The Federal Opposition has alleged dodgy operators claimed the Government's rebate of up to $1600 a roof without installing insulation.

Mr Combet, also the Minister Assisting the Minister for Climate Change and Energy Efficiency, said he was disgusted that fraud may have been committed under the program.

"The Government is committed to aggressively pursuing those who may have committed fraud," Mr Combet said.

"The actions of unscrupulous operators have had a serious impact on legitimate businesses, employees and households who participated in insulation program.

"I am determined to take action against these unscrupulous operators."

Mr Combet said the Auditor General has agreed to conduct an audit of the scheme.

"As Minister, let me assure all those who may have participated in non-compliant or fraudulent behaviour in connection with the Home Insulation Program, that we will track you down," Mr Combet said.

The $2.45 billion program was axed following the deaths of four installers and nearly 90 house fires.

The cost of fixing the scheme looks set to exceed $100 million, with at least 200,000 homes to be inspected for fire and electricity risks.

It's to be replaced with a new and better-regulated scheme from June.

Foil insulation fitted in more than 50,000 households under the botched rebate scheme will also be either ripped out or made safe by installing safety switches.

Meanwhile fewer homes will now be insulated Australia-wide because the Government has to pay to fix the bungled program, Treasurer Wayne Swan has said.

Mr Swan said the money needed to fix the axed program would come from the new scheme's budget.