, in particular foil being used in precisely the manner that Mr Ruz warned of in February and in precisely the manner that killed Matthew Fuller in October. Do you not see it perhaps as a troubling indicator of the lack of the appropriate knowledge base in the PCG that you weren’t aware of what happened in New Zealand?

THE WITNESS: Yes, I was quite worried when I heard about it and when I was at consultations with the Queensland authorities and I think it was Malcolm Richards - - -

MR PERRY: Yes. So - - -

THE WITNESS: But I don’t think Malcolm Richards mentioned New Zealand to me.

MR PERRY: Once you became aware of what had in fact been done in New Zealand which if applied here in almost all probability would have prevented the deaths of both Matthew Fuller and Mitchell Sweeney. When you became aware of that, did it not occur to you to ask the blindly obvious question, “Well, that is something we should have been aware of earlier”?

THE WITNESS: I think I asked that question.

MR PERRY: And the answer was?

THE WITNESS: The answer was that it was different, as I said in my statement.

MR PERRY: Was the difference because it was under the floor rather than in the ceiling?



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MR PERRY: Dear god. From your perspective now, that answer is just ludicrous, isn’t it?

THE WITNESS: Well, in hindsight, yes, it is.

MR PERRY: Yes. So when you were told it was different, did you ask what difference?

THE WITNESS: Well, as I recollect, it was about the time – it was immediately after Matthew Fuller’s death and that we were considering whether we would ban it or whether we would move to just alternate fastening arrangements for foil.

MR PERRY: And you asked – you were told about the New Zealand experience and someone told you, “We looked at that and it’s different, Mr Forbes.”

THE WITNESS: That’s right. But then we had - - -

MR PERRY: All right.

THE WITNESS: And we had subsequent consultations with industry, as I recollect, after that.

MR PERRY: And then you asked the person in your department who told you about this New Zealand experience about why it was different, didn’t you?

THE WITNESS: Yes, I did.

MR PERRY: And what you were told, as I understand your answer, is, “In New Zealand, they stapled it to floor joists. In Australia, we’re stapling it to ceiling joists.” Is that the thrust of it?

THE WITNESS: That’s the thrust of it.

MR PERRY: You’ve been in this business 33-odd years. Don’t tell me you were satisfied or considered that explanation was sufficient.

THE WITNESS: No, because we then – we had consultations with the industry in days immediately thereafter.

MR PERRY: And the industry people other than, what, the foil people, all said to you, “We’ve been telling you about this for some time.” Mr Richards, Mr D’Arcy – these people all said, “We’ve had concerns about foil for some time.”

THE WITNESS: Yes. They said that to us and I think there was – as I said earlier, I recall a – a meeting in parliament house which the minister had convened where we brought all those industry players together to find a way forward.


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MR PERRY: 27 and 28 October or thereabouts. There are some documents - - -

THE WITNESS: Yes, something like that. Yes.

MR PERRY: Yes, okay. Tell me, up until that time, do you say it was not your appreciation, firstly, that rollout foil was being actually stapled to roof joists – that is, you weren’t aware that that was happening or might happen.

THE WITNESS: I wasn’t aware of that.

MR PERRY: Yes. That either was or might happen?

THE WITNESS: Both. I wasn’t - - -

MR PERRY: All right. And you weren’t aware – or had you contemplated that such a thing did happen, it was extraordinarily dangerous.

THE WITNESS: It could have been quite dangerous.

MR PERRY: Yes. Can we go to CPS.002.001.2920. While it’s being turned up, this is the CPSISC booklet that came out some time in August 2009. Were you aware of it?

THE WITNESS: Of the booklet?

MR PERRY: Yes.

THE WITNESS: Yes.

MR PERRY: Have you read it?

THE WITNESS: I think I only read it - - -

MR PERRY: After the event.

THE WITNESS: - - - after the event.

MR PERRY: Yes. Go to page 35 then. I think we’ve gone too far. Thank you. It’s the box on the bottom. There you go. I notice, maybe for my benefit than anyone else’s, the numbers at the bottom sometimes doesn’t correlate with the number which you’re actually going past. All right. Down a bit further. Yes, it’s taking a little while. Keep going down a bit. The other way – by “down”, I mean. Right. Do you see the thing in the middle? “Warning.”

THE WITNESS: Yes.


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MR PERRY: Tell me, was that matter, the practice of stapling RFLs to ceiling joists poses a high risk of electrocution – was that matter ever brought to the attention of the PGC for consideration?

THE WITNESS: Not that I recall.

MR PERRY: Here, you have the booklet developed for the purposes of your program containing a warning of this kind complete with the consequences in the diagram beside it and you would expect, wouldn’t you, that where there is a high risk of electrocution being referred to a potential method of installation of one particular type of insulation, that if the information flow within your department is being effective and if the PCG ..... any proper role with respect to workplace health and safety issues, this would have to be brought to the attention of the PCG?

THE WITNESS: I think the PCG should have been aware of it, yes.

MR PERRY: Because a matter of this kind immediately upon recognition of it calls for a very serious response, doesn’t it?

THE WITNESS: It does.

MR PERRY: And it calls for the sort of action the PCG was specifically implemented or created to implement.


MR PERRY: This is August, about two months before Matthew Fuller’s death. How is it that a matter of this kind, bearing in mind your answers now, is not brought to the attention of the PCG?

THE WITNESS: I don’t know why it wasn’t brought to the attention of the PCG.

MR PERRY: Because if it had been, your own booklet – if it had been, you would expect, would you not, the PCG to act promptly and effectively to proactively ban the risk that this is referring to?

THE WITNESS: As was the response after Matthew Fuller’s unfortunate death, it should have happened earlier.

MR PERRY: But the PCG is set up to control, effectively, the program, isn’t it?

THE WITNESS: It is, but the PCG has got to be informed.

MR PERRY: Well, you’re the head of the PCG. You’ve got a senior position in the department. Can you give even hypothetically an explanation of how something of this kind in this booklet is not brought to the attention of the PCG?


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THE WITNESS: All I can say, it’s a failure of process.

MR PERRY: But the process – taking you back to your own paragraph 31, the process – sorry, 25. The process in PCG tier 1 programs is to have a project management framework designed to try to make sure the right questions are asked, that the right sort of risk framework is put in place, etcetera. Tell me, what information protocols or guidance was in place so that under a tier 1 project with this project management framework, a matter as serious as that raised in the CPSISC booklet would be brought to the attention of the PCG?

THE WITNESS: Well, all I can say is that there’s a risk register which the PCG was considering on its weekly meetings – should have reflected this, and it should have, therefore, been brought up to PCG.

MR PERRY: But it would be much more fundamental than that. One doesn’t have to await the risk register, even if that process fails miserably. Surely, a matter as significant as this - stapling RFLs to roof joists carries the high risk of electrocution. Surely, a matter as fundamental as that should be red flagged and taken up to the PCG if this project management framework for tier 1 projects that you talk of had any real, as compared to theoretical, effectiveness.

THE WITNESS: Well, I can’t explain why it wasn’t brought to the attention of the PCG. I cannot explain.

MR PERRY: I understand that. What I asked you was, surely with any sort of proper protocols a matter such as this doesn’t have to await the risk register. This sort of thing should be brought immediately to the attention of the PCG.

THE WITNESS: Well, I would have thought that it would have been, but - - -

MR PERRY: Yes. I mean, what protocols did you have in place so that information of this kind would come to the PCG? Only the risk register?

THE WITNESS: My understanding is the risk register was then reflected in terms of risk managers, and people having risk responsibilities, up to them to bring that forward.

MR PERRY: All right. Was it the responsibility of the risk manager to bring it to the attention of the PCG? Of course, the risk manager himself or herself would have to be informed first.

THE WITNESS: Yes, of those who were responsible in those particular areas for that issue.

MR PERRY: Was there an understanding or a system whereby matters of this kind would necessarily be reported to the risk manager?


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THE WITNESS: Well, I can only assume that they should have been. I can’t – I don’t – I can’t recall the protocol to that effect. All I can recall is that people are professionally based and you would expect them to bring such issues forward.

MR PERRY: Wouldn’t a properly formulated project management framework contain just such a requirement, that matters that go to risks of this kind be reported to risk manager or PCG promptly?

THE WITNESS: You would have thought that, and that – you would expect that to come through the - - -

MR PERRY: Yes.

THE WITNESS: - - - risk register and the – the risk owners for those.

MR PERRY: Now, the second thing you spoke of was supervision. You know that the supervision requirement did not specify supervisors be on site. You just say that was your expectation.


MR PERRY: Yes. You know, do you, that in South Australia where they have a registration scheme the regulation there requires in terms onsite supervision?

THE WITNESS: No, I don’t recall that, but that was my expectation nonetheless, that that’s what I thought was going to happen.

MR PERRY: Why not use the words then? Why just leave it for supervision?

THE WITNESS: Well, on reflection, I would have used “onsite”.

MR PERRY: Yes.

THE WITNESS: But at that time “supervision” to me meant onsite.

MR PERRY: But you’ve been in a business such as this for 30-odd years. What this program was contemplating in many senses was the antithesis of your experience – untrained, unskilled, inexperienced individuals, both as installers and installer companies, or registered installers, to be more accurate.

THE WITNESS: Is that a comment, or are you asking me - - -

MR PERRY: Yes. It’s a question, isn’t it? This program anticipated in registered installers, and the installers themselves, people untrained, inexperienced, unskilled.

THE WITNESS: Yes.


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MR PERRY: Yes. All right. Now, may I take you, please, to 36. Now, you’ve got your statement in hard copy, so what I will ask the operator to do, please, will you turn up STA.001.015.0001 and then go to page 0016, which is paragraph 101 of Mr Keefe’s statement. What I’m going to do, Mr Forbes, is put a paragraph of Mr Keefe up on the screen whilst, at the same time, you have the hard copy of your statement in front of you. All right?

THE WITNESS: Yes.

MR PERRY: Now, you may read the whole paragraph if you wish, but the part I’m asking you about is, see about the middle the word, “however, no workshops”?

THE WITNESS: Which paragraph in - - -

MR PERRY: 101.

THE WITNESS: 101. Right.

MR PERRY: All right. Mr Keefe seems to be saying that:

...no workshops were held for electrical safety –

etcetera:

This was because electrical safety had not featured highly in the risk assessment risk profile for the HIP at the time –

which is end of April, into May. All right? That connects with your recollection, does it?

THE WITNESS: Well, I don’t recall electrical safety coming to the fore at that time.

MR PERRY: Did it come to the fore when the attention of the PCG ultimately turned to it after the 1 July rollout?

THE WITNESS: I don’t recall it in those terms about electrical safety, but certainly safety of installers.

MR PERRY: Did it come to the fore after the CPSISC booklet in the middle of August?

THE WITNESS: No. I think the issue there was fire after end of August.

MR PERRY: No. The CPSISC booklet. I took you to it.

THE WITNESS: Yes, and – but I – as I said, I - - -


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MR PERRY: Didn’t come to – right.

THE WITNESS: I don’t remember reading that, or that booklet coming to the - - -

MR PERRY: Is it fair to say that electrical safety only came to the fore after Matthew Fuller’s death?

THE WITNESS: I think that’s true.

MR PERRY: Now, you have heard from Mr Horton a suggestion that Mrs Coaldrake was of the view that installer safety wasn’t a risk to the Commonwealth and, therefore, wasn’t included in the risk register. I think he asked you a question or two about that. Do you recall that?

THE WITNESS: Yes, I recall him saying that.

MR PERRY: Yes. Do I take it that your view was that installer safety was a risk, but should have been in the risk register?

THE WITNESS: Well, I think on reflection the answer is yes. It should have been.

MR PERRY: No. Not on reflection; at the time you were looking at the risk register, do you assume that it incorporates risk to the installers, or was that not your understanding, or did you just not address the issue perhaps?

THE WITNESS: Well, I assumed that it was in the – the risk register.

MR PERRY: Back to your statement, please. In 36 where you are:

Safety risks were also taken into account by the PCG, but only when reflected in the risk register.

It seems to indicate that the risk register was really the only source of information with respect to safety risks that the PCG took into account or acted upon.

THE WITNESS: Because that was the information it had before it.

MR PERRY: And that’s the only information it had before it.


MR PERRY: It’s the only information it ever sought to have put before it. Never went outside the risk register, did it?

THE WITNESS: Well, there would have been conversations in the corridors, but I don’t – I don’t recall any discussions of safety issues in the corridors.


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MR PERRY: No. All right. Can I take you, please, to para 40 – sorry – 39 in your statement. Now, it’s just over the page. Stop. A bit more, where we can see the bottom of one part of the paragraph and just when it starts – no, we don’t quite get it. All right. You see at the bottom of page 7 – you go up a bit now, please. That’s it:

I have no recollection of New Zealand being raised. I have a recollection of when it was raised. I was –

and then down to the next page –

advised.

I asked you about this earlier, but I just wanted to bring you back to it. You don’t recall who advised you that it was different.

THE WITNESS: No, I don’t.

MR PERRY: Yes. That’s all right.

THE WITNESS: But I – but it – if it was, it was more likely to be Kevin Keefe, I think. But I’m not – I can’t be certain.

MR PERRY: Thank you. I wanted to take you, please, to the document which is MIN.002.001.3517. I don’t think you will have it so you will have to ask for the screen. Right. Now, firstly, to put this in context, will you go to the page which is 3526 – controller, please. It’s part 4, governance. 3526, yes. That’s part 3 so we go down a bit. There we go. There’s a project sponsor, you. You approved the project plan.

THE WITNESS: Sorry, what’s the context of this? What’s this document?

MR PERRY: This is the 16 April 2009 design and implementation document, tier 1 project plan version 1.2. Okay.

THE WITNESS: Right. Yes.

MR PERRY: And if you wish – won’t take too much time – that’s the first page is what he says, okay.

THE WITNESS: Yes, okay. No, that’s fine.

MR PERRY: Right. So you’re the sponsor. Will you go ahead, please, firstly to 3527, training working group. Did that report to the PCG? Got it? Stop.

THE WITNESS: It may have but I remember – I think Melissa McEwan was at the PCG representing DEWHA.


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MR PERRY: All right. Will you go to - - -

THE WITNESS: But I don’t know whether the training working group actually reported or whether she did.

MR PERRY: ..... 3530. Just go up a bit, I think. Up. Yes, keep going. See Office of Coordinator-General?

THE WITNESS: Yes.

MR PERRY: In this plan, the first dot point:

What the OCG did was ensure progress, direction, speed and delivery.

Does that ring a bell as to how it actually worked?

THE WITNESS: Yes, pretty close.

MR PERRY: Yes. Then will you go to 3534. See OH&S, state and territory governments. Now, this is April. Quarterly meetings. You have no recollection, as I understand it, of any meetings with the Queensland state OH&S department as compared to Fair Trading.

THE WITNESS: No.

MR PERRY: And the purpose of the quarterly meetings was protecting worker and consumer against hazards and enforcing the minimum standards. So there’s the plan. What about the execution? There doesn’t appear to be, from your evidence, any contact with those departments – sorry – in the states to protect worker – the workers against hazards or to enforce minimum OH&S standards. Is that right?

THE WITNESS: There was certainly no quarterly meetings.

MR PERRY: And no meetings to your knowledge. Is that right?

THE WITNESS: There may have been with South Australia but I’m not sure.

MR PERRY: That’s the best that you can think of.

THE WITNESS: That’s – yes.

MR PERRY: Right. Then back to 3521. It’s the bottom of that page under the heading “Target output/deliverables”. Right. Stop. I know these things – a lot of these things changed after April so I’m just going to ask you about the last dot point:

The national register of installers was meant to ensure quality, safety, scale and national coverage objectives.


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Was that what the national register of installers throughout the program – that is, right up until its rollout and thereafter – actually did? Ensured quality and safety?

THE WITNESS: I think it was its intent but it didn’t meet that.

MR PERRY: No, and it didn’t meet it because the minimum standards for registration as an installer were adapted in order to effect a 1 July rollout with as many installers as possible. That’s right, isn’t it?

THE WITNESS: Yes.

MR PERRY: Yes. Thank you. Thank you, sir.

COMMISSIONER: Mr Keim.

MR KEIM: Thank you, Commissioner.

<EXAMINATION BY MR KEIM [3.50 pm]

MR KEIM: Mr Forbes, my name is Stephen Keim. I appear for the family of Mitchell Sweeney, who was the young man who died on 4 February 2010, and the program, you will recall, was brought to an end soon thereafter. I wanted to ask you a question about paragraph 18 of your statement, and it’s the statement there sourced in Mr Murdak and Mr Hoffman that the focus of the HIP was economic stimulus with an emphasis on job creation rather than a strictly environmental program related to energy efficiency. Are you able to provide in any more detail the precise words that either of those men used to make that point? Were they said in a certain context in order to dismiss other ideas?

THE WITNESS: Well, I think – well, they were said in context related to discussions at – in PCG by Martin Hoffman, and I think Mike Murdak emphasised it to me a couple of times in meetings I had with him.

MR KEIM: Yes. Although - - -

THE WITNESS: But they were sort of in the gist of what I have written there.

MR KEIM: Okay. The – we don’t know what’s in the middle of that paragraph, but it starts off talking about being briefed verbally in late January 2009, so I thought that the context might have been earlier than the establishment of the PCG. You’re able to help me?

THE WITNESS: Well, that was briefed verbally in late January; that was after the Cabinet decision.

3.4.14 P-1881 M.A. FORBES XN©Commonwealth of Australia MR KEIM

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MR KEIM: Yes. What you – 3 February. It was announced on 3 February.

THE WITNESS: No. I think the Cabinet decision was before that. It was the announcement on 3 February.

MR KEIM: Yes. We might have been cross-purposes.

THE WITNESS: Right.

MR KEIM: I accept that the discussion with them must have been after 3 February, but I gained the impression from what is said at the beginning of the paragraph that it may have been earlier than the first PGC meeting, which I thought was in early April.


MR KEIM: So does that help you recall when these things were first said to you and what was said?

THE WITNESS: Well, it was at this time I remember discussions around the original proposal which DEWHA was starting – was putting together, which, as I recollect, went to a five-year program.

MR KEIM: Yes. Okay. So it was saying that the five-year program would have to be delivered in two and a half years, and it was about job creation rather than energy efficiency?

THE WITNESS: Well, it was about both, but it was being put in the context of a job creation program.

MR KEIM: Yes. Okay. I want to take you back to that PCG meeting on 1 May. The minutes are AGS.002.015.1200. Now, I just want to you remind you, and you have been told this before, that you weren’t at the meeting on 8 May. So I want to ask you again what you can recall about that. Just wait til it comes up on the screen. If we can go down to 4D. And you can see the dot point and then it says Agenda Paper 4D, attachment B, Conditions for Inclusion on the Installer Provider Register – your supervisory role – and my suggestion is that the minute taker might not have got this paragraph down properly, but in any event, it says:

PCG members agree that installers supervising installation must have a valid OH&S card.

So it was something to do with the supervisory role.

THE WITNESS: Yes.


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MR KEIM: Okay. Now, in that context, can you remember what Mr Hoffman said at that point in the meeting, and can you remember what Mr Keefe said at that point in the meeting?

THE WITNESS: I would like to help, but I can’t recall.

MR KEIM: Okay. Now, I just wanted to take you to another document, which is not your document, but it’s some emails which appear to be relating back to that. The document is AGS.002.030.0010. And they’re emails involving Aaron Hughes, Melissa McEwan, and ultimately Jane Spence and William Kimber. If we can go down to – in fact, it’s the first email. And the paragraph – so sorry – the one at the top of the document. So it’s actually the last email. My mistake. Down a little bit. “I think the concern”, that paragraph there. Now, I can just give you this as a background while you’re looking at that, Mr Forbes. What Mr Hughes and Ms McEwan were doing were drafting the provision with regard to the installers not requiring any more than the OHS card provided there was a supervisor. Do you understand that?

THE WITNESS: Yes.

MR KEIM: And that was then – that was adopted at the meeting of 8 May where you weren’t present. But the reference there – and this is Ms McEwan speaking to Aaron Hughes:

I think the concern that Kevin raised at Friday’s meeting about on the job apprentice style training wasn’t actually addressed so I have put in some suggested words to deal with that.

I presume that that’s a reference to Mr Keefe and not to the Prime Minister of the time. Does that help you – assuming that – and recalling the Kevin had said something about on the job apprentice style training – does that help you at all in remembering what Mr Keefe said at the PCG meeting which took place on Fridays, is that right?

THE WITNESS: Well, I read what’s there but I’m afraid it doesn’t crystallize in my mind what was said by Kevin or – I think you said exchange with Martin Hoffmann.

MR KEIM: Yes. So that doesn’t help you at all.

THE WITNESS: I would like to help but – but I just can’t recall.

MR KEIM: Okay. If we can go to paragraphs 44 and 45 of your statement, and I wanted to ask you some questions about the shortness of the time. And now, you describe it in 44 as “horrendous”. You describe it 45 as “tough task”. And somebody else – although this was probably not the – eventually the full effect of their evidence – has described it as “insane” to the Commission. Firstly, with regard


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to paragraph 44, who other than Mr Mrdak did you raise your concerns about the shortness of the time?

THE WITNESS: Well, I think there was discussions in the Department of Environment executive - - -

MR KEIM: Yes.

THE WITNESS: - - - where I raised it with my colleagues.

MR KEIM: Yes.

THE WITNESS: But that was probably more to offload rather than ask them to actually help. I think I was just saying we’ve got a problem, we’re going to have to deal with it.

MR KEIM: Yes.

THE WITNESS: And I think the only other expression I had was with - - -

MR KEIM: So is that Keefe and Carter?

THE WITNESS: No. Well, I think I probably said that to Mr Carter and Mr Keefe but I’m talking about my ..... colleagues and I think it was the acting Secretary at that time, Gerard Early. But it would have been in passing, not necessarily in an explicit – asking them for help. It was me just saying, look, we’ve got this and we’ve got some problems because of the timelines.

MR KEIM: Yes. Now, the evidence you’ve given with regard to the shortness of the time, just about every witness that has come into the Commission seems to have had a similar opinion, that the amount of time to do the job was not sufficient. Does that reflect your opinion?

THE WITNESS: Yes.

MR KEIM: And one can also express that as the amount of time to do the job was not sufficient to make sure that it was done properly and safely. Do you agree with that?

THE WITNESS: Well, I don’t know about the last word. It certainly wasn’t – on reflection now, I would agree with that, about properly and safety, but at the time I think it was about can’t be done properly.

MR KEIM: Okay.

THE WITNESS: My – as my mind was in 2009.


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MR KEIM: Now, what is puzzling – I would suggest – is that there’s not a single document that I’ve seen where any public servant has placed on paper their very strong concerns about the shortness of the time that was available and the fact that it simply did not allow the job to be done properly in that time. Have you seen any paper like that?

THE WITNESS: Not that I recall but, as I said, it was expressed verbally. We may have put it in something to the Minister about – though I can’t recall it in writing – about the very difficult timelines which we were faced.

COMMISSIONER: Now, isn’t the job of a very senior person like yourself to say, Minister – or whoever it is you are talking to – this can’t be done. Because you didn’t do it in the end. I mean, what you did on 1 July was have the Medibank system up and running. A month before that you had your register of installers. But you hadn’t rolled out your compliance things. You hadn’t rolled out the safety aspects of it properly. So you didn’t get there, and you were telling them, I think, all along. The point is: why don’t you tell the Minister or those above you?

THE WITNESS: Well, I think we did verbally, saying we have got a challenge to actually meet this timeline.

COMMISSIONER: Why?

THE WITNESS: Sorry?

COMMISSIONER: Why?

THE WITNESS: Why - - -

COMMISSIONER: What was magic about 1 July?

THE WITNESS: Because that was what the Prime Minister wanted.

COMMISSIONER: Can you not say, “It can’t be done, Prime Minister.”

THE WITNESS: Well, senior public servants tend to – there’s a culture that once a decision is made, and – let me just go back a step. When is a decision is being contemplated, it’s important that public servants tell the decision maker what the consequences are of taking a particular decision prior to them making that decision so they are aware of all those consequences. But once a decision is made, the public service is to gather its loins and to get on and deliver it for the government. And if it said 1 July, you had to try and make it by 1 July.

COMMISSIONER: Right.

THE WITNESS: Now, you can go back, but the consequences of that are that you’re not meeting the government’s timelines, and there will be a lot of verbal


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discussion about whether that was appropriate or not, and I don’t think we ever go to that point where we felt we would go back because there was concern about meeting 1 July but then we ended up with a solution to get us to 1 July.

COMMISSIONER: You say that the advice comes before the decision is made, and once it’s made, it’s your job to implement it.


COMMISSIONER: So was any advice sought from you prior to the decision being made?

THE WITNESS: I wasn’t involved in any of the decision making, or the input to those decisions to that cabinet.

COMMISSIONER: Do you know if any of your senior colleagues were?

THE WITNESS: I don’t know.

COMMISSIONER: Sorry, Mr Keim. I don’t want to - - -

MR KEIM: Thank you, Commissioner. See, I want to test that proposition that once a decisions made, you can’t do anything. And at some stage, if the implications of carrying on with the decision are so bad, a duty must arise upon the public servant to say, “I know you’ve made this decision. If you instruct us to carry it out, we will, but you must know the implications. I mean, if it comes to 10 babies dying as a result of the decision, at some point a duty arises, doesn’t it, to give the frank and fearless advice that these are the risks associated with continuing to implement this decision.

THE WITNESS: Yes. I think that’s a fair assessment, but I think that the – in the context in which you’re putting it, up to beginning of July and through July, I don’t think we were in a position where the safety issues were paramount in our mind to actually bring that to the attention of ministers. And certainly when we became aware of some of those issues, we did bring it to the attention of the ministers.

MR KEIM: Was there any point between 3 February and 1 July that you though the decision to start on 1 July could be implemented properly? That is, with the training in place, with the audit and inspections in place, and with the pocket book distributed on 1 July. Was there any point between 3 February and 1 July that you thought that was possible?

THE WITNESS: Well, I think early in April when we had the new model, which gave us a window that we thought we might get to 1 July, I think at that point I was starting to feel as though we might get there. But as we progressed towards 1 July there was things which were – we weren’t quite getting there and, as we said before, the compliance and audit program was one significant omission.


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MR KEIM: You must have known by 1 May that, again, there was no way the decision could be implemented properly by 1 July.

THE WITNESS: Well, it was probably towards the middle of May, I think, but I – I will have to re-read all of those – anyway, the general gist of what you’re saying is probably correct. They were around - some time in May I was having – what - I was worrying about some elements of the program not being in place.

MR KEIM: And you - - -

THE WITNESS: But we had – we had interim solutions in a way which, sort of, mitigated my fears. So there was interim solutions around the compliance regime.

MR KEIM: But you’ve already told the court that they only went to fraud.

THE WITNESS: Only went?

MR KEIM: To fraud.

THE WITNESS: Yes.

MR KEIM: So you must have know that it wasn’t a solution; it was just - - -

THE WITNESS: Well, it was an interim fix.

MR KEIM: Yes. But an interim very partial fix.

THE WITNESS: In hindsight? Yes.

MR KEIM: Okay. And I thought you, in your evidence to the Commission, when you were being asked questions by my learned friend, Mr Horton, was that you felt that you didn’t have enough time to turn your mind to questions like safety, to make sure that issues like that, the right questions being asked, as you discussed with Mr Perry – you felt that you didn’t have enough time to do the thinking that was necessary to make sure that it was turned out properly. That’s correct, isn’t it?

THE WITNESS: I think that’s a reasonable summary of my feelings.

MR KEIM: You came into work each day and you thought, “Everything is just happening too quickly. I can’t be sure that I’m addressing everything that needs to be addressed.” Is that a fair summation?

THE WITNESS: I think that’s a fair summation, because I not only had responsibility for this program, but for a range of others as well.

MR KEIM: Yes. And let me ask you about this: if you had done what I’m suggesting was possible, if you had written an email to those in the Department


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senior to you, including Ms Kruk, and if you’ve sent the same email to the members of the office of Coordinator-General who were working with the department, Mr Mrdak and Mr Wilson and Mr Cox, perhaps, you would have expected that you would have got – if you sent the email and the email had said, “We cannot start this program on 1 July because the necessary requirements are not in place. There are too many risks associated with commencing on 1 July”. You understand the type of email that I’m talking about

THE WITNESS: Mmm.

MR KEIM: It’s the sort of warning that we’ve been discussing; you agree with that? Sorry, you have to say yes or no.

THE WITNESS: Yes. Sorry, I thought you were going on to another question.

MR KEIM: And am I right in thinking that people would have come to you and said, “Why are you doing that? Why are you putting them in writing? Why don’t you just get on with implementing the plan?” Is that what you would have expected if you did that?

THE WITNESS: That was my expectation because I was talking about those issues verbally with them.

MR KEIM: Yes. But if you had put it in writing, you would have got some fairly strong blow back. Am I right in thinking that? That’s what you would expect?

THE WITNESS: Well, yes. My job was to actually deliver it.

MR KEIM: Yes. But if you had put it in writing, am I right in also thinking that people would have had to address the concerns that you raised because you had put it in writing? There was now a paper trail that they could not ignore; is that correct? Is that a correct expectation?

THE WITNESS: Yes, but I would probably caveat it by saying if I already knew what the answer was, why would I put it in writing? See, I mean, there’s an issue here about wanting to get on and achieve the job and, if you like, the other issue of, well, let’s get everybody involved. If you like, pass the buck. Because there is a bit of a culture about ensuring that you remain positive to get things done, and I think that’s probably a culture which is quite prevalent in the public. So if you don’t actually put your hand up ..... problems until the end, which I think is a mistake. It should be done early; it shouldn’t be done later. That’s a bit of a cultural issue within the APS.

MR KEIM: All right. Mr Forbes, you really know the answer to your question, “Why put it in writing”, don’t you? You put it in writing because you’re standing up as a frank and fearless public servant and saying, “There is a problem here. It has to be addressed”; do you agree with that?


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THE WITNESS: Well, I guess, in generality, yes.

MR KEIM: In retrospect – and I don’t want to get emotive about it, but in retrospect, I ask as – on behalf of the people whom I represent, would you feel better now if you had written such a letter at some time between 3 February and 1 July?

THE WITNESS: Yes. The answer to that would be yes.

MR KEIM: And the Commissioner raised this with you, and I will put it to you in this way: it was probably a difficult thing for somebody as senior as Ms Kruk to do to make the call because she was too senior and too far away from the day-to-day aspect of it, and it was probably too difficult for someone like Ms Brunoro or Mr Kimber or Dr Delbridge to be able to make that call because they were too junior and too meshed into the day-to-day.

COMMISSIONER: Just a minute, Mr Keim. I didn’t think I put that to anyone. You can ask that question, but don’t attribute it to me.

MR KEIM: That’s so. I was just extending on it a little bit, Commissioner. So the proposition I want to put to you is that – I’m not saying that you’re the only person who could have made the call, but your level of seniority as the sponsor of this program probably put you in a pretty good position to do it. You were senior enough to cop the flack and get away with it and junior enough to know exactly what the problems were. Do you agree with that?

THE WITNESS: Yes. I think that’s a reasonable assessment.

MR KEIM: Now, that’s only the first of my two difficult questions. I want to come to the second one now. Again, the Commission has heard day after day after day that the risks would be mitigated by the fact that there was an OH&S regulatory system in the states and territories. That’s your evidence as well. This is said in the context where, for every experienced installer working in the industry, the program intended to bring 23 more people who haven’t done installation work previously into the industry. Do you agree with those numbers?

THE WITNESS: Well, those numbers are probably around right, I would think.

MR KEIM: Yes. Mr Mrdak said to do twice as many in a month as was previously done in a year. That’s where I get my 24th from.

THE WITNESS: Okay.

MR KEIM: And you agree with that broadly?

THE WITNESS: Yes. I agree with that broadly.


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MR KEIM: Now, you and I have probably not worked on building sites, but in terms of our general work, we’ve probably both had enough experience to say that building sites aren’t like well-run classrooms. Not everybody obeys every rule on a building site. Would you agree with that as a general proposition?

THE WITNESS: Well, I don’t have the experience to actually answer the question, but I think in general terms, there’s likely to be some non-compliance.

MR KEIM: Yes. With a lot of rules, including the safety rules.

THE WITNESS: Yes.

MR KEIM: Okay. And I suppose the fourth part of the proposition that I’m asking you to consider is that, not only were we bringing 23 for 1 in terms of employees into the industry, an ocean of money was being made available so that people would be attracted into the industry. Do you agree with that as a general description of what was happening as part of the program?

THE WITNESS: An ocean of money. Well, certainly, the object was to bring a lot of people into that sector to get employment up.

MR KEIM: And there was a profit motive for that. They came into the industry because they would be able to make money putting in installation.

THE WITNESS: There was a market mechanism put in place, yes.

MR KEIM: So I want to ask you against that background, did you really think that the OH&S regulatory system of the states, without any further consultation, financial input, material input, would effectively mitigate the risks to installer safety brought about by this program?

THE WITNESS: Well, it was my expectation that they would because they were dealing with a very a large construction sector prior to this program, and that one can only assume that they had a reasonable and effective occupation health and safety regime. If they didn’t, I think there would be all sorts of other issues involved outside of just installation issues.

MR KEIM: That’s what you thought at the time.

THE WITNESS: Yes.

MR KEIM: Do you think that now?

THE WITNESS: It worries me that the state regulatory system appears quite deficient in the construction sector. That’s quite a concern.

MR KEIM: My question was do you still have that view that you had before?


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THE WITNESS: Well, I’m saying the experience - - -

MR KEIM: The state OH - - -

THE WITNESS: - - - the experience that I had from the Home Insulation Program was – what I have now is that I don’t think the occupational health and safety regime in the states is very effective.

MR KEIM: It’s easy to criticise a State OH&S regulatory system. It’s easy to criticise them but it’s really the reasonableness of the expectation then. So many inexperienced people were being put into a specific industry. You would be aware that every regulatory system can always do with more resources. You’re asking them with their existing resources, in each State and Territory, to cope with a huge influx of inexperienced workers in a dangerous type of work, weren’t you?

THE WITNESS: We’re expecting their regime to accommodate it.

MR KEIM: Yes. And you still think that that was reasonable?

THE WITNESS: Well, I think my view is that we would use a different model. We would go through the States now. We wouldn’t have used the business model which we had. I think we would use a totally different way of trying to deliver that, given the experience we’ve had.

MR KEIM: So is that saying that your expectations were in fact unreasonable?

THE WITNESS: No, I think the model we use wasn’t appropriate on reflection and hindsight.

MR KEIM: Okay. I want to ask you a question that’s about paragraph 64 of your statement. It’s the meeting with Mr Richards that I wanted to ask you about.

THE WITNESS: Yes.

MR KEIM: When did you meet with Mr Richards?

THE WITNESS: I’m uncertain. I know he met with the Minister, as I recall, and I think he may have come over to our office as well, but I can’t recall exactly.

MR KEIM: Was Mr Levey there when you met with him?

THE WITNESS: Mr Levey from - - -

MR KEIM: The Minister’s office.


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THE WITNESS: Well, if Mr Levey was there that means the meeting would probably have been in Parliament House. I would have met with – I don’t think Mr Levey would have come over to the Department.

MR KEIM: Okay. So you don’t think – you think that you met Mr Richards in a separate – in separate – your own meeting with Mr Richards, is that right?

THE WITNESS: Well, look, I’m not – I can’t recall whether it was separate or with Mr Levey or with the Minister. I just cannot recall that.

MR KEIM: Okay.

THE WITNESS: I certainly recall meeting, though, with Mr Richards.

MR KEIM: Did you ask Mr Richards about the New Zealand experience? That would have been, presumably, freshly in your mind.

THE WITNESS: No, I don’t think I asked Mr Richards about that.

MR KEIM: Were you aware of the New Zealand experiences at the time?

THE WITNESS: Yes, I think I had been briefed before the meeting with Mr Richards, which included me becoming aware of the New Zealand experience.

MR KEIM: And Mr Richards might have been a pretty good person to ask about it.

THE WITNESS: Well, look, I may have asked but I can’t recall whether I did or I didn’t.

MR KEIM: Okay. Can the witness see QIC.006.001.3737? These are the consultation meetings on the – I’m not sure now whether it’s 27 and 28 October or 28 and 29 October, with regard to what should be done in the wake of Matthew Fuller’s death and what that implied. Do you remember those meetings?

THE WITNESS: The ones in Parliament House?

MR KEIM: I think people have said they’re in Parliament House. I’m not sure if this is the right document but that’s the meeting – that’s certainly the meeting, the 27th and 28th. Can we scale – scroll, rather, down. That’s the end of that document. I will ask you this: at the end – or at the beginning of the second day some recommendations – the other minutes of these say that the following recommendations were tabled by the Department.

THE WITNESS: Right.


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MR KEIM: And those recommendations include a recommendation that metal staplers be banned but they don’t include a recommendation that the use of rollout foil should either be suspended or banned.

THE WITNESS: Right.

MR KEIM: You understand that - - -


MR KEIM: And those recommendations, in effect, became the changes to the guidelines that took effect on 2 November. You understand what I’m talking about?

THE WITNESS: Yes. Yes, I do.

MR KEIM: It has been suggested that you were responsible for those recommendations within the Department. Is that correct?

MR HOWE: I wonder if that question could be clarified. It was put to the witness that he was responsible for recommendations. I think my learned friend meant taking them forward after the consensus of the meeting.

COMMISSIONER: Is that what you meant, Mr Keim?

MR KEIM: It wasn’t. I was referring to some specific evidence which – I will try and place it in context for the witness, Commissioner. I was asking Mr Keefe about how those recommendations came to be made and why particular aspects of them were made, namely the banning of metal foils rather than – banning of metal staples rather than the suspension or ..... suspension or banning of rollout foil itself. And Mr Keefe’s evidence was that you would be a better person to ask those questions of and so my question of you is did you have an intimate knowledge as to how those recommendations came to be made.

THE WITNESS: Well, I'm trying – struggling to recall but as I recollect those meetings in Parliament House that there was a consensus reached at those meetings about the way forward, as I recollect. And they became the recommendations for adoption by the meeting, as I recollect.

MR KEIM: Okay. I want to ask you four questions with regard to that. Did you give any thought to recommending that a report be obtained from an electrical engineer with expertise in safety because that had actually, you might recall you were shown a document of the new risk committee which had actually raised that question even before Matthew Fuller’s death. Did you give any thought to commissioning an expert report on the safety associated with the use of rollout foil?


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THE WITNESS: No. But we had a round table. The Queensland regulator, as I recollect – this document – who is it – Tony Leviton and Peter Lamonte and I think Malcolm Richards was also there as I recollect.

MR KEIM: And my learned friend Mr Howe says the master electricians were there.

THE WITNESS: Sorry?

MR KEIM: The master electricians.

THE WITNESS: Yes, the – Malcolm Richards, that’s where he’s from as I recollect.

MR KEIM: Yes. Was there any reason why you didn’t recommend that the use of rollout foil be suspended while an expert report could be obtained?

THE WITNESS: As I recollect there was discussions about banning rollout foil as an option. But I don’t recall a discussion around the use of an expert electrical engineer.

MR KEIM: Okay. Can I raise this question with you: why – I'm not saying that you shouldn’t consult with people in that way – but why have the decision made by a committee process in which you actually have the people who have a vested interested in foil there which may well make it more difficult for other people to recommend matters which might be seen to impact harshly upon the manufacturers of foil?

THE WITNESS: Well, I don’t think people would have – in that circumstance and the circumstances we were in – it would hold back people from expressing their view.

MR KEIM: Can I just give you a context with regard to that. Mr Ruz has given evidence to the Commission that when he raised the matters on 18 February he felt quite intimidated because people stared at him because he had raised something that appeared to be bad news. You don’t think that that sort of phenomenon would take place in a committee of the kind that you assembled there?

THE WITNESS: No. Because as I recollect the Minister spoke to those there and wanted their free advice about the way forward.

MR KEIM: My last question on this subject is was there a perceived reluctance or was there a reluctance on your part to make a stronger recommendation in terms of the guidelines of the program with regard to the use of rollout foil and then the State – the Queensland State Government was prepared to do in terms of regulatory action. That is, did you feel a reluctance to suspend foil from the program if the Queensland State Government wasn’t prepared to ban ..... foil in its jurisdiction?


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THE WITNESS: Well, I remember a discussion with the Queensland Regulator to that regard, whether it should be banned or not and that – who would be responsible in that regard and I don’t think we resolved that because if it was to be done it needed to be done, from my view, at both ends – in Queensland and by the Commonwealth in terms of its guidelines.

MR KEIM: Because of some perceived political blowback?

THE WITNESS: No, I think it’s because it required coordinated action to ensure it actually happened.

MR KEIM: Why – if it was the right thing to do in your opinion, why wouldn’t you just remove it from the program and let the money speak for itself, or the lack of money speak for itself?

THE WITNESS: Well, I think I was relying on the views which came out of the meeting - - -

MR KEIM: Okay.

THE WITNESS: - - - that foil could remain.

COMMISSIONER: Mr Keim, I’m proposing to adjourn now, unless you’re more or less finished.

MR KEIM: I’ve got one more – two further questions.

COMMISSIONER: One more question. Right.

MR KEIM: Do you know Dr Delbridge, who worked in the Department?

THE WITNESS: No, I don’t know Dr Delbridge.

MR KEIM: Could the witness see document ABC.002.001.0113? Dr Delbridge resigned at the end of July or finished up at the end of July. This is his resignation letter.

………., MR: I think it was his contract wasn’t renewed actually - - -

MR KEIM: Well - - -

………., MR: - - - rather than resigning.

MR KEIM: The letter speaks for itself. Just have a read through. See that, 29 July 2009?

THE WITNESS: Yes.


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MR KEIM: Just read through it. Look at the end of that paragraph, starting “the burden of technical policy advice almost likely for”. See it? Any knowledge of those matters that Dr Delbridge perceives to have been the difficulties he was facing in his job?

THE WITNESS: Well, I don’t recall this note from Dr Delbridge and clearly it’s – he has a strong personal view in that regard.

MR KEIM: So nothing that he’s talking about ever passed your desk and you never became aware of recommendations he was making or anything?

THE WITNESS: No, I don’t recall seeing this at all.

MR KEIM: Yes. That’s the end. Thank you, Commissioner. Thank you, Commissioner.

COMMISSIONER: Adjourn till 9 o’clock in the morning.

MATTER ADJOURNED at 4.35 pm UNTIL FRIDAY, 4 APRIL 2014


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Index of Witness Events

ANDREW WILSON, ON FORMER OATH P-1754EXAMINATION BY MR HORTON P-1754EXAMINATION BY MR PERRY P-1760EXAMINATION BY MR WINDSOR P-1772EXAMINATION BY MR KEIM P-1773EXAMINATION BY MR BRADLEY P-1780EXAMINATION BY MR HOWE P-1790EXAMINATION BY MR FAULKNER P-1795EXAMINATION BY MR HOWE P-1797

THE WITNESS WITHDREW P-1800

MALCOLM ANDREW FORBES, AFFIRMED P-1801EXAMINATION-IN-CHIEF BY MR HORTON P-1801EXAMINATION BY MR WINDSOR P-1852EXAMINATION BY MR PERRY P-1855EXAMINATION BY MR KEIM P-1881

Index of Exhibits and MFIs

3.4.14 P-1897©Commonwealth of Australia

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