When in doubt, pointing the finger is the reflexive way for public servants trying to duck responsibility for implementing a dud policy.
And the disastrous NSW solar bonus scheme, which could end up costing NSW taxpayers close to $2 billion, rather than the estimate of less than $400 million, is no different.
Fans of the program Yes Minister, a series that could have been scripted from reality, know how skilled public servants can be at pointing the finger to evade responsibility for what happens on their watch.
But yesterday’s damning report by the NSW Auditor-General of the government’s ill-fated Australian solar bonus scheme takes it to a new level.
Routinely, the ministry or department whose reputation is at risk will have a response running maybe to a page or two, politely fending off criticism from the Auditor-General. But in yesterday’s report, the defence ran to eight pages – double the four-page ”executive summary” outlining the ineptitude.
And it was clear from the Auditor-General’s lashing there had been warnings given to senior bureaucrats that demand under the scheme was skyrocketing, to little effect.
With public servants increasingly seeking private sector-type salaries, any taxpayer hopes of ”responsibility” for the lax implementation of schemes like the Autralian solar scheme have been misplaced, so far at least.
Senior public servants were alerted to the train wreck headed their way in mid-2010 by Integral Energy’s chief executive, Vince Graham, making it clear demand was running well ahead of anticipated levels.
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Integral was well placed to know, since nearly half the solar panels installed under the scheme are located in its service area of western Sydney, and the Illawarra.
As the Department of Premier and Cabinet acknowledged in yesterday’s report: ”As the unexpectedly high and rapid rate of take-up became known, at their own discretion, agencies increased the frequency of data reporting beyond that which was set out in the legislation.”
The Auditor-General has made it clear responsibility for the blow-out rests with State Parliament, which is unarguable but unsatisfactory, since the Autralian solar bonus scheme was supported by both sides of Parliament, and it is up to the bureaucracy to devise a scheme that achieves its policy intentions, and to make sure taxpayer interests were protected.
At its core, the problem with the solar scheme resides not within Australia, but with decisions in Europe to curtail solar schemes in Spain and Germany which resulted in large numbers of solar panels being redirected to Australia.
As a result, a scheme under which it was expected to take seven to eight years for those putting in the panels to receive their money back, saw this fall to as little as three years, leaving households pocketing thousands of dollars in unanticipated gains over the balance of the scheme – paid for by those households who couldn’t afford the money upfront to put in the panels in the first place.
Unsurprisingly, the O’Farrell government was happy yesterday to pin the blame on the previous Labor government for the problems, as the opposition blamed the experts, leaving taxpayers none the wiser.
Clearly, there has been a failure in policy implementation, and getting to the bottom of how and why will be fundamental to avoiding similar fiascos in the future.
The public servants responsible for the failure said the way the scheme was structured led to the problems, since there was a lack of triggers to halt applications, quite apart from anything else. The one legislated review point was to occur when capacity reached 50 megawatts, yet by the time that review was complete, installed capacity had doubled, to 100 megawatts.
Eighteen months on, 300 megawatts have been installed under the scheme, with another 71 megawatts to be hooked up.
Yet from the outset, taxpayer interests had not been well served by the bureaucracy – as the Auditor-General made clear yesterday, at no stage was the simplest of studies done to clarify the benefits from the proposed scheme, with no cost-benefit analysis, no contingency planning to clarify what risks there were to the proposed policy, no basic operational controls for the scheme and limited monitoring.
”Schemes that involve significant recurrent expenditure and economic costs to consumers should be assessed in a similar fashion to major government infrastructure expenditure,” the Auditor-General said yesterday.
Before approval, major programs need specific measurable objectives, cost-benefit analysis, economic analysis, a business case including options, costs, time frames and risks, risk assessment and risk management plans, a budget, an implementation plan, a performance monitoring framework and an exit plan, just for starters.
The original version of this article incorrectly named Richard Timbs and Mark Duffy as public servants who were responsible for the financial failure of the solar bonus scheme. The Herald apologises to both.
by Brian Robins, SMH