Gavin Atkins warns of yet another possible rort in the $2.45 billion insulation fiasco:
Jack the Insider says Peter Garrett tried to warn Rudd:
And really, the operative word here is inherent.
Plus, there's a lot of wailing about what has befallen the insulation industry now, but think it through for a moment. Imagine the scheme was proceeding as planned. After a while, just about every existing home owner who could be arsed would have had free insulation put into their roof.
What then for the industry?
How much work would be left for all of the businesses that had flocked to it? Not much. Sooner or later there would have to be a very nasty correction where most of them would end up going out of business and a lot of people out of work.
A perfect little example of what happens when governments decide to give out subsidies - the price signal gets distorted, (and remember that essentially prices are information, so if prices are artificially inflated or deflated the information gets scrambled), and the market becomes unbalanced.
And the inevitable correction - the chickens coming home to roost - will arrive sooner or later.