Govt cool on insulation extension

University of Otago researchers found that households which had installed insulation had cut their hospital and prescription costs. Photo / Kenny Rodger

The Government has not committed any new money to a housing insulation scheme despite reports showing it had provided $1.2 billion in health benefits - a four-fold return on its funding.

A series of studies commissioned by the Ministry of Economic Development said the $347 million Warm Up New Zealand programme, which subsidised the cost of insulation and heating homes, had generated significant health benefits since its introduction in 2009.

University of Otago researchers found that households which had installed insulation had cut their hospital and prescription costs.

In research published yesterday, it was also estimated that the scheme had prevented 18 deaths among people 65 or older who had previously been hospitalised with respiratory illness.

The combined benefits of reduced mortality and illness, and increased energy efficiency, was measured at $1.58 billion over nearly four years. More than 99 per cent of the economic benefits came from reduced health costs.

Warm Up NZ was the result of a National-Greens agreement in 2009. Greens co-leader Metiria Turei said its economic rewards were evident.

"Most of those savings come from savings in health which come at a time when New Zealanders are really concerned about cuts in the health budget. There is every reason to extend it," she said.

Warm Up NZ originally planned to help insulate 190,000 homes in four years.

Housing Minister Phil Heatley announced last Thursday that the scheme had been so cost-effective that the Government could extend it for a year and help insulate 41,000 extra homes with the original budget.

The funding was now expected to run out in July 2014.

Asked whether the Government planned to extend it further, Mr Heatley, who is also Energy and Resources Minister, said through a spokesman that National would make any considerations on its future "in due course".

By July 2014, 230,000 homes will have benefited from the programme.

Ms Turei believed there were up to one million more New Zealand homes that lacked insulation.

"I am concerned that there is no decision yet to extend the programme beyond its current budget allocation," she said.

The scheme also made energy efficiency savings of $26 million, but researchers found that there was no direct economic benefit in installing cleaner heating systems.

The scheme provided a 33 per cent discount off the cost of insulation for homes built before 2000, or 60 per cent for poorer families.