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May 19, 2012

Finally, the home insulation stimulus ends.

Cartoon: By Nicholson.

When the Rudd government was confronted with the global finance crisis, it went into panic mode and raced into its stimulus effort. This consisted of spending as much money as possible as quickly as possible, something it still gives the perception of doing.

Essentially what was done was to follow the lead of the US, only more ineptly. Bank deposits were guaranteed, which lead to a massive move of investment out of the non-bank finance system, throwing it into crisis. Then there was the cash splash with $900 cheques sent out to nearly everybody to get them spending again. This lead to a few good parties, but most was put away for a rainy day.

Along with ‘cash for clunkers’, the ‘Building the Education Revolution’ scheme, which constructed school buildings at two to three times the normal price, came the home insulation scheme. The idea of this was primarily to spend heaps of money and to give the appearance of saving the planet in the process. This disaster was canned over two years ago and most of the damage has been fixed to the point where the government is bringing it to its ignominious end:

The $2.45 billion Rudd government scheme, which offered rebates for the installation of insulation in homes, was shelved in April 2010 after it was linked to four deaths, 224 house fires and up to 1000 electrified roofs.

The Gillard government committed to inspecting a minimum of 150,000 homes with batt insulation and all homes installed with foil insulation, and announced today it had exceeded that commitment.

Parliamentary Secretary for Climate Change Mark Dreyfus said the final tranche of the plan to clean up the program would conclude on June 30 after close to 250,000 home safety inspections. “The latest results show 247,837 inspections in total have been requested and completed,” Mr Dreyfus said. …

In April 2010, cabinet opted to dump the home insulation program, which was rolled out as part of the economic stimulus program, and spend taxpayers' money ensuring the safety of installations already carried out.

A $15 million industry assistance program was also set up to help businesses affected by the abrupt end of the scheme. A total of 1.1 million homes received subsidised insulation under the scheme, which was plagued by fraud and safety problems. Installers were paid rebates of between $1000 and $1600.

An Auditor-General's report released in 2010 found the federal government program put stimulus ahead of safety. The report found the Environment Department was overwhelmed and unprepared to successfully roll out the scheme. …
No final cost to this debacle has been announced.


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