While pressure continues to mount on the Government over its botched insulation scheme, more casualties of Environment Minister Peter Garrett’s restructuring of the Government’s green programs are emerging.
Businesses set up to provide residential energy assessments under the Government’s Green Loans scheme are facing substantial losses, job cuts and collapse after Garrett announced a cut in the maximum number of assessments that can be performed per week.
The controversy comes after the Government scrapped the troubled insulation rebate, with the Coalition calling for Garrett’s resignation after it was revealed he did not read a year-old report warning of the scheme’s dangers until last week.
SmartCompany has been told of at least four businesses which face closure due to the changes in the green loans and assessments scheme. Previously assessors could perform any number of assessments per week, but now the Government has restricted this number to a maximum of just five per week, and three per day, severely impacting income.
It comes after the Government recently announced the 350,000 assessments it had flagged for completion by 2013 will all be performed by this April.
Tom Buckley, managing director of Green Home Loans Australia, says his business will be impacted as a result of the changes.
“These changes will certainly have an impact on our business. That having been said, we did think this scheme was going to finish in the next two months and thought we were going to have to do something… but in terms of company structure, you can’t make anything off of five assessments per week.”
“If you’re an individual doing these assessments, now you’re getting about $1,000 per week. I think the Government has really restricted people and I think a lot of people will now leave the industry.”
Buckley says he has also spoken with industry contacts who have said they must close their businesses as a result of the new changes. There are several businesses which have employed a force of assessors to take advantage of the scheme.
However, with each assessor now restricted to just five appointments per week, these companies will now be forced to restrict their employees to part-time hours.
“The Government’s excuse is that this will provide a quality service, but you can still do that with more than five per week. It’s going to affect us, because the structure of our business doesn’t change and we need money to run it.”
“There are companies out there which have people employed, and the margins just aren’t good. Many people will leave the industry.”
Additionally, the Government has also said the number of assessors will be capped at 5,000, after the number blew out over the past year.
Fraser Clayton, managing director of Alpha Green, expects most of his contractors to leave the industry as a result of the changes.
“The real impact is on the individual assessors. It’s these people who won’t be able to make a living. I don’t think it was intended this way, but many of these guys are breadwinners and can’t survive on five jobs a week.”
“The short-term impact is that it’s imposed losses on our business, and the full-term impact is that we’ll lose our employees. We support our contractors with back-end infrastructure and booking and stuff, but if they can only do five jobs per week it’s a part-time income.”
Dewayne Montey, managing director of Ecovation Water and Energy, says he is disappointed by the drop to just five assessments per week but is also annoyed at the reduction in the number of loans to be given out.
“Three a day I could be comfortable with, but not five per week. I’m also not entirely happy with the dropping away of the less popular component, the subsidised $10,000 loan. If there was more education about the loans there would be a higher take-up.”
The loans are offered to those who have had their homes assessed in order to make “green” improvements. However, they have not been as successful as the assessment program itself, with only 1,000 out of the 75,000 loans taken up.
“We’re a consultancy so we have products apart from this, but it is still a revenue stream. There are obviously a lot of people who are going to lose out and anyone who is an independent assessor is going to struggle.”
“The other thing is that the green loans themselves need to be fixed. I have people calling me up and asked for their assessment report from last August – that is why they haven’t taken out a loan, because the Government isn’t handing out the reports.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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