Former PM questioned over insulation program in class action brought by more than 140 suppliers and installers

Former prime minister Kevin Rudd has said his government would not have proceeded with the rollout of the home insulation scheme had it been alerted earlier to unacceptable safety risks of the scheme.

Giving evidence from New York through a video link to the Victorian supreme court on Monday, Rudd was questioned over the Labor government’s $2.7bn home insulation program that was cancelled in 2010 following the deaths of four insulation workers and house fires.

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The program was a part of the government’s $42bn economic stimulus package aimed at shielding Australia from the effects of the global financial crisis. A class action has now been brought by more than 140 suppliers and installers who claim the government was negligent and their businesses suffered financial damage when the program was shut down.

Representing the plaintiffs, Jim Delany QC asked Rudd what he and the government’s strategic priorities budget committee – known as the “gang of four” – would have done if advised by parliamentary advisers to delay the rollout of the program due to unacceptable risks.

“My response ... would have been to have said, ‘You have to get this right, we cannot proceed with a program that has unacceptable safety risks’,” Rudd replied.

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Rudd told the court that as well as the economic benefits, including employment opportunities that would result from insulating homes on a large scale, the program also fit with his government’s climate policy.

Now the president of the Asia Society Policy Institute, Rudd was asked by the court to confirm the period he was prime minister: from December 2007 to June 2010, and between June and September 2013.

“That’s correct, I have the scar tissue to prove it,” he said.

Rudd was cross-examined by Rachel Doyle SC, representing the government, about how the money allocated towards the program would have been spent if the program had been scrapped earlier due to safety risks; as well as what he would have done if he was advised of the safety risks of the program at a time when the stimulus package was not necessary.

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“This is all hypothetical,” Rudd said. “I think we’re building edifice on edifice now, aren’t we? It’s a bit like saying, ‘How many financial institutions would have fallen over had we not done [what we did to respond to the global financial crisis]?’”

Rudd added that the court had “come to the end if its tether” of hypotheticals. But he emphasised he was not made aware of any safety issues with the program until February 2010, when the strategic priorities budget committee met and considered the recommendations made by a taskforce commissioned to review the scheme.

The case before Justice John Dixon continues.