Pink Batts Scheme – What Went Wrong?

Pink Batts Scheme - What Went Wrong?
The Australian Government’s 2009 Home Insulation Program is often referred to as the “Pink Batts Scheme”

Actually, the Pink Batts Scheme (also nick-named the ‘pink batts debacle’ or even the ‘pink batts disaster’) was never really just about Pink Batts. The story of the scheme – or at least the key events we know and remember from it – is eyebrow raising to say the least. Millions in profits were made by some, while established businesses were rocketed into overdrive before brought to their knees almost overnight.

So, what exactly was the “Pink Batts Scheme” and how did it go so wrong?


Australia, like much of the world, felt the ripples of the Global Financial Crisis in 2008. In response, the Rudd Labor government of the day devised the Energy Efficient Homes Package, aiming at stimulating the economy. The Pink Batts Scheme was part of this package – a well-intentioned plan that would ultimately unfold into a tragic tale of unintended consequences.

In February 2009,  as the Global Financial Crisis continued casting its long shadow, Prime Minister Kevin Rudd introduced the Energy Efficient Homes Package, of which ceiling insulation was a key component.


The Home Insulation Program, came about to boost the construction industry, create more jobs and make Australian homes more energy efficient. It was thrown into the mix as a way to tackle economic challenges during a broader stimulus plan. Reflective foil insulation would also play a part in the scheme, due to its effectiveness in reflecting radiant heat. (Foil insulation is particularly useful in areas with high sun exposure).

Specifically, the scheme’s intention was to boost the insulation industry by subsidising the installation of insulation in homes. The Rudd government planned to insulate two million homes in two and a half years, at at cost of around $2.45 billion. This would result in huge business growth and employment opportunities, not least in the insulation and construction fields.


As the Pink Batts Scheme gained traction, there was a strong push for quick implementation. The initial excitement, fueled by the aim to boost the economy, led to a speedy nationwide rollout. With no requirements for installer certification or even formal safety training of any sort, new installers flooded into the market. Every man and his trailer was now a potential insulation business, combing the streets and knocking on doors with a cheery offer of “free insulation” to the surprised residents. Many able bodied homeowners also rushed to install their own insulation at the best of their ability in order to cash in on the government rebate.


The unprecedented surge in demand for insulation led to a challenge which could easily have been foreseen and likely prevented, had the scheme been rolled out more slowly and with a few more checks and balances in place – a historic supply crunch. The sudden spike in demand for insulation materials resulted in industry wide shortages. As any insulation supplier knows, Pink Batts insulation (and other brands of glasswool insulation) require a lot of storage space, and once the incoming stock supply tap was turned off, it didn’t take long before the insulation stockpiles across the nation began to feel the pinch. With the local production lines running at and beyond their production capacity, many insulation businesses turned to overseas, directly importing shipping containers of insulation (at times of questionable quality) to their door. Sadly four young workers also lost their during this time. Apart from this tragedy, severe third-degree burns and multiple ‘near misses’ occurred to various installers due to the use of staple guns while the electricity being live, and 94 house fires were also reported.


In response to the tragic incidents associated with the Pink Batts Scheme and the media pressure which followed the Commonwealth Government took radical action. On February 9, 2010, the use of foil insulation was promptly suspended from the program. Ten days later, recognising the need for a comprehensive reassessment, the entire Home Insulation Program was halted in its tracks. At the time, 1.1 million homes had been insulated (some very poorly), with $1.4 billion approved for payment.

The abrupt halting of the Pink Batts Scheme sent shockwaves throughout the Australian insulation industry. With the demand tap turn off, and an entire industry in overdrive to manufacture, import and stock up on insulation, the impact was almost instantaneous. Prior to the scheme, there were an estimated 200 businesses in Australia engaged in retrofit insulation installation. A year later, this number had climbed to a staggering 8,300 businesses registered under the scheme.  While many of these new installation businesses no doubt packed up and went back to what they had been doing before, companies which had invested heavily in the scheme clung anxiously in the hope that a new and improved scheme would again breath life into an industry which appeared to be on the brink of collapse.

At the time of the February 19 announcement, the government had stated its plan to replace the scheme with a new “Renewable Energy Bonus Scheme”, the insulation component of which would commence 1 June 2010. However, this was not to be…


With an increasingly acute awareness that things were not going to plan, physical roof inspection audits were ramped up. As of March 2010, over 13,000 roofs had been inspected, of which almost 30% were found to contain concerns relating to safety and/or quality workmanship. The system appeared to be broken. 

The final nail in the coffin for the ill-fated pink batts scheme came on the 22nd of April 2010, over 2 months since the scheme was initially halted. On this day, we heard the Federal Government announcement that it would abandon the scheme which had been planned to replace the Home Insulation Program. The Pink Batts Scheme was over for good – or was it?

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