Death of insulation scheme to result in closures, sackings
By Miles Godfrey
Daily Telegraph
April 22, 2010
THE Federal Government's decision to end its bungled $2.45 billion home insulation scheme will force dozens of companies into bankruptcy and result in hundreds of workers being sacked, accredited Sydney insulation firms say.
The scheme was open to fraud and never about aiding the environment, but rather a chance to splurge unprecedented amounts of public cash, Tony Arundell, manager of Hoxton Park-based Eureka Insulation, said.
"Blind Freddy could have seen the scheme was open to fraud from day one," he said.
"It was a scheme to get people working but all it's done is hurt the real workers of this country and I think the Government deserves to be punished."
Doug Mill, owner of Chatswood-based The Demand Group, added: "We're all looking at the likelihood of failing and today's announcement will push us all further towards that."
Federal Energy Efficiency Minister Greg Combet confirmed today that the controversial home insulation scheme was being canned.
The Federal Government suspended it in February after evidence of shonky installation came to light, but had said it could resume in a modified form in June.
Mr Combet blamed the scheme's failure on "unscrupulous operators" and admitted a significant number of jobs would be lost.
But Mr Mill and Mr Arundell both said "cowboys" found the scheme easy to rort and that sufficient auditing was not in place until it was too late.
"Anybody with a white card, which takes five hours to obtain, and the ability to get insurance was able to get in on the game," Mr Mill told AAP.
Mr Arundell admitted the scheme initially worked well, with home insulation firms almost universally making extra cash.
But cowboys had quickly exploited loopholes, he added.
Eureka Insulation upped its staff from 16 to 40 to meet increased demand and splashed out on advertising, marketing and stock.
The Demand Group upped its headcount from six to 20 and is now back to five, with the likelihood of shedding at least one more job.
Eureka owes about $200,000 in advertising costs directly associated with the insulation scheme.
Mr Arundell says his firm will survive but says other firms will be liable for millions of dollars and are likely to cease trading now the scheme has ended.
At least two Sydney-based insulation manufacturing firms have also closed with the loss of hundreds of workers, he said.
"It was a complete joke. We became acutely aware that it was not about the long-term standing of the industry but about putting cash into the community.
"It really wasn't about the environment either but about throwing money out there," he said.
"We knew that it was fraught with danger. The murkiest crystal ball could have picked it up."
So far everything Lu Kewen aka. Kevin Rudd’s Government has touched, they have Fucked,Australia is fast becoming the third world basket case that Lu Kewen’s head office in Beijing thinks should be our destiny.
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