Compensation Claim

Three insulation batts manufacturers – CSR (Bradford), Fletcher Insulation (Pink Batts) and Knauf – are seeking $50 million in compensation from the Australian government after the sudden withdrawal of the home insulation scheme last year, according to a report in the Australian Financial Review.

All three companies increased production and imported extra supplies to meet demand after the government announced a $4 billion home insulation subsidy in early 2009. But the scheme that was championed by Federal Environment Minister, Peter Garrett, was scrapped a year later amid a scandal over shoddy installation and the deaths of several workers who were electrocuted installing foil insulation. The companies now want government compensation for more than $50 million of unused insulation material sitting in their factory yards, with legal action on the cards if the negotiation route fails.

Fletcher Insulation has an estimated 3,000 tonnes of surplus Pink Batts in 12 metre-high stacks as long as a football field at its factory in western Sydney. Fletcher spokesman Philip King said the company had announced an $18m write-down last year as a result of the shut-down. “Very little has transpired since then, except that the market has continued to be disrupted as a result of the very abrupt way in which the scheme ended,” he said. “In terms of compensation, all we can say is we would consider our options.”