The Home Insulation Program was a good idea, but plagued by misfortune and a general lack of stringent safety standards. Here are the summaries of the 4 deaths blamed on the HIP :-
The road to hell is paved with good intentions.
My definition of a good idea is where the value of all benefits is greater than the value of all costs. After all it was paid for with borrowed money which we tax payers have to eventually repay as well as the interest costs in the meantime.
So the loss of 4 people's lives is horrendous and I won't seek to put a value on that.
But the other quantifiable costs are:
# Loss of around 60% of existing home insulation domestic industry - costs here = increased unemployment, loss of skills, loss of tax paid by both companies and employees. Multiplier effect estimated (Access Economics) about 2.2-2.7x.
# Cost of rectification of dangerous insulation - last reported cost was over $680m (went very quiet leading into the fed election, no updates to be found).
# Cost of increased power use by houses insulated (requiring more carbon generation by coal-fired base load stations and gas peaking power stations).
# Cost of importing materials from overseas due to loss of ongoing domestic production - in the range of $90-170mn in PV terms.
# Cost of interest on insulation scheme (debt funded) - Homeowner Insulation Program:
[5] incentives for homeowner occupiers to have insulation installed ($2.8 billion over two and a half years); eventually when stopped costed at $2.45bn for installation and over $680m for repairs etc. So say $3bn at 6% = $180m PA.
Total costs (PV) of interest = $3bn (as a perpetuity 180/0.06)
Benefits (see releases at the time) claimed energy efficiency - less power use by the insulated houses - subsequently found WRONG.
Create 5,000 to 10,000 jobs in the short term leading to 1,000-2,000 additional ongoing - RESULT - net loss to industry of over 2,600 jobs from level before date of announcement.
From a purely selfish home-owner viewpoint who got something for nothing - That was a great idea!
For landlords to put in insulation and be able to charge more rent as now a more desirable property - That sure was a great idea.
But for the tens of thousands of people who are not rorting the system and are waiting in severe pain (or dying) for an operation such as a hip, knee, shoulder replacement or a liver transplant etc - it does not seem such a great idea.
But then explain that it cost close to $7 billion and that amount could have built 10-12 new 'teaching' hospitals and fully funded them for the next 30 years, provided full dental cover to all aged pensioners and under-privileged (means tested exclusions where assets above $3m) the list is nearly endless.
Knee-jerk decisions rarely lead to optimal outcomes.
Welcome to the nanny state. You'd think you lot would stop mentioning pink batts since the current commonwealth government have displayed gross hypocrisy over this issue. Nanny state and waste money on a political witch hunt. Meanwhile, no royal commission on sexual abuse in the military.
