The Green Loans program will be phased out in the coming months and will transition to a new Green Start program, Minister for Climate Change, Energy Efficiency and Water, Senator Penny Wong, announced today.

The announcement follows consideration by the Government of a series of reviews, including the inquiry by Ms Patricia Faulkner AO into the Green Loans program. These reports – the Faulkner Inquiry, Resolution Consulting Services report and the Protiviti Consulting report – have all been publicly released today on the Department’s website and will be tabled in the Senate.

The new Green Start program will be delivered through Commonwealth grants in two rounds:

• In the first round, the Commonwealth will fund the delivery of energy assessments for households. Grants will be awarded to accredited assessors and organisations who can deliver high quality assessments through a competitive process.
• In the second round, the Government will seek proposals from community and welfare sector NGOs and other organisations to provide practical help to low-income and disadvantaged Australians to improve their energy efficiency.

The new Green Start arrangements will benefit Australian households – particularly low-income and disadvantaged Australians - by helping them to save energy and reduce energy bills.

They will also give greater certainty to assessors about their future under the Green Loans program and will be delivered through transparent and robust administration.

Applications for funding under both of these rounds will open later this year. The Government will announce further details regarding delivery of the Green Start program in the coming weeks, following targeted consultation with stakeholders.

It is the Government’s intention to transition the Green Loans program to Green Start later this year. In the meantime, sustainability assessments will continue to be delivered under the current Green Loans arrangements to ensure a smooth transition to the new programs; and the current suspension on additional assessor contracts, announced in March, will continue.

Senator Wong said demand for sustainability assessments was strong because they provided practical advice on how households could reduce their impact on the environment.

Since July 2009, more than 340,000 home sustainability assessments have been provided to households.

Senator Wong said the Green Start program would assist households to become more energy efficient.

"Green Start will assist Australians who want to save energy and use energy more efficiently," Senator Wong said.

"By installing energy saving appliances, households can save on power bills and reduce their carbon footprint.

"This scheme will be of particular benefit to low-income households, who spend a greater proportion of their incomes on energy consumption than high-income households."

Energy efficiency programs, including the Green Start and Green Loans programs, were added to Senator Wong’s portfolio in March 2010.

Senator Wong informed the Senate on 10 March of serious issues relating to the Green Loans program, and asked the newly-formed Department of Climate Change and Energy Efficiency to provide a frank assessment of how household assessments could be better delivered.

The component of the program which provided interest-free loans for energy-saving devices was discontinued from March 22, but households continue to receive home sustainability assessments.

The reports released today show there were significant problems relating to the Greens Loans program.

Senator Wong acknowledges the serious matters identified in the reports and welcomes the Department of Climate Change and Energy Efficiency response that has also been publicly released today on the website.

The reports’ findings and recommendations have been central to the design of the new Green Start program. Changes made to program arrangements include:

• Delivery of the Green Start program through grants, improving value for money, transparency and outcomes;
• Removal of demand-driven component of the Green Loans program to safeguard against budget blowouts;
• Appointment of a probity advisor to review the proposed grants assessment process for Green Start;
• Department to seek assurance from an independent adviser that the proposed arrangements are consistent with the recommendations of the independent reports, including the Faulkner inquiry;
• Auditing assessors to ensure they are complying with the guidelines;
• Internal Department changes to assist executive and staff to manage risks, including enhanced training.

The reports can be found at www.climatechange.gov.au