I had thought that this foil insulation was fiberglass batts with a foil vapor barrier. I googled "foil insulation" and found that it's just some thin sheets of foil backed material of some sort. See http://www.healthyheating.com/Page%2055/Page_55_o_bldg_sys.htm

I remember as a kid, back in the 60's when my father built our house he used fiberglass material intended for freezers between ferring strips (masonry outside walls) and some sort of foil lined tar paper over the fiberglass, just behind the sheetrock. I think it's just to create a vapor barrier, and not insulation. That's all it would be anyway.

I think NASA uses stuff similar to this on space probes and satellites, but in space there's no convection (no air) and it's out in the open to reflect sunlight. Not hidden inside.

Now I see why the Aussie politician should be criticized, as this foil insulation is a poor choice for the job.