O'BRIEN: And I'm now joined by the Prime Minister, in our Sydney office. Kevin Rudd, you've just seen that story. Reputable business, seven laid off yesterday, seven laid off today, company facing bankruptcy. How quickly are you going to get this money out to a firm like that?
PM: Well we've taken action to establish this insulation workers' assistance fund. And, as of next week, we'll begin assessing those firms which will qualify for assistance in terms of their employees. You see, with companies like that, Kerry, based on the nature of the report just done then by Heather Ewart, obviously there are many, many in the vast majority of the installers are good companies doing an honest day's work.
O'BRIEN: But there's-
PM: What's our challenge? It's to sift out those who have evidence of a pattern of wrong insulation, thereby creating a security- a safety problem.
O'BRIEN: But right at this moment, seven workers- just in that one business- seven workers out of work yesterday, seven workers out of work today. As of now, what's their income while they wait for your bureaucracy, which now has to have a question mark over it to some degree after what's happened, gets this latest program rolling, starts to get this 41 million out?
PM: Well, what we announced yesterday, Kerry, was three sets of measures. The first, of course, dealt with providing support for employers, and employees, where they are still operating within the business. The second relates to the support we can give through the job services network to find alternative employment. And the third of course, lies in providing training places - interim or long-term - to assist people into longer term permanent jobs.
Can I just add one other point?
O'BRIEN: Hang on, hang on.
PM: No, I need to add one other point. Remember, the home insulate program was also a finite program. That is, it was designed as part of the stimulus strategy to conclude at a fixed point. The industry knows that-
O'BRIEN: Yeah, but that was another- that was another 14 months away. This has come to a very abrupt halt.
PM: That is correct, but I'm saying, even prior to this, the Employment Minster, for example, Mark Arbib, had in place a range of transitional training programs to take these workers from where they are now, into a new set of skills and on to long term unemployment.
O'BRIEN: That is a lot of collateral damage because of a botched Government scheme.
PM: Well, let's not try and sugar-coat this, Kerry, and I don't begin to for one minute. This program has created real problems on the ground. It has resulted in a lot of difficulty for a lot of people. As Prime Minister of the country I accept responsibility for that. My job now is to fix it up.
O'BRIEN: Okay. You said on Sydney radio this morning that the Environment Department hadn't implemented the program perfectly, something of an understatement I would have thought. Where exactly did the Department go wrong, in your view?
PM: Well, what we've had is a- well, let's put it into its context. What Minister Garrett did was establish standards for the industry which didn't exist before at all. This is the home insulation industry. And that is, one, for the training of workers, two, for the first time, the national application of occupational health and safety standards for the industry, and three, a quality standard, under the building code, for the use of this insulation product-
O'BRIEN: Now, I'm going to have to stop you there because-
PM: They are the standards.
O'BRIEN: I understand that, because Peter Garrett has been explaining this for two weeks now. You've been explaining it for several days. You went on Sydney radio today, it was all over the radio, it was in the newspapers this morning, it was in the Parliament today. We've heard that. What went wrong?
PM: Well plainly, what has gone wrong is that those who were rorting the system, those who were shonky operators, were not picked up by the compliance mechanisms which were established.
O'BRIEN: So-.
PM: That's the problem.
O'BRIEN: What went wrong that the Department's compliance mechanisms did not work?
PM: Well plainly, in the case of those installations where we've had a safety concern arise as a result, we see evidence plainly of the system not having worked as it needed to.
O'BRIEN: Yes.
PM: As I've said before-
O'BRIEN: But what went wrong, where did it go wrong?
PM: Well, compliance means that you have a compliance system within it which provides quality control and assessment of the installations which go into each home. The compliance-
O'BRIEN: Yes, I understand-I understand what the compliance is, I'm saying what went wrong with the compliance system? How did it fail?
PM: Well, it failed because it didn't pick up a pattern of, shall I say, wrong installation, or badly done installation, by a certain number of firms. That is what went wrong. The Minister had established a series of risk management strategies across the program, mindful of the advice which had come forward from the risk assessors originally, but plainly the point-
O'BRIEN: Okay, but it failed.
PM: Yeah but look, I'm just saying to you loud and clear, Kerry, this- there's no point sugar-coating it one bit- this program has produced real problems for people, both workers and the companies and for households. There's no point beating around the bush about it. Accept responsibility for it and get on and fix it.
O'BRIEN: Okay, there were very clear, and I'm- what I'm getting to, really, is- who will take responsibility? It's not enough, I suggest to you, to say the buck stops with you. That's a kind of Peter Beattie strategy- "something's wrong, I'm going to fix it, sorry about that". But who will take real responsibility for this failure? There were very clear early warning signs to your Environment Department from various authoritative resources very early. From industry, from various State and Territory agencies. Quite bleak warnings, months before your program was rolled out.
Despite all the steps your Department of Environment says it took and that Peter Garrett accepted as a result of those warnings, we now know that the very things warned against happened. There've been house fires, there've been deaths, there've been untold shoddy and unsafe installations. You've now been forced to collapse the scheme. Now, what is that, if it is not a fundamental corruption- incompetence, sorry, a fundamental incompetence by your Department?
PM: Well, as I said before, the compliance systems have not worked, and the Department of the Environment is responsible for ensuring that those compliance systems worked across the board. Now plainly there is a major problem there. You said before-
O'BRIEN: So is your Department incompetent in the way this has been done?
PM: Let me just answer the other part of your question and your premise, which I dispute.
You said that, quote, "taking responsibility as the Head of Government doesn't mean anything". I just completely disagree with that. I think- I think you're wrong.
O'BRIEN: Well, it doesn't mean anything if it's just a form of words.
PM: Well, it's not because what has happened in the period in which the problems alive in this program- and there are many that we've got to deal with- that means that I, as Prime Minister, have to step up to the plate, and put in place the systems and the personnel to make sure we deal with the problems for workers, and that's what we announced yesterday, the problems for businesses who are in transition to the scheme we proposed to bring on from 1 June, and thirdly for households as well. They are the three concrete areas of work. If you say that's a form of words, I actually just don't agree with you, because on the ground my job is to make sure that those practical problems which are now being experienced by people are met. And that's the responsibility.
O'BRIEN: But how do you get the message back to the people who were responsible for the implementation of this program, including your Minister, that this has been a massive failure. That this has been a fundamental collapse in public trust of your Government's policy in this regard? Another early warning came, as you now know, from a risk assessment report commissioned by the Department of Environment from Sydney law firm Minter Ellison.
There's a powerful irony to be found in their risk register.
That is this five page chart, which on page two gives an assessment of political risks. They found that it was an extreme risk politically, quite apart from all the other risks they identified. It was an extreme risk politically, the said. In fact, they recommended, quote, "close engagement with Minister, Minister's office, Prime Minister and Cabinet, Coordinator General". Here's the irony- your Minister only saw this document for the first time this week. This week. Extreme political risk, apart from all the other risks. How do you feel about that?
PM: Why don't you hand me the document?
O'BRIEN: Yeah.
PM: Because I think it would be useful to look at what it has to say. Because one of the things that are contained within the document, in the period that I have looked at it, also goes to the question of how you deal with some of the safety concerns which have been raised. Installation quality and compliance is one. There are about two or three others which go to the safety of the program. And what the document demonstrates, as I have read it, is that the strategies put forward at that time were judged by Minter Ellison to be capable of managing the risk. That is-
O'BRIEN: And that was presented to the Government on April 9 and on April 29, your Environment Department had a phone hook-up, as you're well aware now, with all of the State and Territory agencies that would have been involved, in part at least, in oversight of how this program was to be implemented in terms of things like quality control and health and safety requirements.
The very clear message that came from those State and Territory agencies was, it doesn't matter how perfect your regulations are going to look on paper, we simply do not have the wherewithal, the manpower, the expertise to deliver on this. Because it is such a massive program, and you are trying to do this too quickly.
PM: What I would say in response to that, Kerry, is that the Minter Ellison report which you've just handed to me has about three specific sections which go to the question of safety and of quality control, and the proper training of workers. And in hose three sections of the report, which you've actually just skipped over in what you've just said- the conclusion by Minter Ellison was that the strategies put in place by the Minister were either effective or capable of tolerably managing the risk.
O'BRIEN: But Mr Rudd, you're ignoring the fact that this was on April 9, but on April 29, the people who would have been charged around this country via the States with the supervision of the regulations and the processes and the procedures, were yelling loud and clear that the risks were huge and that the regulations could not be enforced. That was after you got this reassurance.
PM: From the period when this report was delivered, which as you said was in April, and when the guidelines for the program were introduced at the end of June and early July, the Minister, I'm advised, received not just input from risk assessment documents, risk assessment meetings involving not just Minter Ellisons, but a whole range of other people, and the Department in response to that put together the guidelines for the program. Now-
O'BRIEN: But the bottom line Mr Rudd, is that those State agencies in that phone hook-up and the warnings they gave were right. That is what's happened.
PM: Well, let me-
O'BRIEN: Their warnings came true.
PM: Well let me- without going to the detail of that hook up, and you said I'm familiar with it- in terms of detail of it, I am not. What I am aware of, having gone through this particular document, is the contents of what was available if to the Department through the Minter Ellison report. But let me step back from it all. You said this has all been gone through too quickly. The bottom line is, what the Government was seeking to do was to respond to the global financial crisis. What we could do.-
O'BRIEN: We understand that.
PM: I know. Let me finish my sentence. Which is, we could use that as some sort of an excuse for having got things wrong. I don't intend to do so. I intend to accept responsibility for what's gone wrong her - and a fair bit has- and therefore, to take responsibility for fixing it up, for workers, for firms, and also for households who are concerned.
O'BRIEN: What have you learned from this? What has Peter Garrett learned from this?
PM: I think- I'm disappointed in myself for not asking more questions. In the pace of events last year, it's easy in hindsight to say we should have asked more questions, but we didn't have time. But I accept responsibility for that. I'd say on top of it, though, that the big challenge we've got now is to deal with the practical problems of the type just referred to in the program you mentioned. I take seriously the seven jobs just referred to.
O'BRIEN: Fourteen.
PM: The seven jobs that were referred just now as being dismissed today, and I think seven yesterday.
O'BRIEN: That's right.
PM: I don't seek to lighten the content of the program put together by Heather Ewart at all. I take each of that seriously. Why did we step up to the plate with our response to the global financial crisis with programs across the country? Because we didn't want the economy to collapse. Plainly, this particular program has been implemented ineffectively, and you've got problems. Our job now is to step up to the plate. With workers losing their jobs, our job, through the overall stimulus strategy, was to protect hundreds of thousands of jobs while their being lost worldwide.
O'BRIEN: But very-
PM: In this industry there are 6,000 jobs at stake and I take each one of those jobs really seriously, which is what we-
O'BRIEN: Okay, but-
PM: Why we are intending to step up to the plate to try and make a difference on the ground.
O'BRIEN: Very briefly, Mr Rudd. There are the people whose- the families who've lost children, who've died. There are the people who have been put out of business. There are the people who've lost their homes through fire. There are the people who are worried sick about whether their house is safe. There are all of these repercussions, ramifications. There would be many people who would be listening to this tonight and they'd be hearing you say sorry, but they would be saying, "who in your Government, and in your bureaucracy, is going to feel the pain they have felt and are feeling?"
PM: Well, in our system of Government, I am responsible for the lot of it. In terms of the accountability of that to the Australian people, they will make that plain when we next go to the election. I accept that. That is as it should be. Can I add one thing to what you have just said- which is, when it comes to this program nationwide, and the impact which it has on households, based on the survey done by Government of some 15,000 households, which is targeted in large part on those suppliers who have been judged to be unprofessional or incompetent or dodgy, the finding so far is that 92% of households have no safety risk.
Secondly, that means that we have a challenge to bring that as close as possible to 100%. And that is what we're resolved to do. That, however, is vastly different to someone saying there is a security problem or safety problem with all households. That defines the problem I must get on with. And that's the problem the Government must get on with to make a difference, to make amends for what has been, frankly, a program which has failed the people's expectations of the Government, and failed the high standards I have set for myself and the Government as well.
O'BRIEN: Kevin Rudd, thanks very much for talking with us.