Rebate cut leaves insulation firms cold

SOUTH-west insulation installers are concerned the Federal Government's decision this week to cut a ceiling insulation rebate from $1600 to $1200 will lead to job cuts.Operators fear demand for insulation will decline when customers no longer get ceiling insulation for free and have to pay a contribution.Many insulation installers have been enjoyed a boom time following the Federal Government's provision of a $1600 rebate from July 1 this year for home insulation.In many cases, the rebate covered the entire cost of ceiling insulation for the average Australian home.The rebate, part of the Federal Government's Energy Efficient Homes Package, was part of the Government's effort to stimulate the economy and counter the effects of the global financial crisis that has since eased.Paul Riches, from the Camperdown-based Australian Elements Insulation, said the rebate cut had put immense pressure on his business.Mr Riches said he hoped to employ about 10 people for the next two weeks to add to his existing workforce of 15 in the slim hope of getting through his backlog of installations before November 16 when the rebate will be cut."Because the jobs have been quoted at $1600, we will have to go like hell to get them all done (by November 16) to cover ourselves."To lose $400 a job will take the profit out of it."A shortage of insulation will make it difficult to complete all booked jobs by November 16, Mr Riches said.He said he expected to have to cut his workforce drastically because the cut in the rebate was likely to reduce demand.Mr Riches said the rebate cut was "wrong" but if it had to go ahead, installers should have been given longer before it came into effect.Michael Ryan from Warrnambool-based Westvic Insulation said the company did not expect to know the full impact of the rebate cut until after November 16.Mr Ryan said he expected the company would then have to ring customers to see if they wanted to proceed with the insulation with the lower rebate of $1200.His company had increased its workforce by two to three people to cater for the strong demand sparked by the $1600 rebate.