Senate hears of scams and waste as scandal heats up

More disturbing revelations have surfaced in the growing scandal over the Australian Government's A$2.5 billion ($3.07 billion) programme to insulate the nation's homes.

Mismanagement of the programme and faulty installation are alleged to have killed four people, caused more than 80 fires, and raised complaints of widespread scams and waste.

The scandal threatens to engulf Environment Minister Peter Garrett, who continues to come under heavy political fire.

Yesterday the Senate began inquiring into the programme, which offered significant rebates for householders to install insulation in their roofs.

Submissions have told of a wave of early warnings about the dangers and potential for corruption, most of which were ignored until late last year.

Master Electricians Australia, which represents electrical contractors, said it had been concerned from the start that the programme would attract a sudden and large influx of unskilled installers.

It said that combining unskilled labour with electrical cabling meant tragedy would not be too far away, with incorrect installation of metal-based insulation such as foil and woollen batts threatening serious damage to lives and property.

The organisation first warned of the risks last May - before the scheme began - and continued in the months leading up to October after members told of "live" roofs found in houses recently fitted with foil insulation.

Master Electricians called for the immediate withdrawal of metal-based insulation, for greater training of installers and for electrical safety inspections for houses already installed with the products.

Garrett finally announced more training and formal risk assessments in late November.

An unnamed housing assessor gave further details of the death of a 19-year-old installer, who was untrained as an installer and had no knowledge of working in confined spaces, she said.

"When he was found lying on the road his body temperature was 80C and he had a heart rate of 200bpm.

"Why did this happen? He was the third death ... Was nothing learned from the first two?"

Further submissions alleged rip-offs in the programme.

One unnamed registered installer said he had warned officials "many times" about the potential for corruption, including details of abuses of the system - including one case in which a contractor installed insulation in a three-year-old complex of 280 homes, all of which were already insulated.

Other allegations included companies who had simply dumped batts in the roofs of elderly people's homes without installing them, and another who covered only about three-quarters of the roof space and failed to install a Government-subsidised air-conditioner that had been paid for.

One contractor cracked three plaster ceilings in a 71-year-old's house and refused to pay for the damage.

When Senate hearings opened yesterday, AAP reported taxpayers' money had been wasted in the installation of ineffective insulation in about 400,000 of the 1 million homes covered by the scheme in the past 10 months.

Polyester Insulation Manufacturers Association representative Tino Zuzul said tests on 20 products imported from foreign suppliers had shown that all had failed to meet expected standards.

Garrett and Environment Department officials had been briefed on the industry's concerns last month, but the association had been told it was up to individual homeowners to ensure their insulation had been installed to code.