Steve Hutchins (NSW, Australian Labor Party) Share this | Hansard source

After 11 years of inaction, denial and neglect, Senator Bernardi, Australian working families made it clear that they wanted a government prepared to act decisively on this issue and tackle climate change head on. Labor made a commitment to do just that.

The Rudd Labor government has taken that commitment on board and run with it. Within weeks of forming government, we had negotiated Australia’s ratification of the Kyoto protocol at the Bali climate change conference. Now we are taking the next steps by patching up the holes and tightening the loose screws on the National Greenhouse and Energy Reporting System. The ultimate purpose of these amendments is to fix the problems created by the previous government’s failure in developing the administrative procedures to be followed and their failure to consult with stakeholders about the legislation.

The then member for Kingsford Smith, now the Minister for the Environment, Heritage and the Arts, was particularly scathing when, in his speech to the second reading debate in the House of Representatives, he referred to the ‘sloppy’ drafting of the original bill, the National Greenhouse and Energy Reporting Bill 2007. The Senate Standing Committee on Environment, Communications, Information Technology and the Arts found that, while the relevant stakeholders supported the intent and purpose of this scheme, they had not been consulted in the drafting process and as a result there were a number of flaws. This amendment seeks to rectify those flaws. The goal of the national reporting system is to unify the mishmash of local, state and Commonwealth reporting requirements that have been imposed on industry and effectively create one national scheme for greenhouse emissions reporting.

Minister Wong and the government have been working cooperatively with Australian business and state and territory governments to implement the National Greenhouse and Energy Reporting System. These amendments have been developed in consultation with these stakeholders. By streamlining the existing greenhouse emissions and energy reporting requirements on business, the Rudd Labor government is seeking to reduce the red tape faced by business.

This process is not being developed in isolation; the streamlining of reporting is being pursued with state and territory governments through the Council of Australian Governments’ Working Group on Climate Change and Water. This reporting framework will underpin the planned Carbon Pollution Reduction Scheme due to commence in 2010. The National Greenhouse and Energy Reporting System will collect data across the Australian economy that will underpin the Carbon Pollution Reduction Scheme and provide better information to the public.

The amendments to the act are minor administrative amendments. They will make mandatory the separate disclosure of scope 1 (direct) and scope 2 (indirect) greenhouse gas emissions. Scope 1 emissions, for Senator Bernardi’s benefit, are those that result from an activity or a series of activities that constitute a facility—that is, they are the direct result of the facility’s activities. Scope 2 emissions result from activities that generate electricity, heating, cooling or steam consumed by the facility but do not form part of the facility. Scope 2 reporting is internationally accepted as a standard component of corporate greenhouse gas emission inventories. The government has committed to publicly disclosing scope 1 and scope 2 emissions data separately—a practice that is widely supported by data users—and will ensure that publicly available data is usable and relevant. This is something that those opposite would have realised had they bothered to consult when drafting this legislation.

These amendments will also require any member of a corporation’s group to provide assistance to an external auditor during audits of the corporation to ensure the integrity of the external audit regime is maintained. There is no sense in developing a scheme like this without putting in the proper enforcement and accountability measures. This amendment will fill a glaring hole in the legislation as it stands.

The last two changes that I want to take particular note of are provisions that were raised by the Treasurer in his second reading speech. The first deals with a gap in the legislation that would have made life very difficult for business. Under the current act, corporations could only register to participate in the scheme once it was established that they had reached the emissions threshold. There was no provision to register in anticipation of this, meaning that any business new to the scheme would encounter a great deal of difficulty. These amendments will allow corporations to register for reporting before an emissions threshold is met, rather than having to wait, thus removing a red-tape burden on business.

The second deals with the reporting of carbon offsets outside the regular business of a corporation. Currently, the act only allows offsets to be reported if they arise from a project carried out by the corporation. This would exclude the possibility of reporting offsets created by the activities of a different corporation. An example of this would be an airline offsetting its emissions via tree-planting activities. Should this continue, it would be a significant disincentive to investing in carbon offsets—which any government that is serious about tackling climate change should be doing its utmost to encourage. Again, this is another significant gap in the legislation that was a result of sloppy drafting and a lack of consultation by the previous government.

These amendments do not increase regulatory burdens on industry or have any budgetary impact. They are designed to improve the administrative operation of the National Greenhouse and Energy Reporting Scheme. They are designed to better reflect the original policy intention of the current act and, if passed, will make it easier for business to comply with their reporting requirements. If anything, these amendments will make compliance easier for business. This system will, by the 2009-10 reporting year, reduce the number of reports that businesses are required to submit under the existing greenhouse and energy programs across Australia. The Rudd Labor government is simplifying the system and making it easier to tackle climate change head-on.