Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Sustainable Development and Cities) Share this | Hansard source

The Appropriation (Water Entitlements and Home Insulation) Bill 2009-2010 and the Appropriation (Water Entitlements) Bill 2009-2010 have been hurriedly rushed into the parliament to take account of the Rudd government’s mismanagement and inability to implement its policy undertakings. These are supply bills for both ordinary annual government services and extraordinary services in relation to water entitlements and home insulation. The coalition will obviously be supporting these bills, following our tradition of not opposing government supply bills. That certainly does not negate the opportunity to highlight why we are here today and to make some, I think, measured, very helpful and informative observations about the way in which these programs have been administered.

In relation to the government’s Home Insulation Program, this legislation provides additional funding that reflects the conclusions announced in the government’s Mid-Year Economic and Fiscal Outlook report, which basically pointed to the fact that the allocated funding for this financial year will run out before year’s end. The administered funding of $695.8 million is to be brought forward from the next financial year into this one to ensure that people applying for grants under the Home Insulation Program can have those grants processed and payments made.

The second bill provides resources for water entitlement acquisition and the acceleration of water buyback activity within the Murray-Darling Basin system. Administered funding of $4.9 million for the Water for the Future, Restoring the Balance in the Murray-Darling Basin Program is to be brought forward—$4.4 million from 2013-14 and $500,000 from 2014-15—to provide the Department of the Environment, Water, Heritage and the Arts with adequate resourcing to efficiently implement the government’s water purchase program for this financial year. This will also provide funding to accelerate water buybacks within the Murray-Darling Basin system.

Administered funding of $650 million for the Restoring the Balance in the Murray-Darling Basin program, under the Water for the Future program, will be brought forward from later years. This includes $320 million from 2010-2011 and 2011-12—that is, $220 million and $100 million respectively. The Mid-Year Economic and Fiscal Outlook report in November also identified $330 million to be brought forward from 2010-11, $100 million from 2011-12 and $130 million from 2013-4 to provide for additional water buybacks this financial year.

The government’s stated objective is to restore the balance of the Murray-Darling Basin, to purchase water entitlements to restore the environmental health of the basin system and to smooth the transition—we are led to believe—through sustainable diversion limits anticipated in the new basin plan. So you can see some adjustment to water allocations to bring about the change in limits envisaged in the new basin plan.

To date the Restoring the Balance in the Murray-Darling Basin Program has secured the purchase of more than 600 gigalitres of water entitlements. For those people who are listening, that is water entitlements, not necessarily water. Water entitlements represent a right to extract and to divert water from that system when it is available. If it is not available, you are simply purchasing an opportunity to make that diversion, to take that extraction, at a time when it does become available.

In the current environment and with the current flows and rainfall situation in the Murray-Darling Basin, most of that purchase is for paper, not for water. It is actually buying air in empty storages, air in lower level riparian systems, air that surrounds water that may have been there at some point when the allocation was made but is not there now. Therefore, you are purchasing the paper that gives a right to water if and when it becomes available. The government believes that bringing forward the funding in the bill will enable it to accelerate that purchase program and provide for new purchases and new initiatives this financial year. Additionally the government believes that with the additional appropriation vendors will receive timely settlement of their water trades under the Restoring the Balance in the Murray-Darling Basin program. It is important that those water users who are making their entitlement, their right to extract when water is there, available for purchase by the government receive timely payment for it.

Essentially, though, these bills tell the story of the Rudd government—that is, a government that is poorly managing its legislative timetable, hence this has been rushed in; poorly managing its program design and implementation, hence you see these enormous overruns; and poorly managing the task of connecting policy action with public policy purpose. Here is an example of where the purchase of air and paper masquerading as water purchases needs to be seen for what it is. The work ahead for the nation, for the agricultural sector and for state and territory jurisdictions on the more sustainable use of water in the Murray-Darling Basin will require more than the purchase of paper and of air.

In relation to the insulation program, here we have seen a frenzied marketplace. I do not know how else you could describe it—a frenzied marketplace that has seen people leap at the opportunity to have up to $1,600 paid for insulating their homes and a lesser amount for investment properties or rental properties. I know personally people who have been in other career paths who have seen this as the modern-day equivalent of a gold rush. They have abandoned, let us say, a more modest ambition for income and personal economic security to rush headlong into the insulation business. A friend said, ‘A couple of years working on this and I will be able to pay off my mortgage.’ This is the gold rush but it is pink—pink batts. Much of this product has not been produced in Australia, and much of the work has been overpriced. Quotes for homes in my own electorate that were of $600-$700 prior to the announcement of this program have all of a sudden rocketed up to the maximum amount that can be claimed.

There are tragic examples. We see, again, another report in today’s media about the loss of a young life—a life lost way too soon. A young man involved in this program lost his life in a tragic accident in Queensland. There are calls from unions to say this program has been so poorly implemented and administered that the adequate training that installers should have has not been available in all cases to try to guard against tragedies like the one we have seen reported today and earlier events. Much haste, not a lot of thought—many people seeing this as a gold rush of their own that they want a piece of. It is quite an extraordinary program in that I think everyone in this House accepts that home insulation is one of the most cost-effective things you can do to improve the environmental performance of your home—far more cost effective than other more substantial investments with longer payback periods, like the pathway my family has been on, putting in solar hot water and things of that kind.

Rather than encourage people to consider the attractiveness of home insulation as a way of reducing energy costs and improving the environmental performance of a home, being one of the—sorry for the economic jargon—lowest of low-hanging fruits in that the gains are very easily within reach and the business case, the payback, is very attractive, the Rudd Labor government does not do the work to say, ‘What is the impediment to taking up this opportunity?’ It does not encourage or provide any incentive for people to consider their own self-interest and to act accordingly by having their homes insulated. It says: ‘Hang the cost. We have got the Commonwealth bankcard free of debt thanks to the Howard years. Rack it up on the bankcard!’ The Rudd government’s extraordinarily lazy, sloppy, careless, headline-hunting strategy of public policies will pay for the lot: ‘We will pay for the lot. We will make $1,600 available even if that is vastly more than what it costs to insulate a home. We will pay for the lot, even though a smaller incentive might bring about the greater public awareness and appetite for home insulation to achieve that goal where private householders will be playing a partnership role with a government incentive. No, no—don’t want to do any of that. Let’s pay for the lot and chuck it on the taxpayer’s visa card because the nation is in a position to do so. Don’t do the thoughtful thing about recognising that home insulation and the payback of your investment in home insulation is one of the smartest things you can do. No, no—don’t let that take its course. Pay for the lot.’

What hope have we got of getting households to do other things that might be slightly less attractive—still attractive but slightly less attractive in payback terms: about their glazing, about appliances and hot water systems, and about heating systems? What hope have we got when on one of the most attractive lowest hanging fruit, most cost-effective things a home owner can do, the taxpayer is paying for the lot? And in some cases they are paying twice the amount or even more that it actually costs to insulate them. What hope have we got encouraging families to think about energy efficiency in their lighting and electrical systems, even the use of natural light—thinking about more efficient refrigeration, the adoption of more efficient hot water appliances and hot water heating systems and solar hot water systems that may involve the private householder making a contribution themselves; the selection of appliances that have a stand-by function so that they are not sucking in more energy than they need when they are not actually being used; or even looking at some of the mechanical systems for heating and cooling in homes?

What hope have we got? We have created this mindset in the Australian public, borne out of the most extraordinarily lazy, headline-hunting government we have seen. It is happy to put the whole price of home insulation on the Visa card of the nation. We are seeing now the need to update the funding that is available. We are seeing now the need to reallocate and add to stimulus expenditure. I touched on the fact that the taxpayer is paying way over the odds for work that was attractive in payback terms anyway. As has been acknowledged, even Australia’s biggest manufacturers of insulation batts are having to go offshore to meet up to 30 per cent of their total orders. It is a stimulus of some kind, but it is not a stimulus too close to home. You are seeing millions of dollars being spent on overseas-supplied home insulation batts at a price that is many times the actual cost. Now we are seeing more money being put into that program.

The opposition have consistently warned the government about its impact on this sector. We warned it would induce an artificial level of demand—hysteria, a gold rush mentality—in the insulation sector, which the industry would not be able to respond to, and that supply would be far outstripped by demand. In spite of these warnings, the Rudd Labor government raced through its home insulation subsidy for homeowners with minimal industry consultation to address the issue of installation implementation safety. We have seen tragic examples. Again, my thoughts go to the family members of people who lost their lives as a result. It has forced Australian industries to buy more expensive overseas stock than they wanted and put an extraordinary price bubble into the cost of insulation.

People in one of the retirement villages in my electorate—where people go peaceably about their retirement years—have been getting a knock on the door from people offering to insulate their houses. These might be five- or six-square—and in some cases smaller—retirement homes. They are being told: ‘It will cost you nothing. Just sign here.’ Sure enough, they are signing an application to the Commonwealth to get $1,600 to insulate their property. Many of them just a few months earlier had been told it might cost $400 to $500. As I mentioned earlier, the displacement effect in the economy has created an enormous turbocharge in the energy efficiency and sustainability area within the building sector. There has been a rush to that area because the taxpayer is footing the bill.

The Minister for Finance and Deregulation, Lindsay Tanner, has acknowledged that $1 billion worth of Australian stimulus money went overseas. That is like a rounding error to this crowd, but a thousand million dollars went overseas to China to buy Chinese pink batts via this insulation program—which we are now putting more money into. When asked about this, Mr Tanner, in his thoughtful response, simply shrugged off the criticism and said, ‘So what?’ There is a big ‘so what’ here. It is about poor government policy program design, poor preparation for the impact of this government intervention, very poor accommodation of industry capacity to support this activity, very poor implementation of the program—including in some cases tragic results—and a very unwelcome and artificial inflation in the cost of a home improvement activity. It has a very attractive payback period anyway because the government is footing the bill. You could call it the ‘so what bill’. ‘So what’ is the attitude of the Rudd Labor government when $1 billion of the stimulus money, designed to add some vitality to the Australian economy, simply goes on Chinese pink batts.

The finance minister introduced these bills at the last possible minute. That underlies the legislative program, which is light anyway. The Rudd Labor government treats the parliament with contempt. It does not seek to be held accountable here. These days it uses it as a law-passing institution only. But even that is a challenge. These bills were introduced at the last minute—yesterday—and the government wants them passed today so they can be debated in the Senate next week, because the bills require immediate passage due to insufficient funding. In the lead-up to the MYEFO, the Mid-Year Economic and Fiscal Outlook, it should have let people know some action was required. It said so in that report. Yet here these bills are, having been dropped in the House yesterday. There has been a flurry of activity to try and accommodate the government’s mismanagement of the legislative program so the bills can get over to the Senate next week. Why? The government is running out of money. Funding for this Home Insulation Program is close to being exhausted. The 2009-10 appropriation will run out in late December, and that is why there is a need to provide for this debate in the parliament today. The opposition has been happy to accommodate and to help save the government from itself.

Funding for the water buybacks from the Murray-Darling Basin are not sufficient to cover the cost of the trades that the government anticipates will be offered to it under the water purchase program for this financial year. It does not give you a lot of confidence. I can understand why people are anxious about the Rudd Labor government. I can see why they are troubled by the broken promises, the inability to take tough decisions and the fact that there is no clear forward agenda. We get these bitsy bits of government activity and flurries of media releases and the like. Then there is very poor execution of the projects. We see understandable concerns about wasted expenditure. I have pointed to the poor program design that has made what should have been a positive program far more expensive than it needed to be and has created problems of its own. This is in an area where a better-targeted incentive could well have brought about the outcome that people were seeking to achieve. This is a carefree attitude to spending. We have been brought back into this place to try and put more expenditure on the Rudd credit card.

To reinforce the point about the very poor program design, when we look at issues around energy efficiency and insulation, what seems to be a very worrying lack of sincere commitment to sustainability and energy efficiency is evidenced by the government’s own behaviour. Look at promises made in the lead-up to the election about this house, the big house, the national Parliament House. Those commitments leading up to the election were very clear: Rudd Labor sought to convince people that it would lead by example and it would do so by powering Parliament House and all MPs’ electorate offices with renewable and clean energy. But Senate questioning has revealed that nothing of the kind has even occurred. The Rudd Labor government has buried its promise of a green powered Parliament House and opted for a 10 per cent green energy electricity contract to avoid significant budget costs, rather than honour its election commitment. How extraordinary. We saw the Prime Minister, the opposition leader as he then was, very pleased with himself going around saying that Rudd Labor would lead by example and making all these promises. Yet what we see is, again, promises that were short-sighted and confused, an inability to secure and implement any meaningful outcome from those headline commitments and another missed opportunity. So the big house, the Parliament House of Australia, supposedly powered by renewable and clean energy, is nothing of the kind. Another broken promise by the Labor government, and the justification for that was one of cost.

So here we have the Rudd Labor government making this commitment to the Australian public that the big house, the Parliament House, would be run on renewable and clean energy, and telling the Australian public through its flawed and friendless Carbon Pollution Reduction Scheme, so-called, that everyone else can accommodate the cost of cleaner energy through its lack of willingness to embrace the opposition’s very important benchmarking measure for the treatment of the energy sector where cleaner energy systems will actually be rewarded with carrots and those that are less clean will be punished. The Labor government is just too full of its own rhetoric to even understand its design punishes every kind of electricity generation. Even those that have modest greenhouse gas emissions will be punished under Labor’s CPRS. Those that are less clean will be punished more, but every energy generator that has any emissions at all will be punished. So if the Rudd Labor government says it will make the parliament of Australia a clean and green energy powered house and then walks away from it because it is too expensive and goes for a proposition that is a poopteenth, a very small percentage, of their undertakings on the basis of cost and then comes in here with a poorly designed emissions trading scheme that will impose incredible cost increases on everyone else’s electricity and says that is okay—there, writ large, is the hypocrisy of this government. It will not walk its own talk. It will not act in the way it is demanding other people act. Yet it goes out there expecting the Australian public to think it is for real on issues to do with sustainability, climate, energy efficiency and a better management of our economy.

I think it is writ large that the government is short-sighted and does not believe its own spin now. No-one else believes its spin in the Australian community. Now you are seeing the Rudd Labor government not believing its own spin because it is not even acting on it either. When there is an opportunity to improve the sustainability of the built environment, Australia’s existing building stock is very important. Minister Garrett made what was actually a cover version of an earlier announcement last week in Melbourne at the Energy Efficiency Council where he re-announced something that has been announced and announced, over and over again. He re-announced it again in a set-piece speech about what should be demanded of new commercial buildings, ignoring the fact that, at best, about two per cent of the commercial building stock is turned over each year and 98 per cent is not. So what do you do about the 98 per cent of the commercial building stock and its environmental performance? Under the Rudd Labor government some will get given money, a handout through a program in the Industry portfolio. Nobody knows how you get to succeed in that grant program and how you do not.

The very clear fact is that the few projects that will be funded through that Greening Your Building program in the Industry portfolio will be held up as if this is happening right across the commercial building sector, when we know that is not the case. They will have a few totemic cases that they will put into their ads, that they will use in the prefabricated speeches that now masquerade as answers in question time. They will say: ‘Look at this building—it’s doing this. They’ve got tri-gen, they’ve double-glazed it, the lift systems have been changed and they’ve got escalators that turn off when nobody is using it. Isn’t this great!’ as if that is happening everywhere, when it is not. There will be a few spotty examples to be held up as totemic evidence that something is happening. But 98 per cent of the building stock is not changed each year, and the vast majority of commercial building owners and operators will not benefit from the largesse of the government’s grants program. So what are you do? What you do is embrace what the opposition has been arguing for: green depreciation. You accelerate the depreciation, the writing off, of expenditure on investment in new plant and equipment, fixtures and fittings that actually improve the environmental performance of a building. You say to the building industry, ‘Here is encouragement for you to turn your mind to these opportunities, a number of which are quite attractive and have reasonable payback periods anyway, and we will accelerate and enhance that attractiveness so that you act now.’ Then you will get activity right across the sector, not this spotty stuff that you are seeing from the Rudd Labor government.

I say ‘spotty’ and I say that it is a government that does not walk the talk because we only need to look at its own activities. We have heard about the Building the Education Revolution. Prime Minister Rudd on 23 June went out to Trinity Christian School in Canberra, a set-piece opportunity where there was all the gee-whizzing that you could possibly have in relation to a project being undertaken under the Building the Education Revolution, so-called, program. But what he revealed in a set-piece speech is just how slack and appalling the Rudd Labor government is on implementing its own talk. Here we have got a bill to supplement the funding for the insulation in homes program that is out of control. It is the gold rush of this century as people flocked to that industry sector knowing that, even if it only costs 300 bucks to insulate a home you can get 1,600 off the Rudd Labor government, such is their ‘Ruddomics’. But then we look at the Building the Education Revolution program and we learn nearly one in 10 of projects approved under the first round of that program do not even have building insulation. Isn’t that extraordinary? These are new buildings, supposedly for the 21st century, and one in 10 do not have insulation. But it gets worse. One in five do not even use energy-efficient lighting, so committed is Rudd Labor to improving the sustainability and environmental performance of the built environment. Less than half have energy-efficient glazing. Less than a quarter have solar panels. A third do not even think about using shading. These are new buildings being funded by the taxpayer that do not even have basic attributes that the building industry says should be a part of every new building and that common sense says if you are going to build something new, build it to contemporary standards. So important is insulation that one in 10 do not even have any insulation! Yet we are here debating a bill that is providing hundreds of millions of dollars so that other people can be putting insulation in their places, and the Rudd Labor government does not even walk its own talk.

There is more evidence of it. The Green Loans farce—what a fiasco that is. Just in recent days the Minister for the Environment, Heritage and the Arts, Peter Garrett, finally responded to my question on notice. He admitted that of 18 August not one cent had been provided to households to undertake water and energy efficiency improvements in Australian homes, even though they were promised that would be what they would get help with in the lead-up to the last election. Despite reannouncement upon reannouncement and assurances from the Prime Minister as late as June in 2008 that the Green Loans Program would provide relief to Australian families under financial strain from rising energy costs—hello!—nothing has happened. This troubled and confused, unwanted, flawed and friendless program has not even got to first base. By 18 August, not one cent had been provided. Let us look at some of the statements in Labor’s election policy on 30 October 2007. It said Labor’s solar green energy and water renovation plans will:

• Offer low interest Green Loans of up to $10,000 to make 200,000 existing homes more energy and water efficient, with subsidised environmental audits and free Green Renovations packs.

On 13 May 2008 Minister Garrett, in his own press release, said—it sounds similar and I am sorry it is a cover version—that:

Up to 200,000 working families will be eligible for Green Loans over five years to improve the energy and water efficiency of their homes, as part of the 2008-09 Budget.

We are now talking about the 2009-10 budget. He went on to say on 8 May 2009:

Environment Minister Peter Garrett said Australian homeowners will be able to make their homes more energy and water efficient with 1000 home sustainability assessors ready to begin work and credit providers signed up to commence the rollout of Green Loans Program from July 1

That was 1 July. There is still nothing happening. And then you see in a prime ministerial statement on 5 June 2008:

Rising energy and petrol prices are already hurting Australian families and Australian businesses. That is why we are: helping Australian families take practical action …

The bottom line is that not a dime had been provided by 18 August. This is more evidence that programs that need care and attention, careful consideration of their design and their impact on the economy, on Australians and on the debt position and deficit of this budget do not get the attention they deserve. More effort is put into press releases and headline hunting than development and design. (Time expired)

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