Judi Moylan (Pearce, Liberal Party) Share this | Hansard source

I am pleased to have this opportunity to speak on the Building Energy Efficiency Disclosure Bill 2010. From time to time I have engaged with people in the property industry, the peak organisations and, indeed, local government to encourage them to move towards sustainable developments. It makes good sense as it will make a real contribution to reducing our greenhouse gas emissions in this country and it also makes good commercial sense to conserve energy. I was Chair of the Parliamentary Standing Committee on Public Works for nine years. I think that committee made a very solid contribution by quizzing agencies with major projects on behalf of the government to ensure that they had engaged with the Greenhouse Office to develop energy efficient buildings. It is really important that the government always takes the lead in these matters.

Luigi Di Serio is an urban planner who maintains a highly visited webpage on skylines of the world. In the introduction on his site he very eloquently describes the central role of cities. He says:

The downtown core of big cities across the world, are the cultural pulse and economic engines of urban regions where millions of people live. The skyline is the fingerprint of that city. All urban life begins each day and ends each night under the watch of the city’s tallest skyscrapers and most grand architectural structures.

City skyscrapers are often only viewed though the prism of being marvellous feats of engineering and aesthetics. As beautiful as they are, each building’s primary purpose is functional—that is, to provide the space where commerce and industry can thrive.

The Property Council of Australia estimates that there are more than 21 million square metres of floor space in 3,980 commercial office properties in major population centres around Australia—that is, approximately one square metre of office space for each person in Australia. In Perth alone there are over 1.3 million square metres of commercial office space and more than 100,000 people travel Monday to Friday into the CBD to utilise that space.

As the focus of economic life, it should not come as a surprise that energy used by commercial buildings accounts for approximately 10 per cent of Australia’s greenhouse gas emissions and that emissions from the commercial building sector are growing by three to four per cent each year. From these figures, it is quite apparent that reducing the environmental footprint of commercial buildings is an important element in any strategy to lower Australia’s emissions. Moreover, promoting energy efficiency is commercially sensible, with large cost savings to be recognised through simple measures such as having more energy efficient air-conditioning and lighting, installing insulation, recycling water and making greater use of renewable energy sources.

The Building Energy Efficiency Disclosure Bill will require information about the energy efficiency, including lighting, of office areas greater than 2,000 square metres to be disclosed at the point of sale, lease and sublease. At present, there are 2,170 buildings in Australian major centres with lettable areas over 2,000 square metres. Disclosure will take the form of building energy efficiency certificates, which will show star ratings. The star rating must be disclosed in any advertisement for sale, lease or sublease and shall be accessible in an online database. The intention is to promote greater consideration of energy efficiency and empower the market with information to encourage more energy efficient improvements.

The origins of the bill were initiatives by the former coalition government. In December 2004 the National Framework for Energy Efficiency was agreed to. A key element of stage 1 under the plan was a nationally consistent legislated regime for mandatory disclosure of energy performance of commercial buildings by the end of 2007. The change of government at the federal level appears to have delayed the bill coming before the House, but this very welcome measure is better late than never.

There are, however, issues that the government must address to ensure that building energy efficiency certificates accurately represent a building’s efficiency. Proposed section 21 of the legislation does not specifically prescribe the method of assessment; instead, it delegates that authority to the secretary of the department. The explanatory memorandum to the bill assumes the National Australian Built Environment Rating System—otherwise known as NABERS—will be utilised; however, NABERS does not currently provide a nationally consistent star rating.

To achieve the top five-star rating the building must well exceed the industry average for energy efficiency. A rating of one star is below that average, but to determine the industry average NABERS bases its algorithms on the now superseded Australian greenhouse rating system, which varied state to state. The methodology means that the industry average benchmark could be 2.5 stars in New South Wales but three stars in Victoria and two stars in Queensland. The result is confusion when you compare star ratings across the states. A three-star rated building in Queensland—signifying higher than average energy efficiency for that state—would equate to an average rating in Victoria.

In submissions to the Senate inquiry on this bill, Peter Verwer, the CEO of the Property Council of Australia, raised the star disparity as potentially confusing to investors. He made the point:

While this flaw might be overlooked if investors only compared homogenous markets, the reality is that multiple geographical markets are often considered before investment decisions are made.

Investors seek out energy-efficient buildings as they are cost-effective to run and maximise potential returns. As environmental and investment considerations are in synergy, it is beneficial to those selling interests in buildings to maximise their star rating against both their domestic and interstate peers. Achieving clarity across borders will ensure no undeserved geographic advantage and will further promote energy-efficient practices in the battle to win investor funds.

NABERS is currently under review because of the star disparity across state and territory borders and, as a consequence, concern has arisen that this House is being asked to endorse a bill that envisages using an as yet unrefined system. That being said, delaying this bill in search of the perfect system might in fact give us less impetus to quickly and correctly update the NABERS system. What is certain, however, is that the government yet again has not lived up to its promises. The government promised that the flaws would be addressed to prior to mandating the systems used, and clearly that has not occurred.

Industry supports the NABERS methodology, though, and has been the driving force in promoting meaningful change. Since its first iteration, the measure has fundamentally transformed, adopting many industry suggestions. Tenancy and base building efficiency have been separated into different rating components, and waste, water and indoor environment are all individually measurable. From fierce industry opposition of the originally unworkable management system, NABERS is now accepted as the industry standard. I can only say that this shows the value of working closely with industry in order to get the legislation we passed on this place right, to make the necessary changes to make it workable. As I said, the industry has strongly supported the NABERS methodology and has worked constructively to try and promote meaningful change.

Matthew Clark, the manager of NABERS in the New South Wales Department of Environment, Climate Change and Water, estimates that 50 per cent of all Australian CBDs have a NABERS rating. That equates to 10.5 million square meters of rated commercial space in more than 1,000 buildings. In fact, it is now possible for anyone, including office managers, to easily rate their tenancy efficiency free of charge using the example application on the NABERS website. The method of measurement could also easily apply to hotels, shopping centres, schools and hospitals, and I think many of us hope to see the focus on energy efficiency extend across all building types. That certainly would be my wish—including for residential buildings. As I said, this not only makes sense in terms of reducing our carbon footprint but makes good economic sense both for householders and for commercial, industrial and public building owners and builders.

The most important aspect of NABERS is that it sets an above-average stretch target, where building owners can aim to outperform their peers, playing on the competitive nature of the market. As commercial buildings across Australia spend approximately $4 billion on energy each year, the potential for economic and environmental benefits are vast. The stretch target is already proving successful, with most tenants who re-rate their buildings achieving an average of 13 per cent improvement. Across the industry, that has resulted in 200,000 tonnes of carbon savings a year, and a $520 million financial saving.

For tenants, the greatest carbon and financial savings can be achieved through efficient lights and tenant lighting management. The building energy efficiency certificate proposed under this bill specifically singles out lighting for scrutiny, which is a welcome focus. But, worryingly, little headway appears to have been made on developing a cost-efficient lighting assessment process. In testimony to the Senate inquiry on this bill, the Department of Climate Change and Energy Efficiency commented:

Finalisation of the tenancy lighting assessment, including on-site testing, is due to be completed in May [2010]—

which date has passed—

Training is scheduled to be provided from July [2010]. This allows sufficient time for tenancy lighting assessments to be carried out prior to the commencement date of disclosure obligations (anticipated to be around October 2010).

But now, in June, the lighting assessment tool still remains to be finalised. The window for industry to be ready is quickly closing and it is unfair for the government, which is dragging its heels working out the assessment tool, to expect industry to work by the rigid time frame. The government must act quickly, in consultation with business and to their satisfaction, to remedy this situation or delay the commencement of the lighting tool.

The NABERS assessment can currently assess tenancy energy consumption based on electricity bills, of which lighting is the predominant factor. Cumbersome floor-by-floor lighting audits can be undertaken as well, although such audits are costly exercises. This shows that the capacity to measure lighting efficiency does exist. It is now just a matter of the government transferring practice into an industry tailored software calculator.

The benefits from simple lighting changes are exemplified by the WA government owned Dumas House in Western Australia. A full lighting upgrade was undertaken across the 14 floors, replacing outdated florescent lamps and adding timers to control lights. The project cost $130,000 but has reduced electricity use by 510,000 kilowatts, equating to $63,000 per year, in energy savings on lighting alone. After only two years, the initial capital outlay was fully regained—again, very impressive figures.

Another example is Perth’s tallest building, Central Park. In 2001, the building received a base rating of 4.5 stars, but the whole of building was rated at 3.5. Commenting on the disparity, Shaun Arseven from property manager Jones Lang LaSalle noted:

This shows that the tenants’ light and energy consumption in this building has potential for savings so we will now concentrate on achieving significant reductions in these areas …

Central Park now boasts a five-star base rating, with 21 per cent of energy being drawn from renewable energy sources.

Direct action to maximise building energy efficiency has proven to be, and will continue as, an effective method of reducing carbon emissions and costs to business. As previous chair, as I said, of the Public Works Committee, this policy was put into practice. For every government building and major infrastructure work scrutinised, the committee asked proposing agencies to develop the buildings in the most efficient way, including conserving and utilising water more wisely. One 14-storey building constructed as a departmental headquarters utilised the surface area of the roof as a water catchment facility and built in an underground storage tank, on top of incorporating the most up-to-date energy saving measures at the time. Such forward thinking should drive our approach to building design.

Analysis conducted in 2004 as part of the National Framework for Energy Efficiency and reported in the previous coalition government’s forward-thinking white paper Securing Australia’s energy future identified substantial areas where commercial energy efficiency opportunities were not being taken up. It found that significant proposals with payback opportunities of four years or less existed across the commercial, residential and industrial sectors—not including the transport sector—but were not taken up. The analysis estimated that, if only half of the gains were implemented, it would increase GDP by approximately $975 million a year once fully implemented. With this analysis in mind, I reiterate to the House words I spoke last year. Promoting energy efficiency to the maximum makes good sense all around: it reduces costs, boosts the economy, conserves finite resources and reduces emissions.

In closing, I shall refer again to the words of Luigi Di Serio, the creator of the ‘Skylines of the World’ website. In ranking Perth at No. 39, he comments:

Perth has been leading Australia in population growth for several decades now. Just a few decades ago this city was nothing more than a large town. With numerous nightlife spots, Perth is now a major business and tourism centre having more 5 star hotel rooms per capita than any other large city in the Oceanic continent. Perth is a tourism hot spot with a great nightlife. As the city grows, so does its skyline.

To indulge Luigi’s thoughts, I would say that as the skyline grows so will the necessity of energy efficiency. This bill is a welcome move to support that aim, and I am very pleased that Minister Wong, the minister responsible in that other chamber, has addressed some of the concerns raised by the coalition and by the member for Dunkley, as the shadow minister, to ensure that this bill is made much more workable than it otherwise would have been. As I said before, it is important to stress in this place that we need to have close consultation with industry in order to get the settings right in our legislation and our regulation. We have seen the terrible mess that occurs when this does not take place. In the operation of any new laws, we have to make sure that they are workable and practicable and that they can be put into place in order to achieve the aims that are set out. Together the coalition and the government, and indeed the industry input, have made this legislation more workable than it otherwise would have been. I commend the bill to the House.

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