Budget bails on green buildings but not irrigators

The Green Building Council of Australia (GBCA) speculated last week that the Tax Breaks for Green Buildings program would be scrapped in the 2012-13 Budget and, sure enough, their fears were confirmed. The program was noticeably absent from the Budget announcement, indicating a withdrawal of the funding allocated to the scheme in last year’s Forward Estimates.

“The decision to scrap the Tax Breaks for Green Buildings program is extremely disappointing,” said the Chief Executive of the GBCA, Romilly Madew.

“The Gillard government is backing away from a 2010 election promise and abandoning its commitment to provide incentives for green buildings.”

Further disapproval came from the Australian Sustainable Built Environmental Council (ASBEC).

“This disappearance of allocated funding from last night’s Federal Budget indicates that the Tax Breaks for Green Buildings scheme has been scrapped,” said ASBEC President, the Hon Tom Roper, “contradicting government assertions that it had been merely deferred for 12 months to finetune the details.”

Roper’s comment refers to the program’s already long delay - in April 2011, Assistant Treasurer Bill Shorten outlined how the program was being delayed by 12 months to finalise the design and to get it right.

The $1 billion retrofitting program was expected to provide an incentive for businesses that invest in eligible assets or capital works to improve the energy efficiency of their existing buildings. The scheme’s commencement on 1 July had been eagerly anticipated by organisations within the building and construction sector, with ASBEC’s ‘Second Plank Update’ report, released during 2010, identifying some 46 megatonnes of reductions in CO₂ emissions through improved energy efficiency in buildings alone.

“Enhancing the energy-efficiency capabilities in the Built Environment represents one of the quickest and easiest wins for reducing our emissions and improving the carbon footprint of our economy,” Roper said.

“In the 12 months since the government announced the scheme’s deferral last May, industry has been working closely with the government to design a scheme to maximise uptake among building owners and developers.

“In good faith the industry provided an enormous amount of time and effort in collaborating with the government on the recommendations advocated by the Industry Roundtable, set up to consult on the scheme.

“Scrapping the program 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 next 12 months.

“We can’t afford to let such an outstanding opportunity, for sector-wide carbon reductions and efficiency gains, simply slip through our fingers.”

The Tax Breaks program was promised as part of a package of measures to complement the carbon price.

“Buildings represent the fastest, most cost-effective opportunity to reduce our greenhouse gas emissions. Without this program, the greatest opportunity to improve energy efficiency, at the least cost, will be missed,” Madew said.

“Despite the hours of consultation, the willingness of the industry to provide input and the goodwill generated by non-government and private sector organisations, the Australian government has cowardly chosen to renege on its commitment.”

What about the water?

While the government has reduced funding for Water for the Future — National Urban Water and Desalination Plan, and the National Water Security Plan for Cities and Towns programs, the cuts to the Driving Reform in the Murray-Darling project won’t come into effect until 2015-16. The government is investing an additional $350 million in the Murray-Darling Basin. Minister for Sustainability, Environment, Water, Populations and Communities, Tony Burke, said the government is “committed to delivering a plan for the Murray-Darling Basin that restores our rivers to health, ensures strong regional communities and sustainable food production”.

“Murray Darling Basin reform has been put in the too hard basket for too long, caught in a deadlock between the states,” he said.

“We have a once-in-a-generation opportunity now to get a national basin plan.”

$200 million of the funding will go towards the Strategic Sub-System Reconfiguration Program, a new four-year initiative, which will achieve water savings through reconfiguring inefficient off-farm water delivery infrastructure where this is coupled with the purchase of water entitlements.

“Proposals will be developed at a local community level involving infrastructure operators and their irrigation customers,” Burke said.

“The program is being developed in consultation with key irrigation water providers and will be flexible to encourage projects which work for the particular circumstances of each irrigation district.”

An additional $150 million is being provided to the On-Farm Irrigation Efficiency Program from 2012-13 to support individual farm infrastructure improvement projects, which will contribute to bridging the gap in the final Basin Plan.

Applications for the next round under the program will open soon. Proposals will be sought from organisations in the southern connected Murray-Darling Basin system having close relationships with irrigator communities including irrigation infrastructure operators, catchment management authorities, commodity or agricultural industry groups, and regional irrigation bodies.

“This program builds on the good work of farmers in improving water efficiency at an on-farm level. Irrigators have informed my department that they have spent funds for supplies and services from two previous rounds of this program almost entirely to the benefit of regional businesses,” Burke said.

“I expect this to be the case also with the additional funding. Other benefits will be improved flexibility of crop rotation from new irrigation systems, reduced labour times and costs, reduced nutrient run-off and application rates, increased crop yields, the ability to spend financial savings on other on-farm upgrades, and more sustainable farms.”

By Carolyn Jackson and Lauren Davis