Roof Insulation Bungle Bankruptcy

7000 small businesses are facing bankruptcy and 6000 workers are likely to lose their jobs after the collapse of the insulation installation scheme.  When the government introduced the home insulation scheme it dramatically increased demand for home insulation. This false demand was met by a dramatic supply side increase in the number of “insulation installers”.  This false demand was bound to end at some point; it’s just happened a lot sooner than many people expected.

Small business owners have likely invested large amount of money in cars, equipment, training and advertising.  Many will have borrowed against their homes to set up the businesses. These will be the first to face bankruptcy, losing assets they have taken years to accumulate.   The second group of people facing bankruptcy will be insulation workers.  Unemployment is the number one cause of bankruptcy in Australia; this will undoubtedly increase bankruptcy rates.