Residential Energy Efficiency Scheme

I seek leave to make an explanation before directing a question to the Minister for Consumer Affairs on the subject of the residential energy efficiency scheme (REES) and OCBA's investigations.

The Hon. J.M.A. LENSINK: Earlier this year I asked a question of the minister on 11 May in relation to the robustness of licensing and regulation of building contractors involved in the federal home insulation bungle. At that stage, the minister stated:

OCBA commenced a fairly significant compliance campaign in July 2009...A number of them are under investigation.
The minister also stated in that response that South Australia was in a very strong position because of our tighter regulation to monitor the installation of insulation in this state compared with other states.

My office and, clearly, The Advertiser newspaper have come across some dodgy practices within the REES scheme. It has been stated that OCBA needs to investigate some 1,000 homes believed to have been insulated with inappropriate products and that there are some homes that are also more vulnerable to fires due to installation by unlicensed and unqualified persons. My questions are:

1. Were any of those businesses and/or individuals she stated were under investigation relating to the home insulation scheme the same businesses and/or individuals that are now being investigated under the REES scheme?
2. Given that the large number of homes and homeowners who have been put into a very vulnerable positions through REES, does the minister now consider that the regulation regime requires reform?
3. Given that ESCOSA has ruled out taking any action, can the minister guarantee that some compliance penalties will be attempted to be applied against energy retailers and/or their contractors?

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for the City of Adelaide) (14:30): I thank the honourable member for her important questions. In terms of the REES scheme, which commenced on 1 January 2009 and was administered by the Essential Services Commission of South Australia (ESCOSA), under that scheme, electricity and gas retailers and their contractors offer incentives, as we know, to adopt energy saving measures, including lowering showerheads, draft proofing and also installation of insulation. The scheme obviously aims to reduce power bills and greenhouse gas emissions, and it has a particular focus on low income families, who are obviously the most vulnerable to the costs of energy.
ESCOSA undertook an audit of the REES and found that approximately 1,250 homes had insulation installed by a small number of unlicensed or incorrectly licensed companies. I am advised that all of the companies became appropriately licensed in 2009. I am further advised that, of the 1,250 households, only 51 had insulation installed without a qualified and licensed supervisor present. So, they are obviously the households that were of most concern to us.

Safety checks have been undertaken on 30 of these 51 householders, I have been advised. Both electricity and gas retailers and OCBA are endeavouring to contact the remaining 21 households. I have been advised that, of those, some have indicated that they don't wish to be audited; others have simply not responded to the correspondence that has been left for them. I understand that, where possible, emails have been sent. I am also advised that, where possible, doorknocking has also occurred. My advice is that quite significant attempts have been made to contact those 21 households.

I would like to take this opportunity to remind members that, if anyone has concerns about the safety of their insulation, they obviously should make sure they have a licensed electrician come out to check that insulation and they should contact the Department of Climate Change and Energy Efficiency if the insulation was installed as part of the federal government's home insulation program. OCBA will continue to work with ESCOSA to ensure that only appropriately qualified and licensed contractors participate in that REES scheme. In terms of the specific question the honourable member asked me about the overlap of householders, I would need to take that part of the question on notice and bring back a response.

The Hon. J.M.A. LENSINK (14:33): I have a supplementary question deriving from the answer, and perhaps the minister could take this on notice. Is the minister saying that no fines or penalties have actually been applied to the building work contractors who were found to be in breach?

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for the City of Adelaide) (14:34): I will have to take that on notice and bring back a response.

On Tuesday 28 September 2010

The Hon. G.E. GAGO (Minister for State/Local Government Relations, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for the City of Adelaide) (14:23): I seek leave to make a personal explanation.

Leave granted.

The Hon. G.E. GAGO: On 15 September 2010, the Hon. Michele Lensink asked a question about insulation installation and the Residential Energy Efficiency Scheme (REES). In my answer I stated that I understood that all insulation companies involved in this scheme had become appropriately licensed in 2009. Today I have been advised that OCBA has received new information from ESCOSA in relation to another installer who had been involved in the REES. That installer I have been advised was licensed in May 2010.

Replied on Thursday 29 September 2011

In reply to the Hon. J.M.A. LENSINK (15 September 2010).

The Hon. G.E. GAGO (Minister for Regional Development, Minister for Public Sector Management, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for Gambling): I am advised:

1.Several building work contractors who operated both under the Residential Energy Efficiency Scheme (REES) and the Commonwealth's Home Insulation Program have been investigated by the Office of Consumer and Business Affairs (OCBA).

In order to pursue legal action, OCBA requires sufficient evidence to prove each aspect of an offence including evidence of unsafe or substandard work to support each case. This information was held by the Commonwealth and safety and quality audit information was supplied in December 2010.

An Initial investigation of the 15 installers of interest against the information provided by the Commonwealth determined that 14 installers would not be pursued for various reasons. These included that:

·the information supplied from the Commonwealth did not indicate sufficient evidence for action to be taken;

·the installer was no longer in business or had disappeared ; and

·an appropriate OCBA licence has subsequently been granted.

Further detailed insulation inspection documents submitted to the Federal Government by its subcontractors, including photographs and detailed audit observations were sought and provided by the Commonwealth in late January 2011.

The investigation against the targeted installer is progressing and is well advanced.