John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

We are dealing with Australian Greens amendments (1) and (5) to (7) on sheet 4784 revised, moved by Senator Milne. The question is that amendments (1) and (5) to (7) be agreed to.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Just to remind the chamber where we are up to, when we finished debating the amendments on the last occasion, the Minister for the Environment and Heritage, Senator Ian Campbell, had just responded to amendment (1) that I was putting forward. The amendment was to accept, in principle, a national energy efficiency target and to move that the Senate set up a task force to work out how that target would be implemented. The amendment also requires companies to do as the government asks—that is, to do an audit of the energy efficiency opportunities that may be available to them—but my amendment goes further and requires companies to implement that target. Also, it would require them to have a payback period.

As it currently stands on the sheet circulated by the Chairman, we are dealing with my amendment (1) on sheet 4784 revised. I ask senators to be aware that we are looking at the revised sheet. I ask leave to also incorporate amendment (2) in this body of amendments. So, when we vote on this tranche of amendments, it would include amendments (1) and (2) and (5) to (7), as they all go together.

Leave granted.

I move Australian Greens amendment (2) on sheet 4784 revised:

(2)    Clause 4, page 2 (after line 8), after the definition of monitoring warrant, insert:

payback period means the period of time it takes to recoup the cost of the initial capital outlay of an energy saving project.

I add this amendment to the amendments I mentioned before. I would like to speak to them now and respond to Senator Ian Campbell. Senator Campbell said, in his rejection of my proposed amendments, that there is a moral imperative to see strong economic growth continue. He implied that, by requiring companies to implement the findings of their energy efficiency audits, somehow that would not be good for economic growth. Once companies have identified the energy efficiency savings, my amendment says that they must implement those measures if they can get a payback on those measures within two years. It is not going to impact on economic growth because if the company gets the audit and it says, ‘You could take this measure, but in fact you wouldn’t get a payback on that for 10 years,’ my amendment would not come into play. My amendment is saying, ‘Let’s force them to implement the audit findings.’ In the first stages, between 2006-07 and 2007-08, we would say to them, ‘If you can pay it back and if you’re going to get benefits within two years, do it,’ and then it would gradually extend it to a four-year payback by 2010-11 and 2011-12. That way you gradually increase the pressure on companies to implement the findings.

I do not accept the minister’s statement that an interventionist approach such as this would have larger costs to industry, because he also went on to say later that in fact the idea of this is that companies would identify the savings and, once they have seen the savings as a result of their audit, naturally they would implement them. That is where my difference with the government is in regard to this. There has been no evidence to date to show that companies, when they have looked at what they could do in a voluntary capacity, would actually go ahead and do it if they have other short-term imperatives—for example, expansion and other things that the company’s strategic plan might have in place. This is not asking them to lose money. All this is doing is requiring them to prioritise energy efficiency over other strategic objectives that they may have in their company’s forward planning process. What the Greens are proposing will in no way undermine the bottom line.

The other thing that it will do is give a level playing field to the companies who want to do the right thing. At the moment, the government’s bill applies to the 250 largest energy users in Australia. What if they all do their audit as required by the government and they all see before them a number of initiatives that they could take which will cost them some capital in the short term? If those companies that want to do the right thing take those measures in the first three or four years, there will be a capital up-front cost. Then there will be the laggards who have no intention whatsoever of taking on those up-front costs. So the progressive companies will have a barrier to doing the right thing because they will be constantly held back by those who have no intention of doing the right thing. If you want to reduce greenhouse gas emissions in Australia and reduce the amount of energy that companies use, you have to allow the good, progressive companies to take the action they need to take without then being at a disadvantage on a non-level playing field.

This just goes to pure, simple, sensible economic management. I have talked to a lot of people in the private sector. What they have said is that they do not mind government regulation but they do not like being told how they have to do it. I am proposing that the government’s measure with my amendments would do exactly that. It would set a regulatory framework that would require them to do an audit and tell them they must implement the audit. But, as to how they do that, the measures they take are the measures they identify for themselves. I do not see a downside in the amendments I am proposing. Furthermore, I am proposing a strategic plan of identifying a national energy efficiency target for the long term. I am not suggesting how that target would be developed or how it would be implemented. What I am proposing is that the government moves to set up a task force which, within the next 18 months, would report and work out how to actually do that, as indeed has occurred in many European countries.

Finally, the government makes the statement that the Energy Efficiency Opportunities Bill will apply to the 250 largest companies and it will have a good outcome because it will reduce energy use. That is the leap of faith that the government makes. I would like the government to identify what its performance objective is and where the accountability is in this bill. I am proposing a mechanism which would give accountability. The minister has identified 250 companies. I am asking the minister to stand up and tell the Senate what he identifies as his objective energy saving as a result of this bill and what the time frame is, because there is no time frame either. I would like to know exactly how much energy he anticipates saving in the next three years as a result of this legislation. What is your target? What do you require these companies to save? If they do not, will you then move to do as I am proposing and put in a requirement to implement these particular measures?

It is no use going with this plan in the same way that the government currently is going on greenhouse. We have to reduce greenhouse gas emissions by 60 per cent in the next 50 years, yet there is no mechanism for doing it. There is no target to say whether we are on track, what our objective is and how we measure anything against it. The criticism that I am putting to the government now is that it is putting something out there which says, ‘Do an audit,’ and by osmosis the audit will lead to a reduction in energy use. I am asking the government to give us the target so that we, the Senate, can measure the government’s performance on energy efficiency as a result of this legislation by determining the performance level of the 250 largest companies in response to its legislation. If you do not have a target then you are just talking hot air about energy efficiency. We will not know for the next couple of years how many companies actually implement any measures as a result of the energy efficiency bill.

The downside and the big cost of this is that state governments right now are considering building new energy infrastructure at great cost to the taxpayer. The Australian taxpayer is once again subsidising energy use by large companies while the federal government is not prepared to put any pressure on them to use energy efficiently. We all know that energy efficiency is the cheapest way of saving energy. It is the low-hanging fruit in the whole energy debate. We do not need to be building new power stations and new sources of supply if we can reduce the volume of energy being used by the same amount that those new power stations would bring online.

I spoke last time about the potential to run a major education campaign to let people know that, when they turn off their energy appliances at home using standby remote control, they are actually using energy. About 12 per cent of energy use in Australia occurs when people are not there and they thought they turned the appliances off with the remote but in fact they are still using energy. There are a number of ways of doing it. My point here is that, with state governments moving again to look at the supply issue, why can’t we see energy efficiency as a substitute for new supply by saving the same volume that would be provided through development of new infrastructure that would cost a great deal more both in upfront capital cost and cost to the planet through greenhouse gas emissions and long-term problems?

And so I put to the minister that, rather than just reject the amendment I am putting forward, he should respond to the criticisms I am making. What is your target for these 250 companies? How will we judge whether this initiative is a success or not? If it is not a success—if you have not reached your target in the next 12 months—will you then do as I am asking and have a requirement to implement the audit findings over a period of time, where there is a reasonable pay-back period, and to provide a level playing field for progressive companies instead of continually rewarding those who are not and will never be prepared to do the right thing until they are required to?

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

The Democrats will support the amendments moved by the Australian Greens. The problem that we have at present is that there is no significant driver for energy efficiency in this country; electricity is still cheap enough for big corporations to ignore this as being an issue for them. I recognise the problems associated with putting up such complex amendments as these. I also realise that the government is not likely to agree to them. But I also sense that there is deep frustration on the part of non-government members in this place about the lack of progress on this issue. This is an attempt, and I congratulate Senator Milne on it, to put in place measures which could provide that driver.

I will give an example of where big industry does not take up measures which have very short payback periods: cogeneration. Cogeneration is a system for use where, mostly in big manufacturing operations, a lot of heat is generated. Cogeneration can harvest that heat and use it to generate electricity, usually with the use of natural gas and generators. Enormous savings can be made over time as well as energy being fed into the grid. But when last I looked at the figures, only a very small proportion of the potential for cogeneration had been picked up. That is despite the fact, as I said, that the payback period is very short.

As Senator Milne has already indicated, the problem is that businesses make their decisions on infrastructure based on other priorities. If the government were really serious about getting across to them the message that Australia has to reduce its greenhouse emissions massively—by at least 60 per cent by 2050—this would be one very good way of doing that. I would hope that the minister, if he rejects this out of hand, which is what I think we are all expecting, will at least take up some of the ideas and come back to this place in the future with legislation which puts in place something similar. To reiterate, the Democrats, like so many people in this country, are disappointed that there has not been much of an effort at all on energy efficiency. Voluntary measures have not worked up until now, and there is no reason to suggest that they are going to work over the next five or 10 years either. This is a mechanism which would at least ensure that they do.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

The opposition acknowledges that there has been some serious thought put into the propositions embodied in the amendments that have been moved by Senator Milne on behalf of the Australian Greens. As Senator Allison has conceded, this is a complex set of propositions with, I think, quite laudable aims in terms of promoting the achievement of energy efficiencies and putting in place a number of measures to require corporations to identify the areas in which those savings can be achieved. They are complex, and that complexity is something that the opposition would rather look at and assimilate in a better time period than is available for the consideration of this legislation.

That in itself does not completely direct our consideration of the amendments. As I intimated earlier in this debate, our concerns also arise because this would become yet another measure creating a slush fund for the government to administer. The amendments put in the hands of the minister the distribution of moneys collected under these measures. Those moneys are to be expended at the discretion of the minister on particular projects. I have had some involvement, through this place, in looking at measures administered by this government where ministers had the final say on where particular moneys—accumulated under this or that budgetary measure or by the collection of revenues, such as the levy on milk products—were spent. I have seen the way that the government has abused the process of distributing those funds to garner political advantage. Looking at the Dairy RAP program, we have seen millions of dollars distributed across the country, not necessarily into the areas most affected by dairy deregulation but into areas which the government considered advantageous for it in the electoral advantage that such expenditure might garner. We saw such edifying propositions under Dairy RAP as the expenditure of moneys for a private school in Toowoomba for running wine appreciation classes. That was supposed to help the dairy industry in the Toowoomba region. In Beaudesert it was used to fund the purchase of property for a polocrosse field. There was of course a world-class polocrosse facility within an hour’s drive, but that did not stop the funding of this facility. As I understand it, it is not much more than a paddock with a shed, a gate and a sign. But that expenditure enabled the announcement to be made and some political advantage to be generated.

Of course, under the Regional Partnerships program, better known to the public as ‘regional rorts’—and this is probably most germane to this legislation—we have seen an amount of money approaching $1.2 million paid to a company called Primary Energy Pty Ltd. Primary Energy Pty Ltd have an idea. They have been funded for that idea. They do not have financial backers; they do not have an ethanol plant under construction; they do not, indeed, have any idea of when they will actually have that plant under construction. The final amount of money—a small amount of the original grant of something in excess of $1.2 million—will be paid when they finally get a financial backer. In excess of $1.1 million has been paid to Primary Energy to date to achieve precisely nothing. Of course, when I say ‘nothing’, I mean that there was nothing in it in a public sense. But, in a party political sense, we have seen a series of announcements and the promotion of the expenditure of this public money as an opportunity for the electorate of the then Deputy Prime Minister in the seat of Gwydir.

So we have seen the government administering these pots of money under various programs, allegedly to promote particular outcomes, and in some cases achieving them. But, in many cases, they achieve not the promotion of the public interest but the promotion of the political interests of the National Party and the Liberal Party, depending on which part of the country this falls in. We saw on the weekend the release of another paper that analyses a number of government programs, including the Roads to Recovery program. The Prime Minister promised that the Roads to Recovery program would not be used to advantage coalition seats, yet a Mr Leigh from ANU published a paper on the weekend that shows that there is a weighting in the Roads to Recovery program in funding National Party and Liberal Party seats, giving them an advantage over non-government seats, and attributes to that funding an outcome in terms of votes. I have called for the government to respond to that paper because it makes a very serious allegation. The Prime Minister, in the case of the Roads to Recovery program, faithfully promised that it would not be used in any way to distribute funds disproportionately or to the advantage of the coalition, yet that is precisely the allegation made in the paper Mr Leigh recently produced that has been the subject of some discussion over the weekend.

We want to acknowledge that in many respects this is a worthwhile proposition that has been put forward by Senator Milne, but we still think it needs some work done to it and we are not happy to give our support to a proposition that would create yet another slush fund for a minister of this government to administer when its form, in relation to those propositions, has been so bad.

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

I think I would be more amused to see Senator Milne respond to that fairly pitiful approach from Labor, which I guess reflects the total paucity of any policy ideas when it comes to greenhouse gases or climate change. They have not had a new policy in 10 years. I guess it would be shocking for Senator Milne to expect anything greater than a repeat of the Labor Party’s hatred of regional Australia and Regional Partnerships programs and the continuing attack on Primary Energy, the company of which Ian Kiernan is chairman, after a personal attack on Ian Kiernan recently. Then, of course, there is a slamming of the Roads to Recovery program, which picks up so much of the road funding that is required around Australia because state Labor governments, state by state, have dropped the ball in relation to road funding. These are direct grants to local governments to build roads. I think Senator Milne’s propositions deserved far more attention than was given by the Labor Party.

During the last sitting week I set out the reasons that we were opposed to the more interventionist approach of Senator Milne, but I do not think it is fair to say, as Labor has said, that it is a complex set of arrangements. I do not think it is that complicated. I think Senator Milne proposed the establishment of a task force with four members. This task force is to be established within three months. The task force would report to the minister within 18 months of the commencement of the act. The minister would have to make the report public. You would establish an energy savings fund, which I imagine would be funded by the industrial corporations or companies required to comply with this part of the law. The fund would do certain things: promotion, public awareness building and encouraging energy savings, for example. I do not think it is a complex set of proposals at all. I think it is a cop-out for Labor to say that it is too hard for them to devour this over the last 10 sitting days and come to a conclusion on it.

My view, however, is not as negative about the response that Australians make to the need to protect our climate, to protect our environment and to do so through voluntary measures. The history of the past decade or so shows how the government works in partnership with the private sector, and we have done that very effectively through the Greenhouse Challenge Plus program. We work with them, for example, through the Solar Cities program. There are 11 fantastic short-listed proposals—private-public partnerships again, which I think will transform the impact of the roll-out of renewable energy across Australia. We work together in a range of programs: the building energy rating systems that the Commonwealth has supported; the water energy labelling systems, which again put information into the hands of consumers; the appliance rating systems—all of these world leading systems have the government working in partnership with the private sector to inform people about the consequences of their decisions.

In a way, this mandatory measure—it is not a voluntary measure—mandates for the first time in Australian history that around 250 companies, our biggest energy users, representing around 60 per cent of the energy consumed in Australia, will be required to make an energy efficiency audit and to publish those audits. They will also be required to publish compliance with those audits. That puts a very powerful new measure in place. I think it is unfair to the Australian community and to Australian industry that have in fact responded so strongly, community by community, business by business, household by household, to the challenge of sustainability. How do we ensure that we have a strong economy with job security where people can look forward to the future knowing that they will have an economic environment where their children can get an education and jobs and where the main breadwinners in each household will have some job security? How do we also ensure that they live in that environment of economic security alongside a natural physical environment where the damage done in the past is being repaired and that environment is made sustainable for the future?

More and more people are becoming aware that we cannot keep pumping greenhouse gases into the atmosphere at the rate we have in the past. We have put about a trillion tonnes of carbon into the atmosphere over the past 150 years. If we do not make the sorts of changes that we are part of making here today, we will pump another couple of trillion tonnes into the atmosphere over the next 50 years. The consensus of science says that that could change the climate dangerously and put at risk not only human life but also ecosystems across the planet. We have to find the most efficient and the most effective ways to do what Senator Milne says. It would be terrific—an incredible economic and environmental outcome—if you could, through energy efficiency measures, save us building a couple of fossil fuel powered stations.

Senator Milne is quite right: the state governments between them have about 25 fossil fuel powered power stations on the drawing boards at the moment, and yet they have the temerity to blame the Commonwealth government for not setting up a carbon-trading scheme. They do nothing themselves. They have virtually no program other than very small greenwash proposals to put the odd solar cell on a library here and there or change 20 per cent of the ministerial car fleet to Priuses—all those sorts of greenwash things. Virtually no state government has any serious public investment program to substantially change the greenhouse footprint of Australia. They do have 25 fossil fuel powered power stations on the drawing board, and many of them will get built to fund the increasing number of desalination plants that they have got on their books. So the states really are getting away with murder when it comes to greenhouse gas policy. They can always point the finger at Canberra, but the reality is that here in Canberra the government is committing billions of dollars to investment programs and we are bringing in this new mandatory measure for Australia’s top 250 energy-consuming companies.

I think that Senator Milne is making a very good point in terms of the payback period. Companies will have to look at the payback period of all of these investments and they will have to make an assessment of where they put their investment. The reality of these audits is that for the first time many of these companies will see the bottom line benefits, the energy consumption benefits and the greenhouse gas benefits of reducing their energy use and improving their efficiency. Perhaps, for example, in the case that Senator Allison raised, going to cogeneration will force many companies, for the first time, to look at how they better use heat from existing processes and whether they can use that heat to produce energy and to save energy from the grid and from fossil fuel powered power stations. They may well do it. I think this is a substantial step forward. I think the higher regulatory approach that Senator Milne puts forward would not be effective in the view of the government in improving Australia’s energy efficiency.

Senator Milne asked me to say what this bill’s objectives were and how we would measure effectiveness. We will measure effectiveness when we see the 250 companies do their audits and publish their audits and their compliance. That is what we seek to set out here in terms of the overall targets that the government has set our country. We have set our country a target of limiting our greenhouse gas emissions to 108 per cent of 1990 levels. That is our Kyoto target. We are on track to achieve that. There are many risks to achieving that in a rapidly growing economy but, according to our latest figures, we are on track to achieve that target. We are one of the few countries in the world that is on track to achieve it. Of the annex 1 signatories, the handful of countries that have commitments under Kyoto—and I think there are only 35 of them; less than a third of the world’s emissions are covered by Kyoto—very few will meet their targets through domestic action, as Australia will. That is our target. The government also accepts—or, as the environment minister, I accept—that the globe needs to reduce greenhouse gas emissions by around 50 to 60 per cent by about the middle of this century, as Senator Allison has said. Australia cannot do that unilaterally. Australia may actually be able to make a bigger contribution or it may make a smaller contribution, but the target for the world is a 50 to 60 per cent reduction in greenhouse gas emissions.

Australia has also committed, as a very high policy priority, to take on its share and its role in achieving that target as a responsible member of the international community. That is why we are deeply engaged in all of the international processes through the UN Framework Convention on Climate Change, through the G8-plus process and through the Asia-Pacific climate change partnership through a series of technological partnerships and a world-leading program of domestic action.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

There are a couple of other things I want to mention. The minister keeps referring to the appliance-rating system as an example of the government’s energy efficiency measures. It is one of the recommendations that came out of the urban water inquiry that was conducted. For the record, I remind the minister that that was not a government initiative; it was in fact a Democrat initiative. The government came to us and said that they wanted to transfer some money out of a fund, which we were a party to negotiating, into other programs, and this was our suggestion. The point is that we did not sit around waiting for the appliance industry to do audits to see whether they would like to put rating systems on. They had shown no interest in this matter up to that point. It only happens when government acts and says, ‘This must be done and it must be done by this date.’ I hope that the mandatory labelling system that applies to appliances will soon move to a mandatory energy efficiency rating so you will not just see how many stars you have got but you can be sure that the appliance you buy meets minimum standards. That is where we need to be moving.

I think we have given big industry lots of time to look at their energy efficiency and where it might be going. Now is the time for us to move from what is a voluntary measure. They cannot possibly say that the government is not interested in reducing efficiency. Given Kyoto and the great debate there is around greenhouse, they cannot possibly say they have not noticed that this is an issue or that a lot of people in this country would like them to move to greater efficiency. To think that if they have an audit they will suddenly change their mind about this is ludicrous and laughable. That is the reason, Minister, that some of us in this chamber are talking about obligation and the need for the government to put in place that obligation.

I have a question. I am not sure whether I missed this in the debate. Regarding the 250 companies that are required to report that they have conducted audits, is there a reporting-back process that indicates when and if they accept those audits and go on to do the work which is demonstrated to be viable?

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

Yes, it is an annual public report. We did cover that earlier.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I appreciate the minister saying that they will judge the performance of this legislation on the basis of the number of companies that comply with the mandatory requirement to audit, but that is not the point I was making. I am expecting that they will all oblige and meet their mandatory obligation to audit the opportunities they have for energy efficiency. I think the minister well understands the point I was making, which was not whether they agree to do their audits and then do them but what government then expects them to do. You are putting a lot of faith in companies doing the right thing after they have done their audits.

I agree with you that if you are a company it makes sense to want to save money, and if you find a way of saving money it is not very sensible to think that you would not take that action. But the point is that companies have a number of competing objectives at various times and, unless you prioritise energy efficiency, they may well choose to spend any capital they have up front on other initiatives rather than investing in energy efficiency, even if there is a relatively short payback period. I do not think two years is excessive. That is the absolute easiest hurdle. It is not an unduly harsh measure to propose that they identify energy savings that will pay them back in two years. Then it can be taken out to four years over a period of time so they know what is coming.

I still have not heard the minister respond to the idea that, by failing to have a mandatory requirement for them to implement, you are not creating a level playing field. You are not offering an incentive to progressive companies who might wish to take that action but might see themselves as disadvantaged with respect to other companies who are not required to take that action and are able to spend their money on other things. That will slow it down. That is why I will be moving an amendment later in relation to a performance objective to force a requirement to look at this in a couple of years.

But again, it will be a lost opportunity. There is a lost opportunity factor. The minister talks about Australia’s compliance with Kyoto. Let us remind ourselves: the only reason Australia will come in—if it does—on our target of 108 per cent of 1990 levels is the windfall gain the Australian government was able to achieve by counting the avoided emissions from stopping land clearance. It is not because we have reduced our greenhouse gas emissions in either the transport or the energy sectors. If you take out the one-off windfall gain Australia got under the Kyoto arrangements as a result of its land clearance policy, you find that Australia’s emissions in the transport and energy sectors are well above—20 to 30 per cent—the Kyoto level.

Let us be realistic; let us not kid ourselves about Australia performing or outperforming other countries on the Kyoto targets. We got the most generous target in the world—an eight per cent increase on 1990 levels while other countries tried to set themselves reductions. Having got that generous target, we have had the windfall gain. You cannot have many more windfall gains unless you manipulate the system in order to generate credits from something else so you do not have to take any action.

I am talking about the transport and energy sectors and, in the case of this bill, the 250 large companies in particular. I am not persuaded about this, having looked at the aluminium sector, some of the other big industries around Australia in the last few years and the subsidies. They already get incredible subsidies for bulk power contracts. I have not seen them take energy efficiency initiatives so that when the bulk power contracts run out they can continue to compete. I am seeing them now mounting major pressure on governments to continue bulk power contracts rather than reduce their dependence on energy.

As to the state governments, you are absolutely right. It disgusted me to see the previous Carr government in New South Wales—I recognise that the former Premier has now left politics—set up a greenhouse gas office and approve a new coal fired power station and a desalination plant. It is the height of hypocrisy. It disgusts me. Then I look at South Australia and I see BHP Billiton’s planned Roxby Downs expansion. In order for that to happen, they want the government to build them a desalination plant so that they have the water to sustain the increased mining of uranium, to send that offshore. The whole thing is a disgrace. I do not see BHP Billiton—except in the headlines over the Wheat Board scandal of course, undermining appropriate processes and systems around the world—out there accepting the full-cost responsibility of anything they want to do. No; they have their hands out for the government and the government is rushing to help them, not only with a desalination plant but also to subsidise their expansion through the provision of energy to run their desalination plant.

It is time that people started to look at the whole cradle to grave aspect of production and energy costs, because energy is embedded in everything. I think we should recognise just how urgent the crisis is. We need action now. We cannot wait for companies to get around to it. That is why I do not accept the minister’s explanation about how you are going to judge the performance, the effectiveness, of this legislation. I will not be judging the effectiveness of this legislation on whether companies comply with the need to do an audit—I expect they will. But I want to know, in the absence of a mandatory requirement for them to implement the findings of these audits, at what point the government is going to say: ‘These 260 companies use X amount of power now. If they have not reduced that power consumption as a result of these audits within three years and by X amount then we will take some action to force the implementation.’ That is what I want to hear from the government. I cannot understand why you have an objection to moving on this now, especially when, as I have said, there is in my view a very generous two-year payback period. That is the concern I have.

As to the Labor Party’s opposition to the amendments, I am disappointed, because there has been quite a period since we last sat for the Labor Party to think about and look at these amendments. I did draw them to the attention of the shadow minister. There has been adequate time to look at them. It is another lost opportunity to move forward on this, especially when I recall that, Senator O’Brien, in relation to the Greens sun bill a few years ago it was the Labor Party that derailed that Senate committee report into the implementation of the Sun Fund. That was another attempt by the Greens to generate money to put into the development and roll-out of photovoltaics across rural Australia. That is something that I am still passionate about.

I am inspired by the German experience and by the visit to Australia this week of Dr Hermann Scheer, who has been the brains behind German energy efficiency and renewable energy legislation. He is here giving a seminar at this very time. I regret that I am unable to be at that seminar because I am here in the chamber. He has talked about the way in which in Germany they stimulated a revolution and created 160,000 jobs in renewable energy technology by moving to a relatively simple conceptual framework that said, ‘We will require power companies to buy renewable energy at a fixed price over a period of time.’ As a result, people could go to the bank and borrow to install renewable energy—photovoltaics, wind or whatever it is—because there was a guaranteed price over a period of time. As a result, Germany has created a solar revolution.

We could be doing the same in Australia. I am seriously disturbed by the fact that we have abandoned the whole renewable sector in favour of so-called clean coal and the fossil fuel industry. I certainly resent that going on at the moment and the shift in research priorities at the CSIRO. Even just lately we have had in South Australia a situation in which Tim Flannery has been virtually censored for saying that climate change is the greatest security threat facing humanity. The federation of commercial television stations said that they objected to that wording. How can we have a situation where people get censored for their opinions?

Sir David King, Tony Blair’s chief scientist in Britain, has come out and said exactly the same thing. People are saying it all over the world, but apparently in Australia we are not allowing people out there in the community to hear the message that this is urgent, this is serious. We are beyond voluntary action. If we do not act now we could have some major climate catastrophes. The science is showing that this will not be an incremental process; this will be a threshold process. The point is that we do not know when we will reach the threshold, but when we do there will be no going back. That is the frightening thing. Around the world we are seeing the acidification of the Southern Ocean, the slowing down of the great ocean conveyor and the melting of the ice caps. Surely in Australia we can require the 260 biggest energy users to do an audit of energy efficiency opportunities and to implement them if the payback period is less than two years.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Milne, could you confirm that you are moving amendments (1) and (2), then (5) to (7) on revised sheet 4784, and R(7) on sheet 4784 revised is the new R(7)? Is that correct?

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

That is correct.

Question put:

That the amendments (Senator Milne’s) be agreed to.

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

by leave—I move government amendments (1) to (32) on sheet QF234:

(1)    Clause 8, page 4 (lines 19 to 23), omit subclauses (1) and (2), substitute:

        (1)    A controlling corporation’s group consists of the following entities:

             (a)    the controlling corporation;

             (b)    the controlling corporation’s subsidiaries covered by subsections (3) and (4) (if any);

             (c)    the joint ventures covered by subsection (5) (if any);

             (d)    the partnerships covered by subsection (6) (if any).

        (2)    The members of the group are the entities mentioned in subsection (1).

(2)    Clause 8, page 5 (after line 10), at the end of the clause, add:

        (5)    A joint venture is covered by this subsection if a member of the group (other than a joint venture or partnership) is a participant in the joint venture and the participants in the joint venture have either:

             (a)    nominated that member as the responsible entity for the joint venture in accordance with regulations made for the purposes of subsection (7); or

             (b)    not nominated an entity as the responsible entity for the joint venture in accordance with those regulations.

        (6)    A partnership is covered by this subsection if a member of the group (other than a joint venture or partnership) is a partner in the partnership and the partners in the partnership have either:

             (a)    nominated that member as the responsible entity for the partnership in accordance with regulations made for the purposes of subsection (7); or

             (b)    not nominated an entity as the responsible entity for the partnership in accordance with those regulations.

        (7)    The regulations may establish rules under which:

             (a)    participants in a joint venture may make, and revoke, nominations for the purposes of subsection (5); and

             (b)    partners in a partnership may make, and revoke, nominations for the purposes of subsection (6).

(3)    Clause 9, page 6 (line 8), omit “Note”, substitute “Note 1”.

(4)    Clause 9, page 6 (after line 9), at the end of subclause (1), add:

Note 2:  Section 70 of the Crimes Act 1914 creates an offence where Commonwealth officers (including persons performing services for or on behalf of the Commonwealth) disclose information in breach of a duty of confidentiality.

(5)    Clause 9, pages 6 (lines 19 to 22) omit subclause (5), substitute:

        (5)    The application must:

             (a)    identify the controlling corporation; and

             (b)    contain any other information required by the regulations; and

             (c)    be in the form (if any) specified in the regulations.

     (5A)    Regulations made for the purposes of paragraph (5)(b) may only require the following information:

             (a)    information that is reasonably necessary for assessing applications made under this section;

             (b)    information that would be required by subsection 12(4) to be entered on the Register if the controlling corporation were registered under Part 4.

(6)    Clause 10, page 6 (line 26) to page 7 (line 15), omit subclauses (1) and (2), substitute:

        (1)    A controlling corporation’s group meets the energy use threshold for a financial year if in that year the total energy used by the entities that are members of the group is more than 0.5 petajoules.

(7)    Clause 10, page 7 (lines 30 to 34), omit subclause (6).

(8)    Clause 11, page 8 (after line 11), at the end of subclause (2), add:

Note:   Section 70 of the Crimes Act 1914 creates an offence where Commonwealth officers (including persons performing services for or on behalf of the Commonwealth) disclose information in breach of a duty of confidentiality.

(9)    Clause 11, page 8 (lines 14 to 17), omit subclause (4), substitute:

        (4)    The application must:

             (a)    contain information required by the regulations; and

             (b)    be in the form (if any) specified in the regulations.

     (4A)    Regulations made for the purposes of paragraph (4)(a) may only require information that is reasonably necessary for assessing applications made under this section.

(10)  Clause 12, page 9 (before line 5), before subclause (1), insert:

     (1A)    The object of this section is to encourage compliance with this Act by providing for a register containing information about corporations registered under this Part and their compliance with this Act.

(11)  Clause 12, page 9 (line 9), after “contents of”, insert “part or all of”.

(12)  Clause 12, page 9 (after line 15), after subclause (4), insert:

     (4A)    Regulations made for the purposes of paragraph (4)(b) may only require information that is reasonably necessary to further the object of this section.

(13)  Clause 14, page 9 (after line 26), at the end of subclause (1), add:

Note:   Section 70 of the Crimes Act 1914 creates an offence where Commonwealth officers (including persons performing services for or on behalf of the Commonwealth) disclose information in breach of a duty of confidentiality.

(14)  Clause 14, page 9 (line 27) to page 10 (line 2), omit subclause (2), substitute:

        (2)    The application must:

             (a)    contain information required by the regulations; and

             (b)    be in the form (if any) specified in the regulations.

     (2A)    Regulations made for the purposes of paragraph (2)(a) may only require information that is reasonably necessary for assessing applications made under this section.

(15)  Clause 15, page 11 (lines 8 and 9), omit the note, substitute:

Note:   Section 70 of the Crimes Act 1914 creates an offence where Commonwealth officers (including persons performing services for or on behalf of the Commonwealth) disclose information in breach of a duty of confidentiality.

(16)  Clause 18, page 13 (lines 28 and 29), omit subclause (7), substitute:

        (7)    The assessment plan must set out the manner in which the controlling corporation intends to comply with subsection 22(1).

     (7A)    Without limiting the scope of subsection (7), the assessment plan must set out:

             (a)    whether the controlling corporation intends to rely on section 22A in order to comply with its obligations under subsection 22(1); and

             (b)    if the controlling corporation intends to rely on section 22A in that way—the other members of the group that are intended to prepare a report in accordance with section 22A; and

             (c)    whether the controlling corporation intends to rely on section 22B in order to comply with its obligations under subsection 22(1); and

             (d)    if the controlling corporation intends to rely on section 22B in that way—the corporation that is intended to prepare a report in accordance with section 22B.

(17)  Clause 18, page 13 (line 30) to page 14 (line 7), omit subclause (8), substitute:

        (8)    The regulations may:

             (a)    set out requirements for a proposal in relation to the following:

                   (i)    the types of actions mentioned in subsection (4);

                  (ii)    the deadlines for doing those actions;

                 (iii)    matters that must be set out for the purposes of subsections (7) and (7A); and

             (b)    require particular information to be set out in the assessment plan.

        (9)    Regulations made for the purposes of paragraph (8)(b) may only require information that:

             (a)    is reasonably necessary to assess the extent to which this Act achieves its objects; or

             (b)    is reasonably necessary for the administration of this Act.

(18)  Clause 19, page 14 (after line 11), at the end of subclause (1), add:

Note:   Section 70 of the Crimes Act 1914 creates an offence where Commonwealth officers (including persons performing services for or on behalf of the Commonwealth) disclose information in breach of a duty of confidentiality.

(19)  Clause 20, page 15 (before line 7), before subclause (1), insert:

     (1A)    The object of this section is to require registered corporations to undertake assessments of a kind mentioned in paragraph 3(2)(a).

(20)  Clause 20, page 15 (lines 7 to 11), omit subclauses (1) and (2), substitute:

        (1)    A registered corporation must ensure the carrying out of the proposal in its approved assessment plan for assessing the opportunities for improving the energy efficiency of its group.

        (2)    A registered corporation must ensure the carrying out of that proposal in accordance with requirements (if any) set out in the regulations.

(21)  Clause 20, page 15 (lines 19 and 20), omit paragraph (3)(d), substitute:

             (d)    any other matter reasonably necessary to further the object of this section.

(22)  Clause 22, page 16 (before line 12), before subclause (1), insert:

     (1A)    The object of this section is to create public reporting requirements of a kind mentioned in paragraph 3(2)(b).

(23)  Clause 22, page 16 (after line 27), after subclause (3), insert:

     (3A)    Regulations made for the purposes of paragraph (3)(d) may only require information that is reasonably necessary to further the object of this section.

(24)  Clause 22, page 16 (lines 30 and 31), omit paragraph (4)(b), substitute:

             (b)    be signed by a person who is the chair of the board of directors, the chief executive officer, the managing director, or an equivalent officer, of the registered corporation; and

             (c)    include a statement by that person that the board of directors of the registered corporation has reviewed and noted the report.

(25)  Clause 22, page 17 (after line 3), at the end of the clause, add:

        (6)    Despite subsection (5), the report need not be made available to the public at a time if, within the period of 12 months ending at that time, the registered corporation had made another report under this section available to the public.

(26)  Page 17 (after line 3), after clause 22, insert:

22A Public reporting—decentralised reporting

        (1)    The registered corporation is taken to comply with subsection 22(1) in relation to a period mentioned in subsection 22(2) if:

             (a)    the registered corporation’s approved assessment plan sets out, in accordance with paragraph 18(7A)(a), its intention to rely on this section in order to comply with its obligations under subsection 22(1); and

             (b)    the registered corporation prepares a report that describes the way in which only part of the proposal mentioned in paragraph 22(3)(a) was carried out during the period; and

             (c)    one or more other members of the group prepared a report or reports describing the way in which the remaining part or parts of the proposal were carried out during the period; and

             (d)    each report mentioned in paragraph (b) and (c):

                   (i)    meets the requirements in subsection 22(3) for the part or parts of the proposal to which the report relates; and

                  (ii)    meets the requirements in subsection 22(4); and

                 (iii)    has been made available to the public in accordance with subsection 22(5).

        (2)    For the purposes of applying subsection (1) in relation to a report prepared by a member of the group other than the registered corporation:

             (a)    treat references in subsections 22(3) and (4) to the corporation, or the registered corporation, as references to the member of the group that prepared the report; and

             (b)    treat references in subsection 22(3) to the proposal in the approved assessment plan of the registered corporation as references to the part or parts of that proposal to which the report relates.

(27)  Page 17 (after line 3), after clause 22, insert:

22B Public reporting—reporting by manager of joint venture

        (1)    Subsection (2) applies if:

             (a)    a joint venture is a member of the registered corporation’s group; and

             (b)    the participants in the joint venture have nominated a member of the group (the responsible entity) as the responsible entity for the joint venture for the purposes of subsection 8(5); and

             (c)    a corporation (the operator) operates or manages the joint venture; and

             (d)    the registered corporation’s approved assessment plan sets out, in accordance with paragraph 18(7A)(c), its intention to rely on this section in order to comply with its obligations under subsection 22(1); and

             (e)    the operator prepares a report that describes the way in which the part of the proposal mentioned in paragraph 22(3)(a) relating to the joint venture was carried out during the period; and

              (f)    the report is signed by the chief executive officer of the operator; and

             (g)    the report includes a statement by the chief executive officer of the operator that the board of directors of the responsible entity has reviewed and noted the report.

        (2)    If this subsection applies:

             (a)    subsection 22A(1) applies in relation to the report prepared by the operator as if the operator were a member of the group; and

             (b)    for the purposes of applying subsection 22A(1) in relation to the report prepared by the operator:

                   (i)    treat the reference in subsection 22(3) to the corporation as a reference to the operator; and

                  (ii)    treat references in subsection 22(3) to the proposal in the approved assessment plan of the registered corporation as references to the part or parts of that proposal to which the report relates; and

                 (iii)    disregard paragraphs 22(4)(b) and (c).

(28)  Clause 23, page 17 (lines 12 and 13), omit note 2, substitute:

Note 2:  Section 70 of the Crimes Act 1914 creates an offence where Commonwealth officers (including persons performing services for or on behalf of the Commonwealth) disclose information in breach of a duty of confidentiality.

(29)  Clause 23, page 17 (after line 18), after subclause (3), insert:

     (3A)    Regulations made for the purposes of paragraph (3)(b) may only require information that is reasonably necessary to:

             (a)    administer this Act; or

             (b)    assess the extent to which this Act achieves its objects; or

             (c)    assess the benefits and costs of complying with this Act.

(30)  Clause 23, page 17 (after line 22), at the end of the clause, add:

        (6)    Despite subsection (5), the report need not be given to the Secretary at a time if, within the period of 12 months ending at that time, the registered corporation had given the Secretary another report under this section.

(31)  Clause 25, page 19 (after line 11), at the end of subclause (2), add:

Note:   Section 70 of the Crimes Act 1914 creates an offence where Commonwealth officers (including persons performing services for or on behalf of the Commonwealth) disclose information in breach of a duty of confidentiality.

(32)  Clause 29, page 22 (line 32), omit the penalty, substitute:

Penalty:                10 penalty units.

Question agreed to.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I move Greens amendments (3) and (4):

(3)    Heading to Part 3, page 6 (line 2), at the end of the heading, add “energy use threshold”.

R(4) Clause 10, page 6 (lines 26 to 28), omit subclause (1), substitute:

        (1)    The energy use threshold will be prescribed by the regulations.

     (1A)    The regulations must set a sliding scale for the energy use threshold of a minimum of 0.5 petajoules for a controlling corporation’s group for each financial year commencing in the 2006-2007 financial year reducing annually to a minimum of 0.2 petajoules for a controlling corporation’s group by the financial year 2011-2012.

      (1B)    A controlling corporation’s group meets the energy use threshold for a financial year if in that year the total energy used by the controlling corporation’s group is more than the energy use threshold nominated for the relevant financial year as prescribed by subsection (1A).

As the bill is currently structured, the energy use threshold relates to companies that use more than 0.5 petajoules of energy, thereby restricting the bill’s capacity to draw in all of Australia’s small and medium scale businesses. At the moment the bill deals with Australia’s largest 250 companies. I think it is entirely appropriate that we target the largest companies to begin with, but we also want medium sized companies to look to energy efficiency as a way of becoming more competitive, reducing their costs, contributing to Australia’s reduced greenhouse gases and contributing to reduced pressure to build new supply.

What I am proposing with these amendments is that, instead of just leaving this bill to capture the largest companies in Australia, the threshold be reduced over a period of time so that by the year 2011-12 it would apply to companies using more than 0.2 petajoules. At the moment the bill is saying, ‘Okay, we recognise it is just going with the largest 250 companies.’ By having a sliding scale so that the threshold reduces over time, we are giving notice to medium-sized companies in Australia—those that use between 0.2 and 0.5 petajoules—that, over a period of time, they too will be captured by this legislation. It is really telling corporations that, as we roll into this legislation, they too will be captured by the need to do energy efficiency audits.

Again, this is not saying that the government’s initiative is not worth while; it is saying it is worth while but it does not go far enough because it is not capturing the next level of industry in Australia. I think it is entirely appropriate that middle-sized industries in Australia are on notice that this bill is coming down the track and will apply to them and that they have a period of time to adjust to the idea that they too will be involved in the energy audits. I regret, of course, that the legislation—with my amendment having been defeated—will not require them to implement what they find, but at least having a sliding scale will increase the number of industries across Australia to which the legislation applies. It is a simple notion: a sliding scale, reducing the current threshold of 0.5 petajoules down to 0.2 petajoules.

Ian Campbell (WA, Liberal Party, Minister for the Environment and Heritage) Share this | Link to 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.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

The opposition will not be supporting these amendments. I am advised that it is our view that at this stage the thresholds which have been established of picking up 60 per cent of business picks up the largest businesses. The measures as proposed in the amendments would introduce complexity for the smaller end users, which we would not support at this stage. We think that that is a measure for the next stage in this process, so we will not be supporting these amendments.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I thank senators for their contributions. I would just like to respond to the minister when he says that he does not want to put the additional cost on second- and third-level industry to conduct the audit and report. The whole point about energy efficiency is that it is designed to save companies money. Frequently, unless they are forced to do the audit in the first place—which is, I am sure, why the government is moving on the large companies—often they do not identify just how inefficient their operations are in terms of the amount of energy they are using and the cost savings that are achievable. Frequently they surprise themselves at how much money they can save.

I object to the notion that the government is about not passing on cost increases to consumers, implying that energy efficiency is going to cost. Energy efficiency will save businesses money directly but it will also save the community and the world a long-term cost associated with increased energy supply. It is the supply and demand issue that has to be addressed here. I think it is reasonable to say that once the large companies get into energy audits there will be a template for how you actually go about it. It is a quarter of a million dollars for the large companies. I am sure it is not going to be a flat fee of a quarter of a million dollars for medium and smaller companies. There will be other ways of doing it. It will be less complex for less complex operations, and so on. So I reject the notion that it is going to be a quarter of a million dollar fee for everyone, regardless of whether it is BHP or some medium-scale business in a regional centre, for example. There will be cost efficiencies in terms of scale.

I agree with what the minister is saying—that at the moment by targeting and carefully focusing the legislation on the 250 largest companies you are looking at 60 per cent of the energy use, and that is a good thing to do. We are also looking for cultural shifts here. We are looking for regional leadership. We are looking for community leadership. We are looking for people to be able to show that, at any scale of business, energy efficiency is a good idea. So by moving to capture more medium-scale businesses, you take this from just the 250 around Australia into, as the minister has himself acknowledged, thousands of businesses across Australia.

Not only are we talking about leadership in energy efficiency, cogeneration and take-up of renewables but we are also talking about competitiveness. Reducing the costs of production is one thing the government ought to be conscious of since it goes into these free trade agreements that put increasing pressure on Australian business to be able to compete with prices when you have China, in particular, sending manufactured goods to the global market that are heavily subsidised by the environment, human rights abuses and low wages. Everywhere I go, Australian businesses say to me that their main problem is that they just cannot compete against low-wage economies that subsidise levels of production by destroying the environment and by poor occupational health and safety standards as well as low wages.

So, given that, if we can help companies to be more efficient and reduce the costs of production it must be a good thing. It is my contention that the only way you will get them to do this is by requiring them to do the audit, which is the very rationale the government is using for big business. I am arguing that the same rationale applies to medium and small business—although 0.2 petajoules would not be a small business, so we are talking medium-scale businesses. Let us encourage these businesses to do their audits and find ways to make the audits affordable. Let us look at that. I do not know what those cost savings are going to be. If the government chooses to reject this, as the Labor Party has in the short term, let us have a look at what the costs would be for businesses of that scale to undertake similar audits. Surely once we get it down to a fine art with the large companies it will not be that difficult to modify for medium-scale companies.

Again, I think that this is a lost opportunity to spread the cultural change—the shift that is required—across the whole of Australia, and rural and regional Australia in particular. I cannot see that by staying with the 0.5 petajoule threshold we are actually spreading the message about energy efficiency and achieving the cultural change and the shift that we need to assist business not only to be better for the environment but to be more competitive in their fields.

Question negatived.

I move:

(8)    Page 30 (after line 26), at the end of Part 9, add:

42 Review of operation of Act

        (1)    The Minister must cause an independent review of the operation of this Act to be undertaken as soon as possible after the fifth anniversary of the commencement of this Act.

        (2)    The person who undertakes the review must give the Minister a written report of the review.

        (3)    The Minister must cause a copy of the report of the review to be tabled in each House of Parliament within 12 months after the fifth anniversary of the commencement of this Act.

During the course of this debate, I have argued that one of the main problems with the bill is failure to require the outcomes of the audits to be implemented. The minister has just said that, by virtue of creating, effectively, a league table amongst big business as to who is doing the right thing by implementing the energy efficiency measures that have been identified, the public pressure will be such that they will do the right thing. That implies a whole new round of activism and requiring the community, shareholders and activists to go out there and start running campaigns on this when there is absolutely no need to do so if the government would actually require the companies to do it.

I have also said that we should establish the goal that we are trying to achieve and the time frame we are trying to achieve it in, and the minister still has not responded to that. What is the level of energy saving the government would expect to achieve within three years as a result of this bill? We need to know so that we can see whether it is in fact being effective. You will have your audits which will tell you what could be done and what has been done, and I guess you will have a running sheet of what has been saved and what is achievable, but I am moving for an independent review of the operation of the act to be undertaken as soon as possible after the fifth anniversary of the commencement of the act.

In other words, five years after this act is implemented let us have an independent review of exactly whether this Energy Efficiency Opportunities Bill has been effective in reducing the amount of energy that these companies use. The review should be given, as a written report, to the minister, and the minister must then table a copy of that review in each house of parliament within 12 months of the fifth anniversary of the commencement of this act. In other words, an independent review will take place after five years, that will be given to the minister and the minister will table it within 12 months of that.

I do not think that that is unreasonable. I expect the government will say, ‘We will be reviewing it all the time as it goes on in terms of the audit.’ But at least if you have an independent review of the act after five years, if companies have not done as the government expects they will do—and that is actually implement the initiatives that would save the greatest amount of energy—it gives us an opportunity to come back and take whatever steps might be necessary at that point. So I think it is more than reasonable.

We have a difference of philosophical opinion here as to whether requiring companies to do the right thing by enforcement measures or asking companies to do the right thing in a voluntary capacity is the right way to go. We have a different philosophical view on it, and mine is that we should require them to do it, within reason, if there is a reasonable payback period. However, since that is not the government’s view, and I have not been able to prevail upon the Senate to accept that view, I now ask that the Senate supports the notion of an independent review after five years so that we can then take other measures if they are necessary. Again, this is not because we have some idea about going after big business. This is about two things. It is about climate change and doing the right thing in terms of the global environment, and it is about saving taxpayers from investing in new energy production on the supply side, which is hugely expensive. However, it is also about helping companies, in spite of themselves, to be more competitive in a global environment by reducing their ongoing costs of production.

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

I indicate Democrat support for this amendment, as we supported the previous amendment put forward. It is a modest request of the government, and the government has in the past acceded to such requests by the Senate, so I encourage Labor to support this and the government to agree to it. It is perfectly reasonable. We cannot know if this has worked unless we have a review. This simply asks the government to do that.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

The opposition will be supporting this amendment. We do think it is a modest request but very worthy of our support. We agree that the issues which have been canvassed in this debate are extremely important to the Australian public and, indeed, to the whole of this globe, and we think it is extremely reasonable to ask that the operation of the propositions which the government have embodied in this bill with the amendments that they have proposed ought to be subject to an independent review and that review should not just sit on the desk of the minister when it has been conducted—it should be made public. Therefore, subclause (3) of this amendment, which would require the report of that review to be tabled in each house of parliament, places the matter fairly and squarely before the public and requires the government of the day—whoever it might be at that time—to table that report so that there can be full public knowledge. We know of no reason why the government would not support this other than that they may be unhappy about scrutiny of their actions. Their support or otherwise of this amendment will show whether the government are prepared to be open and transparent in their dealings with issues as important as this.

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

This is an important issue, and I think all parties have acknowledged that. It is sending the right signal—that as parliament we need to ensure that we are encouraging all to do more with regard to energy efficiency. As I said, all parties have agreed that it is an important area, and we are sending a strong signal to business that they must look at energy efficiency opportunities. The issue here is that we should have a review after a certain period of time to have a look at how well the program is working and see whether extra measures need to be taken. Family First support this amendment, and I am hoping to see it put through.

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

On page 41 of the explanatory memorandum the government sets out a timetable for evaluation and review of the program. It sets out the process in some detail—the completion of a baseline survey this year; ongoing data collection and analysis from company reports from 2006 to 2010; yearly efficiency review and reporting, as I have mentioned previously, throughout those four years; yearly ‘running changes’ throughout 2006 to 2010 to give us an ongoing update about performance against the audits; special evaluation data collection in 2009; a draft evaluation report written in January 2010; the circulation of the draft report in February 2010; and the final evaluation report written and released in July 2010.

That is full evaluation, reporting and public release to occur in four years, not five. So the government’s proposal is actually more stringent than the amendment that Senator Milne—without any doubt with the best outcomes in mind—is proposing. We go over and above that and say we will have a review evaluation for the five months after the final report, up until December 2010, and then implement evaluation findings in the ongoing program. We regard this as an ongoing program. It is the beginning of a substantial change to the way companies in this country look at their energy use. It will help them change their energy use and become a lot more efficient, and it is a program that the government are committed to.

The energy white paper, which is a substantial piece of policy work and has been analysed and copied around the world, identified through studies done within the National Framework for Energy Efficiency that projects within the residential energy sector could see savings of 13 per cent. I think Senator Milne was looking for some idea of the sort of savings that could be made. I am not saying these are targets; these are achievements that have been identified within the National Framework for Energy Efficiency. Page 109 of the energy white paper reports that they looked at energy use reductions in the order of 10.4 per cent for the commercial sector and 6.2 per cent for the industrial sector. They are substantial achievements in terms of greenhouse gas reductions and energy efficiency improvements. Within the government’s own explanatory memorandum before the Senate is a program for review that is more stringent than Senator Milne’s. The government are keen to make this work, to make sure the program is a success and to see it reviewed comprehensively. We have made a commitment in the explanatory memorandum, and I now make my own commitment, to ensure that that review is public.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

The issue here is the independence of the review. We have seen many government reviews in the past which we have later found out have left out significant detail because pressure was brought to bear and changed the tenor of the reporting. The key is that the review be independent. We have just had the example of a recent report on climate change where we found that the recommendations had been lifted out of the review and had never seen the light of day. The recommendations in that report on climate change have only been reported recently. They were for strategies and targets to reduce greenhouse gas emissions, and they were rejected. My requirement here is for an independent assessment that is then made public. That is the issue of concern here. Yes, the government has put in place an evaluation process, but I am moving that it be independent and not government controlled.

Question negatived.

Bill, as amended, agreed to.

Bill reported with amendments; report adopted.