Environment Minister Peter Garrett has been stripped of responsibilities for the household insulation scheme, Prime Minister Kevin Rudd says.
Mr Rudd has announced the establishment of a new stand-alone department of climate change and energy efficiency, which will be headed up by Penny Wong.
Under the changes announced by Mr Rudd in Sydney on Friday, Mr Garrett will be appointed minister for environment protection, heritage and the arts.
Meanwhile, Greg Combet has been appointed the minister assisting the minister for climate change and energy efficiency and will be given the direct responsibility for the troubled insulation program.
Mr Rudd admitted the department changes were a demotion for Mr Garrett.
"This move is designed to achieve stronger coordination and greater efficiency in the development and delivery of climate change policies and programs, especially in relation to energy efficiency and renewable energy," Mr Rudd said.
Mr Garrett released a statement saying he 'welcomed' the opportunity to continue in the portfolio of Environmental Protection, Heritage and the Arts, calling them 'key interests and passions'.
He admitted the implementation of the insulation scheme was 'not without its problems', but says he has confidence in Greg Combet.
