Greg Combet, Minister Assisting the Minister for Climate Change and Energy Efficiency, today announced further details of the Government’s Home Insulation Safety Plan.

The Home Insulation Safety Plan will help restore confidence in the insulation industry as it adjusts to new circumstances and provide reassurance to households that have had insulation installed under the Home Insulation Program (HIP). The Safety Plan will also put in place strong measures to track down and prosecute any fraud that may have occurred under the HIP.

The HIP was designed as part of the Government’s response to the global financial crisis. Under the HIP, insulation was installed in over 1.1 million homes, which had a very positive impact on the economy. It generated jobs at a time when unemployment was projected to rise substantially, and will have positive environmental benefits over time.

The Government’s Home Insulation Safety Plan will help restore confidence and address the impact that the termination of the HIP has had on the industry.

A key to success of the Safety Plan will be the participation of long-standing and reputable companies in the industry, and other important Australian firms that participated in the HIP.

The Safety Plan envisages the constructive participation of those firms.

The Government believes that it is vital that major Australian companies and long-standing reputable insulation firms stand behind their work under the HIP, and specifically that they stand behind the quality of their insulation product and its installation.

The key elements of the Government’s Safety Plan are:

• A Home Insulation Safety Program (HISP)
• A Foil Insulation Safety Program (FISP)
• Industry Assistance
• Strong Fraud and Compliance Measures

The HISP and FISP will be administered by the Department of Climate Change and Energy Efficiency.

The amount required to meet the Government’s commitment for HISP and FISP will be met from within the existing budget for the Home Insulation Program.

As the Government is negotiating with the potential contractors that will undertake these Programs, it would not be appropriate to discuss the specific amounts involved.

The Government’s Industry Advisory Panel has provided expert advice and assistance in developing the HISP and FISP.

A Home Insulation Safety Program (HISP)

Under the HISP, safety inspections of a minimum of 150,000 homes that had non-foil insulation installed under the HIP will be carried out.

These inspections will be targeted at those homes that are most likely to have safety issues.

In addition to these inspections, any household that has safety concerns with installations under the HIP can request an inspection. The Government is committed to inspecting as many homes as are necessary according to an ongoing risk assessment process.

Inspectors will be able to undertake simple remediation work, for example the fitting of downlight covers where required. The cost of this safety remediation work will be borne by the Government.

The Government intends to contract a national organisation that has experience in managing large-scale programs to oversight and manage the HISP. This organisation will source other companies experienced in the insulation/inspection industry to complete the work.

These companies will be subject to strict safety criteria. Firms that did insulation installations under HIP may only qualify if they satisfy these criteria. This includes a requirement that the participating firms were compliant under the HIP, and a commitment that they stand behind the quality of the insulation product used, and the quality and safety of the installations that they and their subcontractors carried out under the HIP.

The capacity for long-standing, reputable insulation industry firms to participate in this large scale inspection program will be a vital boost for those firms and their workers, and help restore industry confidence. 

The contracting process for the HISP will be finalised as soon as possible.

The Department of Climate Change and Energy Efficiency will consult with insulation companies to discuss these arrangements.

Until the new inspection program is in place, the current arrangements enable householders who have safety concerns to ring and request a safety inspection through the Safety Hotline on 131 792, which will be carried out as soon as possible.

A Foil Insulation Safety Program (FISP)

Under the FISP, the 50,000 homes that had foil insulation installed under the HIP will have the option of having the foil insulation removed, or alternatively on the advice of a licensed electrician, having safety switches installed.
 
Householders that choose to have the foil insulation removed will be eligible for up to $1,000 rebate under the new Renewable Energy Bonus Scheme.

It is expected that the FISP will commence in the near future. Upon commencement it is estimated that the FISP will take approximately 6 months to complete.
 
As an interim arrangement, householders who had foil insulation installed under the Home Insulation Program can get their homes checked by a licensed electrician which will be paid for by the Government. This can be arranged by contacting the Safety Hotline on 131 792.

Assistance for Industry

The most important form of industry assistance that the Government can provide is to help restore confidence in the home insulation retrofitting segment of the industry. 

The HISP will be critical in this regard.
 
The HISP will assist long-standing reputable firms in the industry by allowing them, subject to meeting the criteria, to participate in home inspections. This will entail a significant amount of work over a period of some months.
 
Further to these measures, the Government will also make available further deferral of GST payment obligations plus a $15 million package to assist in meeting the cost of insulation stock-holdings for firms that participated in the HIP and that have appropriate compliance records.

This will assist reputable business to meet the costs that are associated with the storage of their stock, while the industry recovers.

Details and program guidelines for the industry assistance will be published as soon as possible.  The program will be administered by AusIndustry.

This is in addition to the $41 million Insulation Workers’ Adjustment Package. 

Fraud and Compliance Actions

Fraud and non-compliance under the HIP will be investigated and where possible action will be taken to recover money and, if necessary, referrals made to the police or other authorities for potential prosecution.

The Department has appointed a team of forensic auditors who have already commenced work. The auditors will prepare material for consideration by police and other authorities.

The Department has also moved additional staff and resources into audit and compliance work.

The Auditor General has also commenced an audit of the Home Insulation Program which is expected to be completed by late September.

Note - Further details of these announcements are available on www.climatechange.gov.au.  Installers will be able to register their details at this site in order to receive future announcements. An email to the installer network will be sent shortly to this effect. The hotlines will address the information in this announcement from mid next week.