Budget 09: Warm fuzzies for home owners

Pink Batts for home insulation. Photo / Supplied

A budget designed to deal with chill economic times has delivered one warm fuzzy - a grant up to $1800 for homeowners, which is not subject to income testing.

Community Service Card holders will be able to get grants as high as $3000.

Funding of $323.3 million over four years is tagged to fit houses built before 2000 with insulation and clean heating under a programme the Government designed with the Green Party.

About 180,000 homeowners will be eligible for the grants from July. An assessor will establish how much insulation each house needs and then homeowners will decide how much they want done.

The programme will be delivered by the Energy Efficiency and Conservation Authority (EECA) and subsumes $79.6m of its funding, previously used in grants targeted at people on lower incomes.

"This will be a significant stimulus to the building industry and will have positive environmental and health benefits," Finance Minister Bill English told reporters at the budget lock-up.

Grants of a third of the cost of home insulation are being offered, capped at $1300. ECCA will register assessors who will decide what insulation is needed. For example if an assessor decides only $2100 of insulation is necessary, the maximum grant will be $700.

Homeowners will be able to meet the remainder of the assessed cost through loans provided by electricity companies, councils and banks, which have indicated they are interested in backing the scheme.

Money can be paid through power bills, council rates or mortgages. Interest will be charged.

A further $500 will be available for sufficiently insulated homes to go towards buying clean heating devices, which include approved log burners, pellet burners, heat pumps or flued gas heaters.

Community Services Card holders can get up to $1800 for insulation and a further $1200 for heating.

Landlords of card-holding tenants will be entitled to a maximum $1800 for insulation and $500 for heating.

The heating grants are for fixed amounts rather than a third of the cost.

Energy and Resources Minister Gerry Brownlee said the New Zealand Insulation Fund would generate jobs for people in the industry and reduce health problems.

"It's designed to reduce health risks from living in cold, damp homes and provide energy efficiency gains," he said.

Green MP Jeanette Fitzsimons said the country would recover its investment four-fold in 20 years through energy and health savings.

About 19,000 homes are insulated each year. This is expected to increase to 27,500 in 2009-10; 40,500 in 2010-11, then 52,000 and 60,500 in the two following years.

Autex Industries national sales manager Robert Croot said the company had already committed to employing more staff to cope with demand.

The textile and fibre manufacturing and product development company employees 100 staff in New Zealand and 90 in Australia.

"The initiative will provide us with the market stability to employ new staff and invest in our New Zealand operating company," Mr Croot said.

"I have already received sign-off to employ three more staff in production, administration and the sales team."

Click here for the Budget documents

- NZPA