By Robert Carry

The Government has began to reign in its stimulus spending by cutting $250 million from its $2.7bn insulation program ahead of the Reserve Bank’s meeting on interest rates.

The Environment Minister announced yesterday that it would trim the program from $2.7bn to $2.45bn while adding a range of safety precautions and consumer protections. The move will see the rebate cut from $1600 to $1200 effective from today.

“The time is now right for us to make sensible changes to take pressure off the market while ensuring this hugely popular program still offers generous incentives for households,” said Peter Garrett.

Garrett added that demand for the rebate was currently running well above projections with over 500,000 homes already having installed ceiling insulation as part of the initiative.

According to the The Age, the move has been timed to come in just ahead of the Reserve decision on whether to change interest rates, due today. Experts are predicting that the rate will be increased by either 25 or 50 basis points with further hikes planned before Christmas.