Federal Government Reigns In Rogue Department

Federal Government Reigns in Rogue Department Over Building Energy Disclosure Scheme

The property industry today welcomed the Federal Government's efforts to reassert control over the Department of Climate Change and Energy Efficiency (DCCEE).

In order to avoid another botched implementation program, following the embarrassing Green Loans and 'pink batts' fiascos, the Federal Government has instructed DCCEE to improve its management of the mandatory disclosure regime for office buildings that starts on 1 November, 2010.

The Property Council of Australia says the Minister for Climate Change and Energy Efficiency, Greg Combet, and his Parliamentary Secretary, Mark Dreyfus, have responded to industry concerns by directing the department to properly consult with stakeholders and refrain from penalising property owners until grey areas around mandatory disclosure rules are clear.

"Greg Combet and Mark Dreyfus have done a great job of listening to genuine industry concerns", said Peter Verwer, chief executive of the Property Council of Australia.

"Property investors support disclosure of environmental performance, we support the NABERS environmental measurement tool and we are committed to strong industry leadership on these issues."

"However the Department refuses to heed the real world advice of industry practitioners and has turned a very simple, straightforward scheme into a shemozzle."

The Property Council and its members have provided the Department with multiple examples of implementation problems along with practical solutions, most of which have been ignored.

"We welcome the establishment of a consultative committee, to be called the Commercial Building Disclosure Scheme Implementation Forum," Verwer said. "It's a great pity this committee did not meet until the last day of business before the legislation kicked off and six years after we first proposed it."

The Property Council says the new implementation committee should be led by an
independent chair rather than the Department.

"We're perplexed by the Department's refusal to adopt modern governance
principles of transparency and independence."

"Nevertheless, the committee is a step in the right direction as it will help clarify a growing list of implementation grey areas in a regime that carries penalties of $110,000."

"We'll watch closely to ensure the Department doesn't penalise the industry before it clarifies its own rules and releases plain English compliance guidelines."

"Despite all these issues, the Property Council supports the mandatory disclosure scheme based on the guarantees provided by the Government."

"Our greatest hope is that the Department will learn to value proper consultation."

"Given that mandatory disclosure is slated to extend to shopping centres, hotels, schools, hospitals and houses in the near future, it is critical the Department gets it right next time."

"When it comes to people's homes, any repeat of the mistakes that plague the
office scheme will result in a severe backlash."

Further Comment please contact:
Peter Verwer
Property Council CEO
0407 463 842

Troy Bramston
Property Council Chief Advocate and Strategist
0412 508 580

Mandatory Disclosure What's the Problem?

Scope the legislation is not working the way Parliament intended.

Should mandatory disclosure apply to hospitals, industrial estates and hotels? No, but it does.

Should mandatory disclosure apply to tenancies or buildings of less than 2,000 square metres? No, but it does.

Is the legislation designed to produce meaningless information? No, it's meant to empower building users with facts.

However, meaningless information results when ratings are based on a building that has been substantially vacant over the previous year, or when it is being refurbished, or when central services (such as air conditioning) are shared between office and non-office uses within the same building.

In these cases, a NABERS rating of zero will usually result.

The Department knows these examples produce "garbage in, garbage out" results. But their response is "just make it work" or "apply for an exemption".

Should old advertisements for buildings that are on the world wide web trigger a breach of the law? No, but the Department's left hand says they do, the right hand isn't sure.

Should you be fined when your tenant or energy company won't give you the data needed to prepare a NABERS rating? No, but that's a definite risk under the current rules.

Management Issues

The Department admits it is "absolutely log-jammed" with exemption applications.
However, the property owner is held responsible for breaking the law even if the
Department fails to process the application in a timely manner.

The mandatory disclosure rules are so unclear that the Department gives out
contradictory advice to the public. In short, it doesn't understand its own law.
Written requests on critical issues have received no response.

Further Comment please contact:
Peter Verwer
Property Council CEO
0407 463 842

Troy Bramston
Property Council Chief Advocate and Strategist
0412 508 580


SOURCE: Property Council of Australia