Right now, we are choosing the course of our economic recovery. We can choose to stimulate the economy in the short term, make huge progress on climate and take care of vulnerable people.

Last week’s homebuilder policy was a blunder, leaving too many benefits on the table, and handing out budget treats to the wrong people and projects.

For less than the $25,000 homebuilder grant we could retrofit a social housing property. On average this would cover solar, a hot water heat pump, upgrades to thermal performance (through underfloor, cavity or rooftop insulation, sealing and draught-stopping), a good-sized battery, and replacing gas heating with electric.

The benefits are clear and go further than immediate economic stimulus. As the thinktank ClimateWorks found, upgrading and electrifying our housing stock is a powerful climate lever. That’s already happening for a lot of middle class housing, but our clean energy revolution is leaving too many people behind.

When it comes to energy efficiency, our private rental stock is awful; it’s even worse in social housing where our most disadvantaged citizens live. For those households, we can provide energy security, cut energy cost burdens, make their houses healthier, while taking climate action and stimulating the economy.

Right now, social housing tenants can’t make improvements to their homes, community housing providers have inadequate funds, and governments haven’t adequately prioritised energy retrofits. But now is the time, and it’s a better stimulus option than homebuilder.

Homebuilder’s supporters say the program pulls forward demand for trades and has a high multiplier effect; one dollar of government funding, they say, could stimulate six dollars of household demand. But that assumes eligible applicants have a lazy $150,000 ready to spend, and they would otherwise sit on their hands. Nope; this is a profligate handout to renovators who would likely spend anyway.

Social housing energy retrofits avoid these issues. These upgrades need government support, as tenants and community housing providers lack the funds to implement at scale. Through work led by Community Housing Industry Association Victoria and BOOM!Power, we know demand of hundreds of millions of dollars exists.

The list of benefits continues: Energy solutions generate bill savings for tenants, so they could contribute back to the capital pool with a part of their savings; allowing more investment and more tenants benefiting. We can create a virtuous circle of investment and cost savings, alongside warmer, healthier homes.

Fewer energy-wasting houses means lower peak energy demand, so all our bills come down. Fewer houses with temperature spikes in summer and plunges in winter mean better health outcomes, so health costs reduce. More money in the pockets of low-income tenants means higher ongoing spending, further stimulating the economy.

Then there’s jobs. This is a jobs-rich industry. Today’s energy solutions combine hard assets with integrated digital technology – leading to appealing careers for younger Australians, who increasingly want to combine digital with sustainable. Experienced tradies, facing reduced work, can mentor newcomers. The Beyond Zero Emissions Million Jobs Plan includes energy retrofits as key in our Covid-19 economic recovery.

The Lord Mayor’s Charitable Foundation has supported workshops so the community housing sector can develop a deep understanding of the benefits for tenants as well as investment barriers and best-practice programs from around the country and the world. The sector is ready to deliver but it needs government leadership.

So far, the Victorian and New South Wales governments have run a small number of solar focused retrofits for community housing. But without scale and continuity they create a grant dependency. Potential grant recipients are incentivised to wait for further funding rather than looking to invest in sensible cost-saving measures sooner.

It’s better when governments set targets and support implementations. Like Germany we could incentivise with a combination of grants and low-interest loans. Like the Netherlands we could take a “block-by-block” approach and target hundreds of thousands of home renovations by 2030.

We know our homes are poorly constructed and insulated. We know our older relatives and neighbours restrict their energy usage to reduce costs, putting their health at risk. We also know that to change this we need a well-run program to ensure tenants get solutions that are decent value for money. Government and philanthropy can support such a program. Impact investors stand ready to help scale it quickly.

The question is whether our governments can take the opportunity stimulus funding presents and prioritise social housing energy retrofits. We are actively choosing not to do so, despite record low interest rates and capacity in our job market.

We have this chance; all it needs is leadership to chart a different course. If we set this up well, we can go beyond a green new deal; Australia can have a green and gold new deal that’s fairer for all.

o Jeremy Burke is the head of product and strategy at Impact Investment Group. Previously he worked on the establishment and operation of the UK Green Investment Bank

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