The Government needs to admit it was wrong to scrap a $1 billion fund to insulate private houses, says the Labour Party.
The Government says it is considering increasing a $15 million fund for insulating state houses as part of its response to the economic downturn.
Last year, it scrapped the Green Homes Fund for insulating low and middle-income households.
Prime Minister John Key says the fund was scrapped because the money was not available - not because the idea was flawed.
Labour Party leader Phil Goff says the Government should consider reintroducing the fund, which would slash the electricity bills of all households, cut carbon emissions and improve family health.
Mr Goff says the Business Council for Sustainable Development estimated that the fund would save almost $5 billion in energy use over 10 years.
Mr Key last week said the Government was examining whether to bring forward various projects including roading, housing and school building.
The National Party's pre-election housing policy included investing $15 million to upgrade the ventilation, insulation and energy efficiency of state houses.
Mr Key says the Government is looking closely at putting more money into the nationwide scheme. He says there would be health benefits, since children living in damp cold houses are likely to fall ill more often and end up in hospital.
Mr Key said the scheme also has positive implications for tackling the effects of climate change.
The Green Party says widening the scheme from state houses to include all homes would benefit the economy more.
Greens co-leader Russel Norman says most poorly insulated housing is privately owned.
