Local insulation companies have been forced to cut back on staff following a halt to the Federal Government’s home insulation rebates.
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The Home Insulation Program offered homeowners up to $1200 in rebates for insulation installation. It ended last Friday after claims the scheme was linked to four deaths and 90 house fires.
Federal Environment Minister Peter Garrett is under pressure to resign over the issue and said a similar program offering $1000 would start in June.
Until then, however, local insulation companies say they will have to make arrangements to get them through the expected drop in business.
“For the next couple of weeks we’re looking at revising staffing levels,” Pell’s Plasterboard owner Lionel Pellow said.
Similarly, South Coast Insulation and Solar owner Doug McPhan said they would have to lay off four to five staff in the short term.
“It’s not very nice but we obviously can’t have people standing around here doing nothing,” Mr McPhan said.
The halt to the insulation scheme was announced on Friday with a cut-off for the rebates at end of business the same day. Mr Pellow said this wasn’t enough time to make arrangements because they’d had installation jobs booked weeks ahead.
“We consider the cut-off date was absolutely unreasonable,” Mr Pellow said.
Instead of attending the jobs, Mr Pellow has been on the phone to customers with existing homes, informing them that they could not have insulation installed under the rebate scheme.
“We’ve had people ringing us, saying we’ve already got a quote to install insulation. We’ve had to reply, saying ‘sorry we can’t do it because the Government stimulus package has stopped’.”
While people have the option of paying for the whole installation themselves, Mr Pellow said in 100 per cent of his cases, customers preferred to wait until June.
“It’s had an impact on reputable companies because of a poorly thought-out decision by the Government,” he said.
While the Federal Government hoped to reintroduce the reduced rebate in June, Mr McPhan said it would act differently in that home owners would have to wait for up to 13 weeks to receive the rebate.
Mr McPhan explained the old rebate involved the insulation company claiming it on behalf of the homeowners, where the customers would only pay the difference between the total cost and what they received from the rebate.
“We wore the time delay in receiving the rebate where householders may not have had the ability to pay for insulation upfront,” Mr Pellow said.
“All companies benefited from it. It was a system to help people struggling with mortgage debts to insulate their homes to save energy and save money themselves.”
However, it’s not the end for businesses as Mr Pellow said they were still able to install insulation in new homes, and had other avenues to keep things afloat.
Mr McPhan said he expected to see a dip in business, but insulation was “still a viable industry”.