Helping Industry to claim compensation from losses arising from
the Federal Government's failed insulation scheme
An article in today's Australian Financial Review
(page 7) neatly summarises the losses and difficulties being faced
by those in the supply chain industry arising from the Federal
Government's cancellation of its insulation scheme. The abrupt
cancellation of the scheme has meant that many importers who had
purchased products to sell to installers of insulation now do not
want that product and have "walked away" from their
contractual commitments. This leaves large numbers of containers
filled with insulation being held under Customs' control,
together with other "cleared" containers full of
insulation being held in storage facilities around the country. In
the overwhelming majority of cases, those providing services in the
supply chain (including shippers, freight forwarders and licensed
customs brokers) find themselves facing issues such as dealing with
those goods trying to get clearance of those goods and payment for
those goods from their importer clients.
Unfortunately, the compensation scheme announced by the Federal
Government at the time it cancelled the insulation scheme only
applies to installers of insulation, not importers or their service
providers. In our view, it is no answer for Government to say that
those in the supply chain have their contractual remedies against
their importer clients when it is those importer clients who have
been also adversely affected by the decision to cancel the
insulation scheme. Many of those in the supply chain must take
action now to clear goods from Customs' control (by paying GST
and customs duty) to mitigate losses by moving goods to cheaper
storage premises. Actions against importers may take many months
and, in many cases, those importers will not have the financial
ability to pay any awards made against them.
We are acting for a number of parties in the supply chain who
are seeking financial compensation from Government. It is
encouraging that the Minister responsible for dealing with the
issues arising from the insulation scheme has asked for relevant
parties in the supply chain to come forward to put their cases for
compensation. We would be pleased to assist by co-ordinating a
group of claimants to make the strongest possible representations
to Government for urgent and comprehensive compensation. We can
only hope that this is one case in which Government will be
prepared to make appropriate comprehensive and urgent compensation
payments rather than adopting the type of approach which it had
adopted in making compensation arising from the failed introduction
of the Integrated Cargo System where a number of importers have yet
to be compensated over four (4) years since the introduction of
that Integrated Cargo System.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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