By Tina Perinotto
23 March 2010 – [See update] Mandatory Disclosure could have a starting date of about October this year and it may come with a heavy stick, according to industry sources.
Speaking off the record, insiders say that Senator Penny Wong’s Federal Department of Climate Change and Energy Efficiency, which is now handling the legislation, is firming on a start date and that the legislation will also include stiff penalties applied on a daily basis for owners of buildings that do not comply.
Whatever the fine details, the point is that as the legislation looms closer the industry is becoming more nervous.
The proposal is that every commercial office building of 2000 square metres or more must declare energy use –using a NABERS energy rating – at the time of sale or lease.
While the top end of town is relatively comfortable with NABERS – about 60 per cent of commercial office space in the Sydney CBD and 50 per cent across all CBDs are rated for NABERS energy – the legislation will pose significant challenges for other property owners.
At the Australian Direct Property Investment Association annual conference in the Yarra Valley in Victoria last week, delegates heard that many direct property owners – perhaps 80 per cent of commercial building owners – are unprepared for the legislation. In terms of the needs to retrofit their buildings for climate change they simply “don’t get it.”
Partly this is because direct property owners do not have the access to resources and consultants available to listed property companies.
Today Property Council of Australia chief executive officer Peter Verwer underscored the concern about the impact the legislation with a number of issues.
He said the industry needed more time and more preparation. “The key issue is going to be the start date and the transitions provisions,” he said in an article in The Australian Financial Review.
At the Green Cities 2010 conference in February Mr Verwer said that Mandatory Disclosure would “not save a single tonne of carbon”.
He pointed instead to the need for a series of “low-cost incentives for owners to increase the energy efficiency of their buildings.”
These included accelerated property depreciation, rebates, improved appliance standards and even a voluntary emissions trading scheme, customised for the sector, he said in the report.
However, Mr Verwer has said that Treasury is strongly opposed to accelerated depreciation.
In response to a query from The Fifth Estate that this might be based on the cost to taxpayes, Mr Verwer said that accelerated depreciation would be revenue neutral to taxpayers. (See another view on accelerated depreciation).
tperinotto@thefifthestate.com.au