Tom Roper, speaking at a 2010 property event in Canberra

11 May 2012 – Following is the text of an open letter sent to  Greg Combet, Minister for Climate Change & Energy Efficiency, from Australian Sustainable Built Environment Council president Tom Roper, sent Wednesday, 9 May 2012.

Dear Minister Combet,

I write to you, both in sorrow and in anger, at the Government’s action in breaking its key election promise on Tax Breaks for Green Buildings.

Many of our members have already contacted us, concerned at what this broken promise means for future government/industry relations.

You will remember that it was industry that requested the program be delayed to a July 1st 2012 starting date, to improve its design and effectiveness.  Following the April 2011 announcement of an industry/government roundtable by your colleague, the Assistant Treasurer, the Hon Bill Shorten, the program remained in the forward estimates.

This attempt at cooperation seems to have been trashed by last night’s announcement. The building industry, as well as the substantial reduction in carbon emissions, are the casualties of the Treasurer’s announcement.

The Roundtable produced a proposal that was easily implementable, without the requirement for legislation and took into account the need to minimise expenditure in the 2012 / 2014 financial years.  I have asked, on a number of occasions, without success, for approval to distribute the Roundtable Report to at least those involved in its work.

Building owners and managers and the broad ranging ASBEC membership eagerly anticipated the scheme which would have encouraged the retrofit of existing stock and the significant expansion of higher NABER’s rated buildings.  What was to be a comprehensive plan to reduce emissions from buildings is now limited to the much smaller and uncertain effects of the carbon price.

ASBEC’s 2010 Second Plank Update report identified some 46 mega tonnes of CO2-e emissions reductions through improved buildings energy efficiency, the quickest and easiest reduction to improve the economy’s carbon foot print. The work undertaken by both the Centre for International Economics and the Allen Consulting Group was made available to your Department and the Government.

This has been totally ignored in the statement made in Part 1 of Budget Paper No 2 (page 42), where it is claimed that the scheme “would have driven higher cost abatement than that delivered by the carbon price.”  Our estimation, through our work on the Tax Breaks scheme and our Second Plank Update report, is in the order of $12 a tonne.

The abandoned scheme’s reductions would have produced real tonnes, not estimates or prophecies as owners were not reimbursed until the post-retrofit NABERS rating confirmed the actual reductions.

Scrapping the programme altogether sends clear signals to a sector already fatigued by uncertainty around carbon pricing.  In the long term, it will undoubtedly mean a loss of potential jobs that would have been created through retrofit projects, which are far less likely to eventuate without the scheme and will add to unemployment in the building sector in the foreseeable future.

It diminishes Australia as a leader in climate change mitigation, in contrast with major programs in the United States and Europe.  It damages the thinking that has been part of the National Energy Savings Initiative and the work done by and for your Department on White Certificates.

If the Government wants to achieve the maximum carbon emissions reductions, complementary measures such as Tax Breaks for Green Buildings must accompany the Carbon Tax.

Yours sincerely,

The Hon Tom Roper?President