The owners of more than 1000 asbestos-ridden Canberra homes will be all but forced to sell up and move after the federal government agreed to loan the ACT $1 billion for buybacks and demolitions.

While homeowners affected by Mr Fluffy asbestos insulation will be advised the scheme is voluntary, they will be strongly encouraged to sell their homes for demolition and remediation work.

In fact, while announcing the in principle agreement alongside ACT Chief Minister Katy Gallagher on Tuesday, federal Employment Minister Eric Abetz advised the land would be “compulsorily acquired”.

Ms Gallagher later corrected the record, but stated only a small number of Mr Fluffy homeowners would still be their homes in five years’ time.

They will primarily be elderly people who have had long-term exposure and strong attachment to their homes.

“If somebody says they would like to live in their homes until they pass away or move into a nursing home … we will enter into an arrangement,” Ms Gallagher said.

“But ultimately every house has to be demolished.”

The scheme will essentially bulldoze the equivalent of a small Canberra suburb – a total of 1021 residential properties that had loose-fill asbestos installed by insulation company Mr Fluffy up to 40 years ago.

While a $100-million federal program removed the toxic material between 1989 and 1993, residual fibres have since been discovered.

The ACT will buy the house and land at market price as though it doesn’t have asbestos. After the remediation process the original homeowner will get first chance to buy back the land.

That will cost the ACT government, and Ms Gallagher couldn’t rule out a rate increase or other savings measures.

“We will have to pay for the bill. And we will have to find a way to do it,” she said.

Despite stumping up a loan of up to $1 billion, the scheme should only have a minimal impact on the federal government’s bottom line.

The federal government will have no technical or legal responsibility, said Senator Abetz, who added the loan is estimated to save the ACT government about $32.3 million.

The two governments will now negotiate the fine print. It’s hoped federal legislation will pass by the year’s end.

NSW homes in the neighbouring town of Queanbeyan will miss out on the scheme.

Mr Fluffy ceased operating with asbestos by 1979 – one decade after the Gorton government was warned by its own health expert that using the material should be discontinued.

Dirk Jansen, who owned the family business during the period, died in 2001.

As amosite asbestos was not banned until 1989, no legal cases were ever brought against Mr Jansen or his sons.


By David Barbeler