Barry O’Farrell

1 November 2012 – As we mark the first anniversary of the full introduction of mandatory disclosure of office building energy efficiency, readers of the current commercial property “For Sale” ads in newspapers would have noted that NABERS Energy ratings are being clearly displayed these days.

They’d see, for example, that Stockland’s 9 Castlereagh St, Sydney, surely one of Harry Seidler’s least-appreciated office gems, rates a surprisingly modest 3.5 stars; that 20 Allara St in Canberra is a decent 4 stars, and 973 Nepean Highway in suburban Bentleigh in Melbourne is a lowly 2 stars.

But there’s been one office portfolio vendor who’s been advertising recently that has not displayed their NABERS Energy ratings at all.

And that’s made me mad as hell.

That owner is the NSW Government. The O’Farrell government is flogging off seven office assets to make ends meet, hardly a great way to run a business but that’s politics and a debate for another time.

If a property company were selling an office building and it did what the NSW Government has done, the ad would be illegal, with penalties of up to $110,000 a day, unless the buildings for some reason were an exception to the law, or had been granted an exemption. As well, advisors to the owner, in this case Macquarie Bank, would also have broken the law.

My mind boggled. Would Minister Greg Combet be fining Premier O’Farrell and his officials? Make an example of them? Show them nobody’s above the law? And at $110,000 a day, that would be handy for getting the federal budget back into surplus?

I’ve read the Building Energy Efficiency Disclosure Act 2010. I knew that section 8 states that the law “binds the Crown in each of its capacities”.

I had always understood that to mean if a government sells or leases more than 2000 square metres of space, they must meet the disclosure requirements of the Act.

I was wrong. In fact, governments are not covered by the Act. The advice I have received from the CBD Scheme is that: “Section 15 [which explains that only constitutional corporations are covered] imposes disclosure obligations on constitutional corporations only and imposes no obligations on entities that are not constitutional corporations.”

So what we have here, I discover, is a case whereby the Australian Government has enacted a scheme that significantly improves the visibility of energy efficiency in office buildings, both by the NABERS Energy rating of the building and, for the past year, how efficient the lighting is in the space, without requiring government buildings to comply.

However, while it may not be against the law to advertise government buildings for sale without a NABERS rating being displayed in the ad, I’d argue it’s morally indefensible.

I’m sure every commercial building owner in Australia would agree: governments expect them to have valid, current BEECs and to advertise them on sale or lease, but Governments don’t need to do so themselves.

It’s a bit rich, isn’t it? How about governments leading by example?

So I wondered if the NSW Government is embarrassed by its ratings. Was that why there are no ratings displayed in the newspaper ads?

The twist to this story, however, is that the NSW Government assets up for sale are actually strong performers. The ratings are pretty good!

Those responsible, the previous Labor Government and its officials and contractors who delivered these results, should be proud:

The McKell Building in Sydney is NABERS Energy 4 stars

  • 207 Kent St, Sydney, is 4.5
  • 84 Crown St, Wollongong is 4
  • 4-6 Bligh St, Sydney, is 4
  • 2-6 Station St, Penrith, is 4.5
  • 117 Bull St, Newcastle is 4.5
  • 11 Farrer Place, Queanbeyan is 4.5.

Sure, this is not as good as GPT’s portfolio ratings these days, and hardly industry-leading, but it’s good.

As well, apart from 207 Kent St and 84 Crown St, Wollongong, the

Tenancy Lighting Assessments show pretty good lighting energy efficiency, too. The TLA for 117 Bull St, Newcastle, shows lighting energy efficiency as low as 3 watts per square metre in one office area and 4 in another. That’s outstandingly low.

Yet again, for no real reason other than apparent indifference, we see a government not in any way supporting even its own policy statements on energy efficiency.

As we mark one year of the CBD Scheme’s full operation, it’s timely to reflect on how an incredibly cheap government initiative – both NABERS and the CBD Scheme – has had such little government support. Remember, it took three governments (Howard, Rudd, Gillard) six years from the time the Howard Government announced mandatory disclosure to its full implementation.

And this year, 2012, was originally supposed to be the year Phase two of the CBD Scheme would come into effect, covering hotels and shopping centres. I’ve seen no word on when that will happen. I’ve seen no Regulatory Impact Statement for this, just Energetics’ scoping study in June 2010.

To me, the fact that the NSW Government breached the spirit of the law last month with those advertisements highlights yet again one simple fact: cutting carbon emissions in existing buildings may be the quickest, cheapest way to cut carbon emissions, but it’s just not something governments take seriously.

Gavin Gilchrist heads energy efficiency group Big Switch Projects and is the Energy Efficiency Council representative on the national NABERS Stakeholder Advisory Committee.