Greg Hunt (Flinders, Liberal Party, Shadow Minister for Climate Action, Environment and Heritage) Share this | Link to this | Hansard source

It is a great pleasure to speak on behalf of the coalition on the Greenhouse and Energy Minimum Standards Bill 2012 and to offer our support for it. Our points in relation to this bill are very simple. With regard to energy efficiency, the environment and reduction of greenhouse gases, there are three critical points: (1) we agree on the science, (2) we agree on the targets and (3) we disagree on the mechanism where it involves a carbon tax, which is in effect an electricity tax.

We propose an incentives based scheme which does practical things, rather than one which, in the end, requires having to purchase $3½ billion of foreign carbon credits each year, every year. That figure will increase from 2020 onwards.

Where does this bill fit in? It fits in against a background of long coalition support for practical action to do real things such as ensure that we have energy efficiency measures in place in our country that are not about imposing a massive electricity tax. This bill is part of the positive agenda, which we support, but it stands in stark contrast to the carbon tax, which we do not support.

Let me begin by dealing with the negative side, which we cannot and will not support and which we will repeal. The problem with the carbon tax, first and foremost, for all of those concerned with greenhouse gas abatement, is simple: it does not do the job. Our domestic emissions will go up rather than down. They will go up from 578 million tonnes in 2010 to 621 million tonnes in 2020. That is almost 43 million additional tonnes—about two tonnes per person right across Australia—more than was the case a decade earlier. So throughout the period of the first eight years of the carbon tax our emissions will go up, not down. The tax will not do its job.

We have ventilated elsewhere our absolutely clear concerns about electricity, gas and refrigeration prices that will rise on a truly astronomical scale and about the impact that will have on small businesses, farmers, families and seniors. That is something that is well and clearly constructed, and I think the public knows that. But what is of surprise to me and to others, on both sides of this House, who want to see an improvement in efficiency and a reduction in emissions, is that it does not do its job. That is the extraordinary part about it, and that is where the relationship to this bill is so fundamental. Emissions will go up, not down; electricity prices will go up, not down. At the same time, nothing will happen; our emissions will simply continue to increase. People may well ask: 'Why is that the case? Surely that is counterintuitive?' The problem with taxing electricity is that it is a singularly ineffective mechanism. Electricity is an essential service and therefore is a largely inelastic good. It is not perfectly so, but in terms of pure price responsiveness it is largely inelastic. We will see that electricity prices will go up but that demand will not be affected in any significant way. Other elements can affect demand. I spoke with the head of the Australian Energy Market Operator yesterday. There is no doubt that the provision of solar panels has helped reduce demand for grid based electricity and that other elements, including the hollowing-out of the Australian manufacturing industry, have had a significant impact. There have also been seasonal impacts. But price alone has been a wildly ineffective mechanism. Work from around the world shows that, in a developed economy, electricity is an essential service and therefore significantly price inelastic. That is why driving up the price of electricity will not decrease our emissions in any significant way. That is the tragedy of the carbon tax: all of this pain with no fundamental or apparent gain. Those are the problems.

Let me move from the fact that we know—we believe, we are convinced—that the carbon tax is not going to achieve its objective to this bill. This bill builds on a set of national standards for the energy efficiency labelling of products in Australia. It is quite a practical measure. It is in line with our approach of direct practical initiatives. It allows the government to ensure that there is a set of uniform national labelling standards that will replace existing state and territory labelling that fulfils the same purpose—in other words, it consolidates into a single, national set of standards. That is what we want. That is what we believe in. That is what we want to occur. It is a very positive outcome.

The bill delivers a national expanded Equipment Energy Efficiency Program that enables Australian governments to ensure that, among other measures, there are common product types and standards—products that use forms of energy other than electricity; products, such as window glass and air-conditioning ducting, that affect energy consumption and standards for the identification of the greenhouse gas intensity of particular products. That is all practical information which is not overly onerous. It builds on the agreement of the Council of Australian Governments and the steps taken by it. The scheme was designed to accelerate energy efficiency efforts and to streamline roles and responsibilities across different levels of government. Those are all positive elements.

I am pleased that the responsible member of the executive, the Parliamentary Secretary for Climate Change and Energy Efficiency, the member for Isaacs, is in the chamber. Our senators, in their inquiry into this bill, raised concerns about the treatment of the lighting sector. They were worried that there would be issues about the confidentiality of sales data and that the bill was overly onerous in its imposition of reporting requirements. Whilst we have many disagreements with the government, I thank the parliamentary secretary and his office for directly addressing the concerns, knowing that what we say in this place has an impact under the Acts Interpretation Act on the interpretation of the legislation. I thank the government. They have made commitments which we regard as adequate, significant and important. I will trust that the parliamentary secretary will deliver on those.

Against that background, we agree on the targets and on the need for practical action; we disagree on the mechanism. But this is one point where we can happily provide agreement. On that basis, I am delighted to offer support for the Greenhouse and Energy Minimum Standards Bill 2012.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

) ( I rise to speak in support of the Greenhouse and Energy Minimum Standards Bill 2012 and the Greenhouse and Energy Minimum Standards (Registration Fees) Bill 2012. The speech we heard from the shadow minister is not a speech he would have made at any time during his student days when he wrote a thesis urging a price on carbon. It is not a speech he would have made as a candidate in 2007 when he stood with John Howard, the then Prime Minister, and urged a price on carbon. It is not speech he would have made when Brendan Nelson was the Leader of the Opposition when he urged a price on carbon. It is not a speech he would have made when he was the spokesperson for the member for Wentworth when he was the opposition leader. In fact, it is not a speech he would have made in this place three years ago.

All through his life he has been a passionate supporter—correctly—of putting a price on carbon. As the Productivity Commission has recommended, it is the most environmentally effective and economically efficient way to deal with the challenges of dangerous carbon emissions in our atmosphere which have an impact on our environment and our economy. For all his life, he has been an advocate for doing that. It is not a speech he would have made just three years ago in this place. Let us not kid ourselves: that speech was made in the political interest of the Leader of the Opposition and the shadow minister and not the national interest. It is in the national interest to put a price on carbon because it is good for our environment and, long term, it is good for our economy.

We believe it is important to do this. Those opposite have the same targets with respect to reducing carbon emissions by 2020. A carbon price will see reductions in annual emissions of 159 million tonnes by 2020. It is the equivalent of taking 45 million cars off the road. I do not know where the shadow minister was when the information was circulated, but it does not come from our caucus. It comes from those who assess these things. It comes from Treasury and the Department of Climate Change and Energy Efficiency.

Those opposite will impose a tax on our economy of about $48 billion, hitting every household with a tax slug of $1,300. It is effectively a carbon price of about $62 a tonne. He did not say that when he came in here. We have an emissions trading scheme. It will be a fixed price for a few years and then a sliding price. On one hand, there is the carbon price. On the other hand, there is the legislation that we are dealing with today. It complements what we are doing.

Australians are already acting. We know that. They are switching off their lights; they are switching off their appliances. We know they are looking to invest in efficient products and appliances. We can see that. In ads on TV, in brochures in the mailbox and on internet sites you can see that there are appliances and products being sold by retail outlets that advocate this because obviously consumers are discerning. They want to be energy efficient. They know it is good for their pocket and they know it is good for the environment, so they are taking steps already.

ABARES thinks that 55 per cent of our target to reduce carbon emissions by 80 per cent by 2050 can be effected by energy efficiency measures. This is an important thing. We have seen already in the last few years a 13 per cent reduction in emissions this way. Business as usual is not what Australians believe. In their personal lives—through recycling, insulating their homes, putting solar panels on their roofs and looking at energy efficient hot water systems—they are taking steps in a practical way already. What we are doing here is putting in a national framework, getting rid of the inefficiencies of state based arrangements. We applaud those arrangements. We know that they have had an impact. But when I have a Queensland retailer like R.T. Edwards who wants to distribute its products into New South Wales and Victoria, I want to make sure that it does not have to deal with eccentricities, inefficiencies and regulatory burdens. I want to make sure that there is a national framework. This will have the impact of adding about $5.2 billion to our economy. That is $5.2 billion added to our GDP that we can have in our economy that lifts the burden on business.

Those opposite always claim that they are the champions of business and free enterprise. But it always takes a Labor government to do these things. We are the real champions of the business community and small business. It is quite clear that that is the case. We stood up for business during the GFC. We stood up for them when those opposite were asleep at the wheel. We are standing up for business with respect to the carbon price and energy efficiency.

We think this is particularly important. As I say, we will see about $5.2 billion being added back to our economy by 2020 through these particular measures. This is part of a commitment that we took to the 2007 election and a commitment that was made through COAG in 2009—that is, to establish this national framework, the Equipment Energy Efficiency Program, known as the E3 Program. We are replacing those state based legal frameworks with a single national framework. We are replacing the four state based regulators with a single energy efficiency regulator. It is an important step, ensuring consistency between the states and territories and getting rid of what I call the energy dingo fence between the states. It makes sure that the burden of regulation can be lifted so that when one company, like R.T. Edwards in Ipswich, has its products labelled we know that it can sell it interstate.

The E3 Program consists of two elements. I will deal with them briefly. They are the minimum energy performance standards, which set the mandatory requirements for energy efficiency, and the energy rating labels to assist consumers to choose the most energy efficient appliances.

We love appliances. We have them all throughout our houses. There are air conditioners, TVs—often multiple TVs—DVD players, stereos and the like.

They are all through modern Australian homes; you can see that whenever you go into them.

The benefits are quite clear to consumers. Energy bills are reduced and consumers have informed choices, and they will make choices. I can recall that years ago in Queensland, in south-east Queensland in particular, we thought demand for water was inelastic. But we knew that during a seven-year drought water demand became elastic. We took steps to make sure that we reduced consumption of water. We made sure of that. That is clearly the case, and when we lifted the burden of restrictions, what happened was that Queensland consumers kept the same consumption of water.

We know energy is the same. We know people have taken steps to reduce their consumption of energy. We have seen, for example, that since the energy rating labelling began in New South Wales in 1986 the energy used by domestic refrigerators and freezers has decreased by 67 per cent. That is a very significant reduction over a period of time. Delivering these efficiencies is important for consumers. I think we need to reduce the barriers to a national framework that have been set up by state based arrangements. I think consumers want this and this goes hand in glove with putting a price on carbon.

I think the member for Tangney is speaking next for those opposite, and I would be interested to see his passionate support for the coalition's attempts to reduce carbon emissions, because from every speech I have ever heard in this place from him I am not necessarily convinced that he even believes that we should be taking action on climate change. I will be fascinated to hear his speech in relation to this matter. I am not even sure whether he thinks it is going to be a waste of time doing this, but we think it is important. On one hand we are putting a price on carbon and on the other hand there are energy efficiency measures. Lifting the burden of regulation is in the national interest. While we are pursuing the national interest, the economic interests and the environmental interests of this country, those opposite are pursuing their own sectional and political interests and running a reckless, irresponsible campaign against what is economically efficient and environmentally friendly for our economy.

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

I am sure the member for Blair will be listening with interest. Let it be clear that the coalition is committed to a cleaner future. We have a holistic plan and a green army. The effect of the carbon tax is well documented and I will not dwell on that. This bill highlights the philosophical differences between the coalition and Labor. I will briefly touch on a number of issues with the bill and how shifting the philosophical paradigm could produce better results.

The ethos of this bill is regulation—regulation of bads, as opposed to incentivisation of goods. Regulatory approaches are slow, costly and ineffective. Incentivisation and market based policies work faster and more cheaply and are more sustainable. Think of a virtuous cycle. The literature on market theory and contestable markets would inform you of that. The member for Blair obviously was not quite so interested because he is leaving the chamber.

This GEMS bill is based on the need to comply with the UNFCCC guidelines. There are two issues here: (a) the premise is flawed, insofar as anthropogenic climate change is based on loose scientific ground and (b) even if the science is accepted then the targets are not realistic. Is a five per cent CO2 reduction from 2000 levels by 2020 and an 80 per cent reduction by 2050 realistic under the carbon tax? Luckily Labor does not work in business, because in business we talk about plans being SMART, where the 'R' stands for realistic.

The reality of the carbon tax is that carbon dioxide emissions will go up by 2020, from approximately 580 million tonnes per annum to about 630 million tonnes per annum. The way that you get the five per cent reduction is sophistry and spin, which has to do with the purchase of rubbish overseas carbon credits. So Australia will not be reducing its carbon dioxide footprint, regardless of what those on the benches opposite say. The reality is that global problems require global solutions, and there is simply nothing remotely approaching a global solution or a global view of the need to reduce CO2 emissions or indeed the mechanism by which you would do that.

As I have said, the principal reason for pursuing GEMS is deeply flawed. I take issue with the scientific sources cited in the bill. The reports referenced are from bodies with vested interests—for example, ClimateWorks Australia. These bodies are engaging in rent seeking behaviours in order to justify their existence and enlarge the money allocation for the next financial year. The objectives at hand include reducing CO2. I thought it was about reducing global average temperatures, but of course we dare not speak about that because the reality is that even if you accept the IPCC position you know for a fact that the effect is negligible to none. The other objectives are cleaning up the environment and making electrical products more energy efficient.

A better way is to reallocate the resources that would otherwise be used to regulate, distort markets and stunt imagineering. Why not reallocate that money and invest it in early intervention and R&D prizes—not programs but prizes to spur, not stunt, imagination? Put money into the cheap end of the innovation pipeline. Get rid of the fungibility issues and rent seeking behaviours dominant in the research industry.

This mindset is losing the West our historic lead over China and other developing nations. Compliance does have a cost.

Small business cannot afford more green tape. This bill will affect all electrical products, insulation, energy, refrigerators—even cows. Labor do not stand for the working person any more. Why would they increase the price of everything, even of making a cup of tea—the cup, the water, the kettle? They are negative. They want to punish people. Labor do not trust or believe in the ingenuity of Australians to invent our way to a new tomorrow; the coalition is excited about the creativity of our people.

The bill makes reference to the 'reticence' of the government. They should be reticent, given their spectacular failures, such as the Home Insulation Program, the Green Loans Program, Green Start, school halls, set-top boxes and the NBN—I could go on all day. What makes them think that they can deliver now, when they could not deliver before? Moreover, seeking to harmonise state legislation—as this bill explicitly sets out to do—sounds good but in practice will have desultory results in the long run.

Vision is what the coalition is all about. The coalition believes in the fundamental brilliance of the competitive marketplace of ideas. This is true in the arena of legislation as well, where incremental amelioration must fight radical innovation. This creative destruction is the nature of capitalism. Innovative legislation breeds an innovative environment, and hence innovative products.

My strongest objection must come from the application of history and evidence. We know from the European Union and specifically the ECB that one-size-fits-all policy rarely works. The implications of unintended consequences can be seen today as a principal contributory factor to the depth of the financial crisis in the EU.

Optimal environmental outcomes require a policy that is flexible and that is tailored. What works in WA will not necessarily work in Victoria; what works in Victoria will not work in Queensland; and what works in Queensland will not work in Tasmania—but nothing works in Tasmania! Policy optimisation is contingent on local knowledge, flexibility, and case-specific environmental factors. The coalition is seriously concerned about the impact of green tape. It is having a real and measurable effect on small business, families and foreign direct investment decisions. That is why a living impact statement is required.

Like the government itself, this bill is tired and troubled. It means well, and perhaps that should be good enough, but when it comes to the future, and the future of our environment, good enough is never enough.

Darren Cheeseman (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in favour of the government's Greenhouse and Energy Minimum Standards Bill 2012 and the related Greenhouse and Energy Minimum Standards (Registration Fees) Bill 2012. The Australian government has committed to reducing national greenhouse gas emissions by at least five per cent on 2000 levels by 2020, and by a further 80 per cent by 2050. A number of measures have been implemented by the government to meet its commitments. There has been a raft of policy initiatives, including the Renewable Energy Target scheme, which aims to increase the use of renewable energy by some 20 per cent. We have also introduced the clean energy future package, which uses a range of mechanisms including a price on carbon to create incentives for reducing greenhouse gas emissions in our economy.

Energy consumption by appliances and equipment is a major source of greenhouse gas emissions. That is what we are here to talk about today. For many of these products there is considerable potential to improve energy efficiency at minimum cost. In 2007, the Australian Bureau of Agricultural and Resource Economics and Sciences estimated that 55 per cent of Australia's emissions reduction target to 2050 could be met through energy efficiency improvements.

These bills, which together make up the greenhouse energy minimum standards legislation, implement a 2007 election commitment and a 2009 commitment by the Council of Australian Governments to achieve nationally consistent regulation of equipment energy efficiency across the nation. That makes sense; if we did not go down this path, we would end up with the states and territories having different laws, different standards and different reporting requirements, which would be a compliance nightmare for those that manufacture equipment or import equipment into this country. By passing these bills, we can create a system which will enable consistency across the nation.

Australia's energy efficiency regulation began with energy labelling for household refrigerators and freezers way back in 1986 in New South Wales, followed soon after by Victoria. In 1992, a national program was established and funded to collectively coordinate energy efficiency regulation across all states and territories. Today, the E3 program also includes New Zealand and covers 23 product types in residential, commercial and industrial sectors, delivering energy and financial savings in a transparent way to households and businesses.

The E3 program relies on two main tools, mandatory minimum efficiency levels and energy-rating labels, to provide consumers an opportunity to compare product for product.

Minimum energy levels help to keep the most inefficient products out of the Australian market. For instance, inefficient lighting products in the Australian market can be phased out. Energy-rating labels help Australian consumers and businesses to compare products based on energy use, which not only is good sense but would lead to consumers being able to, in the long term, properly value a product that they might consume, because the labelling will provide them with useful information of energy consumption. When consumers go shopping they will be able to use star-rating systems which will provide them with an easy mechanism to determine the energy efficiency of products.

In 2005, 83 per cent of consumers surveyed reported referring to the energy efficiency label when purchasing major household products. If it was 83 per cent in 2005, I could predict that it will certainly be higher now. With a price on carbon consumers will, quite rightly, be even more intensely focused on finding products that are energy efficient. It makes a lot of sense. Another example of savings is switching from a one-star to a seven-star television, which could save households some $100 a year in their energy bill. I think consumers will, quite rightly, be using the star-rating system on TVs to provide them with guidance about what the energy costs might be in the future. This is about empowering consumers to take account of the energy use of particular products.

The Council of Australian Governments agreed in 2009 to establish national legislation to regulate energy efficiency. As I mentioned earlier, if the Council of Australian Governments had not decided to take that course of action, then we would have seen a situation in which states took action themselves to inform their consumers. That would have meant that, ultimately, we would have ended up with different laws around the country dealing with this matter. It would have made an absolute nightmare for producers of goods and for those who import products into Australia that consume energy, such as TVs, refrigerators, kettles or any other number of products.

It makes sense that the Council of Australian Governments agreed to the approach that the Labor government had proposed. I think we have some common sense legislation as a consequence. The legislation will harmonise Australia's energy efficiency program and remove administrative inconsistencies in its application for both business and government. I think this is a very worthwhile exercise. It is my understanding that consumer groups, groups concerned about the need to take action of climate change and the business sector all support having a consistent approach across the nation and therefore, as I understand it, approve of the government's desire with respect to this matter.

I think I might leave my contribution at that. I certainly commend the work of the ministers who have had carriage of this portfolio area. The consistent approach across the nation makes an enormous amount of sense. Empowering consumers is something that I value, and I know consumers very much want to have information that is readily accessible, that makes sense in a simple format and that enables them to pick products on the basis of energy or on any other number of measures. I commend the bill to the House and look forward to its implementation.

Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

The coalition has a good record of caring for the environment, while restricting green tape. The coalition does this through coordinated, considered policies rather than through the incongruous group of complex and inconsistent schemes that have blown out of control and proportion under Labor, particularly since the last election. The coalition seeks to reduce green tape in a number of schemes to deliver consolidated air, land, water and energy schemes through a national structure.

The Greenhouse and Energy Minimum Standards Bill 2012 and associated bill only take into account a national scheme within the energy component. It is a good start, but a lot more can and needs to be undertaken. The largest imposition of green tape is the carbon tax, which started on 1 July. The carbon tax, as we all know, is a $9 billion a year tax and it will hit every Australian through their electricity and gas bills.

Australia had low-cost power at one stage and had affordable energy. That is why we were a country so beneficial to business and industry.

But that does not exist any more. The carbon tax hit Snowy Hydro, an electricity generation and retailing company that owns, manages and maintains the Snowy Mountains Hydro-Electric Scheme. It helps power New South Wales, Victoria, Queensland, South Australia and the Australian Capital Territory. It provided, in 2010, 4,500 gigawatts of clean renewable energy or 37 per cent of all renewable energy in the mainland electricity market in that year.

The Greenhouse and Energy Minimum Standards Bill 2012 puts in place a set of national standards for the energy efficiency labelling of products in Australia. The bill allows the government to set uniform national labelling standards, taking over from all existing state and territory legislation for the same purpose. The bill will deliver a national expanded Equipment Energy Efficiency E3 program, which will enable Australian governments to regulate all electrical product types; products that use forms of energy other than electricity, for example, diesel or gas; products that affect energy consumption of other products such as insulation, window glass and air-conditioning ducting; the greenhouse gas intensity of products; minimum performance requirements for regulated products, such as the temperature at which refrigerators must operate; and potentially negative environmental and health effects relating to regulated products.

Agreement was made by the Council of Australian Governments, COAG, in October 2008, to begin the scheme. The Australian government pledged $37.1 million over four years in the 2012-13 budget to finance the Australian government's share of the cooperative E3 program. After initial stakeholder consultations, the strategy was themed around four key areas. Sourced from COAG meeting outcomes, the document on the National Strategy on Energy Efficiency came out in April 2009, firstly, to assist households and businesses to transition to a low-carbon future—not that the amount of money or the number of families and households it covers will go anywhere near compensating for increased power bills, fuel prices and grocery costs under the clean energy bills. As for business, they have no hope of covering costs and must absorb the so called cleaner energy bills' imposition. There is little government help and it is difficult to pass costs on to consumers—secondly, to reduce impediments to the uptake of energy efficiency; and, thirdly, to make buildings more energy efficient. Local governments have also taken up the cudgels in this area, perhaps too officiously. Government working in partnership and leading the way would be desirable yet it would be considered almost idealistic in this day and age with this Labor government.

Energy efficiency labelling is currently regulated by individual states and territories. Contained within the Greenhouse and Energy Minimum Standards Bill 2012 is an upgrade to the existing star rating scheme for the energy efficiency labelling of products to a national system. Having identified various legislative options, in January 2010 the government published a regulation impact statement and held a further six public information sessions. This was followed by a supplementary discussion paper, which drilled down on compliance obligations and enforcement measures, and another consultation period followed that. On 31 May this year the bill was referred to the House Standing Committee on Climate Change, Environment and the Arts. The House committee referred the bill to the Senate Environment and Communications Legislation Committee. The ECA committee delivered its report on 20 August, just this week.

The report called for the bills to be passed. The coalition supports passage of the legislation but has dissented specifically on noting the concerns of the Lighting Council Australia in respect to certain criminal sanctions. The coalition is concerned about the heavy burden of regulation and red tape—some might call it green tape—imposed on business across all areas of government. There is concern the legislation adds to that onerous regulation. Coalition senators also note the numerous issues raised by the Senate Scrutiny of Bills Committee in respect of an individual's personal rights and liberties. However, the matter has been raised directly with the government. We understand it is being looked at. We will have to take Labor in good faith—if only the public had similar confidence in what Labor says and what Labor does.

While I am not normally accepting of government undertakings, on this occasion the government has been reasonably cooperative, has addressed the coalition's concerns that have been raised and in particular has given an appropriate undertaking that it will do so as part of the discussion of this particular bill. These undertakings have effect under the Acts Interpretation Act. I acknowledge the government for its cooperation yet note this is a win for coalition senators.

The major stakeholders of this bill are Master Builders Australia, the Australian Chamber of Commerce and Industry, the National Electrical and Communications Association and CHOICE. All industry groups mentioned have given this bill in-principle support. Master Builders Australia and the National Electrical and Communications Association have expressed concern about possible duplication of regulations under this bill and a further inquiry through a parliamentary committee is needed to fully understand the bill's implications. ACCI has indicated that it has no concerns with the overall intentions of the bill provided the bill itself does not add to increased regulatory burdens for the industry. That government's exposure draft on the bill has noted that the government intends to work with industry to allow individual contributions from each affected industry during the regulation impact statement process. In August 2011 the draft GEMS bill was released and submissions were accepted over a two-week period. In response to concerns of stakeholders, the government did publish a consolidated response to the main issues raised at that particular time.

The star energy system is good because it is so simple. The beauty of it is in its simplicity. As the member for Corangamite stated, it empowers consumers when they are buying such products as televisions and refrigerators. When I refer to televisions, we live in an age of high-definition and digitalisation that has caught up with and well passed by a lot of pensioners. If only a simple system had been in place for many pensioners. Many in my electorate have expressed a lot of concern about the rollout of the set-top box program. Quite frankly, it would have been cheaper in many circumstances for the government to have bought a new high-definition television for pensioners rather than roll out this non-sensical set top box program, which is going to ultimately cost the taxpayer and Treasury.

Also, whilst referring to the six-star rating, it is great that we have a star rating system on the fridge door, but what about the labelling of the food inside the fridge? I would encourage anybody who is listening to go to YouTube and search for 'orange dumping'. There is a video there by Rocco Pirrottina, of Distant Light Productions, posted on 1 August this year, showing the dumping of oranges. It is a sad video to watch. It is the dumping of oranges from the back of a truck—oranges freshly grown in the Murrumbidgee Irrigation Area, some of the best oranges you will ever see in Australia—on a paddock for as far as you can see. And that was not just happening on 1 August; it has been happening every day since. That is because there is so much cheap imported juice concentrate and so many overseas oranges coming through. And they are poorly labelled. Our labelling system is not as good as it ought to be. It is a shame that the government cannot put forward a bill similar to this one so that consumers, when they open their six-star rating fridges, can look inside and take out food which is also properly labelled. That would prevent these sorts of videos going up on YouTube showing the tragic dumping of fresh, tasty Australian fruit which is meant for metropolitan and regional markets right throughout Australia but is unfortunately being ploughed into paddocks as we speak.

This bill is agreed to by the coalition but with certain conditions. The bill has already been referred for inquiry to the House Standing Committee on Climate Change, Environment and the Arts. We have put forward our concerns about it. There are some other aspects of it which still need to be looked at, but, overall, it is good. It will empower consumers, when they buy household appliances, to see whether they are energy efficient and make their choice accordingly.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Greenhouse and Energy Minimum Standards Bill 2012 and the Greenhouse and Energy Minimum Standards (Registration Fees) Bill 2012. To put this debate into context I want to quote directly from the Senate Environment and Communications Legislation Committee report of August this year following its inquiry into this legislation:

The Australian Bureau of Resources and Energy Economics estimates that residential households accounted for around 11 per cent, or 440 petajoules, of Australia's total final energy consumption in 2009-10. Household energy is used for various purposes such as operating household appliances, space heating and cooling, water heating and cooking. Household appliances include lighting, refrigerators, freezers, televisions, information technology equipment, washing machines, clothes dryers, microwaves and dishwashers. Since 1989-90, household energy consumption in Australia has grown by 41 per cent, or an annual rate of 1.6 per cent. It is anticipated that, by 2020, household energy consumption will increase to 467 petajoules as the population and number of households increases. Energy consumed by appliances and equipment is a major source of greenhouse gas emissions in Australia.

The report goes on to say:

The stationary energy industry in Australia produced 201.4 million tonnes of carbon dioxide equivalent emissions in 2010, representing 54.1 per cent of Australia's net emissions, excluding land use, land use change and forestry. It is predicted that, by 2020, Australia's total stationary energy emissions will increase to 332 million tonnes of CO2 equivalent emissions, 33 per cent above 2000 levels.

I think that sets the framework under which this legislation was established. The increase in Australian energy use arises from there being many more home appliances than in years gone by, by homes themselves being larger and sometimes less energy efficient—today we are supposed to be constructing more efficient homes, but I am certainly not convinced that that is being achieved by some of the designs that I have seen—and by an increase in population, which automatically flows on to more energy requirements.

Reducing energy consumption by the use of more efficient household appliances can make substantial savings in total greenhouse gas emissions. In 1992 the National Equipment Energy Efficiency Program, otherwise known as E3, was established to coordinate several state based schemes. The E3 program is a mandatory scheme which requires that appliances for sale display an energy rating label. In July 2009 a COAG agreement was reached to improve the E3 standards. That agreement included trying to establish a nationally consistent policy framework which streamlined the process and simplified compliance and enforcement regimes, as well as reducing total transaction costs.

In August 2009 the Australian government released a discussion paper, and six public hearings were held around Australia to gain feedback on the proposed changes to the E3 scheme. In January 2010 a regulation impact statement was proposed on the national scheme, and an additional six public hearings were held around the country.

Since their introduction into this parliament, the bills have been referred to the Senate Scrutiny of Bills Committee, the Senate Environment and Communications Legislation Committee and the House Standing Committee on Climate Change, the Environment and the Arts. I do not think any other piece of legislation has had as much scrutiny as this legislation.

Consultation with industry has been very widespread. Whilst consultation has taken place, it is my understanding and recollection that the only parties to respond to the Senate inquiries were the Clean Energy Council of Australia and the Australian Lightning Association. I suspect that is because there was no substantial concern with the legislation as it currently stands. Subsequent to those inquiries, I made a statement in the House on behalf of the Standing Committee on Climate Change, the Environment and the Arts discharging our obligations in respect of our inquiry. Our committee largely relied on the work that was carried out by the Senate committees because we were not going to duplicate that work. In particular, the committee took note of the responses from the department and from the minister to concerns raised by the Senate committees. Our committee was satisfied that the legislation ought to be brought back into the House to continue the debate.

The changes proposed under this legislation are significant and important—important to the broader industry and important to the country. To the broader industries it means a streamlined process, in which there will not be different legislation across the different jurisdictions. The intent is to have everything nationally consistent. I have no doubt that that will be welcomed by the industry sector. It will be welcome because it will make their obligations much easier and it will save them considerable funds in the process. For the nation it will make a huge difference because we will have consistent standards and by having consistent standards, I believe, we will be able to achieve our targets of reducing greenhouse gas emissions much more easily. In fact, it is estimated that by 2020,under the existing scheme, energy consumption will be reduced by about 13 per cent and there will be something on the order of a $5.2 billion saving across the country as a result of the current E3 program. The changes to the legislation will further reduce energy output by around 15 per cent. If we are making those sorts of savings right now, what will the savings be if energy output is further reduced by 15 per cent?

The other aspect of this legislation is that the existing E3 scheme only targets businesses that supply products in Australia and does not regulate businesses that purchase their products overseas. Again, that is inconsistent. These bills will end that double standard and close loopholes currently existing in state laws that may encourage business to purchase overseas products. Under the legislation the regulator will have powers to issue infringement notices and where appropriate to take court action, but it will also empower the regulator to ensure that the scheme is properly administered across the country. Again, that is important. I think there would be little disagreement that in today's market the energy rating scheme used by suppliers and manufacturers goes a long way towards their total sales. In fact, I understand that something like 85 per cent of consumers, according to research, choose their appliances based on the energy rating label attached to them. That being so, it is important to ensure that those energy labels are accurate. It is also important because it encourages investment in more efficient appliances by manufacturers. If they know that by making a more efficient appliance they will increase their sales, that will encourage the necessary research and development and investment. There are huge consequences to having a labels system in place.

These bills will make that whole process much easier, much simpler, and will streamline it for all concerned. I believe that they are an important step not only in reducing our energy output across the country but also in attracting investment into manufacturing industries throughout this country. I commend the legislation to the House.

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

Like the member for Makin, I am very pleased to speak on the Greenhouse and Energy Minimum Standards Bill 2012 and the Greenhouse and Energy Minimum Standards (Registration Fees) Bill 2012. These bills for me push three important buttons. The first one is reducing greenhouse emissions as we move toward a clean economy. The second is empowering consumers to drive innovation and reduce their own electricity costs. The third is something this government has worked on consistently since coming to power in 2007—the removal of duplication across states in order to simplify the red tape burden for business. The legislation deals with the way businesses and consumers communicate with each other about the energy efficiency of appliances. We all know about the E3 system. The familiar energy rating label is one of the best recognised brands in Australia. In 2005, 83 per cent of consumers reported that they referred to the label when purchasing major household appliances. We have all seen those star rating stickers on appliances when we shop.

The Greenhouse and Energy Minimum Standards Bill 2012, the GEMS Bill, establishes national legislation for the Equipment Energy Efficiency Program, the E3 Program—one of the better acronyms I have seen in a while. The GEMS Bill implements a 2007 election commitment and a 2009 commitment by the Council of Australian Governments to establish national legislation to regulate equipment energy efficiencies.

Since the program's inception at state level in 1992, things have gone quite well. There has been a lot of work at state level and one can only say that the program has been successful. But a large number of inconsistencies and inefficiencies have arisen in what is essentially a state regulated E3 program. By replacing the seven state based legal frameworks with a single national framework and replacing four state regulators with a single energy efficiency regulator, we are significantly reducing the red tape burden for industry in this area and simplifying things for consumers.

The GEMS Bill will also allow the expansion of the energy efficiency program to a wider range of products. The program originally started in 1986 with domestic refrigerators and freezers. It has grown significantly since then but still focuses on electrical products. This bill will allow energy efficiency regulation for products that use other forms of energy, such as gas, and products that affect energy use, such as insulation and windows. The GEMS Bill will deliver a more consistent and expanded E3 Program which is all about reducing Australia's greenhouse gas emissions and reducing power costs for Australian households and businesses. The GEMS Bill is appropriate and adapted to implementing Australia's commitments under the United Nations Framework Convention on Climate Change. The Greenhouse and Energy Minimum Standards (Registration Fees) Bill 2012 supports the main GEMS Bill with a legislative basis for the national regulator to charge registration fees, consistent with the process in the existing E3 Program.

The energy consumed in the operation of appliances and equipment in the home is a major cost to householders. Most of us do not really know what the energy cost is appliance by appliance. We are becoming more and more aware of leaving appliances plugged in that are drawing power 24 hours a day. We are now aware of the need to turn things off when they are not being used. But there is still a long way for us to go. In many cases, people are completely unaware of the amount of energy their appliances use, how much that costs and how much it contributes to emissions.

There is considerable potential to improve the energy efficiency of many products at minimal cost. When I am talking about this to people, I use a related analogy. In the United States of America, power points do not have switches on them: when you plug something in it stays on, whereas in Australia we have switches on our power points and we often have switches on our appliances. For many decades it was believed that this was a relatively cheap form of power. There is no practical reason that that was the case; it is just the way it was. There are many things in our own houses that are very similar to that. There are things that we do because we always have done them that way, but we are actually using considerably more power than we need to use.

This legislation implements a commitment that we made at the 2007 election to establish national legislation to regulate the energy efficiency of products and appliances supplied in Australia. COAG also made a commitment to that in 2009. The E3 Program comprises two elements. Minimum energy performance standards set mandatory energy efficiency requirements for equipment and appliances sold in Australia and prohibit the sale of the worst-performing products. As consumers, we are becoming more aware that certain products that we use in the house draw considerable power but are used for only short periods of time. Setting minimum energy performance standards is a very important element of reducing greenhouse gasses.

Energy rating labels assist people to choose the most energy-efficient product at the point of purchase, using the familiar star-based rating system: the more stars shown on the label, the more efficient the appliance. This is a system that Australians have become quite used to. When you buy a new appliance, it is quite common for people to ask, 'How many stars does it have?' It is one of the first things that my family consider when we are buying an appliance. It is always a great pleasure to remove the old item with one or two stars and replace it with something with five, six or more stars.

The benefits to consumers are clear: energy bills are reduced and there is better consumer information to inform the choices that consumers make. Because the consumers have more choice and power, they will drive innovation themselves. As consumers become more aware and choose the better rated appliances, manufacturers will respond. Giving consumers the power to drive innovation is a very important part of moving towards a clean energy future.

Since energy-rating labelling began in New South Wales in 1986 with domestic refrigerators and freezers, energy used in those appliances has decreased by 67 per cent—an amazing achievement just by giving consumers choice. Refrigerators have become cheaper in real terms, and their effective size has increased. I will repeat that number, because it is quite amazing: with the use of energy-rating labels since 1986, the energy use of domestic refrigerators and freezers has decreased by 67 per cent. At present, people are upgrading their televisions for all sorts of technological reasons. If you switch from a one-star to a seven-star television, it could save your household about $100 every year in energy bills.

The GEMS legislative package will deliver efficiencies to regulated businesses and government by replacing seven state and territory laws with one national law and by replacing four state regulators with a single national regulator. The national legislation will correct the different treatment of suppliers and importers that exists in state law, so ensuring a level playing field for Australian businesses and cutting regulatory burdens. This government has been diligent over the last four years in reducing duplication across state borders and simplifying the business activity of companies which trade across borders. We hear of many cases where these changes have made a substantial difference to the way businesses operate. Now, for the first time, the same regulations will apply to businesses that import products for commercial use. The fact that this same regulatory system did not in the past apply to the import of products for commercial use has made the playing field somewhat uneven for domestic manufacturers. This legislation contains regulations that will level the playing field for domestic manufacturers.

It is estimated that the GEMS legislative package will drive energy efficiency gains that will deliver $5.2 billion in energy savings in 2020 and reduce household power consumption by up to 28 per cent compared to power consumption under business-as-usual conditions. In 2007 we committed to do this, and the nation has been moving towards it since 1986 with a great deal of success. It is great to see this package of legislation, which takes a national approach. I commend the bills to the House.

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I thank the members who have contributed to the debate on these significant bills. I also thank my state and territory counterparts for their continued cooperation on the legislation. The Greenhouse and Energy Minimum Standards Bill 2012 and cognate bills implement a key reform in Australia's national strategy on energy efficiency. This reform goes to the heart of two of Australia's most important policy objectives: assisting households and businesses to reduce their energy bills and reducing greenhouse gas emissions. It is a timely reform when energy prices have risen so dramatically before the introduction of Australia's carbon price and when Australia's international partners are coordinating to develop a global response to climate change.

The legislation arises from a commitment by the Council of Australian Governments to improve Australia's 20-year-old equipment energy efficiency program by introducing national legislation. The E3 program has delivered significant energy savings efficiency for households and businesses over 20 years. In 2010 alone, energy efficient air conditioners and refrigerators promoted by the E3 programs saved Australian households and businesses over $1 billion in electricity costs. The total energy savings are forecast to reach more than $5 billion in the year 2020.

Despite past successes, all Australian jurisdictions recognise the opportunities that come from creating a truly national program. A national program will allow for greater consistency in energy efficiency regulation and provide a more level playing field for businesses and consumers. The Australian government will realise these improvements with the GEMS legislation and deliver continuing energy savings far Australian households and businesses.

I thank industry for their very important contributions and support; this is a widely supported measure. In particular I thank Lighting Council Australia, whose submission I will come to, and the Clean Energy Council. The Clean Energy Council welcomed the government's commitment to establish a national legislative framework for regulating the energy efficiency of products supplied in Australia. The Clean Energy Council has stated:

Energy efficiency remains one of the most important policies that governments can deliver to both reduce emissions and to protect consumers from rising electricity prices.

The Clean Energy Council was particularly supportive of the establishment of a single national regulator and of the harmonisation of standards, registration processes and fees. The Clean Energy Council was also supportive of the expansion of measures to cover a greater range of products, and the closing of loopholes in state laws that allow imported products to enter Australia without meeting minimum efficiency standards. The support of the Clean Energy Council is very welcome and attests to the benefits of this legislation.

I turn to responding to a few of the matters that have been mentioned in today's debate. I thank those opposite for supporting the government on this legislation, which will save money for both households and businesses. This legislation compliments Australia's carbon price and promotes energy efficiency by addressing non-price barriers that impede the uptake of energy-efficient products in the Australian market. Addressing non-price market barriers complements the carbon price and addresses market forces that lie beyond the reach of a price-based mechanism. But without a carbon price Australia cannot achieve the emissions cuts we have agreed to. The carbon price will see Australia's annual emissions reduced by at least 160 million tonnes in 2020 from where they would otherwise have been. This is the equivalent of taking around 45 million cars off the road. Without our carbon price, Australia cannot move to a clean energy future.

Labor's plans will cut carbon pollution and drive investment in clean energy technologies and infrastructure such as solar, gas and wind. It will help build the clean energy that future generations deserve. It will help not just us but also our children and our grandchildren. In stark contrast, families would be worse off under Tony Abbott's plan. They would be $1,300 worse off from higher taxes which would be handed straight to the big polluters.

I note the remarks made by the member for Tangney. I can best summarise the member's remarks by quoting the Leader of the Opposition, who has said that the science of climate change is 'absolute crap'. After hearing the member for Tangney speak, no-one can be in any doubt that a refusal to accept the science of climate change continues alive and well in the opposition ranks. We should again note that there is clear consensus among climate scientists that climate change is real, that it is currently being observed and that it will have significant future impacts if no action is taken to reduce global greenhouse gas emissions. The CSIRO, the Bureau of Meteorology and the Australian Academy of Science, along with science academies around the world, agree that human activity is almost certainly causing climate change. It is clearly in Australia's national interest to continue to work to achieve the international goal of limiting warming to below two degrees. To do this, it is imperative that we play a responsible role in international action and that we do so by taking strong action at home.

This means that we must actually reduce our emissions of carbon pollution into the atmosphere. To do this, we have to drive reform across our economy. Because the Australian economy is so directly dependent on pollution, the only way to abate and reduce pollution is to transform our economy so that we can create a clean energy future.

Debate interrupted.