Shouting fire in a pre-Budget theatre.

Today Greg Combet release a report by the CSIRO into the Home Insulation Program (HIP).

Obviously it shows that the whole thing was bungled and was “a mess”… err what’s that? It doesn’t? Oh.

In what will come as no surprise to anyone who read Possum’s brilliant post last year on the topic – the home insulation scheme did not cause houses to start exploding in greater numbers than before. In fact, once all is said and done and the final figures are in place, it will be shown that there has been a decrease in the numbers of fires per homes with insulation.

I have it on good authority (well Twitter) that Possum is writing a response the CSIRO report, so I shall leave the heavy number crunching to him, but here’s a nice summation of the CSIRO report on the fire risks:

The work of the CSIRO confirms that fire incidents linked to the installation of insulation occurred prior to the commencement of the HIP.

The CSIRO has found that, prior to the commencement of the HIP, for every 100,000 households with insulation in place for twelve months or more, around 2.4 fire incidents occur per year¹.

The CSIRO has found that for every 100,000 households installed under the HIP where the insulation has been in place for twelve months or more around 2.5 fire incidents would currently be expected to occur per year².

In other words, as at 31 March 2011, the level of risk for households with insulation installed under the HIP is now effectively no different to the level of fire incident risk that existed before the program was implemented.

The CSIRO report further indicates that the fire incident rate for households with insulation installed under the Home Insulation Safety Program is continuing to decline. In fact once the 150,000 inspections are complete it will reduce the residual risk (comparable to the fire callout rate) to an estimated 2.2 per 100,000 per year³.

So it was 2.4 fires per 100,000 households with insulation prior to the scheme. Now it is 2.5 fires per 100,000 (Garrett really needed to be slaughtered because of a 0.1 rise per 100,000?) but that as time goes one the CSIRO expects the number to fall to 2.2 fires per 100,000.

Anyone who slammed the program and demanded Garrett’s head need to have a damn good hard look at themselves – including the utter fools who wrote idiotic headlines like

Who do you blame when the roofs are burning

Insulation in houses is a good thing – it’s actually a disgrace that there were over a million houses that didn’t have insulation! But since this program, insulation, due to idiotic reporting in the media has almost become something to be embarrassed about saying you are putting in your roof – as though it is something you should be scared about doing!

The problem is the media went in hard without waiting for the full facts to emerge (or indeed worrying about any corporate responsibility by those who were actually installing the batts – remember the stupid “Garrett would be charged for industrial manslaughter” bullshit from Abbott?).

There is a line in the report that explains this rather nicely:

The rate [of fires] now appears to fall from an initially high rate of about 50 per 100,000 per year down to a rate which is in the region of 1-3 per 100,000. For example, the last 6 months has 9 fire callouts and converts to a rate of 1.63 per 100,000. However if one extra month is taken (July 2010), the number of fire callouts increases to 16 and the average rate through the 7 months is 2.48…. The 6 month value is likely to be closer to the current rate than the 7 month value, since the 7 month summary does not intersect the confidence band for July 2010, but the reality is that the summary figure is based on small number and would change markedly if there were even a few fire callouts in the next month or if some fire callouts were identified that had already happened but not made there way to the database.

Woah. Talk about nerdy statistic speak!

But what it in effect explains is that if you are looking a a short period you will get figures which are distorted. The early period rate of 50 per 100,000 sounds horrific, however it is due to the high number of initial instillations, but it is no more “accurate” than if I were to say “Wow, the HIP has actually caused the incidence of fires to be reduced to 1.63 per 100,000”. Because in doing so I would be guilty of only looking at 6 months, not the entire scheme.

The entire scheme has (by current data) a rate of 2.5 fires per 100,000 per year (or 0.0025% of households). Prior to the HIP it was 2.4 per 100,000 (or 0.0024% of households). Now you might say any increase is too much – but the thing is, as stated above – the CSIRO expects that once they have all the data that the incidence will drop to 2.2 per 100,000.

Terrible. Sackings all round.

Unfortunately Greg Combet while delivering the report adopted the posture of Mister Very Contrite. The reason for this is the ALP’s own fault. Last year Kevin Rudd instead of defending the program and Garrett went on the 7:30 Report and said:

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.

Julia Gillard since she has became PM has not really done anything to rectify the narrative (set in stone as it was I guess):

“This is a mess, I acknowledge that,” Ms Gillard, the Deputy Prime Minister, told Channel 9’s Today Show. “This was a scheme started with good intentions. The shonks got in and it turned into a mess.”

No it wasn’t a mess. And actually if it had been handled differently 12 months ago, it would be a scheme that the ALP should now be using to slap down the Liberal Party. Instead it cowered and (in the words of Bruno Gianelli) said “Don’t hurt me”.

The media response to the report?

Home insulation program: nearly a quarter of homes fail building code standards

Insulated homes did not meet building codes

What is this talk of building code standards? Here’s the report:

Note that nice bold bit – not the same as fire risk. Also note that it is all about conforming with the guidelines of the program.

Unfortunately the CSIRO has no comparable stats with houses pre the HIP. But given the old wiring in many houses, and the way in which insulation was installed in the past (ie with no national standards, and often just done DIY) I seriously doubt it would be lower.

But hey, of course last year we were all worried about building codes; we weren’t at all focussed on fires. So I guess it is only right that the media put the reduced fire risk stat half way down the page…

***

Today Wayne Swan gave a speech in which he was at great pains to tell us how tough the budget will be. This isn’t much of a surprise – Peter Martin (not a bloke too wrapped up in bulldust) reported the other day:

“But it also applies to Australia’s May budget in which Wayne Swan will wear the consequences of some of the successes he had been praying for.

Obscured by talk about the soaring dollar and the hole it is said to be punching in budget revenues is a more complex chain of events, harder to explain in public, but nevertheless painful.

The forecasts for the last May budget were based on the technical assumption the Aussie could stay at around 90 US cents for years to come.

After the Aussie sailed through 100 US cents in October, the November budget update used an assumption of around 98.5 for years to come.

This week the Aussie marched north of 105 and leading economists such as Shane Oliver of AMP were talking about 110 by years end with it staying that high until the next global economic collapse.

Treasurer Wayne Swan said this week the high dollar was “weighing heavily on government revenues”. A leaked Treasury document briefing identified the high dollar as one of the reasons non-mining revenues had all but stopped growing.”

So the Aussie dollar is kicking around the non-mining sector a fair bit. But it is also affecting mining – and not in a way that will help the budget (but will help the economy):

“Miners are responding to the higher iron ore and coal prices driving the dollar in exactly the way we would want them to. They are bringing forward plans to expand and develop new mines.

The latest capital investment intentions survey show an increase in investment plans this financial year of 24 per cent and an increase next financial year of 38 per cent. It’s exactly what Wayne Swan would want. It’ll help set up budget revenue for years to come.

But it’ll cost the budget bid-time in the year ahead. As mining companies invest they write off profits for tax purposes meaning that for at least the next year (the ABS hasn’t surveyed investment intentions beyond then) not only will the non-mining corporate tax take be flat, but tax from the big miners will be weak as well.”

So we have this interesting position where the economy is fine, but the budget is not so fine (or perhaps more actually not as fine).

Swan today said:

“I'm very conscious that the story of our fourth Budget is a very difficult one to tell. It combines short-term weakness, medium-term strength, and boom conditions without the boom revenues.

We can't and shouldn't buy support for this Budget, like our predecessors did. There won't be rivers of gold like they wasted. So don't expect to see billions and billions in pro-cyclical policy measures that will compound the inflationary pressure of this boom like they compounded the inflationary pressures of the last one.

That doesn't mean we're not conscious of cost of living pressures – we certainly are. We know that for communities that are feeling these pressures acutely, talk of a boom seems divorced from their reality. We know that despite the gathering pace of this investment boom the benefits have not reached all Australians in our patchwork economy, and so many people are still feeling the pinch.

That's why we delivered three rounds of tax cuts and an historic increase in the base rate of the pension. It's also why we're going to deliver important policies to ease these pressures – like extending the Education Tax Refund, giving more money to parents of teenagers and disabled kids, introducing the work bonus for seniors, and the like.”

All nice and fuzzy – disabled kids, parents of teenagers (God bless ‘em), seniors, “the like”…. Then this bit (after some words about the emotion of doing a budget – which I am sure are true – it would be a absolute shitty thing being on the Expenditure Review Committee – most of the time you would be saying no to things you would love to say yes to (John Howard was useless at saying no, so too Bob Hawke – especially if it involved sport!)

“On a personal level, it certainly isn't easy making difficult saves. I am in politics because, as a young man, I came to believe that for some in our society, life can be cruel and unfair. I believed then – and I believe now – that there are people who need a bit of compassion, a helping hand from the rest of us. I also believe that it's important to reward the hard-working Australians that are so fundamental to our nation's prosperity. But what I've learned is that without getting the broader economic settings right, without a strong, sustainable economy, none of this is possible.

So we'll be doing things in this Budget that won't be popular, but they'll be the right thing to do. They'll be consistent with our Labor values, driven by the recognition that leaving this task to future generations will mean even more pain for those doing it toughest in our community.”

Now there has been a fair bit of talk around the traps of what exactly are “Labor values”. The budget I guess will gives us some insight to what Gillard and Swan at the very least think are those values. (No doubt the rest of us will just argue whether they are right or wrong).

Either way, you have to say Swan and Gillard have both done the selling of this budget very well. It sounds like it’ll be a shocker (or at least sounds like they want us to think it will be a shocker). Will it? Call back in three week’s time.