Senate debates

Thursday, 4 February 2016

Questions without Notice

Home Insulation Program

2:31 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

My question is to Senator Sinodinos, the Minister representing the Minister for Industry, Innovation and Science, and it is related to the implementation of the Home Insulation Program Industry Payment Scheme. In August 2014 the Royal Commission into the Home Insulation Program recommended that 'arrangements be put in place for compensating those pre-existing businesses who suffered loss arising from their reliance upon the assurances given by the Australian government.' On 30 September 2014, then Prime Minister Abbott told the parliament that these businesses 'trusted government and were let down' and promised a compensation scheme would be developed. Sixteen months on, hundreds of families and small businesses who were financially and emotionally devastated by the failure of the program have not received fair compensation for their losses. The so-called industry payment scheme is not what was promised and has been woefully inadequate. When will the government fulfil its pledge to those families?

2:32 pm

Photo of Arthur SinodinosArthur Sinodinos (NSW, Liberal Party, Cabinet Secretary) Share this | | Hansard source

I thank the honourable senator for his question. He gave me the courtesy of forewarning me of this question. Let me begin by expressing my sympathy to the families of those who passed away in the context of this scheme and also my sympathy for the many industries and businesses that were affected by the cessation of that particular scheme and industry.

It is true that this government took action through a royal commission to address a number of issues relating to the operation of that particular program. Part of that was the industry payment scheme that you allude to in your question. It was our response to the royal commission. The former royal commissioner, Mr Ian Hanger, who did an exemplary job with the royal commission, has accepted the scheme that we have put in place as being consistent with his recommendation.

Under the program, businesses that were corporate entities that were deregistered must be reinstated in order to make an application. The guidelines allow these businesses to be advised of their eligibility to apply prior to reinstatement and to seek an extension of time to apply. Businesses will be advised in writing if their application is accepted or, if their application was not accepted, the reasons why it was not accepted. Accepted applications are forwarded to Deloitte Australia for analysis to determine whether or not the applicant suffered an adverse financial impact. This is not an assessment being done within government; it is an assessment being done at arms-length by Deloitte Australia. Applicants have an opportunity to use the services of the former royal commissioner, Mr Ian Hanger AM, QC, who will provide advice on whether or not an adverse financial impact was determined, the extent of the impact, the impact category and explain the method used to determine the impact. I believe the process, as I have outlined here, is a fair process, but I am happy to take on board any particular facts or circumstances. (Time expired)

2:34 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

Mr President, I ask a supplementary question. Does the government acknowledge that the case of Colin and Erica Thomsen from Queensland, whose home insulation business of two decades was destroyed by the HI PIP program, costing them their home, their business and their assets, shows how inadequate the industry payment scheme is, because they cannot put in a claim by virtue of being liquidated and deregistered, and they simply do not have the money to put in a reregistration, given the thousands of dollars it costs.

Photo of Arthur SinodinosArthur Sinodinos (NSW, Liberal Party, Cabinet Secretary) Share this | | Hansard source

I am not aware of the specific circumstances of the Thomsens. I am advised that the businesses that have subsequently been liquidated and deregistered have no legal standing and, as a consequence, they need to be reinstated to apply—a process controlled by the Corporations Act 2001, not the Home Insulation Program Industry Payment Scheme.

I am advised that four formerly deregistered companies have been reinstated and have applied for a payment under the scheme—a course of action which was open to the Thomsens. I think you indicated in your question that the problem was a lack of means on behalf of the Thomsens to undertake this process. If there is any further information you wish to provide to me on that, I would be happy to take it up with the minister.

2:35 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

Mr President, I ask a further supplementary question. Mr and Mrs Thomsen were advised earlier today, here at Parliament House, by the department that about 40 payments totalling $4 million have been paid under the scheme and that the scheme is winding up. Can the minister confirm that this amount of $4 million has been paid, and that some $20 million was spent on the royal commission? Does the government not see the irony in the royal commission costing many times more than the payments made to the victims today?

Photo of Arthur SinodinosArthur Sinodinos (NSW, Liberal Party, Cabinet Secretary) Share this | | Hansard source

I can confirm that to date 40 payments have been made under the scheme, totalling over $4 million. The scheme is halfway through assessment of eligible applicants and the government is working to have it concluded by the end of the first quarter 2016. The amount of payment offered to applicants by the minister is informed by an independent assessment of adverse financial impact and Mr Hanger's independent expert recommendation.

I remind the honourable senator that the royal commission had quite broad terms of reference. We should not equate the amount of compensation with the cost of the royal commission, which addressed a number of issues including payments to the families of deceased installers, improving safety for workers in roof spaces, ensuring Commonwealth programs minimise work, health and safety risks, and a review into improving government processes and addressing public service code of conduct matters. It has been quite a wide-ranging response.