Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

The Building Energy Efficiency Disclosure Amendment Bill 2014 is an important one, and it is supported by the opposition.

I quote from the second reading speech of the parliamentary secretary on the introduction of this important bill:

The Commercial Building Disclosure Program, supported by the Building Energy Efficiency Disclosure Act 2010, continues to represent one of the most cost-effective opportunities to reduce the use of energy in commercial buildings and improve productivity across the sector.

Since its commencement in November 2011, the CBD Program has transformed the commercial property market. Office buildings with better energy efficiency ratings consistently deliver greater returns for investors, and energy efficiency is now considered a normal part of commercial property transactions.

Commercial building and energy efficiency stakeholders have been actively engaged in the CBD Program and continue to support its important role in driving energy productivity across Australia's property sector.

The commercial building sector is responsible for around 10 per cent of Australia's total greenhouse gas emissions, and this figure is rising. That is why it is extremely important that we have a bipartisan approach to energy efficiency, and, on this occasion, to energy efficiency in commercial buildings and that we understand that there is a direct link between energy efficiency and commercial advantage to building owners and to tenants from these initiatives. Energy conservation, energy efficiency and demand management are very important tools of the new age in managing higher electricity prices, and, importantly, in managing the greenhouse impact of our very large commercial buildings.

Energy efficiency of course represents one of the fastest and cheapest ways that we can reduce the nation's greenhouse gas emissions. The amendments bill proposed by the government is simply a set of housekeeping measures in response to changes that had been, properly, proposed by stakeholders through stakeholder forums. They are changes that will reduce red tape. They are changes that will make this act function better, and they are changes that are supported not just by the stakeholders but by both sides of this House.

I have spoken to the Energy Efficiency Council, the Clean Energy Council and the Green Building Council—all of them accept and support these important changes. We have also had interaction with the Property Council. It would be fair to say that the Property Council has a range of different views around the CBD program. On the one hand, they have indicated that the program is a good program, but they would like to see changes. On the other hand, at times they have called for the CBD program to be scrapped. We on this side of the House do not think this would be a prudent move. We do think that the appointment of ASIL Tasman to review the program by March 2015 is something about which we are concerned. We look forward to receiving that report. But we are concerned that a review that may be directed to remove the CBD program would not be a prudent way to support energy conservation and bring about all the great advantages that come through this program, which the parliamentary secretary referred to in his second reading speech in October this year.

Energy efficiency is not just the national agenda. It binds all levels of government in a virtuous cycle. In this, the role played by all state governments dovetails with initiatives that the Commonwealth has put in place to support energy efficiency. High energy prices help to focus our minds on energy efficiency. Householders do not care what their unit price for energy is—they care what their regular bill is.

Importantly, in the context of energy efficiency, the International Energy Agency's Energy efficiency market report of 2014found that energy efficiency is rapidly becoming the world's first fuel. It is a terrific and very sensible idea. Energy and efficiency improvements in 11 countries, including Australia, delivered more capacity than any other source of energy in 2014. It is a remarkable fact that more energy was saved by conservation than by oil, coal or gas in 2014. Energy efficiency saved those countries 56 exajoules of energy in 2012, which is more than the final energy delivered by oil, electricity or natural gas—indeed, it is more than the total energy consumption of the European Union.

What does that mean for the development of policies that have energy efficiency at the core? We can remove the supply-side bias that exists traditionally in the energy markets. The purpose of network companies is to provide affordable and reliable connection between an energy consumer and an energy supplier, but sometimes the most affordable way to boost reliability is to manage peak demand and put in place sensible energy-efficiency measures.

Our regulations often mean that network companies face incentives to keep energy demand high and therefore build more kit. We have seen this in electricity, and we have seen a pretty good draft decision, in the last week, on energy network, prices and costs. That decision—we hope—will drive a better profile of costs for consumers, industries and customers.

In electricity, in recent years, the lack of cost-reflective tariffs for peak demand has meant that Australians have installed lots of poorly-performing air conditioners—driving up peak demand, adding to problems and making markets unstable. Cross-subsidies meant that households without air conditioning paid, effectively, a $700-a-year cost to subsidise households with air conditioning. Politicians, energy producers and consumers can no longer afford to underestimate the importance of energy efficiency and efficient energy markets. There are some simple energy-efficiency measures that should be encouraged, like more efficient space and water heating, tariff reforms and price reflectivity.

This bill and the way in which it works, in commercial office space, is particularly insightful. The measures in this amendment that make it work more smoothly and make it work better for stakeholders are to be supported. I flag, again, my concern—and the opposition's concern—about any move to remove the CBD. We see the CBD program itself as delivering substantial benefits. Those benefits, as I began in my presentation this morning, were largely and accurately identified by the parliamentary secretary when he introduced this bill.

Major changes proposed in this bill provide for exemptions to building owners who receive unsolicited offers for the sale or lease of their office spaces. That, we believe, will lead to around a $300,000 estimated reduction in the regulatory burden on businesses. That reduction of the cost burden on businesses is important and is wholly supported by this place. Allowing transactions between wholly-owned subsidiaries to be excluded from disclosure obligations will again lead to around a $300,000 reduction in the regulatory burden on businesses. In total, we look forward to in excess of half a million dollars in savings delivered directly to commercial office-space owners and people who rent those spaces in the CBDs of our cities.

Addressing ambiguity in the main act, in relation to the status of assessments undertaken by assessors accredited under the National Australian Built Environment Rating System, the NABERS program, but not accredited under the CBD program, is important. Introducing the ability to determine a commencement date for building energy-efficiency certification, which is later than the date of issue, is also important. It provides greater flexibility for businesses wishing to proactively maintain their current building energy-efficiency certificates for their property portfolios. It removes the need for new owners and lessors to reapply or pay the application for fresh exemptions if there is an existing one in place for a building. This is also important.

We find ourselves at the point, with this bill, where we are wholly in support of its objectives and of the streamlining that has been introduced in these measures. We are extremely cautious at the possibility of the CBD program itself being called into question in the first quarter of next year, and the opposition would like to flag at this moment its great concern. The CBD program itself should be maintained and the commercial benefits that are so profound and so obvious should be maintained.

The BEED Act requires energy-efficiency information to be disclosed. In most cases, when commercial office space of 2,000 square metres or more is offered for sale or lease the BEED Act aims to ensure that credible and meaningful energy-efficiency information is given to prospective purchasers and lessees of large commercial office space. This information helps purchasers or lessees to make more informed decisions and to take full account of the economic costs and environmental impacts associated with operating buildings when they are intending to purchase or lease.

It is really about market information providing a market signal that can be properly understood in a properly functioning market. In that context, this program works. It should be made to work as efficiently as it possibly can. These amendments are insightful in that they do that—they reduce the cost of the application of this act. They are supported, not just by the opposition and the government—that, of course, is critically important—but by the industry that deals in this space. Therefore, this bill is to be supported by this House, supported by the opposition, with the caution that we remain very concerned about the future of the CBD itself. We hope that the government takes on board those concerns. Should the government, at any time, be considering changes to the CBD itself, please be aware that the functioning of that program is extremely important. It provides valuable market processes for ensuring that building owners and future tenants are best informed, it provides an incentive for building owners to make their buildings as energy efficient as they can be, and it allows tenants themselves to take spaces in buildings that are well built, well managed and maintained to the highest energy efficiency standards.

I commend this bill to the House.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

It is good to rise on another bill, the Building Energy Efficiency Disclosure Amendment Bill 2014, which implements the government's commitment to reducing red tape, but in this case potentially green tape, in consultation with industry and other stakeholders to ensure that we have better best practice regulation in place in Australia. I thank the member for Brand, the shadow minister and the opposition for supporting what is a common sense measure. The member for Brand is one of the rare members of the shadow ministry who understands the importance of consulting with industry, listening to them and working with them and not against them, unlike many of his colleagues.

Whilst the member for Brand made some compelling arguments, I do not necessarily agree with his view that you need to have legislation in place in all of these areas and that it is absolutely necessary. The biggest incentive in commercial buildings is, of course, the commercial incentive—that is, to operate them at the lowest cost possible and to operate them in the best way possible. That is good business. It may not require a law. Having a review to understand this—whether this is now necessary—is a very worthwhile endeavour and something we should continue as a commitment to governments of all persuasions in order to reduce the burden of regulation, the number of laws and the unnecessary laws.

It is the case today with the price of electricity and the way buildings are invested in and structured that you of course have to consider energy efficiency—not because the law says so and not because it is the good intention of any particular government but because there is a prime commercial incentive. You would not have a business in this country not considering energy efficiency when investing in a commercial building at the moment. For the member for Brand to say we need these acts of parliament often without any real backup is unnecessary.

The particular changes in this bill that provide exemptions to building owners who receive unsolicited offers for the sale of their office space are going to lead to about $300,000 in estimated reduction of regulatory burden on businesses—about half a million dollars, as the shadow minister noted. We ask the questions, 'Do we need this? Can this be improved? Can this legislation be reduced?' These are the kinds of real-world savings that will produce great productivity benefits to business. That half a million dollars can be spent in other ways by these businesses that will produce a greater return and will allow them to have more time and more space to do more productive activity in our economy. This process can be continued.

It is absolutely starkly obvious that we need a disclosure scheme in general. I am very happy to have a look at it. I am very happy to see whether we need to have it in the future. The commercial incentives are there now for this to happen automatically and for the market to function without having to have a regulation in this space.

The other provisions are also very important. We remove the requirement for six pages of standard energy efficiency guidance text on the building energy certificates. Instead, live interactive online information about energy efficiency for office buildings will be put in place. This is just a contemporary updating of legislation to take advantage of online mechanisms. It meets the need for new owners and lessors to pay the application fee for a fresh exemption if there is a valid one in place. Again, they are common sense measures. Too often with these pieces of legislation that are passed by this parliament, especially when they deal with energy or environmental concerns, there are too many restrictions and too many penalties and too many requirements that really do not have a practical, environmental or energy benefit. These are very sensible measures. The requirements cost industry time, energy, effort and money without producing any real benefits. Again, they are sensible proposals that both sides of the chamber can support.

Other things can be looked at, particularly regarding the defunct Energy Efficiency Opportunities Act and scheme. In particular, we heard evidence in open committee, through my chairmanship of the Standing Committee on the Environment, that there have to be yearly or annual inspections of light fixtures in commercial buildings by law, even though these energy efficient fixtures can sometimes only be replaced every five years. Why you would require them to be inspected annually is beyond me. It is another area that of course has to be changed. Things can be improved. Obviously, the energy efficiency act is the subject of another move from this government.

This is what I am getting at: these pieces of legislation are well-intentioned at the time—sometimes they have a positive effect—but quickly you get to a point where they are too prescriptive and too onerous in their requirements without looking at the benefit produced by the particular regulations themselves. There is no doubt that, when you look at the Building Energy Efficiency Disclosure Act, there is too much of that going on. That has been recognised and agreed to by both sides with the passage of this bill. Of course, in the future we will be looking for further savings in areas where this act can be improved, so that there is more flexibility for business and, of course, more opportunity for people to get on with what they should be getting on with. Energy efficiency is very important; there are savings to be made. There are reasons why you would do it, but, given the fact that there are good commercial reasons—in fact, it is the prime imperative for most businesses who are acting on their building and other investments at this point in time—it is not obvious that we need to have in place so many of these regulatory mechanisms.

All up, of course, the government is very committed to supporting business through the reduction of red tape in improving energy productivity. The bill is going to lead to close to $600,000 worth of reductions in regulatory burdens. It is yet another step in our ongoing red- and green-tape reduction. I look forward to seeing more of these amendments being supported by both sides of the House in the future to ensure that we are moving with the times and not allowing pieces of legislation, such as the Building Energy Efficiency Disclosure Act, to become out of date, and to put a regulatory burden on business with no real return for the environment or of energy efficiency.

(Quorum formed)

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

I thank members of the government for assisting me to deliver my contribution on this bill. Labor supports energy conservation. Labor's Building Energy Efficiency Disclosure Act of 2010 established a legal requirement for owners of large commercial office buildings to obtain energy efficiency information for their building and to disclose it to prospective purchasers and lessees. It also required head tenants who were subletting office spaces to disclose this information. The energy efficiency information disclosed is in the form of a building energy efficiency certificate. This certificate includes a star rating of the building's energy efficiency, an assessment of tenancy lighting, and additional guidance on how the energy efficiency of the office may be improved.

The commercial building sector is responsible for around 10 per cent of Australia's total greenhouse gas emissions, and this figure is rising. It needs to be pointed out that energy efficiency represents one of the fastest and cheapest ways we can reduce our nation's greenhouse gas emissions. Credible energy efficiency information helps parties to make better informed decisions and to take full account of the economic costs and the environmental impacts associated with operating the buildings they are intending to purchase or to lease.

Energy efficiency requirements are an important complementary measure in the suite of policies we need for addressing climate change, such as for new homes and major renovations. Part of the five-star standard, which is now up to six stars, is a requirement for new homes in Victoria to have either a solar hot water heater or a rainwater tank. These are cheap things to install when you are building a house, but more expensive to retrofit later. Many builders do not seriously consider them because they are going for the absolute lowest total cost they can. But they are simple changes which do no harm to people's standard of living, but have huge, positive impacts concerning water and energy use.

The energy used by our buildings accounts for approximately 20 per cent of Australia's greenhouse gas emissions, split fairly evenly between homes and commercial buildings. The business sector is by far the largest energy user in the Australian economy. The industrial sector alone accounts for almost half of Australia's energy end-use and for around two-thirds of stationary energy use. Australia has one of the more energy intensive industrial sectors among developed countries. Energy consumed by residential appliances and industrial and commercial equipment is a major source of greenhouse gas emissions in Australia.

As well as the benefits in reduced greenhouse gas emissions, the Commercial Building Disclosure program has a much broader range of impacts, which are not always captured or measured, such as increased industry capacity and potential building upgrades, that go beyond improving just the energy efficiency of a building and may improve water use, indoor environment quality or other elements. A recent World Green Building Council report provides information regarding the benefits that greener buildings can have on health, wellbeing and productivity.

It is now also well documented that buildings with an environmental rating deliver better returns, so the Commercial Building Disclosure program is helping to deliver increased value in the market. The Building better returns report of 2011 found that Green Star rated buildings deliver a 12 per cent green premium in value and a five per cent premium in rent when compared to non-rated buildings. Quarterly research by IPD also shows that the Green Star and NABERS rated buildings outperform non-rated buildings. The International Energy Agency's Energy Efficiency MarketReport 2014 found that energy efficiency improvements in 11 countries, including Australia, delivered more capacity than any other source of energy.

Greener offices are not only more comfortable to work in, they can also boost productivity, bring down sick leave, support green building-industry jobs and have the potential to deliver savings of 20 to 40 per cent on energy bills. Energy efficiency is a fast, cheap way of making inroads into Australia's greenhouse gas emissions. We need to do that, because Australia has become an international embarrassment on climate change action.

According to a group of senior British conservatives, the attitude of Prime Minister Tony Abbott to the global challenges of climate change is 'eccentric', 'baffling' and 'flat earther'. The group—including Prime Minister David Cameron's minister for energy, a former Thatcher minister and chairman of the Conservative Party—says Mr Abbott's position on climate change represents a betrayed of the fundamental ideals of conservatism and those of his political heroine, Margaret Thatcher. Twenty-five years ago, former British Prime Minister Thatcher addressed the United Nations and placed climate change firmly on the global environmental agenda. She said:

It is mankind and his activities which are changing the environment of our planet in damaging and dangerous ways.

These British conservatives warn that Australia is taking enormous risks investing in coal, and will come under increasing market and political pressure to play its part in the global battle against climate change.

According to Lord Deben, chairman of the Independent Climate Change Commission and a minister in both the Thatcher and Major governments, Australia will come under increasing market pressure to respond to the global shift towards renewable energy. Lord Deben said that Mr Abbott had betrayed the fundamental tenets of conservatism itself. He has been quoted as saying:

I have no doubt that people like David Cameron will be saying to Tony Abbott 'look conservatives are supposed to conserve, they are supposed to hand on to the next generation something better than they received themselves'.

Indeed! Tim Yeo, the chairman of the UK's parliamentary select committee on Energy and Climate Change and a former environment minister under John Major, said:

If I was Australian I would be concerned if my country's economic future and prosperity became dependent upon continued coal exports.

The United Kingdom led the world in 2008 by legislating for long-term, ambitious emissions reductions of 80 per cent by 2050. They have already achieved a 25 per cent drop on 1990 levels. In June, David Cameron opened the world's largest offshore wind farm with 175 turbines in the Thames Estuary. Almost 20 per cent of Britain's electricity is now produced by renewables, with eight per cent powered by wind—equivalent to 6½ million homes.

The UK's energy market reforms and the drive to transform the economy to a low-carbon model are supported by all the major political parties. David Cameron's former Minister for Energy and Climate Change, Greg Barker, said:

I think there is a lot of concern about Australia … people are concerned, slightly baffled by the approach that Australia is taking which looks, actually, slightly eccentric.

You know that your climate change agenda is in trouble when your traditional conservative allies start seeing you as a pre-science troglodyte.

This was further highlighted when the world's two superpowers signed a climate change deal, which I believe is the best news on international action to tackle climate change in nearly 20 years—the best news since the Kyoto protocol. It is an absolutely stunning agreement. China has agreed to ramp up its renewable energy target by one third—over 30 per cent—compared to its previous offer. This will build a massive solar PV industry. Secondly, it has agreed to level-out its emissions by 2030. Given that China's emissions accounted for 70 per cent of the global increase in emissions in 2012, this is a huge turnaround. It is a world away from the sabotage they engaged in at Copenhagen, which I strongly criticised at the time.

What did we hear from government ministers about this historic agreement? The Assistant Minister for Infrastructure and Regional Development said it was a distraction. Indeed, the trade minister, Treasurer and foreign minister all lined up to have a crack. The foreign minister went so far as to send a briefing to the White House in response to President Obama's speech on climate change and the impact that it will have on the Great Barrier Reef.

The foreign minister said that she did not believe the reef was in danger. That is a view that contradicts the scientific consensus that it is in danger. For example, the Great Barrier Reef Outlook Report 2014 from the Great Barrier Reef Marine Park Authority said:

Climate change remains the most serious threat to the Great Barrier Reef. It is already affecting the reef and is likely to have far-reaching consequences in the decades to come.

It seems that only this government fails to accept that climate change is going to take a significant toll on our Great Barrier Reef unless we take action now. The diplomatic push-back against the United States was petulant, and underscores how isolated Australia is becoming on climate change—an international embarrassment, a shag on a rock.

The government has been put on the back foot by the US-China deal, and by comments from world leaders, during and after the G20 summit, highlighting the importance of global action to address climate change, including contributions to the international Green Climate Fund. Even Canada, a country that previously lined up with Australia against contributions to the Green Climate Fund, has now come on board with a $300 million contribution. Thirty countries have pledged $9.3 billion to the fund—just shy of a $10 billion target—to help developing countries cut emissions and prepare for global warming.

The South Korea-based Green Climate Fund aims to help nations invest in clean energy and green technology and build up defences against rising seas and worsening storms, floods and droughts. Money will be spent equally for climate change adaptation and mitigation, especially for the most vulnerable nations, including small island nations and Africa's poorest countries. The fund is designed to help those countries least to blame for, but most at risk from, climate change, with grants, loans and private capital for projects such as solar and wind farms, planting trees or disaster-proofing infrastructure. While other countries are contributing, Australia has ruled out contributing.

The UN climate experts have cautioned that there is no time to lose in the battle against global warming. The UN Intergovernmental Panel on Climate Change warned in November that time is running out to limit warming to two degrees Celsius by 2100 on pre-industrial levels. They said we are on a likely trajectory for at least a four-degree Celsius warming, which is a recipe for melting ice caps, extreme weather events, habitat and species loss, and conflict over access to scarce resources.

Some of the key risks that were identified included: low-lying coastal zones and small islands being vulnerable to storm surges; more frequent flooding in urban areas; breakdown in infrastructure and critical services such as electricity, water supply, health and emergency services due to increases in extreme weather events; increase in deaths and illness due to extreme heatwaves; risk of food insecurity due to warming, drought and flooding; significant drops in agricultural production and rural livelihoods; loss of marine and coastal ecosystems with significant impacts on fishing communities and industry; and threats to native species and ecosystems.

The IPCC report focused on the risks posed by global warming, concluding that in many cases the world is ill prepared. Indeed, the World Heritage Great Barrier Reef topped the local risk list, with the IPCC warning that permanent damage is inevitable. Our leading coral reefs marine scientist and lead author Ove Hoegh-Guldberg said mitigation strategies, such as improving water quality and reducing fishing pressure, will only 'buy time' for the reef.

The Climate Institute said:

The IPCC report places priority on the decarbonisation of energy supply systems. It notes that scenarios likely to achieve the internationally agreed goal of avoiding 2C of warming require energy emissions to decline over the next decade and be reduced by 90 per cent or more from 2040.

The report is clear that humanity is influencing our climate, with changes unprecedented for decades to millennia, and which now threaten our prosperity, security and natural environment.”

This is a consensus document agreed by the world’s top scientists and governments, and is a conservative stocktake that should serve to spur more urgent action on climate change.

Indeed, just this morning, I was one of those MPs who received a petition put forward by many women concerned about climate change and the lack of action occurring in Australia on this front. I commend those women for their civic-mindedness and their concern for this nation's future.

The Climate Institute also said:

Australia is one of the developed countries most exposed to climate impacts in an Asia-Pacific region likely to be severely disrupted by climate change. It is in our national interest to act and encourage others to do more.

For Australia to play our fair part in global emission reductions after 2020, emission reductions will have to be much stronger than Australia's current target range of 5-25 percent emission reductions by 2020. A domestic policy framework that can't achieve this scale of emission reduction by 2030 is neither sustainable nor economically prudent.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

Before the minister leaves the chamber, I want to commend him on the work that he has done particularly in relation to our environment policies. I am sure the minister remembers very well the previous government's failed programs on the environment. There were 20 failures—10 failures of Prime Minister Rudd and 10 failures of Prime Minister Gillard. For a start—and the previous speaker introduced this to the debate—there was the carbon tax. The broken promise on that is a great place to start. There was a promise that there would be no carbon tax, and there was one. We also had the Home Insulation Program. As we know, it was linked to four tragedies. It was responsible for 224 house fires. It has seen 70,000 repairs. That is what the previous government saw as environmental policy at a cost of more than $2.1 billion, of which more than half a billion dollars was simply to fix dangerous roofs. The program was delivered in spite of 21 warnings by the former member for Griffith.

There was the Green Loans Program. It was a Rudd government program. We know that the Green Loans Program wasted $100 million and retrofitted just over 1,000 homes. The Citizens' Assembly program was scrapped before it even started. That was Prime Minister Gillard's initiative. There was the Solar Homes and Communities Plan. That had a $500 million cost overrun. When the previous speaker was talking about environment policy, that is what he was talking about. He obviously has a selective memory. There was the Solar Flagships program. After some years, there was not one watt of energy and not a thing built. That was an announcement from the member for Griffith. We saw all promise and no delivery at all.

There was the infamous cash-for-clunkers scheme. That was, again, an initiative of Prime Minister Gillard. The Green Car Innovation Fund was another spectacular failure. The low emission plan for renters collapsed. These were the programs and practical measures that the previous speaker on the debate in this House was talking about. There were the green technology grants, which stopped and started and stopped and started after the MYEFO came out. Those were another failure. There was the Connecting Renewables Initiative. It folded. The Renewable Energy Future Fund was absolutely squandered. The Global Carbon Capture and Storage Institute unfortunately delivered far more dinners and conferences than progress on carbon capture. We saw the huge number of dollars that went into that program. The green buildings for tax breaks initiative was scrapped before it commenced. The phantom credits were scrapped 2½ years early. Simply advertising the carbon tax was $70 million wasted. The Green Start program was scrapped before it commenced. The contracts for closure were scrapped before commencement. So, after listening to the previous member speak in this House, all I can say is that those opposite obviously have a selective memory when it comes to their own environmental programs and their impact. We saw even with the carbon tax that there was no defined decrease in emission. But what a massive cost to business and households that was.

There also appears to be a lack of understanding about the innovation that is out there in this space. I do not know how many other members meet so many innovative groups and individuals who are working on environmental solutions, often using their own initiative and their own funds. They are certainly making a huge difference. Look at what has happened in the transport sector and how they have improved their performance over the years—for example, the Euro V engines. They are now looking at a Euro VI. There is a lot of work yet to be done, but that is what has been happening in transport. Of course, so many businesses and industries have done enormous work in the environment sector. They are not sitting on their hands. They are proactive in this space. As I said, I see a lot of innovation ahead, and it is ongoing. I think the practical measures that we are taking as a government feed directly into that.

Of course, one of those is something as simple as the Green Army. There are those who have sought to make this out to be some sort of joke; it is no joke on the ground. I am a farmer, and those young people out on the ground actually delivering practical outcomes is exactly what we need. We need things that actually work on the ground, where the taxpayers' dollars get to the ground and get to the practical programs that make a difference. Be it coastal, be it in rivers or be it in riparian areas, there is so much practical work happening on the ground, and that is exactly what we need to encourage. Things that make a difference at a local level, collectively make a huge difference. So I encourage anybody looking at the Green Army Program to get involved, because there is a lot of opportunity at a local level. This will build to 15,000 people on the ground—literally a Green Army working on practical measures. Our natural resource management groups and the catchment councils, which have been working so hard for so long, do the same practical things. No wonder this is a program that will work, because they are already doing this type of work.

I once had a member opposite say to me in a committee that she was surprised that I was on the environment committee, because I was a farmer. Let me tell you that over 94 per cent of farmers are involved in natural resource management or Landcare groups. They are very concerned and very interested, because they then hand on their own property to a next generation of farmers—be it family members or anyone who purchases that property. They want to see that property in the best condition it can be so that it can continue to produce quality food or fibre which this country is renowned for. You can only do that if you are looking after your pastures, if you are looking after your soil and if you are using the right fertilisers. Farming is a science. We have some amazing people working on the land. They are constantly looking at how to do their work better, whether they are an irrigation farmer—looking at how to irrigate more efficiently for so many environmental reasons as well as commercial reasons, and also to manage their pasture—or whatever the case may be.

These measures are going on constantly. Members opposite talk as if nothing is happening anywhere, but there are very practical measures happening right across this country in all fields, and there is much more innovation ahead. We see it every day, almost, in this place and out on the ground. I think we are going to see a lot more innovation in this space than people give us credit for. The measures of this government will add to that, as will practical measures such as adaptation. In the environment committee, we will keep working on a range of matters.

The Building Energy Efficiency Disclosure Amendment Bill will streamline the administrative process. We have discussed in this place previously matters around greater efficiency and reduction, in various ways, of red tape—or green tape in some people's views. Of course, this will, under the Building Energy Efficiency Disclosure Act, address stakeholders' concerns and reduce regulatory burdens on industry. It is very important to stay competitive. We know that in this country we have a productivity challenge. Every way that we can possibly improve productivity for business and individuals is exactly where governments should try to get out of the way, because it is business that creates the jobs and invests their own dollars. So assisting to streamline this process is a very good outcome.

The Building Energy Efficiency Disclosure Act, as we know, requires energy efficiency information to be disclosed in most cases when commercial office space of 2,000 square metres or more is offered for sale or lease. The act aims to ensure that credible and meaningful energy efficiency information is given to prospective purchasers and lessees of large commercial office space. That information helps purchasers or lessees to make more informed decisions and take full account of the economic costs and the environmental impacts associated with operating the buildings when they are intending to purchase or lease. Since the establishment of the CBD program, there have been a number of proposed changes raised through the regular forums with key industry stakeholders to improve the program. Again, that is common sense. Those changes require legislative amendments to the Building Energy Efficiency Disclosure Act and associated legislative instruments, including the building energy efficiency regulations and determinations. The major changes include providing exemptions to building owners who receive unsolicited offers for the sale or lease of their office space. That will lead to an $0.3 million estimated reduction of regulatory burden on businesses. That is not insignificant, as every cent counts in business and your time counts because of time costs. Another major change is allowing transactions between wholly-owned subsidiaries to be excluded from disclosure obligations

Again, this leads to a similar reduction of $0.3 million in regulatory burden on businesses. Cumulatively, it is very important. This bill addresses the ambiguity in the status of assessments in the BEED Act which undertaken by assessors accredited under the National Australian Built Environment Rating System program but not accredited under the CBD program. It also introduces the ability to determine a commencement date for a Building Energy Efficiency Certificate, which is later than the date of issue. That simple measure itself will provide greater flexibility for businesses wishing to proactively maintain current BEECs for their property portfolios.

Another practical measure is removing the need for new owners and lessors to reapply or pay the application fee for fresh exemptions if there is an existing one in place for a building; and another is the removal of the requirement for six pages of standard energy efficiency guidance text on the BEEC by providing live and interactive online information about improving energy efficiency for office buildings instead.

This bill will lead to an estimated $600 million reduction of regulatory burden on businesses and, as I said, any reduction in regulatory burden is what business and industry for some time have been crying out for. As a government, you can respond in a practical way or you can ignore those calls. Every small and incremental change brings about a major change in the business itself—time and the costs involved—and as a result I hope that across all the fields where we are looking at the reduction of red and green tape we will see a streamlining of process and reductions in business costs, while still maintaining the standards that we require as a nation. I want to mention another company in my electorate that is doing a lot of innovative work with wooden building structures. I am sure that they already have a prototype up and running and that we will see more of these types of building in the future. A lot of interest is being shown in their efforts ,and I commend them for their activities.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I am very disappointed with the member for Forrest—she is actually an intelligent, capable person. I cannot believe that the twaddle we have just heard from her. There was not one mention of climate change. She says she supports science and wants to see us being informed by science in the decisions we make. Yet scientists across Australia and the world are telling us that we are facing an enormous challenge in terms of global warming; that this global warming has been created by man; and that we need to take action to reduce our carbon footprint. All we hear from the other side is bleating—this uninformed, unintelligent bleating about green tape and red tape. The other side of the House are wrapping our planet in black tape—they are wrapping our planet in a cloud of fossil-fuel emissions and they are not prepared to do anything about it.

The whole premise of the member for Forrest's speech was that the most important thing that we can do is reduce costs. I would challenge that that is the most important thing to do but, even if that were the premise, putting energy efficiency in place is the critical thing. It is one of the critical things we have to do to put ourselves on the path to an economic future. This piece of legislation, which has been modified to some extent—and we as a party are supporting these modifications—offers an economic incentive for those who build and manage commercial buildings to ensure that these buildings operate in an energy efficient way. That incentive saves money for business; it saves money for small business. Those who do not build commercial buildings now have an option to make massive savings to their bottom line by leasing buildings that have been designed to be energy efficient. We have to put a market signal in there, and having mandatory disclosure is part of that market signal. In turn mandatory disclosure drives behaviour; it ensures that those people who construct large commercial buildings now have a financial incentive to invest up-front in the design and the technology that goes into a more energy efficient way of operating those buildings, while reducing our carbon footprint and reducing the costs.

The great tragedy in this piece of legislation is that we are not moving forward in the way that was planned in 2009, when COAG agreed that the states and the Commonwealth would come together to develop a national partnership agreement on energy efficiency. It was agreed in 2009 that not only would energy efficiency disclosure requirements apply to commercial buildings but also to residential buildings so that if you were selling or on-selling you would have a mandatory disclosure or a star rating for the home you were buying. I have to say it was a great tragedy that that was deferred in 2011-2012 because the states lost interest and they peeled away their support for what was a cooperative arrangement. I think we have done a great disservice to the people of Australia—to those young people who are buying new houses or apartments. We are sentencing them to a lifetime of high costs because we have not given the market signal or the incentive for property developers or builders to get their act together and put in place the technologies that would deliver a cheaper cost of living for them.

When I was a minister in state government we did a great deal of research on lifting standards in home building. We required a greater degree of energy efficiency, and we did very, very detailed cost-benefit analyses. This was resisted mindlessly and violently by the industry at the time. They said, 'It's going to increase the cost of housing.' The economic analysis that we did showed that, whilst there was, I agree, an increment of cost of a couple of thousand dollars onto the cost of a mortgage, within the first year the increased mortgage repayments were more than offset by the saving in utility payments, in electricity and water payments. In terms of the whole-of-life cycle, the cost of living was driven right down. We could not get intelligent engagement from the industry. I am very glad to see that there has been a change of leadership in some of the largest building companies in Western Australia. I believe that under this new leadership, particularly in companies like BGC, we would see a very different response now.

We are supporting this bill. There are some question marks for me around whether or not we should be allowing an exemption where there has been, supposedly, a non-solicited bid. I think there are potentially some problems around the enforcement of that, and that it has the capacity to be misused. I would like to see us go much further and ensure that we do this for residential building.

I will give an example of the appalling things that we see. As mayor of Vincent I was on various development assessment panels. We would have come before us rubbish developments that had absolutely zero cross-ventilation and in which some of the rooms were totally dependent on borrowed light. I would raise these concerns with the developer: 'This doesn't seem to me to be offering a very good product in terms of quality of life and affordability of operation.' They were small apartments aimed at the bottom end of the market. The developer would say, 'Don't worry about that. Don't worry about this cross-ventilation; we're putting in reverse-cycle air conditioning. They're not going to need it.' We are condoning bad design. Indeed, we are rewarding bad design. We are locking people into a lifetime of high energy costs and we are doing nothing to warn people about it. I think that is a national disgrace. We should have informed buyers. I reserve my particular contempt for Queensland, which did in fact have such measures in place. The measure was introduced in Queensland in 2010, and withdrawn in 2012 by the 'enlightened' Campbell Newman, who does not believe in the rule of law and does not believe in the science of climate change. He is a souped up, 21st-century version of Joh Bjelke-Petersen. That is a great tragedy for Queensland. I can assure members that I will be fighting to make this legislation even stronger under the Labor government which I am becoming increasingly more confident we will have in 2016.

The member for Forrest talked about business. There is so much business innovation coming out of the energy efficiency space, but we are putting the kibosh on it. There is a great new Western Australian firm, Ecocentric Energy. It is one of the firms that have not been closed down by a rampaging Department of Agriculture. This company has worked in collaboration with CSIRO and Commercialisation Australia, a project that is now being disbanded, just as Nobel Prize candidate scientists are being sacked, by this antiscience government. Ecocentric worked with Commercialisation Australia to develop a great diagnostic tool that can give very, very fine-grained reports on energy performance within a building or a manufacturing process. They have developed a thing called electrical fingerprinting and developed algorithms that are designed to recognise the energy signatures of each particular electrical device within the premises. It is a very sophisticated piece of kit. Not only did they get support under the Labor government from CSIRO, they were in the process of going to early commercialisation. We have scrapped the price on carbon and so now have no need for energy auditing. As a result, they are being wooed by the United Kingdom—I have seen submissions that have been sent to them by the UK trade office. The UK has said, 'Come over to the UK. We've got compulsory auditing provisions in the UK,'—they are also in operation in the US—'we will assist you in developing that technology.' Ecocentric are another example of the brain drain. This is happening around the world. We have shut down our carbon pricing architecture. We would have had the opportunity to be in there working with China, using the expertise we have developed over the last couple of years to work with China to develop the architecture that they are putting in place for their emissions trading scheme. We have lost that opportunity because we have destroyed the architecture. The member for Forrest went through and described a number of programs that Labor had done that perhaps had been less than optimum. There has been a lot of trial and error. I agree, we are in these new waters. There will have to be a lot of work done.

But I can tell you that the fundamental architecture that the Labor Party landed on and that was put in place within their second term of government is fundamentally the right architecture. We need a price on carbon. We need a decent renewable energy target and not a pretend renewable energy target; we need a decent renewable energy target that is going to drive investment into renewable energy. We needed ARENA, which was the early commercialisation phase, that allowed research and development and that early commercialisation to take place so that Australia could be a technology maker and not just a technology taker. We had the Clean Energy Finance Corporation.

Those four things together formed the essential and fundamental architecture that we need to address climate change and to ensure that Australia has a place in this new world of the 21st century. All of that is gone. It is all demolished. At this point, we are still working on the RET. Hopefully we will get one bit saved and hopefully Mr Palmer is able to continue to at least keep ARENA on life support.

But at the next election I have no doubt that this will be fought to a very large extent on climate change and Australian industry. The government of today will be found to be massively wanting on both of those counts. It is a disgrace that we are not acting seriously, we do not have at our core of this concern about climate change and we do not have at our core a concern about ensuring that we are part of the technology that is being developed. As I say, forget the green and red tape. You are wrapping us up in black tape.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Building Energy Efficiency Disclosure Amendment Bill 2014 in the second reading debate. I quote:

Australia’s productivity is being choked by red tape, with the combined cost of administering and complying with public and private sector bureaucracy costing the nation $250 billion every year.

These are the words of Chris Richardson, the co-author of Deloitte Access Economics' latest report Get out of your own way: unleashing productivity, which was released in October. They are words that clearly depict the reality for productivity and profit margins that Australian business, industry and government is currently facing. It is also the reality that we need to work together now to stop in its tracks if we want to return our country to the level of prosperity that every Australian enjoyed a decade ago under the Howard government.

The report highlights exactly what this government has been saying for the past seven years: unnecessary regulation is a burden on government and it is a burden on industry. It is a burden which is costing this country's productivity margins every day it exists. Yet, it is a burden which the Labor Party insisted on increasing day in and day out for the six long years they were in government. It is a burden that, as this report states, the private sector is also imposing on themselves, through $155 billion in annual costs to administer and comply with their own rules.

We talk about doing it tough in the global economic environment we are currently living in, but this report has showcased the level of hindrance we are also causing to ourselves. It is a hindrance that is costing industry both time and money. That is because instead of employees spending their time working to boost productivity, they are filling in what is often unnecessary and duplicative administrative paperwork. They are also doing this without taking the time to weigh up whether the internal rules and regulations they are abiding by are actually providing a benefit to the company or in fact achieving their objective.

As the Deloitte report stated:

… not all compliance is bad and much of it is necessary. The issue is that many of the rules that are put in place either overcompensate or carry a heavy burden that is not justified on a risk/reward basis.

This is evident when you look at the breakdown of the private sector's regulatory burden, with $21 billion of this total $155 billion in costs being spent on developing and administering compliance rules, while a massive $134 billion is being spent purely on compliance costs. I think members on this side of the House would agree that the coalition government is doing its part to reduce this regulatory burden; but for these measures to be effective, industry must also do theirs.

The Building Energy Efficiency Disclosure Amendment Bill 2014 is one of many repeal bills the coalition government has introduced into this place to reduce the impact of regulation across Australia as part of our commitment to cut $1 billion in red and green tape each year. That is because on this side of the chamber there are people with experience who understand businesses. They understand the economy and they understand that where money and time is wasted it costs Australia's economy as a whole. That whole is $2.1 billion.

This is definitely not a small number, but I am pleased to inform the House that it is the amount of unnecessary compliance costs that will now be saved in red and green tape as a result of legislation introduced by the coalition last month on our spring repeal day and in March as part of this parliament's first ever, and I must say unprecedented, autumn repeal day. It is also a number that I am pleased to advise the House is more than double our original commitment, because that is how much unnecessary regulation is currently choking industry and choking our government departments' ability to work efficiently and effectively.

The coalition government is trying to ease this regulatory burden and we are achieving our goal by working to open up our markets to new businesses and to boost productivity levels across existing industries. The coalition's commitment is not just evidenced by this $2.1 billion in compliance savings but also through our overall policy agenda to work hand-in-hand with business rather than in opposition, as seen under the former government. That is because at the end of the day our goal is the same: to drive profit for business, which in turn will boost our national economy.

The government's recently announced free-trade agreements with some of our largest global export and import markets, including Japan, Korea and most recently with our largest trading partner China will play another key role in boosting our economy, creating jobs and driving higher living standards for Australians. That is because the coalition is a government that recognises that, without business productivity, this nation as a whole will fall flat. We are a government that takes the time to listen to industry and takes note of their needs.

With that in mind, I am pleased that the Building Energy Efficiency Disclosure Amendment Bill is this government's direct response to industry stakeholders' calls for regulatory burdens to be removed and administrative processes to be streamlined for building owners and lessees when applying for a Building Energy Efficiency Certificate under the provisions of the Building Energy Efficiency Disclosure Act 2010. The original intent of the legislation was to improve the energy efficiency of Australia's buildings, while also helping buyers and tenants to make informed decisions about efficiencies when entering into an agreement. It is legislation, I am pleased to say, that had bipartisan and stakeholder support at the time of its implementation and it continues to have that same support today. As we heard from the member for Perth, the opposition are supporting the bill.

The Commercial Building Disclosure—CBD—scheme mandates that energy efficiency ratings of commercial buildings or an area of a commercial building which is more than 2,000 square metres and is used for administrative, clerical, professional or similar information-based activities be publicly available. It also creates a requirement that these buildings must have a current Building Energy Efficiency Certificate before their commercial space can be offered for lease or sale, with the certificate being valid for up to 12 months. Currently, for a Building Energy Efficiency Certificate to be issued the following information must be determined by an accredited assessor. A National Australian Built Environment Ratings System, more commonly known as NABERS, energy star rating for the building needs to be assessed. For those members who are not aware, NABERS is Australia's national rating system which measures the environmental impact or operation of a building, and it does this by assessing its energy efficiency, water usage, waste management and the indoor environmental quality of a building or tenancy and its corresponding impact on the environment. A star rating between one and six is then given to the building, with one star indicating poor energy performance and six stars being regarded by industry as market-leading performance. For a certificate to be issued, an assessment of the energy efficiency of tenancy lighting in the area of that building that is being sold or leased must also be undertaken. With lighting accounting for over 30 per cent of all energy used in commercial buildings, this is important information for prospective tenants, as their future energy bills could be significantly reduced by leasing a property that has a higher performing energy efficiency. Lastly, for a certificate to be issued, the owner or sublessee must provide general energy efficiency guidance information to any prospective owner or tenant.

As I am sure members can see, this is all important information when trying to determine the best value for money in the property market, particularly when identifying the impact of a low versus high energy efficiency rated building on their bills, while also helping to accelerate energy efficiency in some of Australia's largest administrative buildings. For those members who are not aware of the potential impact of a building's low versus high energy efficiency, I will clarify what this means. If a building has a high energy efficiency rating, it would therefore be expected that the business owner's or tenant's corresponding energy bill would be lower than those buildings with poor energy efficiency. This would create savings in the long term, while a higher energy efficiency would also ensure that the building's environmental impact is lower than that of a building which has poor energy efficiency. As identified in an analysis by the Department of Industry, which looked at the investment performance of high versus low NABERS energy-rated office assets from September 2008 to September 2013, higher NABERS energy-rated offices consistently outperformed low energy offices. In September 2013, this saw an annualised return of 9.8 per cent, comprising a 7.3 per cent income return and a 2.3 per cent capital growth.

As I am sure members would realise, buildings across Australia which require a certificate are more commonly found in CBD areas due to the prevalence of large tower buildings. In Swan, there are, however, five buildings which have been issued a Building Energy Efficiency Certificate, which, as it happens, includes the office building where my electorate office is based in Victoria Park. I am pleased to advise the House that I selected my office well. It has an energy efficiency rating which is higher than all other Swan buildings, with 4.5 stars. Although members in this place expressed bipartisan support for this scheme when it was first introduced and have done so since that time, that does not mean its processes cannot be better streamlined and reviews should not be undertaken.

As I said earlier, a big part of reducing unnecessary regulation and compliance costs is to look back at the policies this place has implemented and to find ways to improve them rather than taking the 'if it isn't broke don't fix it' approach, which could potentially cost government and industry billions of dollars in the long run, as identified during this government's Autumn and Spring repeal days. The amendments proposed in the bill before the House are expected to deliver improved administration to the CBD scheme while also ensuring that additional regulatory burdens that hinder industry are removed, creating an annual predicted saving of $600,000 million in compliance costs. As I mentioned earlier, commercial office buildings or an area of an office building which is more than 2,000 square metres are required to have an up-to-date Building Energy Efficiency Certificate.

Although the CBD scheme when issuing these certificates is overall working well, stakeholders have identified a number of issues with the scheme when applying its rules and regulations in practice. The bill directly responds to these concerns by making a number of amendments to better streamline its protocols. One key amendment that will be made is the introduction of an exemption for building owners or tenants to provide an energy efficiency assessment when an offer to buy or lease that commercial property is unsolicited. Currently, the owner of a building would be required to have a Building Energy Efficiency Certificate in place before they could respond to any unsolicited or uninvited requests to sell or lease that building or an area of the building. By making this important amendment on behalf of industry, the coalition will create an estimated saving of $300,000 for businesses by removing this onerous regulatory burden. A second key amendment to the scheme also proposed in the bill will allow transactions between wholly-owned subsidiaries to be excluded from disclosure obligations. Again, this amendment will lead to another $300,000 regulatory burden reduction. Thirdly, as I mentioned earlier, a certificate is issued for a maximum of 12 months and, under the scheme's current provisions, this certificate must commence on the date of issue. According to stakeholders, this is impractical for those building owners and tenants who want to exercise due diligence in maintaining or improving their energy efficiency standards. The coalition has listened to these concerns, with a third proposed amendment allowing the commencement date for a certificate to be later than the date of issue.

Another provision that is currently required for a certificate to be issued is for standard energy efficiency guidance text to be provided to a prospective building owner or tenant. The coalition again believes this is an additional regulatory burden on industry, which could be better streamlined by instead having this information provided online in a live, interactive format.

As I mentioned earlier, although the general requirement is for commercial office space that has an area of more than 2,000 square metres to have a Building Energy Efficiency Certificate, there are exceptions and exemptions to this rule. Under the scheme, newly constructed buildings, which are those under two years old, and strata title buildings are automatically exempt from the scheme. There are also a number of exemptions to the scheme's requirements which are determined on a case-by-case basis. Such exemptions include the building being used for police or security operations, if it is not possible to assign a NABERS energy rating to the building, or for vacant buildings.

In the case of exceptions to the scheme, you do not have to apply to obtain one; however, a building owner or tenant may be required to substantiate why they should be considered an exception under the scheme. Typically, exceptions can relate to the type of building, such as new buildings where a certificate of occupancy has not yet been issued, or for buildings which have completed a major refurbishment for which a certificate of occupancy was issued less than two years earlier. They can also relate to the type of transaction.

Under the scheme's current provisions, new owners and lessors are required to reapply for an exemption and possibly pay a fee even if a valid exemption is in place. Under this bill's proposed amendments, this requirement will, however, be removed to get rid of this unnecessary and costly burden on industry.

While it is important that these amendments are passed in this place to assist industry and respond to their calls for reform of the scheme, I also highlight that the Minister for Industry has commissioned an independent review of the CBD program following a direct request from the Prime Minister. This independent review is currently underway by ACIL Allen Consulting and will report to the minister by March 2015. I look forward to reviewing this report, which I am sure will give all members a greater sense of whether the scheme is continuing to meet its objectives, the scheme's level of effectiveness, and other areas where reform may be needed.

On behalf of the stakeholders who these amendments will benefit, I commend this bill to the House.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

I am delighted to rise today to speak, as did my Labor colleagues the members for Brand, Wills and Perth, in support of the Building Energy Efficiency Disclosure Amendment Bill 2014 that is currently before the House. Since the establishment of the Commercial Building Disclosure, or CBD, Program, back in 2011, there have been regular stakeholder reviews.

The changes in this bill today have been supported wholeheartedly by those stakeholder groups. In fact, these have been issues that have been raised through those regular forums that are quite rightly aimed at ensuring continuous improvement of the program.

These changes require legislative amendments to the Building Energy Efficiency Disclosure Act 2010, the BEED Act, and associated legislative instruments, including the Building Energy Efficiency Regulations and Determinations. The act was created following significant consultation with industry—specifically, the Green Building Council of Australia, the Energy Efficiency Council and the Clean Energy Council.

At the outset, I wish to reaffirm Labor's longstanding commitment to energy conservation and efficiency. Energy efficiency represents one of the fastest-growing and cheapest ways that we can reduce our nation's greenhouse gas emissions.

In fact, the International Energy Agency's Energy efficiency market report 2014 found that energy efficiency is indeed the world's 'first fuel'. The research found that energy efficiency improvements in 11 countries, including Australia, delivered more—that is right: more—capacity than any other source of energy. That is remarkable—more energy from conservation than from burning oil, coal or gas. Energy efficiency saved those 11 countries some 56 exajoules of energy in 2012, which was more than the final energy delivered by oil, which was some 50 exajoules; electricity, at 23 exajoules; or natural gas, at 20 exajoules. It is also more than the total energy consumption of the European Union.

My electorate of Newcastle is lucky enough to be home to some of the world's leaders in energy efficiency research. Scientists at the University of Newcastle's Institute for Energy and Resources, otherwise known as NIER, and scientists at the CSIRO Energy Centre have been at the centre of developments that are changing the way that we use, store and, indeed, generate energy.

I would like to briefly turn to some of the work being done at the Newcastle Institute for Energy and Resources. Their research is based on four key areas. The first is resource productivity and efficiency: looking for solutions to problems facing our minerals, gas and water resource sectors. They also examine energy technologies and utilisation, an area that is driven by economic and environmental challenges with the goal of increasing efficiencies and reducing, of course, greenhouse gases. The third key area for NIER is around advanced materials for energy applications—looking at the significant potential for the next generation of low-cost, sustainable energy applications. And the final area of study that NIER's researchers are great specialists at is land use, social impacts and sustainability, which focuses on the balance between the environment, community and economic activity within energy and resource intensive regions.

I could talk at length—for much of this debate—on some of the fantastic work that is being done by the Newcastle Institute for Energy and Resources; however, I would like to use this opportunity now to acknowledge one of the more recent successes of their researchers. Last month, Professor Behdad Moghtaderi was awarded the Renewable Energy Innovation Award at the New South Wales Science and Engineering Awards for his GRANEX heat engine invention. The engine turns low-grade heat resources that may not otherwise be viably usable into emissions-free electricity. It can be applied to a range of diverse heat sources, including renewable energy, process industries, transport systems and commercial and residential buildings. It is research that will indeed be a game changer for this nation, and I am particularly delighted that NIER its researchers have been recognised for the lead role they have taken in that area.

I would also like to turn to some of the work being developed at the CSIRO Energy Centre in Newcastle. Like NIER, the listing of achievements by the CSIRO Energy Centre would take much more time than we have here today to speak on this bill, but I would like to note that the CSIRO facility, the actual physical space, where much of that groundbreaking work has been conducted, is at the forefront of an energy efficiency build in Australia and is certainly worthy of being noted in this debate. The CSIRO Energy Centre, which opened in Newcastle in 2003, set a new benchmark in terms of ecologically sustainable design, showcasing innovative energy generation approaches, building demand reduction and supply options. They conserve energy through the building's orientation and layout, the construction materials and building management systems. They generate energy on-site through a 115 kilowatt photovoltaic system and a 120 kilowatt gas-fired microturbine co-generation system, and house two high-concentration solar thermal tower arrays capable of 500 kilowatts and one megawatt thermal output respectively. The Newcastle CSIRO Energy Centre most definitely practise what they preach. The work of both NIER and CSIRO showcase what can be achieved here in Australia with proper funding and investment into education and resources and important capital works and investment programs.

As we are discussing energy efficiency in this chamber, it would be remiss of me not to mention the renewable energy target. Until this government came to power, the renewable energy target, or RET as it is known, enjoyed bipartisan support since its creation some 13 years ago under the then Howard Liberal government. It is something that the Prime Minister promised he would not change if elected—but we are regularly reminded, however, that keeping promises is not one of the Prime Minister's strongest points. But keeping the RET was indeed a promise he clearly made. The government specifically committed to the 41,000 gigawatt-hour target and that there would be no changes to the arrangements in the rooftop solar industry, both household and commercial. The crazy thing is that even the Prime Minister's own hand-picked panel set out to review and possibly wind back the RET confirmed that on every possible indicator the RET works and it should be kept. The RET helped drive our nation as a leader in renewable energy technology and use.

When Labor came to government in 2007, there were 7,400 houses across the entire country that had rooftop solar. By the time we left, there were 1.3 million, and that is still growing by 3,000 every month. Unfortunately it is not growing as quickly as it would be if there were not some uncertainty, which this government has now brought through with its review of the RET, but the growth is still strong. Labor's position remains to defend the renewable energy target. It is working. It lowers power prices, lowers carbon pollution and supports an industry that employs thousands of Australians. The RET is an integral part of Australia's energy economy and our efforts to reduce greenhouse gas emissions. Likewise, the Building Energy Efficiency Disclosure Amendment Bill is an important part of our efforts to reduce greenhouse gas emissions.

The commercial building sector is responsible for around 10 per cent of Australia's total greenhouse gas emissions and this figure is rising. The importance of energy efficiency in our commercial buildings is as critical now as ever. Energy efficiency, as I said, represents one of the fastest and cheapest ways that we can reduce our nation's greenhouse gas emissions.

In terms of its effectiveness to streamline the efficacy of the Commercial Building Disclosure Program, the bill before us is an important step in the right direction. As I mentioned, stakeholders support the changes that are proposed in this bill but, notwithstanding the support for those changes, there is a great deal of scepticism about the yet to be published commercial building disclosure, or CBD, review. The CBD is a national program designed to improve the energy efficiency of Australia's office buildings as part of the National Strategy on Energy Efficiency.

Labor's Building Energy Efficiency Disclosure Bill 2010 established a legal requirement for owners of large commercial office buildings to obtain energy efficiency information for their building and to disclose it to prospective purchasers and lessees. It also required head tenants who are subletting office space to disclose this information. The energy efficiency information disclosed is in the form of a building energy efficiency certificate. The certificate includes a star rating of the building's energy efficiency, an assessment of tenancy lighting and additional guidance on how the energy efficiency of the office might be improved.

I commend organisations which are setting a good example for others to follow in energy efficiency, such as the Hunter Water Corporation, in my electorate, which has a 4.5-star rating of its head office in Newcastle's Honeysuckle Precinct.

Not only are the energy efficiency measures good for the environment; they are also economically beneficial for building owners. It is now well documented that buildings with an environmental rating deliver better returns and so the CBD program is helping to deliver increased value in the property market.

The Building better returns report 2011 found that green-star rated buildings deliver a 12 per cent green premium in value and a five per cent premium in rent, compared to non-rated buildings.

Credible energy efficiency information helps parties to make better informed decisions and to take full account of the economic costs and environmental impacts associated with operating the buildings they are intending to purchase or lease.

In the second year of full mandatory disclosure, from 1 November 2012 to 1 November 2013, the CBD program issued 1,081 building energy efficiency certificates and 1,106 tenancy light assessments. These initiatives are making a difference. This bill will certainly assist in terms of tidying up a number of housekeeping measures that, as I have said, stakeholders have brought to our attention for continuous improvement of this program.

However, I do share, as outlined by the member for Brand, Labor's concerns around the future of the CBD program and the potential for this ongoing review to be an effective cover for its abolition. That would be a retrograde step for Australia and, indeed, it is to be avoided at all costs.

Labor supports the objectives of this bill and the efficiencies and streamlining of processes that will be achieved by its measures, but we give a warning about the review of the CBD.

Nickolas Varvaris (Barton, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in favour of this bill, the Building Energy Efficiency Disclosure Amendment Bill 2014, which aims to streamline the administrative processes of the Commercial Building Disclosure program and, in so doing, address the concerns of stakeholders about reducing the regulatory burden on industry.

This bill fits with the coalition's plan to reduce red tape and to make it easier for businesses to comply with commercial building disclosure regulations. The implementation of this bill will result in significant savings for businesses.

The amending legislation will also ensure that businesses will encounter a smaller administrative burden and less red tape when dealing with compliance relating to energy efficiency regulations. The Prime Minister has noted:

… lower taxes, less red tape, and more incentives to work harder and smarter are the key to a stronger economy and better services.

I am pleased to be able to state that the coalition is delivering on its promises to cut red tape and make it easier for business to comply with government regulations.

Currently, the commercial building sector is responsible for about 10 per cent of Australia's total greenhouse gas emissions and the coalition recognises that tackling building energy efficiency is one of the quickest and most cost-effective ways to reduce greenhouse gas emissions, thereby helping to mitigate the effects of climate change.

However, in so doing, it is important to ensure that the burden on business is not overly excessive and unreasonable, particularly in conducting transactions which are already significantly complex and time consuming.

This amending legislation aims to improve the Commercial Building Disclosure program, created under the Building Energy Efficiency Disclosure Act 2010, the BEED Act, with the purpose of allowing businesses to have greater flexibility with applications for building energy efficiency certificates. The bill also ensures that certain businesses can deal with the streamlined administrative process when complying with the Commercial Building Disclosure program.

The Building Energy Efficiency Disclosure Act aims to ensure that credible and meaningful energy efficiency information is given to prospective purchasers and lessees of large commercial office space. The act requires energy efficiency information to be disclosed in most cases, when commercial office space of 2,000 square metres or more is offered for sale or lease, in order to allow purchasers or lessees to make more informed decisions and take a more complete account of the economic costs and environmental impacts associated with the operation of commercial premises which they are intending to purchase or lease. However, under the current regulatory framework, concerns have arisen from various stakeholders about the effectiveness of the program in achieving its goals.

This government has a proven track record of engaging with industry and, in so doing, has listened to concerns and acted to ensure that we make the process of conducting compliance more streamlined and efficient for business.

The amending legislation will make a number of changes in order to facilitate this. Firstly, it will provide exemptions to building owners who receive unsolicited offers for the sale or lease of their office space. Under the present legislation businesses are compelled to provide building energy efficiency certificates when unsolicited offers are made for a potential lease or purchase of any commercial property that falls under the act.

This bill will reduce the regulatory burden on industry, by providing a time-limited exemption from the mandatory disclosure requirements for the two parties involved in a negotiation started by an unsolicited offer. Providing for an exemption in this instance will reduce the need for businesses to provide untimely building energy efficiency certificates and will lead to an estimated $0.3 million reduction of regulatory burden on businesses.

Furthermore, the amending legislation will provide for wholly-owned subsidiaries to be excluded from disclosure obligations when entering into transactions with a parent entity. The effect of this change is to exclude these non-market transactions from the requirements of mandatory disclosure which will, in turn, reduce the burden on industry.

Whilst the present legislation aims to create a more informed marketplace with regard to transactions involving large commercial premises, mandating that wholly-owned subsidiaries transacting with parent entities be compelled to comply with the Commercial Building Disclosure program does not serve to achieve this and simply adds unnecessary complexity to already elaborate transactions.

Excluding these non-market transactions from the disclosure regime will lead to a further estimated $0.3 million reduction of regulatory burden on businesses. Combined with the exemptions to businesses which receive unsolicited offers from potential lessors and buyers, these measures will see a $0.6 million reduction in regulatory burden on business.

In addition to addressing these issues, the amendment will also address the ambiguity in the Building Energy Efficiency Act in relation to the status of assessments undertaken by assessors accredited under the National Australian Built Environment Ratings System. At present, a number of NABERS accredited assessors are not accredited under the Building Energy Efficiency Disclosure Act. This means there is significant ambiguity for businesses around the status of accreditations completed by NABERS accredited assessors. In order to address this issue the amendment will confer additional functions on auditing authorities such as NABERS allowing them to directly provide or approve ratings used in building energy efficiency certificates which are required for compliance with the Commercial Building Disclosure Regulations.

The amendment will also confer two new functions on appointed auditors when conducting assessments of affected commercial property. Assessors will now be allowed to conduct audits of both energy efficiency ratings and lighting energy efficiency assessments provided or approved by auditing authorities such as NABERS for the purposes of applying for building energy efficiency certificates. The bill also aims to allow auditors to conduct audits of applications for exemptions under section 17 of the Building Energy Efficiency Disclosure Act. This has the practical effect of enabling auditing under the Building Energy Efficiency Disclosure Act of NABERS energy efficiency ratings which are conducted by the significant number of NABERS accredited assessors who have not been accredited under the Building Energy Efficiency Disclosure Act up until now. In clarifying the status of assessments that up until now may not have been made by assessors accredited under the Building Energy Efficiency Disclosure Act, the coalition will give certainty and assurance to businesses attempting to comply with the CBD regulations.

The bill also introduces the concept of having both an issue day and a start day which is later than the issue day. At present, there is no distinction between the day a building energy efficiency certificate is issued and the day that it starts to take effect. This will provide greater flexibility for businesses wishing to proactively maintain current building energy efficiency certificates for their property portfolios. The changes will also allow for a new building energy efficiency certificate to be issued in advance of the expiry of a current building energy efficiency certificate and for the new certificate to commence once the current certificates expires, creating a more efficient way for business to ensure that the certificates are up to date and compliant for their entire portfolio.

Furthermore, the act will be amended to allow for variations or revocations of an exemption to be given by the secretary of the department by way of written notice to a person with an interest in the commercial building or area to be affected. In doing so, the amendment will serve to remove the need for new owners and lessors to reapply or pay the application fee for a fresh exemption as if there is already a valid one in place for a building. This measure will make it easier for new owners and lessors to comply with the act's regulations and save them money by waiving the associated fee which under the act as it presently stands is required to accompany any application for a variation. The amendment will also ensure that the requirement for six pages of standard energy efficiency guidance text on the building energy efficiency certificate BEECH is removed. Instead, live and interactive online information about improving energy efficiency for office buildings will be provided in its place, thereby reducing the amount of paperwork that business needs to wade through in regulatory compliance.

By streamlining the work done by assessors accredited under the NABERS program, by making the process of applying for exemption more efficient and by reducing the overall burden businesses have in complying with regulations, the government has taken genuine steps to cut unnecessary red tape. In actively dismantling excessive regulatory burden, the government has not lost sight of the very real need to assist the commercial building sector to seek market based incentives to reform energy efficiency.

As I have mentioned previously, the amendments in this act demonstrate the government's clear commitment to taking into account the concerns of various stakeholders and reduce the regulatory burden on industry. At the previous election the Australian community made it clear that they wished to see a government taking action on these issues which stifle businesses and constrain growth. We have a clear mandate to lessen the regulatory burden and cut unnecessary red tape. This bill is one of the many important steps the coalition is taking to help businesses to facilitate growth. I commend this bill to the House.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Building Energy Efficiency Disclosure Amendment Bill 2014. But before I do so, I commend the member for Barton for his contribution and publicly restate my commitment that I owe him a beer—that debt will be repaid one day!

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Oh, another one you owe!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I will take that interjection! This legislation basically deals with the commercial building sector. It is important that good governments understand the role that the commercial building sector plays in terms of contributing to Australia's greenhouse gas emissions. I am informed that they contribute about 10 per cent of Australia's total greenhouse gas emissions—and, unfortunately, this figure is rising. However, the good news is that energy efficiency represents one of the fastest and cheapest ways we can reduce our nation's greenhouse gas emissions. That is what the Howard government was committed to in the lead-up to the 2007 election, and obviously the Rudd government—and it continued under the Gillard government. We believe that this nation must act. As a Queenslander, coming from the state which is arguably the worst per capita emitter in the world—there is some argument about Qatar—I understand the need to do more. It is not enough to just let things continue unabated. This legislation reflects that commitment of good government to pull whatever levers are possible.

Labor's Building Energy Efficiency Disclosure Bill, introduced in 2010, established a legal requirement for owners of large commercial office buildings to obtain energy efficiency information for their building and disclose that information to prospective purchasers and lessees—people moving into the building. The energy efficiency information disclosed is in the form of a Building Energy Efficiency Certificate—a BEEC. This includes a star rating of the building's energy efficiency, an assessment of tenancy lighting and additional guidance on how the energy efficiency of the office may be improved. It is a sensible bit of information—information that all good people purchasing a building would track down anyway, but it is creating the culture that this is the norm, that this is the standard bit of information that should be available to people when they purchase a building.

It is interesting that when Labor brought in this legislation two property industry reports showed that buildings with the higher energy efficiency ratings are actually commanding better returns in the marketplace. People are obviously prepared to pay more for the tenancies and the buildings because of this higher star rating. And switching to efficient lighting can cut tenants' lighting bills by 30 to 60 per cent. So, it makes good sense for commercial buildings to disclose as much information as possible and then to create the culture that this is the norm. And those stars are something to brag about. If you are a landlord who has a property portfolio and people want with good conscience to invest in a property portfolio, you can say, 'We only own buildings that have these star ratings.' It makes good commercial sense, it makes good environmental sense, and that is why Labor introduced this legislation and it has been largely supported by those opposite.

The amendment bill in front of the chamber now, proposed by the government, is largely a housekeeping measure in response to changes that have been proposed in stakeholder forums, and these changes will reduce red tape. Obviously when the program was brought in it started to achieve its outcomes, but we need to tidy up a few things. The changes before the chamber include providing exemptions to building owners who receive unsolicited offers for the sale or lease of their office space, and this will lead to a suggested $300,000 reduction in regulatory burden. It will also allow transactions between wholly owned subsidiaries to be excluded from the disclosure obligations. So, rather than running around and tracking down information when an entity is largely giving it to itself, there is a reduction in red tape. It also addresses ambiguity in the BEED Act in relation to the status of assessments undertaken by assessors accredited under the National Australian Built Environment Rating System program but not accredited under the CBD program. So, it is largely technical, but it makes sense to streamline this.

It will also introduce the ability to determine a commencement date for a Building Energy Efficiency Certificate which is later than the actual date of issue. This will provide greater flexibility for businesses wishing to proactively maintain their current BEECs for their property portfolio. It will remove the need for new owners and lessors to reapply or pay the application fee for fresh exemptions if there is an existing one in place for a building and remove the requirement for six pages of standard energy efficiency guidance text on the Building Energy Efficiency Certificate, as well as provide live and interactive online information about improving energy efficiency for office buildings instead. It makes sense to get rid of paperwork if the whole intent of the legislation is to decrease our greenhouse gas emissions.

The Department of Industry has appointed Allen Consulting to undertake an independent review with the purpose of assessing the program's objectives, the effectiveness of the program in promoting energy efficiency and its interaction with the proposed Emissions Reduction Fund. This needs to be seen in the context of the Direct Action climate change policy embraced by the Abbott government. That is a $2.55 billion program, or $2,550 million, committed to reducing Australia's emissions. Let us put that in context. That is about $110 for every man, woman and child, yet this program that they are committed to—that the so-called environment minister is committed to, that the Prime Minister is committed to—cannot find a friend who believes it will actually do anything effective. It is effectively giving money to polluters. That is the policy that the government has embraced. We actually saw the Prime Minister rule out ever introducing an emissions trading scheme, which is, as every economist knows, the best and quickest way to obtain a price on a product.

So here we have the party of Menzies abolishing markets, saying that we will never have a market for something that is going to cause harm to our grandchildren and our great-grandchildren, and causing harm to farmers right now. The Prime Minister has said—

Dr Jensen interjecting—

I will take that interjection from the member for Tangney, because remember your policy, the very policy that your party has embraced, is to combat climate change. So, come in spinner! I am looking forward to your contribution on this, because it is always out there. Your contributions are almost at Mars when it comes to climate change. So, the member's party has committed to spend $110 for every man, woman and child in Australia to combat climate change. But we cannot see how it will work. The real risk is that you give some polluters money to not pollute, but then other polluters can step up—because there is no cap on what Australia's emissions could be—and just be able to increase their emissions. There is no cop on the beat, there is no market mechanism to ensure that that does not happen.

So we are going to have every man, every woman and every child in Australia paying $110, all for a mirage. I think the member for Fairfax extracted out of this government a commitment to provide a report on whether there should be emissions trading. They paid $2.55 billion for this report, but the Prime Minister has said, 'We will ignore that report'. So everyone in this chamber should take out $110 and just give it to the environment minister and say, 'Don't worry about the report, because you're just going to waste that money.'

We saw at the G20 meeting that Australia is not in step with the rest of the developed world. We saw China and the United States embrace action on climate change. We have seen India, which is buying a little bit of coal from Queensland, sidestepping that whole coal-fired power generation stage—in terms of bringing those hundreds of millions of people in the rural areas out of poverty—and, instead, they are going to go into solar and the other renewables.

The reality is that Australia had a golden opportunity, under the Labor government in the 42nd and 43rd parliaments, to be ready for a carbon-constrained global economy. Instead, we have lost that opportunity. Those billions of dollars of infrastructure investment in renewable energy have now evaporated and gone to other places—gone to sunnier places, gone too windier places than Australia. Instead, we have a government that fundamentally does not believe its own policy. That weathervane of a Prime Minister is prepared to sacrifice $2.55 billion for something that he actually, one day or another, does not believe in.

This legislation, the Building Energy Efficiency Disclosure Amendment Bill, is part of that Labor legacy of changing the culture. I saw it in Brisbane during the droughts in the early part of the noughties, where the dams in Brisbane were down to nearly 16 to 17 per cent water and suddenly Brisbane, a subtropical city, changed its water consumption patterns all but overnight. I have seen cultures change quickly, and that is what was happening under the Labor government in terms of responding to climate change.

We are obviously the party of jobs. We are not the magic-happens, crystal-hugging party that does not believe in jobs. We are the party of jobs. We wanted Australia to transition in a realistic way so that we could look after the jobs in the mining sector, look after the jobs in manufacturing and the like and end up with jobs in the long term.

Where were the jobs being created under Labor? They were in the renewable energy sector. We have had nearly 71,000 more unemployed people under this government since they came in last year. They do not understand jobs and, worse than that, they do not understand the future, the challenges that are coming our way. We know that there are some revenue collapse issues coming our way, and all the braying of those people that occupy the backbenches up there in the third 15 corner are not going to change that reality. Australia needs to be prepared for a carbon-constrained future—that is the reality.

This legislation is not something for Labor to be concerned about; however, obviously the review that is coming might be something that we need to look at. Under Labor, we did flag that eventually this model of providing certificates for buildings would turn into a cost-recovery model. That was something flagged by the Labor government when it was announced, because the program is only funded for five years. However, this is an opportunity for the government to show its leadership—not mislead, leadership—and make sure that this program continues. Because it is slowly changing the culture, and it will then flow out into households so that when people buy their home, buy their building, rent their building, rent their home, they will be saying, 'What are the long-term costs associated with this?' Because there are many things that can be done early.

That is another reason why this Direct Action policy will not work. That is because almost all of the low-hanging fruit has gone. That is why this $2.55 billion white elephant of a policy is not going to achieve the goals that they are talking about. Ken Henry suggested that it could cost up to $4 to $5 billion per year between now and 2020 just to get to the government's five per cent reduction target.

So it is going to cost even more taxpayers' dollars to achieve the target, or the Prime Minister will have to give up on his attempt to reduce Australia's carbon pollution, and that would make us even more of a pariah. Canada is happy to commit the world environment fund so that Canada gets it. The Prime Minister's only friend at G20, when it came to climate change, Canadian Prime Minister Harper, still understood that climate change is real. You might have a few people that scoff and surf the dark edges of the internet for some crackpot scientists wearing tinfoil hats that support their programs, but that is not the reality of the CSIRO and the mainstream science. The reality is—

Government members interjecting—

Member for Tangney, I know you have a tinfoil hat at home—I understand that—but the reality is that Australia needs to act on climate change; otherwise, we will miss out on economic opportunities and miss out on jobs and, worse, people will start to see us as a trading pariah, and that will be bad for our farmers, bad for our jobs, bad for our manufacturers and bad our grandchildren, who will be lining up to slap the people that betrayed Australia.

Dennis Jensen (Tangney, Liberal Party) Share this | Link to this | Hansard source

It is very difficult to follow a comedy act, but I will try.

We shape our buildings, and afterwards our buildings shape us.

So said Winston Churchill, and today we invoke such vision and leadership. The coalition government prides itself on being responsible stewards of the Australian economy. The primary focus of this amendment is to peel back the overregulation that detracts from the purpose of the legislation in its initial form.

The Commercial Building Disclosure Program, supported by the Building Energy Efficiency Disclosure Amendment Act 2010, has been one of the most cost-effective attempts at reducing energy use in commercial buildings. With reduced use comes reduced costs. That is a real win for business. With this amendment bill we have the opportunity to streamline administration and reduce the regulatory burden on business. This amendment, a savings multiplier, is necessary and called for by the community. I have spoken before on the importance of keeping the regulatory burden subdued. Key to this is focusing on regulatory amendments that help keep compliance costs down. Compliance costs are a wet blanket on the flame of free enterprise and competitive business. Overregulation is the 'hungry, hungry hippo' of the economy. Unlike the lovable children's board game, overregulation leaves everyone the poorer—the people, the economy, the nation.

By passing these building efficiency amendments the government will reduce the regulatory burden on industry, streamline the administrative process of the Commercial Building Disclosure program and address concerns of these stakeholders who have been waiting years for these amendments to pass. These amendments will modify the Building Energy Efficiency Disclosure Act. That bill required sellers—

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour and the honourable member will have leave to continue his remarks when the debate is resumed.