(Image homeinsulationroyalcommission.gov.au)

Alan Austin was requested to present a sworn statement of evidence to the Royal Commission into the Home Insulation Program (HIP). In the third part of his submission he explores how the scheme actually saved lives.

Pink batts Royal Commission submission: Part Three

Read Part One

Read Part Two

The Royal Commission into the Home Insulation Program (HIP) is expected to release its final report next week. However, several vital aspects of the program were not examined by the Commissioner in the public hearings earlier this year.

So what chance a fair overall assessment? Will the Commissioner examine all relevant evidence in private and report on the program’s significant successes? Or will he concentrate only on the alleged failures, which were the sole focus of the public hearings?

Alan Austin was requested by the Commission to present a sworn statement of evidence following his research into the global impact of stimulus packages published here at Independent Australia and elsewhere. This is part three of his submission, edited only for format.

Part One outlined the overall success of the Rudd government’s fiscal response to the global financial crisis (GFC) in 2009-10.

Part Two examined the need for great speed in implementing the stimulus packages.

Lives saved by the program’s rapid implementation

The four deaths which occurred installing insulation in the latter stage of the rapidly expanding 2009 home insulation program were tragic indeed. They certainly warranted the focus, the nationwide mourning and the subsequent inquiries into direct and indirect causes.

But what is the quantum of deaths which would have occurred had starting the HIP been delayed by another month, or another three or six months – or had it not proceeded at all?

Deaths averted include suicide and homicide related to unemployment or bankruptcy, coronary and cerebral injury due to anxiety, industrial deaths due to corner-cutting, deaths due to drug and alcohol abuse exacerbated by the crisis and stress-related traffic fatalities.

A study in the September 2013 British Medical Journal (BMJ) investigated in detail the impact of the 2008 global economic crisis on suicides in 54 countries in Europe and the Americas.

Using data from the World Health Organization’s mortality database and elsewhere, the study used design time trend analysis to compare the actual number of suicides in 2009 with the number that would have been expected based on trends before the crisis, that is, from 2000 to 2007. [17]

The study found thousands of suicides were linked directly to the global financial crisis (GFC), with the highest numbers of people killing themselves in countries where job losses were heaviest:

'We found a clear rise in suicide after the 2008 global economic crisis; there were about 4,900 excess suicides in the year 2009 alone compared with those expected based on previous trends (2000-07).'

The researchers attributed this to soaring dole queues and bankruptcies, repossessions of houses, cars and other purchases and the attendant personal and social problems. They estimated 34 million people worldwide lost their jobs during the crisis.

Key findings were that suicides among all-age men were between 4.2% and 6.4% higher in 2009 than expected if past trends had continued. They found for women, no change in Europe and an increase in the Americas of 2.3%, smaller than that among men.

Mortality data for Australia are found in the one file at the Australian Bureau of Statistics (ABS) at document 3303.0. Refer table 1.2 Underlying causes of death (Australia). [18] For the following analysis, women will be excluded for now.

The number of suicides among men in Australia in 2008 was 1,784. Refer Intentional self-harm (X60-X84), line 1824. Assume Australia’s situation is similar to that of Europe and the Americas, an increase over this level of 4.2% – taking the lower limit – is an extra 75 fatalities. An increase over this level of 6.4% – the upper limit – is an extra 114 fatalities.

Taking the lower number, to this can be added the increased number of homicides arising from the stresses which give rise to increased suicides. According to the ABS, there were 137 male homicide victims in Australia in 2008. Refer Assaults (X85-Y09), line 1850.

Assuming the stress would lead to an equivalent small rise in homicides as in suicides, applying the lower limit of the BMJ findings, a 4.2% increase is another 6 victims per year.

Adding road trauma, there were 1,121 male fatalities in 2008. Refer transport accidents (V01-V99), line 1554. A similar 4.2% increment in traffic fatalities – continuing to assume a similar stress factor – would add another 47 lives lost.

Then adding drug and alcohol related deaths, there were 321 male fatalities in 2008. Refer Mental and behavioural disorders due to psychoactive substance use (F10-F19) at line 494. A 4.2% increment in drug and alcohol fatalities adds another 13 lives lost.

Now add fatalities from hypertensive heart disease. There were 630 male fatalities in 2008. Refer Hypertensive diseases (I10-I15) at line 722. A similar 4.2% increment in these deaths would add another 26 lives lost.

Now add gastrointestinal disease fatalities – ulcers and dyspepsia – there  were 261 fatalities in 2008. Refer Diseases of oesophagus, stomach and duodenum (K20-K31) line 882. A similar 4.2% increment adds another 11 lives lost.

The total for just these six categories of  male lives lost is 178. This excludes increases in fatalities from industrial accidents or other diseases due to stress and anxiety, such as those affecting the cerebrovascular or nervous systems. It does not include women impacted in the same way as men.

These are all likely to be substantial. It is reasonable, therefore, to estimate that a conservative cumulative total would be more than 200 fatalities. That is an annual figure, which would repeat for each year the recession continued and unemployment worsened.

How long the recession would have continued in Australia had it been allowed to get a grip is impossible to know for certain. But the experience of similar economies is instructive.

The World Bank [19] and tradingeconomics.com [20] show, respectively, annual and quarterly negative GDP growth for most of the world’s economies. Of the 34 advanced OECD economies – those most equivalent to Australia’s – from 2008 onwards, only two avoided more than two consecutive quarters of negative gross domestic product (GDP) growth – the accepted definition of recession in Australia.

These were Australia and Poland – the two countries which allocated the highest percentage of GDP in direct investment spending, as shown in figure 3.3, at page 6, above [in Part two of this IA series].

Only four OECD countries avoided a full year of negative GDP growth: Australia, Israel, South Korea and Poland.

Ten experienced one negative year: Austria, Canada, Chile, Germany, Mexico, New Zealand, Norway, Slovak Republic, Switzerland and Turkey.

Twelve experienced two negative years: Belgium, Czech Republic, Estonia, Netherlands, Finland, France, Hungary, Iceland, Slovenia, Sweden, the United Kingdom and the USA.

Six experienced three negative years: Denmark, Ireland, Italy, Japan, Luxembourg and Spain. Portugal experienced four negative years and Greece five.

It is reasonable to propose that had Australia’s economy followed the trajectory of Norway, the preventable deaths would have been in the order of 200+. Had Australia followed Iceland and Finland, the deaths would have been in the order of 400+. Had Australia followed Luxembourg, the deaths would have been in the order of 600+.

All four of those economies were ranked higher on the IAREM table than Australia in 2007. In fact all four were in the top five economies. Refer chart A, page 2, above [in Part one of this IA series].

All four of those governments took stimulus action, but at a lower level and less rapidly.

It is possible to determine which OECD countries implemented the specific stimulus response advocated by Australia’s then Opposition in 2008-09 and make a reasonable estimate of the length of the recession and the number of hundreds of deaths which would then have eventuated. That is beyond the scope of this statement, however.

So what were the actual outcomes for men in 2009 over 2008 on those six variables?

  1. Suicides in Australia fell 8.6% from 1,784 in 2008 to 1,631 in 2009.
  2. Homicides rose 8.8% from 137 to 149.
  3. Traffic fatalities fell 3.2% from 1,121 to 1085.
  4. Drug and alcohol related fatalities fell 13.7% from 321 to 277.
  5. Hypertensive heart disease deaths fell 0.48% from 630 to 627.
  6. Gastrointestinal disease deaths fell 0.77% from 261 to 259.

The rate of population increase was 1.82% from December 2008 to December 2009.

It is not possible to quantify precisely the specific number of deaths averted by the HIP. But it is reasonable to claim that Australia’s stimulus program overall – of which the HIP was a vital part – served to avoid preventable deaths in the hundreds.

It seems strange that some inquiries [into the HIP by coroners, the Auditor-General and the Senate] found that the four deaths related directly to the HIP might have been prevented had the scheme started later by some months or years without noting that any delay would almost certainly have incurred far greater mortality.

You can follow Alan Austin on Twitter @AlanTheAmazing. Coming soon: Part four: A dangerous industry unregulated through the Howard years

REFERENCES

17. http://www.bmj.com/content/347/bmj.f5239

18. http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3303.02009?OpenDocument

19.http://databank.worldbank.org/data/views/variableselection/selectvariables.aspx?source=world-development-indicators

20. http://www.tradingeconomics.com/country-list/gdp-annual-growth-rate

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