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Insulation businesses left out in the cold -

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KERRY O'BRIEN, PRESENTER: Kevin Rudd was in full damage control today over the government's botched
home insulation scheme, blitzing radio stations with interviews and calling an emergency caucus
meeting to instruct all MPs and senators to get out in the streets of Australia and limit the
political fallout.

And today, after freezing the chaotic insulation program for three months, the Government's last
minute attempt to save jobs in the industry with a $41 million rescue package has been ridiculed by
some, at least, of the companies it's designed to help.

The Government suspended the scheme last Friday after it was linked to 93 house fires and four
deaths.

But company managers say, while they wait three months for a revamped program to start again,
activity in the industry has effectively been frozen, and that the rescue package will do little to
stop many small-to-medium businesses from collapsing.

In a moment I'll be talking with the Prime Minister, but first Heather Ewart reports on one such
business in Melbourne.

HEATHER EWART, REPORTER: Outside this small insulation business on the edge of Melbourne's CBD,
workers wait to hear what the future holds.

They know the signs aren't good. For the past two days they've been told to stay at home

Fourteen of them stand to lose their jobs, since the government announced the suspension last week
of its home insulation scheme.

SAM ADAMS, EMPLOYEE: I've never been in a situation like this before. I don't know many people who
have. I don't - literally - don't know what I'm going to do.

HEATHER EWART: Inside, it's a grim story too. The managers of Conec2 Green Energy know the writing
looks as though it's on the wall.

Piles of insulation lie stacked in the front doorway, now next to useless and impossible to sell.
They doubt they can hang on till the Government declares its intentions in June.

So all up what do you stand to lose?

DOUG MCCUTCHAN, CONEC2 GREEN ENERGY: Our jobs, our business; pretty much everything, really. Look,
we'll try to get through till the first of June - we don't think we can - when the scheme gets
relaunched.

We have no idea why it stopped for three months. It's just... Is it a test of the toughest? I have
no idea why they stopped it for three months but maybe, probably it will send us broke.

CAMERON ADAMS, MANAGING DIRECTOR, CONEC2 GREEN ENERGY: We have to consider bankruptcy as an option.

HEATHER EWART: Conec2 Green Energy was set up eight months ago in direct response to the
Government's insulation scheme, which paid rebates for every home insulated.

The business partners had previous experience doing service and sales contracting work for energy
companies. They consider themselves to be reputable operators, who played by the rules.

CAMERON ADAMS: We chose premium stock and therefore that costs more. We had a qualified electrician
in the roof. Obviously an electrician is not a low wage. That is an expensive option but we
believed the Government would support us as we invested in quality in the name of this program.

DOUG MCCUTCHAN: We'd check all our work and we've had zero complaints.

CAMERON ADAMS: We did watch a lot of other businesses cutting corners and we did see some of the
dangers.

HEATHER EWART: The one danger they didn't see was that rogue operators and those cutting corners
might put them out of business, with the Government suspending a program that was supposed to run
till the end of next year.

Despite insulating 200 homes with no record of complaint, they're still mystified as to why they
were never audited.

DOUG MCCUTCHAN: Basic audit principles would have said audit the first five-ten jobs of each
installer and once they pass, then you audit one in a hundred.

HEATHER EWART: What do you want from the Government?

CAMERON ADAMS: Some help. Some help.

HEATHER EWART: As workers filed into an upstairs meeting room at lunch time yesterday to hear from
their bosses, there appeared to be no help on the horizon.

DOUG MCCUTCHAN: Cameron and myself will have a chat to each person individually over the upcoming
days about what their future role is.

I'll be brutally honest. We've got no money in the bank.

HEATHER EWART: By the end of the day, seven workers had been laid off but there was a fresh
announcement from the Government of a $1 million rescue package to avoid job cuts.

This morning, Conec2 workers volunteered to complete a job in outer Melbourne, knowing they
wouldn't be paid. But maybe there was now some hope for the business. Its managers don't think so.

CAMERON ADAMS: Forty-one million dollars is not going to help my business pay its staff this week
or next week.

HEATHER EWART: That's because they say there's simply not enough to go around to 7,000 companies
that they estimate employ at least 40,000 people.

CAMERON ADAMS: Now these costs can't be covered by $40 million divided by 6 or 7,000 businesses and
they surely can't survive for three months till the program releases.

These businesses are closing their doors this week. So, you know... Mr Rudd, Mr Garrett, I implore
you, find your good businesses and use them. Let us help you. Let us help you audit the 160,000
homes that you believe need to be rechecked for the quality of the install.

HEATHER EWART: It's a last ditch attempt to stay afloat

You had to lay off seven workers yesterday. Are you going to have to lay off more today?

CAMERON ADAMS: We need to lay off another seven today.

HEATHER EWART: So that pretty much wraps your business up.

DOUG MCCUTCHAN: Yeah.

CAMERON ADAMS: Correct.

HEATHER EWART: Were you ready for that?

EMPLOYEE 2: Not at all.

SAM ADAMS: No. Not prepared whatsoever.

EMPLOYEE 2: No, not at all.

SAM ADAMS: Not prepared whatsoever.

HEATHER EWART: As the workers and managers say their final goodbyes, they continue to hope for a
miracle.

KERRY O'BRIEN: Heather Ewart with that report.