Government failure and success: A trans-Tasman comparison of two insulation subsidy schemes

In the wake of the 2008 Global Financial Crisis (GFC), the governments of Australia and New Zealand undertook a variety of economic stimulus measures, including home insulation and heating retrofit programs. Australia’s Home Insulation Program (HIP) ended early and in disarray (Hawke, 2010; Kortt and Dollery, 2012) while New Zealand’s Warm Up New Zealand: Heat Smart (WUNZ:HS) program was considered a success, outperforming agreed targets and time frames and producing a variety of health and other benefits (Grimes et al., 2011, 2016; O’Sullivan, Barnard, Viggers and Howden-Chapman, 2016; Preval, Keall, TelfarBarnard, Grimes and Howard-Chapman, 2017).

Effectively, across these two related schemes, one resulted in government failure (Le Grand, 1991) while the other proceeded as well as (or better than) expected. We examine key proximate and more fundamental reasons behind this differential experience. The paper identifies differences in the key characteristics of the two programs and the political and policy contexts that could explain such differing outcomes. These include differences in governance, program targets, program design, implementation, evaluation and the influence of prior public health research. 

While economic stimulus was an aim in each case, our analysis shows that such stimulus needs to be informed by prior research and/or prior implementation experience, especially if the program is to be implemented quickly. The lack of each of these factors in the Australian HIP case meant that its (rushed) decisions were poorly informed, resulting in failure of both the insulation and stimulus aims of the scheme. By contrast, the New Zealand WUNZ:HS scheme was underpinned by significant prior research and implementation experience, meaning that the stimulus decision rested on an appropriate information base. 

The paper first provides background to the two schemes, including the program structures and details about product choices and installation methods. These sections set out the proximate causes of failure versus success of the two schemes. We then analyse the underlying causes of the differing results across countries by analysing the processes of policy advice and consultation, and of implementation and evaluation of the schemes. Some concluding comments highlight our key findings.

Citation

Preval, Nicholas & Ombler, Jenny & Grimes, Arthur & Keall, Michael & Howden-Chapman, Philippa. (2019). Government failure and success: A trans-Tasman comparison of two insulation subsidy schemes. Agenda - A Journal of Policy Analysis and Reform. 26. 51-65. DOI: 10.22459/AG.26.01.2019.03