Funding brought forward for insulation scheme
Funding for the government's insulation scheme is changing to become more flexible, in order to bring funding forward and meet increasing demand.
Monday, November 23rd 2009, 9:50AM 
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by The Landlord
In the first four months 19,759 homes have been retrofitted under the scheme. The scheme's original target was to see 27,000 homes insulated in the first year, but Energy and Resources Minister Gerry Brownlee believes the target will be met after only six months.
"Demand for the programme has been huge in the first four months," he said.
To continue the momentum and address demand, the scheme will change to a multi-year appropriation, allowing funding to be brought forward to withstand demand.
By allowing the scheme to become a multi-year appropriation a steady stream of funding will be on tap to keep the momentum rolling," Brownlee said.
There were 5,720 homes retro-fitted in October, with a considerable number occupied by low income earners, which Brownlee believes is a very positive trend.
"The scheme is reaching those most in need and least able to make the changes themselves."
The Green Party is also welcoming changes to the insulation scheme, which is a Green Party initiative.
"It makes sense to improve as many homes as well can as fast as we can," Green co-leader Jeanette Fitzsimons said.
"We'll get the money we spend through better use of energy resources and a better health for the New Zealanders who live in these homes."
Fitzsimons also praised landlords who had taken up the scheme to support their low-income tenants.
"I'd like to congratulate the landlords who have taken up the scheme to improve the living conditions for their tenants," she said.
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Flexible funding delivers a Christmas bonus for landlords
…As the government struggles with a high dollar, stubbornly high interest rates and getting control of the over heated ‘Warm Up New Zealand Heat Smart’ home insulation subsidy scheme, landlords are seeing their Christmas’s come early.
House prices have rebounded to levels that may concern the Reserve Bank, but will certainly bring Christmas cheer to landlords. Meanwhile the taxpayer plays Santa in this pre-Christmas season of giving, by upping the Christmas budget that is seeing an escalation in the government funded insulation of privately held rental Ho – Ho – Homes so that landlords get a double dose of Christmas cheer.
In early September Government Energy Minister Gerry Brownlee promised “a new network of providers will be signed up to install the insulation from 1 October…This will mean even more suppliers on the ground to deliver the scheme, which will mean more jobs, as well as more homes insulated.”
Unfortunately for Mr Brownlee the statistics show the opposite has occurred. The total number of homes insulated in October is lower than the September total as the government has taken some service providers out of the scheme and the benefits of the government expenditure have been more finely focused.
As the economy stutters towards a tentative recovery, landlords are the real pre-Christmas winners as Ho – Ho – Homes are insulated in the run up to Christmas.
Low-income landlords have seen their allocation of government subsidies increase in October by almost 70% while low-income home owners, the kiwi battlers on struggle street have seen their October allocation reduce by 10% on September volumes.
For general income families the results show the same trend with landlord installations up 6% while homeowner installations are down 30%.
This reflects the economic realities of stark pre-Christmas spending choices for kiwi home owners in a recession that the Minister of Finance openly admits will effect the New Zealand economy for the next twenty years.
Many of these home owners are suffering because they rejected speculative residential housing investment in favour of the ‘safer’ investments promised by finance companies that have since succumbed to the global financial crisis.
As governments across the globe climb out of the recession there is a move to reduce government stimulus packages to ensure a sustainable global recovery. Australia, early adopters of a home insulation subsidy package have reduced their insulation subsidy maximum by 25% from $1600 to $1200.
In New Zealand however in a continuation of borrow and hope policies, the immediate government expenditure available for “Warm Up New Zealand Heat Smart.” has been massively increased
In his latest press statement Mr Brownlee makes much of the trends evident from Warm Up New Zealand Heat Smart, while an analysis of these trends is arguably negative in terms of kiwi homeowners.
Throughout the country National MP’s issue press statements that laud the performance of Warm Up New Zealand in their respective electorates, in a good news frenzy but to what extent is Warm Up New Zealand Heat Smart being implemented for the greater good of the New Zealand economy or is it pork barrel politics.
In early September Mr Brownlee said of the planned October changes to Warm Up New Zealand Heat Smart “I am asking people to be patient while the scheme is still gearing up…Bringing in more companies will mean people can get their homes attended to faster, and start reaping the benefits earlier.”
October results show homes are not being attended to faster and it is landlords who are the stand out beneficiaries of Warm Up New Zealand Heat Smart.
As with most pre-Christmas borrowing the impacts on the borrowers, the New Zealand taxpayer will come sometime after Christmas.
Richard Moore is the owner of Poly Palace. A specialist underfloor insulation manufacturer and installation business whose products are approved for use in Warm Up New Zealand Heat Smart, but whose business does not qualify for the insulation subsidy directly