The insulation industry has been thrown into chaos after the Government announced over the weekend it had scrapped the $1,200 insulation rebate, with thousands of businesses now losing out on work.
While businesses are thankful the decision will see dodgy traders now exit the market, several industry veterans say the Government’s new initiatives to begin on June 1 need to be brought forward to eliminate uncertainty.
Enact Energy, a British company which entered the Australian market on the back of the Government’s green initiatives program, is now questioning its place in the market after the rebate was scrapped.
Danny Morgan, managing director, says the company will now be forced to view its position in the market as a result of the decision.
“Certainly we will need to have a look at the operation. I need to understand from the Government’s view what these interim provisions are, and for customers as well, they need to know what is happening.”
The Government has flagged a replacement program which will come into effect on June 1. But Morgan says the Government acted too quickly in scrapping the rebate entirely and it should instead ramp up regulatory power.
“This is a knee jerk reaction to some of the issues that were going on. Safety is extremely important for us, and we were pleased to see the Government took initiative there, but I feel more adequate planning would have been the best thing for the industry.”
Morgan says there will be a huge impact throughout the industry as a result of the decision, which will leave companies which have spent significant amounts of revenue training installers out of work.
“There certainly will be an impact. Not only from the scheme stopping, but also from the lack of guidelines as to how the new scheme will run and what must be done during the interim period regarding money which can be claimed back.”
Peter Gerster, who owns and operates Melbourne-based insulation business Golden Fleece, says the industry will feel a massive impact due to the sudden removal of the rebate.
He also warned any new rebate must be examined to ensure dodgy traders do not take work away from companies which have successfully trained their employees correctly.
“These reputable insulation companies have spent a lot of time training installers in the correct way, not only to insulate homes correctly but also the way they present themselves in the industry and to the customer, they have all completed training courses required by the Government but most have said that they learnt very little about working in a roof space, onsite training must be incorporated into any new installer courses as most trainees have never been in a roof.”
Gerster says a number of companies already have jobs booked, but there is uncertainty as to how these jobs will work in the new scheme. He urges the Government to register “long established companies” and allow them to continue trading.
“The registered company would be able do the work any time prior to June 1 it will charge the customer / landlord the $1,000 of which can be claimed at a Medicare office after June 1. Some may wait until June but there will be many that will still get the work done, giving the installers an income and saving the Government $10 million.”
Garrett announced the abolition of the green initiatives scheme, which includes rebates for solar infrastructure, last Friday. It came as a Senate inquiry continued its investigation into the insulation rebate, which has been taken advantage of by rogue traders.
Garrett has come under fire for not introducing strict safety standards, after it was discovered some companies have been importing unsafe, cheap materials from China. Four people have died and houses have suffered major fire damage due to these products, along with unskilled labourers installing the insulation incorrectly.
Additionally, yesterday Garrett and prime minister Kevin Rudd both said they did not read a report from Minter Ellison warning the Government about the dangers of the scheme until earlier this month – despite the fact the report was sent in April last year.
“I only sought that full report when we were asked about it and it was provided to my office very recently,” Garrett told ABC Radio National this morning. “That’s correct, I only saw the full Minter Ellison report last week.”
The report warned the Government that the scheme could be taken advantage of by companies which could engage in illegal and unsafe practices.
While the Coalition has continued its calls for Garrett to either resign, or Rudd to sack him, Greens leader Bob Brown has offered similar advice.
“If Peter decides not to go and to hang on, the people will judge that. My advice to Peter would be to go but that is up to him,” he told Sky News today.
The Senate inquiry into the rebate scheme will continue this week.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
