Home insulation to stimulate economy

Bill English, pictured yesterday checking progress on printing his 2009 Budget, will announce a home insulation scheme when he presents his economic plans. Photo / Mark Mitchell

The Government will unveil tomorrow a home insulation subsidy scheme for private home owners to be funded via councils, banks and power companies.

Home owners will be able to get a loan from the government for insulation on homes built before 2000, only some of which will have to be repaid.

It is intended that repayments will be able to be made through council rates bills, bank mortgages and power companies - though not all the details have been negotiated and finalised with relevant players.

The scheme will be the newest part of the Government's attempts to stimulate the economy and will be up and running within a few months.

It will provide jobs and lower power bills over time.

Unlike the existing government scheme that offers funding on a means-tested basis, this one won't be.

National announced the scheme before entering a memorandum of understanding with the Green Party but it has involved the party in the planning of the policy.

Prime Minister John Key yesterday said he was excited about the scheme.

"The Government's scheme will help many more New Zealanders make their homes warmer, drier and healthier. The economy will benefit from increased employment in the building and construction industry, and the environment will benefit from increased energy efficiency."

The scheme is expected to be one of the brighter points in a Budget that Finance Minister Bill English said yesterday would contain no surprises. "It is a predictable Budget and the focus of it is getting the debt under control."

Mr English rejected a suggestion by Labour leader Phil Goff that the Government was "mesmerised" by the credit rating agency Standard & Poor's and was paying too much attention to avoiding a downgrade.

"The agencies are dealing with governments all around the world whose debts are going up," Mr English said.

"Our concern is less with the ratings agencies and more with making sure that NZ's debt does not get out of control because it is New Zealanders who have to repay it."

Asked if his Budget might be contractionary, Mr English said the Budget had been about "striking a balance between protecting people in the short term from the sharp edges of recession, which does mean continued Government spending on the one hand, making sure that over the next three to five years we get that spending and debt under control and I think we struck the balance pretty well".

He did not think New Zealand would be back in surplus within five years but he would not comment on whether he thought it would happen within 10 years.

Labour finance spokesman David Cunliffe said the unemployment benefit would cost $800 million a year if the unemployment rate rose to 7 per cent, from its present 5 per cent, and that a 9 per cent rate would cost $1 billion a year in benefits.

"Is it not time that he [Mr English] worried as much about the real human costs of unemployment as he does about pandering to credit rating agencies?"