On Dotting I's and Crossing T's: The Pink Batt Fiasco

Some hold a child life belief that the Federal Government invariably do things better than the states.

However, as the Defence Department illustrates, its record with procurements has a bit to be desired.

The failed home insulation (or pink batt) scheme is evidence of a similarly patchy outcome with programme delivery.

The pink batts scheme appears to be one of those ‘wish list programmes’ that Departments submit each budget round, with the hope that one day it will win the funding to implement its wish.

As Peter Costello recently said in the Sydney Morning Herald:

In the dying days of the Howard government, the environment department prepared a list of measures designed to reduce carbon emissions. One was to insulate houses. Back in those days, home insulation was dressed up as a climate-change policy.

I was against it. ……………. I could not see how the Commonwealth could hope to manage a scheme to insulate millions of homes with thousands of private contractors when it had no staff with experience to design and supervise such a scheme.

As we now know, law firm Minter Ellison to the Environment Department said that there was, amongst other problems:

too few auditors and insufficient government resources to manage the scheme were among other serious concerns raised.

It is reasonable for Cabinet to expect that a programme consistently sponsored by a department has a well thought through implementation and management strategy. It can be disappointed with the poor outcome.

That said, as Lindsay Tanner said to Sky News, there was no focus on ‘dotting I’s and crossing T’s’ because of the urgency of putting out stimulus measures to combat the global financial crisis. So the executive government deserved what it got from the affair. Sadly, I’s have be dotted and T’s crossed.

And there have been a number of poor outcomes.

As The Australian editorialised:

It's not just the foil batts that have been a headache for Mr Garrett. His Green Loans program, under which households are assessed for energy and water-saving measures then given zero-level loans to finance the innovations, is under fire.

His solar rebate program reportedly blew out by $850m and is also being blamed for distorting the market for other alternative energy innovations such as wind
power…

Not everything can be solved by the Feds using contract management strategies like performance targets and benchmarks, with risk assigned to the party best assumed to be able to manage it and damages (or withholding funds) the ‘modern’ way to ensure compliance.

If the national government wants to act like a state government and get involved in programme delivery and low level standards setting it must staff itself like a state government and develop inspectorates so as to ensure programmes do not run off track.

Julia Gillard seems to have the right idea. When addressing the National Press Club recently on how to improve underperforming schools she said she would:

………. examine ways to provide the support and scrutiny necessary to drive schools to improve, which could include ''physical inspections'' or ''quality audits''.

''I believe that you've got to have the doors open,'' she said.

''Gone are the days when we could have teachers in classrooms with the door closed. I obviously want to see a debate about what more we need to do.

''This may involve external assessment and inspection of schools, and it will certainly involve strengthening school-based performance management of individual teachers.''

Sometimes the public interest needs a properly resourced inspectorate, with old fashioned enforcement powers. If not, there will be more pink batts episodes as the Commonwealth tries to do everything from Canberra.