Local Government (Building Upgrade Agreements) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 11 February 2015.)

The Hon. G.A. KANDELAARS (15:33): At the opening of the second session of the 53^rd parliament, the South Australian Governor, His Excellency Hieu Van Le AO, outlined this government's vision for a prosperous and thriving South Australia. This vision is about seizing economic opportunities whilst preserving our quality of life and protecting the environment. The Governor set out an exciting carbon neutral Adelaide green zone initiative with the ambition that Adelaide will become the world's first carbon neutral city. This bill will go some way to achieving that ambition.

The Local Government (Building Upgrade Agreements) Bill 2015 is designed to deliver environmental benefits whilst unlocking economic opportunities. This is a great initiative based on voluntary principles. Firstly, by introducing a mechanism in our state, the state government will help owners of existing commercial buildings to access finance to fund environmental upgrades of their properties. Secondly, the mechanism will also help tackle the split incentive between landlords and tenants in leased buildings where the building owner incurs the cost of upgrades but the tenant receives benefits through reduced utility bills and improved accommodation.

As a result of these features the mechanism has great potential to unlock retrofitting opportunities and renew ageing commercial building stock; improve the quality, amenity and environmental performance of existing buildings; and, very importantly, stimulate economic activity.

The building upgrade finance mechanism is designed to create a win-win opportunity for the parties involved and the broader community. From a building owner's perspective, the mechanism helps to access private capital on more attractive terms compared to traditional forms of finance; for example, over a longer term at a fixed rate. The mechanism also allows building owners to share the costs of upgrades and the resulting benefits with tenants. This could improve the business case of the upgrade.

Benefits to tenants can include improved indoor comfort, staff productivity, contributions towards corporate social responsibility goals and, in certain circumstances, reductions in operating costs. Benefits to participating councils can include investment attraction and improvement of buildings and urban quality in their municipal areas, reduced emissions, and associated economic benefits. Benefits to the broader community include improved building quality, environmental amenity and reduced carbon footprint of buildings, and employment opportunities as well as opportunities for manufacturers and suppliers of clean technologies.

The establishment of the mechanism aligns with priorities set by the state government last year. In particular, building upgrade finance can contribute to unlocking the full potential of South Australia's resources, energy and renewable assets, making Adelaide the heart of our vibrant state, and can help South Australian small businesses access capital and global markets. In conclusion, this voluntary mechanism is supported by both industry and local government, and truly delivers a win-win situation. I commend the bill to the council.

Debate adjourned on motion of Hon. J.S. Lee.