The chief executive of Australia’s Insulation Council says the industry has taken a massive hit from the botched insulation stimulus scheme, and compensation may now be needed.

Dennis D'Arcy, CEO of the Insulation Council of Australia says before the Home Insulation Program there were around 5000 people working in the industry, that number has now dropped by over a thousand; "The industry has not recovered," Mr D'Arcy said.

The scheme was introduced in 2009 as a move to stimulate the economy and stave off the global financial crisis. The Home Insulation Program has been blamed for more than 220 house fires, more than 1000 potentially electrified roofs and 240,000 dangerous or sub-standard insulation jobs, with the cost blowing out by $1 billion over the original budget of $2.45 billion.

According to the Insulation Council the Government’s plan has been ruinous. The massive funding package drew thousands of unskilled workers to the industry; leading to injury, death, sub-standard safety and installations, and now ongoing disrepute for those left in the insulation industry.

Insulation Australasia Chairman Scott Gibson said businesses continuing to experience the financial nightmare should be compensated for their losses; "Not only have they been left with insurmountable debts, but their businesses have been made worthless by the HIP, and in many cases they have lost their life savings," he said.