The inquiry comes after months of controversy surrounding the scheme, forcing the Government to announce amendments last month which industry veterans said would put thousands of green loan assessors out of work.
A Senate inquiry was launched yesterday by shadow parliamentary secretary for climate action, Senator Simon Birmingham. The inquiry will investigate what advice was given to the Government regarding the viability and potential success of the scheme.
It will also investigate the effectiveness of the booking system, the effectiveness of the Home Sustainability Assessment Reports and the employment of 4,000 surplus assessors under the scheme.
"Only a Senate inquiry can fully explore the issues surrounding this complete debacle of a program, as well as hopefully providing some comfort and finding a way forward for the many Australians hurting as a result," Birmingham said.
A report being compiled by the auditor-general regarding the scheme is already underway, with those findings to be released later this year.
Greens deputy leader, Senator Christine Milne, also said the scheme had potential but many homeowners, and SMEs, were affected by mismanagement.
"The Green Loans scheme was an excellent project marred by extraordinary mismanagement, and it is critical that it is fixed properly," she said in a statement.
"The Greens have been working closely with home sustainability assessors, householders and others to get to the bottom of the Green Loans scheme debacle and we are in an ideal position to help the Minister fix the scheme."
Wong admitted yesterday the green loans program was not ''administered to the standard that the government and community expects''.
The scheme was designed by the Government to provide free assessments for home owners regarding "sustainable" improvements which could be made to their homes.
Following these assessments, the assessors, which were often employed by SMEs, would contact the Government so sustainability reports could be handed out to the homeowners with details of how to proceed.
However, the process was not so easy. Often these assessors encountered delays when attempting to contact the Government in order to make bookings and get paid for assessments, with assessment companies reporting they had to employ dedicated workers just to get through to the booking call centre.
Additionally, it is understood many home owners had not received home sustainability reports until months after their assessment had actually taken place. This is often attributed to as a cause for the low-take up of loans – only less than 2,000 loans had been approved as of February 28.
Problems also arose from the scheme being more successful than the Government intended. There were about 350,000 assessments allowed for under the scheme, which were expected to be completed within four years, but as of last month they were nearly exhausted.
These problems caused environment minister Peter Garrett to announce a number of changes to the scheme last month. The number of assessors, which had blown out under the scheme, was capped while a limit of five assessments per week was announced.
Many assessment firms said this would force a number of layoffs, while industry veterans said independent assessors would flee the market as they would be unable to survive on just five assessments per week at the contracted fee of $200 an assessment.
Milne said in her statement that many people had borrowed money in order to start assessment businesses, only to be limited under the new changes.
"I do hope... the minister will consider reimbursing those assessors who want to cut their losses and get out."
"I hope that Minister Wong's new focus on the scheme can help those people and small businesses across Australia left in the lurch, and bring back public confidence in climate action."
Meanwhile, the Government has said it will pay up to $100 million in order to remove foil insulation or install safety switches in tens of thousands of homes in response to the bungled home insulation scheme.
Assistant climate change minister Greg Combat announced the plan in Parliament yesterday, saying the Government was committed to fixing the bungled installations made under the $1,200 rebate scheme.
A senate inquiry has already been underway regarding the failure of the insulation program.
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