“Certainly it would mean that less houses would be insulated in the long term,” the treasurer told ABC Television on Sunday.
The government has announced foil insulation is to be removed, or an extra safety switch installed, in 50,000 homes.
It will also pay for inspections of about 200,000 homes and fix any problems.
About 1.1 million homes have been insulated so far at a cost of approximately $1.5 billion.
Mr Swan said it was not possible to put an immediate cost on fixing the mess.
“But the cost will come from the existing funding envelope,” he said.
“That is what normally happens in these circumstances.”
However on Friday, the treasurer had suggested otherwise.
“It may well be the case that we will have to make adjustments elsewhere in the budget because of these (insulation) adjustments,” he had said.
On Sunday, he clumsily tried to explain the change of tact.
He said he was simply pointing out on Friday that “we have a normal budget process going on at the moment where we look at out priorities”.
Federal Labor won’t scrap the insulation scheme altogether because that would hurt workers.
“There is an industry out there that has invested … and done the right thing and we think it’s important to do the right thing by them,” Mr Swan said.
AAP