Saturday, February 20, 2010

Australia Bulletin FM

Insulation scheme hits 160,000

From : The Australian, February 19, 2010

KEVIN Rudd was standing by Environment Minister Peter Garrett last night after the government scrapped its botched $2.45 billion insulation scheme, admitting that about 80,000 households faced safety risks.

And the government released figures suggesting up to 160,000 homes had been fitted with sub-standard ceiling batts with minimal benefit to the environment.

After weeks of pressure, Mr Garrett announced the scheme's immediate termination yesterday.

Declaring the risks "unacceptably high", he blamed "unscrupulous, sometimes illegal and shonky operators" for problems in the scheme, which has been linked to four deaths, at least 87 house fires and alleged rorting.

He also released damning legal advice the government had received last April warning that the program could result in house fires and fraud, and might be of little benefit to the environment.

Mr Garrett dumped a major plank of his troubled Green Loans program and the government's solar hot water scheme, plunging key environmental sectors into chaos and prompting outrage from green groups.

As Tony Abbott demanded his sacking, Mr Garrett said an audit of 14,000 homes had revealed safety problems, including batts laid too close to downlights in 8 per cent of roofs and sub-standard insulation in 16 per cent of them. This was on top of the 1000 roofs with foil insulation that had been left live.

So far, 1.1 million homes have been insulated under the scheme, which was announced last February as part of the $42bn stimulus package and was aimed at creating jobs for tradesmen and unskilled workers.

But instead, about 6000 workers attracted to the sector now risk losing their jobs and scores of existing insulation businesses face closure, with home owners left fearful of the industry.

Under a new scheme to start on June 1, householders will be able to obtain insulation or solar hot water systems and claim a $1000 refund through Medicare -- which Mr Garrett argued would put them "back in charge" of the products installed in their homes. They will also be able to claim a $600 rebate for heat pump systems.

But installers will be forced to reregister with the government, pay a cash bond, show evidence of training and minimum skills, provide certified quality assurance and occupational health and safety plans, and be subject to a tough new compliance regime.

And Treasury advice suggests home owners are less likely to take up the offer if they have to outlay the cash initially.

Mr Garrett said there were "significant opportunities" for legitimate companies in the sector. "What I think will happen . . . is that the shonky operators, those that have continually tried to flout the guidelines . . . are now no longer in any way, shape, manner or form, a part of our program delivery," he said.

But the Opposition Leader said Mr Garrett must resign for what he described as the biggest policy failure in recent political history.

"At every stage of this unfolding disaster, experts had warned the Environment Minister that the program was gravely flawed, yet he took no action," Mr Abbott said. "Mr Garrett must be held accountable. You cannot abolish a program of this scale for systemic failure without sacking the minister responsible for that failure."

Mr Abbott also said the failure highlighted policy ineptitude across the Rudd government.

"If you cannot trust the government to effectively run a $2.4 billion program, how can you trust them to run a $1 trillion-plus economy?" he said.

But Kevin Rudd maintained his staunch defence of Mr Garrett as a "first-class minister", while the Environment Minister said he stood by his actions and would not quit.

Mr Garrett said he thought he had received appropriate advice and responded to it diligently.

Asked if businesses would be compensated, Mr Garrett said the government would consider "transitional arrangements" for "legitimate industry participants".

Retrenched workers will be able to access the government's training and job services and home owners worried about their insulation will be able to call a new review office to be established.

Installers will have seven days to claim outstanding rebates for work completed before the close of business today.

His spokesman said "of course" the costs of the scheme would rise, because of the safety audits and new measures that would be taken.

Mr Garrett said he had not foreseen how many of the 7300 business and sole traders on the government's installer register would flout the program's rules.

Only 2500 would have met the training requirements that came into force last Friday, while nearly 4000 would have been suspended and about 1050 deregistered.

Greens senator Christine Milne ridiculed Mr Garrett's revamped Green Loans scheme -- from which he has cut the "loans" element but retained ability for householders to obtain an environmental assessment of their homes.

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