Rob Sitch

On Rob Sitch and The Hollowmen and how to run the country on ideology, dumb headlines, pea-brained thinking and short-term goals

27 March 2014 – Here’s a tale of two cities with a dissonant twist you might not expect.

We’re used to Victoria being the beacon of innovation and cool. Long lines of visitors filing back to Sydney with murmurs of what a great city Melbourne is.

But the tables might now have turned.

Picture the following contrast.

Today [Thursday] the NSW Government’s Office of Environment and Heritage started a week-long program of site visits to showcase the kind of energy efficiency it’s been able to stimulate through three key programs for private businesses and government buildings.

The Energy Saver, Sustainability Advantage Program and the Energy Efficient Government Program are creating savings of $124 million a year. They include 536 members of the Sustainability Advantage scheme who are saving $79 million and the Energy Efficient Government Program, which is saving $15.8 million on the energy bills of government buildings.

At about the same time in Victoria the message will be starting to seep through that the state government there has axed the Greener Government Buildings program.

This means trashing hundreds of jobs and destroying a program that was on track to save $2 billion in energy bills in the next 25 years. At no net cost – in fact, gains – for the taxpayer.

Based on loans from Treasury, the program was designed to fund energy retrofits that would pay back the investment in no more than seven or eight years.

One of the big winners from the program was announced this week – RMIT, which is expecting to save millions in a retrofit program worth a total of $98 million.

The university said the project was the biggest retrofit program in the Southern Hemisphere. We pegged that claim back a bit because we couldn’t be sure that was correct, but you get the drift.

Assistant Treasurer Gordon Rich-Phillips shamelessly boasted about this project in Parliament on Tuesday, just after he announced the cuts. He failed to disclose that by axing the program this was a program unlikely to be replicated.

The new Efficient Government Buildings program that replaces the GGB next year will be a weak, ineffectual reflection of the original.

It’s hard to know where to start to explain the scale of damage that this government has just unleashed on the energy retrofit industry by this move.

Key is that government departments and institutions such as the Melbourne Cricket Ground, hospitals and universities, that were previously able to borrow retrofit funds from Treasury can no longer do so. They must fund their own programs.

To the person in the street (read “voter”) that might sound fair. But the truth is the vast majority of government departments are prevented from borrowing from any source except Treasury. With that option no longer available, they must fund their programs out of their regular budgets.

Now imagine you are the director of a public hospital. How likely is it that you will chose to spend money on energy savings when you desperately need more hospital beds or nurses?

Everyone who works in the energy efficiency industry knows how hard it is engage people in this important task of retrofitting old buildings.

The business case might be strong, the contractor might even offer to pay for equipment or agree to guarantee savings. Still, it’s hard.

The biggest difficulty is to engage busy chief executives or financial officers when they are struggling to keep day to day operations afloat. Even if they can see the savings from Day 1.

This was a theme that emerged strongly in our latest ebook The Energy Gold Rush – your toolkit for strategic energy management.

See our article for the full catastrophe under way in Victoria: Hospitals to suffer as Victoria axes Greener Government Buildings Program

What’s dissonant about this story is that only a year ago it was NSW that wanted to find out how the program worked, and what it could do to embark on a similar strategy.

The pre-approved panel of contractors for instance was duplicated almost in its entirety for NSW’s energy efficiency programs. And we know there was quite a bit of information sharing going on between relevant teams.

It’s hard to fathom what the Victorians could possibly be thinking now, with this about face.

But the spin this week from the Assistant Treasurer’s office was breathtaking in its creativity. Had they been taking lessons from Rob Sitch from the The Hollowmen?

So why had the government dropped an amazing program that was the envy of the rest of Australia, world’s best practice, and a revenue positive loan scheme (not grant) and replaced it with a crock of rubbish?

The Efficient Government Buildings program has been introduced as a new stage in the Victorian Government’s commitment to improving energy efficiency in government buildings.

[Note that so-dangerous word “green” has been replaced by “efficient”.]

The Efficient Government Buildings program… will ensure “cost savings to deliver improved value for money in the context of the state’s broader spending and investment priorities”.

[Ahhh, no; the other one did that; You can picture Sitch at his best – furrowed brow; earnest, leaning forward delivery.]

The Efficient Government Buildings program, as the successor to the Greener Government Building program, incorporates important improvements to deliver a stronger focus on cost savings,

[No it doesn’t.]

greater autonomy for departments and agencies

[read, “You’re on your own folks.”]

and a level playing field for funding proposals.

Recognising that the benefits of energy efficiency projects are now known to departments and agencies, the Efficient Government Buildings program removes the previous mandate imposed on departments and agencies to undertake energy efficiency projects.

[Are mandates to save money unacceptable now? Maybe they’re seen as an imposition on free speech and should be removed – just like the right to be a bigot.]

This will give greater autonomy to departments and agencies to prioritise energy efficiency projects in the context of other capital bids, to improve service delivery standards and reduce service delivery costs.

[Read, “Find your own funds.”]

As a result, energy efficiency projects will no longer be constrained by central funding limits and can be considered as part of departments’ and agencies’ general capital program.

[Ditto]

So what’s going on with the Victorian government?

Has something happened to Victoria’s reputation for innovation and forward thinking? And leading the nation on a number of fronts? And is the government’s action reflecting a change or leading it?

It used to be that people would come back to Sydney from Melbourne with ill-concealed envy. Actually not envy – Sydneysiders don’t do envy – it was more like open admiration. Lord Mayor Clover Moore sent troops down south to work out how to emulate the laneways and streetlife.

It worked.

But what’s happening now looks like role reversal.

The word on the street is that Sydney is cool and Melbourne is… well… losing its edge.

The delicate issue of influence and climate

The question is, can such decisions by governments affect the most important metric of all in a city’s ranking, the cool index?

It’s a delicate thing. The two sides of business/politics and cultural capital are deeply connected. Influence seeps from the top all the way down to streetlife and back up again. If someone interferes with the current the whole thing can stutter (just like the Gulf Stream) and before you know it you have serious climate change on your hands.

Planning and community consultation. Not

The Vics had another blow this week, in planning, when The Age delivered a devastating account of how Melbourne’s long-term strategy, which had been so well praised for its exhaustive public consultation, was trashed.

The Ministerial Advisory Committee’s recommendations on the process were ignored, the report said, and turned into a justification for a dumb road, the East West Link, that so many people don’t want; but the contractors probably do want. Read the story.

But there are contractors and there are contractors.

Look at the miners, they know how to play politics

Those contractors on the energy efficiency side of the corporate world might want to study the political techniques of those who build roads and dig for coal and oil and deal in other poisonous matter.  (And likewise find a spare $20 million or so for lobbying and advertising).

The Energy Efficiency Council tried so hard to get the government to change its mind on the Greener Government Buildings program.

From what we gathered its submissions were beyond reproach: well argued, rational, full of hard figures and economic rationalist thinking.

That’s probably what went wrong. They should try ideology, dumb headlines, pea-brained thinking and short-term goals. Then add in poor maths skills and a failure to understand the difference between a grant and a loan. That works.

Topped with a huge dose of vested interests, plenty of money thrown about where it counts and whatever else they’re drinking right now in the rabbit holes of power.

Okay, we know that the Victorian Coalition government is under pressure.

The talk around town is that it won’t survive the election expected for October or thereabouts. But of course nothing is certain. The Coalition thought it would clean up in the South Australian election and Canberra would have wall-to-wall endorsement for its clean-energy/environment/ethics/human rights trashing agenda (other than perhaps from the more independently minded NSW).

Not so fast.

Check out the polls.

On Tuesday the Morgan Poll said:

ALP (54.5 per cent) biggest lead over L-NP (45.5 per cent) since losing the Election after ALP win narrowly in SA and L-NP win in Tasmania; ALP (52 per cent) leads L-NP (48 per cent) in WA before special WA half-Senate Election. Read more

Also on Tuesday Newspoll said:

“…the Greens’ support rose two points to 13 per cent — the highest it has been since former leader Bob Brown retired from the Senate — and support for others fell two points to 11 per cent, the lowest it has been since last August, just before the federal election.”

Remember the headline we picked out from Scott Ludlam’s galvanizing speech?

“Dear Mr Abbott, every time you open your mouth, the Green vote goes up.”

Watch out world; things could change fast.

And this determination from Canberra to send us all back to the Stone Age is starting to backfire. Instead of instilling fear, the government is attracting ridicule.

Especially with PM Tony Abbott’s regal announcement he would bring back titles such as Dame and Sir.

One avid Tweeter said that within 20 minutes of the announcement half the people she followed had suddenly acquired new handles, all prefaced with “Sir”, “Dame” or “Lady”.

That’s one way to devalue a gold standard.