Wednesday, February 24, 2010

NZ home insulation foolishness tells a lot about attitudes

Following on from the Australian catastrophe in subsidising home owners who can't be bothered paying for their own energy bill savings, there is now the consequences of the New Zealand scheme. However, what it says about the general public speaks volumes about the trust they have in the state, trust that anyone who has spent time working with the bureaucracy knows is misplaced.

The New Zealand Herald reports that many insulation installers are upset that:

"the government subsidies are allowing competitors to hike their prices and still undercut them using taxpayers' money.

They say customers are avoiding them because they see government approval to offer subsidies of up to $1300 for insulation and $500 for energy-efficient heating as a "badge of quality".

Of 249 companies wanting to join the $347 million scheme for the next four years, 60 were chosen based on factors including geographical coverage, financial stability and their ability to carry out self-audits.
"

So in other words, 60 firms are suckling off the state tit, whereas the rest are out in the cold, helping to PAY for their competition to undercut them.

It speaks volumes that the EECA subsidy is seen to be a guarantee of quality, the same stupid mistake Australians made thinking government approved installers were somehow a higher standard. Seriously, do people think bureaucrats exist that check the quality and standards of insulation installers? Do people think that if a state approved installer does work for them that they have a greater degree of sanction if it turns out to be poor quality?

The notion of this is ridiculous. I've known literally hundreds of bureaucrats, most of whom know the limits of their competence. There simply are NOT people out there able to check this sort of thing. Yet people believe the state is somehow benevolent and offers some sort of reassurance.

Now I oppose the fundamentals of the scheme. Yes it might save energy bills, but that is a private good. Those with insulation shouldn't pay for those without to save money. Yes it might improve health of some, but when are people meant to take responsibility for the cold and damp in their homes?

The political reaction to this is predictable. Energy Minister Gerry Brownlie effectively endorsed the idea that the scheme ensures a "tight control" on quality of work, although it isn't clear quite how that quality is being ensured. This contradicts EECA claims that just because some aren't part of the subsidy scheme does not mean their work is poor quality. So is Brownlee just knifing those who don't get taxpayers money to run their business?

Labour spokesman Chris Hipkins thinks the subsidy should be offered to everyone, doing a Peter Garrett.

You see a better response is this:

- Stop the subsidy scheme;
- Tell homeowners that if they want to make energy savings, they should buy their own insulation and use recommendations, word of mouth and other means to explore the market to find good installers and suppliers;
- Tell homeowners who already have insulation that it is unfair to tax those who already have insulated their homes to subsidise those who haven't;
- Used the savings to cut the budget deficit, working towards tax cuts WITHOUT countervailing new taxes. Hiking GST wont help people pay for insulation.

After all, if people paid less taxes they would have more money to spend on discretionary expenditure, and if would rather pay higher heating bills than insulation, why should nanny state save them?

UPDATE: Not PC also has a recommendation of a GOOD installer. A recommendation I'd trust over any government "endorsement" that apparently isn't one.

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