The federal government’s abandonment in the budget of tax breaks for green buildings has left the property industry in a state of shock.

The Australian Sustainable Built Environment Council (ASBEC) said the government had missed an opportunity to reduce greenhouse gas emissions quickly and cost effectively.

The Green Building Council of Australia said the move meant Australia’s low carbon economy had taken a step backwards. ”The decision … is extremely disappointing … and bewildering,” said GBCA chief executive Romilly Madew.

Leading quantity surveyors Napier & Blakeley said the about-face showed a lack of real commitment to the carbon reduction agenda. ”Energy efficiency improvements to the existing building stock is the single most cost effective and fastest way to reduce our collective carbon footprint,” said director Alastair Walker.

ASBEC president Tom Roper said the disappearance of funds from the budget contradicted government assertions that it had been merely deferred for 12 months to fine-tune the details. ”A carbon price alone will not effectively tackle building emissions,” he said.

Assistant Treasurer Bill Shorten announced in April last year that the proposed $1 billion tax breaks for green buildings program was delayed by 12 months to finalise the design of the program and to get it right. The July 1 start of the program had been eagerly anticipated by the building and construction sector.

A study by the Australian Property Institute found that buildings contributed up to 23 per cent of Australia’s carbon dioxide emissions, 40 per cent of energy requirements, 16 per cent of water usage, 30 per cent of solid landfill waste, 40 per cent of raw materials and 71 per cent of electricity consumption.

Mr Roper said scrapping the program sent 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,” he said.

Mr Walker said the promised accelerated depreciation for green retrofits may not have changed behaviour to a great degree. A wait of up to three years was required to reap the benefit – but the latest action was a real blow, he said.

Napier & Blakeley has established a specialised unit to project manage and procure funding for the sustainable retrofit of existing buildings.

”We are not aware of any of our clients deferring the commencement of their projects to obtain the benefit of this phantom tax break,” he said.

”The problem is that some projects may have been delayed, exacerbating the general construction slow down.”

Written by Philip Hopkins
Displayed on Sunday Morning Herald Website – May 12, 2012