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Monday, 10 September 2012
Page: 6451


Senator CONROY (VictoriaMinister for Broadband, Communications and the Digital Economy, Deputy Leader of the Government in the Senate and Minister Assisting the Prime Minister on Digital Productivity) (17:53): I table revised explanatory memoranda relating to the bills and I move:

That these bills be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

GREENHOUSE AND ENERGY MINIMUM STANDARDS BILL 2012

Introduction

The Greenhouse and Energy Minimum Standards Bill 2012 implements a key reform in Australia’s national strategy on energy efficiency, to achieve nationally consistent regulation of equipment energy efficiency.

The Bill will implement a commitment by this Government and the Council of Australian Governments to establish uniform national legislation for energy efficiency. The national legislation will replace seven overlapping pieces of state legislation and establish a single, national regulator to replace four existing state regulators. The new framework will also allow for the future expansion of the Equipment Energy Efficiency Program, commonly known as the E3 Program. These improvements will bring significant efficiencies to the E3 Program and allow greater energy savings for Australian households and businesses.

Australia’s energy efficiency regulation began with energy labelling for household refrigerators and freezers in 1986 in New South Wales followed shortly after by Victoria. In 1992, a national program was established and funded collectively to coordinate energy efficiency regulation across all Australian states and territories. Today, the E3 Program includes New Zealand and it covers 23 product types in the residential, commercial and industrial sectors, delivering energy and financial savings to Australian households and businesses. The consistent efforts and contributions of all Australian and New Zealand governments for over two decades makes ours one of the world’s longest-running energy efficiency programs.

The E3 Program uses two regulatory tools to overcome market barriers that impede the development of more energy efficient products: mandatory minimum efficiency levels, and energy rating labels. Minimum efficiency levels help to keep the most inefficient products out of the Australian market. Energy rating labels help Australian consumers and businesses compare upfront costs with costs over time, assisting them to make the best purchasing decision. These cost-effective measures provide an incentive for manufacturers to innovate and produce more energy efficient products for all Australians.

With these tools, the E3 Program supports two of Australia’s most important policy objectives: helping households and businesses to manage energy bills and reduce greenhouse gas emissions.

The Program is popular, with 83 per cent of surveyed consumers reporting, in 2005, that they refer to the familiar energy rating label when purchasing major household appliances. The E3 Program delivers real and significant benefits to Australia. In 2010 alone, energy efficient air conditioners and refrigerators promoted by the E3 Program saved Australian households and businesses over $1 billion in electricity costs.

National consistency

Australian governments have coordinated well to achieve energy savings but inconsistencies have arisen across the state-based E3 Program. These inconsistencies increase the regulatory burden for businesses and governments alike.

To address these inconsistencies, the Council of Australian Governments agreed in 2009 to establish national legislation to regulate energy efficiency. This commitment was recorded in the National Strategy for Energy Efficiency (measure 2.2.2). The agreement reflects the cooperative history of the E3 Program, which has benefitted from the cooperation and contribution of every Australian jurisdiction for the past 20 years.

The Greenhouse and Energy Minimum Standards Bill 2012 will implement the joint commitment to address the inconsistencies in the E3 Program and streamline processes for Australian businesses.

The Bill will establish a single national Regulator for the E3 Program, and harmonise the legal obligations, efficiency standards, registration processes, and fees associated with the Program.

The national system will improve the regulatory framework while retaining the best of the existing system. Existing efficiency standards and the popular energy rating label will remain unchanged with the commencement of national legislation. The national Regulator will work cooperatively with state and territory agencies and draw on their expertise. New Zealand, which is a participant in the E3 Program, will continue to collaborate on energy efficiency regulation, ensuring the greatest net benefit for both countries.

Expansion

Over the past two decades, the E3 Program has focussed primarily on electrical equipment. The new national framework will allow Australian governments to regulate energy efficiency for a greater range of products.

The expanded E3 Program can cover electricity, gas or other energy sources. It can regulate products such as windows and insulation, which affect the energy use of heating and cooling systems. Into the future, Australians will benefit from increased energy efficiency across a greater range of products.

Any expansion of the E3 Program is of course subject to consultation and rigorous assessment procedures, to ensure regulatory action will deliver positive economic benefits. But the bottom line is that more efficient products save energy, and that saves Australians money.

Key points on how the Bill operates

Under the new framework, businesses must register regulated product models with the national Regulator. This maintains the practice of the existing E3 Program.

Registration allows the national Regulator to monitor which products are entering the Australian market. The Regulator records registered products on the public energy efficiency database, which allows the Australian public to research and compare all registered product models, to inform purchasing decisions.

Businesses that deal with regulated products must ensure their products meet minimum efficiency standards, and carry accurate labels. For the first time, businesses that directly import products for commercial use will also be subject to these obligations. The existing E3 Program only targets businesses that supply products in Australia and does not regulate businesses that purchase products overseas. The GEMS Bill will end this double standard, closing loopholes in state law that might encourage businesses to purchase products overseas instead of purchasing in Australia.

The Bill will establish a range of enforcement options to support these business obligations. It will allow the national Regulator to issue infringement notices or ask businesses to compensate consumers for the cost of products that do not comply with regulations. For more serious breaches of the law, the Bill allows the courts to impose civil and criminal financial penalties. The range of enforcement options ensures that the compliance and enforcement program can take a proportionate approach, able to respond with administrative, civil and criminal action depending on the circumstances of each case. The proportionate enforcement program will be guided by the GEMS Enforcement Policy, which will be made publicly available by the GEMS Regulator.

The GEMS Bill introduces new powers for the national Regulator to obtain information needed to administer the E3 Program. This includes requirements for registrants to provide information on the number of regulated products sold in Australia each year, if the GEMS Regulator requests this information. These powers are modelled on a similar reporting program in New Zealand, although Australia will take a targeted approach where New Zealand requires all regulated businesses to provide product data.

Accurate market information will allow the national Regulator to identify market areas that may require regulatory intervention to overcome non-price barriers to greater energy efficiency. This information will also allow Australian governments to better coordinate the joint E3 Program, nationally and with New Zealand.

The Australian Government is aware of the potentially sensitive nature of commercial information and is committed to protecting it. The GEMS Bill institutes strict controls on the handling of commercially-sensitive information, including criminal offences for government officers who share information without authorisation. The Government will support these legal safeguards with a detailed information handling policy, which will provide clear guidance for government officers on how to handle and protect information obtained under the act. With these safeguards and the lessons learned from New Zealand's existing data reporting program, the Government is confident that information obtained under the GEMS legislation will be appropriately protected.

Responses to Committee Inquiries

The Bill and the explanatory memorandum incorporate amendments in response to issues raised by the Senate Scrutiny of Bills Committee. I thank the Senate Committee for its inquiry into the GEMS legislation and for raising issues that will benefit from clarification.

The first of these issues is that conditions that can be imposed on product registrations should be designed to further the objectives of the Bill. In response to the Senate Committee’s inquiry, the Bill was amended in the House of Representatives to ensure that registration conditions are only permitted where they give effect to the purposes of the legislation.

The explanatory memorandum was also amended in response to the Senate Committee’s inquiry. With this amendment, the explanatory memorandum clearly indicates that procedural fairness applies to decisions to suspend or cancel registrations under the GEMS legislation. Procedural fairness ensures that all people that may be affected by these decisions will be granted a fair hearing before decisions are made that affect their rights and responsibilities.

Conclusion

The E3 Program is an important part of ensuring affordable energy for all Australians, and assisting Australia’s transition to a low-carbon future.

The benefits are real and significant. By 2020, existing E3 measures are forecast to save Australian households and businesses $5.2 billion per year and reduce household electricity use by 13 per cent per year, compared with business as usual. The planned regulatory program is forecast to bring about a further reduction of almost 15 per cent, saving Australian households more than 25 per cent of their yearly power bills.

The Australian Government is committed to reducing energy costs for Australian households, to reducing market barriers for Australian businesses, and to reducing greenhouse gas emissions for the entire country. The improvements made by the Greenhouse and Energy Minimum Standards Bill ensure a strong foundation to continue this important work well into the future.

Debate adjourned.