Date: May 05 2012
Nearly 40 companies have hit the Climate Change Department with compensation claims over the botched home-insulation program, but not a single dollar has been paid out so far.
The government's $2.45 billion insulation scheme was axed in February 2010, plagued by ''cowboy'' operators, dodgy installations, house fires and several deaths.
The axing of the program was followed by a wave of compensation claims alleging defective administration by the government ruined existing insulation businesses.
Thirty-nine companies have demanded money from the government, but no payouts have yet been made, although a spokeswoman said the department was still working through the claims.
The Demand Group, based in Sydney, is claiming $5 million under the Compensation for Detriment Caused by Defective Administration scheme.
The scheme pays compensation on a moral, rather than legal, basis, and only at the discretion of the federal government. The Demand Group director, Doug Mill, said the company was hit hard by the home-insulation program, which attracted untrained operators who took much of its trade.
The early axing of the program also left the company, like many others, with large volumes of excess stock.
Mr Mill and his lawyer met department staff this week, after their claim was rejected in a preliminary decision.
He said the government's program, designed in part as an economic stimulus, ruined his company, forcing him to dip into his own superannuation to keep the business from going under.
''With 1.1 million homes insulated, it meant there wasn't business around,'' Mr Mill said.
''There were so many thousands of installers that arrived, all untrained, in excess of 10,000 of them, they were doing shonky work, fraudulent work, cowboy work, and just poor installations,'' he said.
''So the government shut it down … the fact was their administration was defective, they just couldn't handle it.''
But the department said it was still assessing the company's claim, and said it is giving Mr Mill the opportunity to respond to the preliminary rejection.
''The department's view, together with any response from The Demand Group, will be provided to the decision maker who will assess the claim on moral grounds in accordance with the CDDA Guidelines,'' a spokeswoman said.
Mr Mill said further legal action was among a range of possibilities to be considered if no compensation was paid.
He said the company's dealings with the department were frustrating and drawn out. He said the company was also excluded from the Home Insulation Safety Program, which went back and inspected potentially dodgy installations.
The consequences for Mr Mill are dire if the claim is rejected. ''We'll go into liquidation, we'd go out the door,'' he said. ''I'll lose my home and I'll lose my business probably.''
A department spokeswoman said it would be inappropriate to comment further on group's situation while its claim was still being assessed.
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