The Government’s $41 million rescue package for insulation businesses has been rejected by industry leaders, who have instead called for a new rebate scheme to be brought forward.
It comes as the Government announced the package as an initiative to save jobs and help activity in the industry until the new rebate begins on June 1.
The rescue package is designed to train and provide job services for installers, with about $10 million also set aside for helping businesses keep staff on payroll.
Prime Minister Kevin Rudd told a group of industry representatives outside Parliament House the package would make up for mistakes.
“The Government will not walk away from its responsibilities to the workers of Australia… we are determined to fix this… we want to work this through.”
Rudd also told Parliament the package will help the industry survive an uncertain period during which thousands of businesses could collapse.
“The government will continue to assess the number of workers displaced by the early termination of the home insulation program, and will make adjustments to this package as required,” he told Parliament.
“Many of these people are good honest workers whose jobs have been disrupted because a small number of shonky operators.”
Thousands of homes have been affected by the dodgy insulation, which has resulted in 93 homes burning down and four deaths associated with electrical safety failures.
It comes after several industry bodies have said the Government should not abandon the scheme entirely but clearly define its safety guidelines and instead give benefits to companies which have been operating for a long time.
But Cool or Cosy managing director Robert Nicholls says the Government should clearly define what will be in the new rebate scheme and pull it forward, rather than spend money on a comprehensive rescue package.
“I think the significant limitation of the rescue package, as I understand it, is that businesses will still have to wear a significant proportion of the costs associated with the retention of workers.”
Nicholls says while reports the company will have to lay off about 150 workers are inaccurate, he does believe about 70 will have to be let go.
As an alternative, Nicholls says the Government should do more to bring forward the new rebate scheme and keep activity in the industry flowing as much as possible.
“The more they delay the onset of the new scheme I think the greater the likelihood of the necessary skills being lost.”
“I think there is uncertainty in the industry about this, and although on a positive note the Government has talked about some good things in the new scheme, there needs to be some good planning involved.”
The new scheme includes a $1,000 rebate rather than the current $1,200. But a number of industry veterans, including Peter Gerster from Golden Fleece in Melbourne, have said the scheme should be brought forward in order to save a number of jobs.
Recently Enact Energy managing director Danny Morgan also told SmartCompany the Government should bring the new scheme forward to eliminate uncertainty.
“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.”
It is understood environment minister Peter Garrett, who has been called on by the Coalition to resign over his role in the debacle, has reportedly said he may bring forward the date from the new scheme from June 1, but no confirmation has been made.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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