Home insulation scheme trial: Henry raised concerns over staffing, access to materials

Ken Henry tells court he pointed out two major issues with Rudd Government’s insulation scheme before it was implemented.

Former head of treasury Ken Henry. Photo: AAP

Ken Henry has told a Melbourne court he raised concerns about the Rudd Government’s home insulation scheme before it was implemented.

The former federal treasury secretary appeared in front of Justice John Dixon today as the trial into the Rudd Government’s cancelled home insulation scheme continued in Victoria’s Supreme Court.

More than 140 business owners and tradesmen are suing the government over $150 million in losses they claim were incurred when the program was scrapped after four deaths and claims of rorting.

Dr Henry told the court he was concerned about whether there was enough tradesmen and materials to administer out the scheme.

“I did raise concerns (to a special budget committee set up in response to the global financial crisis),” he said.

“I had two concerns; were there sufficient insulation materials needed for the scheme? And where there enough staff in Australia available to undertake the program?”

Dr Henry told the court, in response to a hypothetical question put by the Commonwealth’s defence team, he would have advised against going ahead with the program if he thought there needed to be a deferral to train up tradies.

“I would have advised the government to reconsider or scale back considerably the program,” he said.

“A deferral could have seen the stimulus impact of the scheme going into 2010 and then it could have been pro-cyclical instead of counter-cyclical.”

Dr Henry, now NAB chairman, said he was not involved in the design of the home insulation scheme itself, but that the second stimulus package was aimed at tradies and builders.

“We learnt from the recession of the early 1990s that tradesmen and builders are heavily hit,” he said.

“We were interested in programs that targeted them.”

The home insulation scheme was announced in 2009 as part of the Rudd Government’s GFC stimulus package.

It was suspended the following year after four workers died and claims emerged that the program was rorted by fly-by operators.

A royal commission, led by Ian Hanger, found seven significant failings into the home insulation scheme’s design and implementation in 2014.

Former prime minister Kevin Rudd told court last week that he would have insisted safety risks in the scheme be fixed, if he had been made aware of them.

“We cannot proceed with a program that has unacceptable safety risks,” he said.

The Abbott government set up a compensation fund in 2015 for home insulation companies that lost money as a result of the Labor scheme’s cancellation.

Former finance minister Lindsay Tanner is set to appear in court later today. The trial continues.