Foil removal may force budget cuts: Swan18:42 AEST Thu Mar 11...

Foil removal may force budget cuts: Swan
18:42 AEST Thu Mar 11 2010



The federal government says it may have to cut budget spending to pay for the botched roof insulation scheme.

The $2.45 billion scheme collapsed under wide-ranging safety and quality concerns, the deaths of four installers, and more than 100 house fires.

The government has announced foil insulation is to be removed, or an extra safety switch installed, in 50,000 homes.

It will also pay for inspections of about 200,000 homes and fix any problems.

Treasurer Wayne Swan couldn't say how much it would cost to deal with the wide-ranging problems.

"It will certainly be quite expensive, there's no doubt about that," he told ABC Radio on Thursday.

Mr Swan said the budget would have to be made to fit.

"It may well be the case that we will have to make adjustments elsewhere in the budget because of these (insulation) adjustments."

Prime Minister Kevin Rudd also flagged the government may have more announcements to make about actions to fix the insulation problems.

Opposition climate spokesman Greg Hunt said experts estimated it could cost $450 million to fix the problems.

The opposition is also seeking to blame Mr Rudd over the bungled scheme, instead of Peter Garrett, the federal minister who had been in charge of it. He has since been demoted.

Mr Hunt told Radio 2GB there was a "secretive" Project Control Group in the Prime Minister's Department which rejected sensible plans for an insulation scheme, forging ahead with the "free-for-all, the honey pot, which drew in all of the cowboys and the shonks and the spivs".

The opposition repeatedly asked Mr Rudd in Question Time about what he knew about safety problems with the scheme during its first months.

Mr Rudd said he was aware of extra actions being taken to address compliance, training and inspection, from last August last year when he received a letter from Mr Garrett. The scheme, which began that month was axed earlier this year.

Mr Hunt asked whether the Project Control Group had watered down safety advice in order to get the scheme up and running.

"I have nothing before me that would indicate that group, in any way, did anything other than the advice that they received on the questions of safety," Mr Rudd replied.