Ian Campbell (WA, Liberal Party, Minister for the Environment and Heritage) Share this | Hansard source

We have two problems with the proposed amendments. Firstly, what we are doing by requiring those within the terms of the bill to be captured is to embrace something like 60 per cent of the energy use by businesses in Australia—around 250 companies. We are requiring them to spend a lot of money. It is a big expense. The rationale for this—and I am biased of course—is a sound one. We are requiring 250 companies to spend a lot of money and, by doing that, we are capturing more than half of Australia’s energy use in the equation.

On our best estimates at this stage, by lowering the standard to 0.2 petajoules, you will capture somewhere between two and three times the number of companies—so you are massively expanding the reach, which I am sure is what Senator Milne would like us to do—but there will be only about a 10 per cent improvement in the size of the energy market. So by capturing nearly three times the number of companies you only go from 60 per cent to 70 per cent. So the efficiency of the measure drops off rapidly.

I know that there is a philosophical difference between the government and Senator Milne on this issue, but we believe that by mandating that these 250 companies not only go through an incredibly expensive energy audit but also are required to report annually on the implementation of the audit you will do a couple of things. Firstly, you will create a public register, effectively, of all of these companies using all this energy showing what they can do to reduce their energy use and become more efficient and annual reporting on what they are doing. So you will be able to identify the best practice companies and you will also be able to identify any company that is falling behind best practice or becoming a laggard, which might have been a word that Senator Milne used. You create a new public accountability process—a league table, effectively—of companies in terms of their performance in reducing energy use, increasing efficiency and, of course, reducing greenhouse gas emissions.

The other thing you will do is create a large demonstration effect. You will create efficiencies and economies of scale in the very business of doing energy audits because you will have this massive number of energy audits. It will be a lot more affordable. It should bring down the price of going through this process for a lot of those second-and third-tier companies that Senator Milne is talking about.

So I think we are aiming in a similar direction. We are very cautious about putting in new levels of red tape and new costs on top of businesses because ultimately that flows through to consumers and puts up the cost of living for people. We want to achieve the very best we can for improved energy efficiency, improved greenhouse performance and improved environmental outcomes and do so with the lowest possible cost to the consumer and to the economy. We think this is the right policy setting to achieve it. I respect the fact that Senator Milne would like a more interventionist, hands-on approach. We are trying to do it in a way that minimises the cost to consumers, particularly low-income earners.