Government fails to meet own energy policy – and it could cost us $20 million a year
Willow Aliento | 11 May 2017
Taxpayers could be footing a huge bill in wasted energy consumption for government offices that don’t bother to follow their own policy directives.
Investigations by The Fifth Estate have found that the federal government, which is determined to slash costs in some of the most vulnerable areas of the voting nation, has NABERS Tenancy ratings for just slightly more than 10 per cent of the 621 commercial offices – and two million square metres – it occupies nationally.
This is despite a policy that has been in place since 2010 that mandates leasing space only in commercial offices with a 4.5 Star NABERS Base Building Energy rating, and maintaining either a Tenancy rating of 4.5 Stars or occupying Whole Building rated space of 4.5 Stars or higher.
So at time of great austerity for many members of the community and huge cutbacks to essential government services, the government requires the taxpayer to foot the bill for a blatant failure by the feds to live up to their own standards.
National manager sustainability for WT Consultancy, Steve Hennessy, who has advised a number of public sector tenants on tenancy ratings, told The Fifth Estate that to get a more accurate estimate of costs would require him to look at each building separately, however he said:
“My calculations are based on reasonable assumptions and are general/indicative only. That said, if the present office leasing demands of the federal government amounts to some 2.35 million sq m NLA and their current average NABERS Tenancy rating is 3.88, improving efficiency to a very reasonable 4.5 stars could equate to a saving of approximately 58,500MWh a year.
“This is the same energy consumed by around 8800 homes each year. If they were to improve to five stars, this could equate to a saving of approximately 90,000MWh a year, the same energy consumed by around 13,800 homes each year.
“In dollar terms, moving from 3.88 to a five star average, could generate savings in the order of $20 million a year. Again, an estimate based on assumptions, but it should not be too far off the mark.”
The National Green Leasing Policy was developed under the auspices of COAG’s Ministerial Council on Energy and the Australasian Procurement and Construction Council.
Under the policy, Tenancy ratings were to have been obtained within 15 months of signing a lease, or when leases are renewed.
Green leases are also mandated as part of an expressed position of government looking to be sustainable in its operations.
However, examination of the published ratings for tenancies show only a handful of government departments and agencies have taken the step of obtaining a Tenancy rating or leasing space in a building with a Whole Building rating.
The standout performers for Tenancy are:
- the Department of Human Services (26 Tenancy ratings)
- the Australian Taxation Office (15 Tenancy ratings)
- Department of Immigration and Border protection (seven Tenancy ratings)
- Centrelink [5 Tenancy Ratings] and the Australian Federal Police (five Tenancy ratings]
Between them they account for 53 of the 79 published federal department or federal agency tenancy ratings.
The biggest space occupiers – in the top 10 – hold few Tenancy ratings at all.
What is extremely concerning in terms of waste and mismanagement of taxpayer funds is that some of the biggest space occupiers – in the top 10 – hold no Tenancy ratings at all.
The 2015-16 Office Occupancy report produced by the Department of Finance shows that the Department of Foreign Affairs and Trade, Australian Bureau of Statistics and Department of Agriculture and Water Resources between them occupy 34 tenancies, with a total of just more than 200,000 sq m of net lettable area.
There is not a single Tenancy rating between them.
Of the other departments that make the top 10 for occupying space, none have Tenancy ratings for even half their tenancies.
Mr Hennessy told The Fifth Estate that some departments may not have obtained the ratings as they were the sole occupants of buildings.
Some buildings with a Whole Building rating may also have a number of federal government tenants that are covered within the rating, he said.
The Whole Building rating will not necessarily separate out each individual tenant’s performance.
Looking at the ACT is one way to test this idea. According to industry sources, the federal government occupies around 90 per cent of commercial office space in Canberra.
The occupancy report showed 161 separate leases in the city.
Yet there are only 20 published NABERS Tenancy ratings for federal government departments in the ACT, and only nine Whole Building ratings.
Of the Whole Building ratings, eight are occupied by government tenants:
- CSIRO headquarters (2.5 Stars);
- ISPT’s One National Circuit, occupied by the Department of Prime Minister and Cabinet (4.5 Stars);
- East Block National Archives of Australia, rated on behalf of Department of Finance (2 Stars);
- Benjamin Orange, Belconnen, tenanted by Immigration and Border protection (5 Stars);
- Campbell Park, Campbell, tenanted by Department of Defence (3.5 Stars);
- 1 Holwell St Greenaway, tenanted by Department of Social Services (5 Stars)
- Manning Clarke Offices Tuggeranong, tenanted by Department of Human Services (5 Stars);
- Cromwell Property Group’s Centenary House, tenanted by the Australian National Audit Office (4.5 Stars).
The other Whole Building rating in the ACT is Engineers Australia’s Engineering House, which has a 3.5 Star rating.
A reason for low uptake of Tenancy ratings could be the lack of clear drivers.
The success of NABERS in the first place was driven by government policies – both state and federal – that mandated occupying space with a high base building rating, Mr Hennessy said.
That caused owners to improve the ratings of their buildings so they could attract and retain government tenants.
As a result, the general share of energy consumed by base buildings has fallen over the past decade or more from 65 per cent of the average commercial property’s energy use to less than 50 per cent.
That means tenants are now the larger share of energy use, as generally it has not been coming down, Mr Hennessy said.
“Tenants are a much harder audience.”
This is also because for an owner, energy is the biggest operational expense, so savings have an immediate and significant bottom-line benefit.
For tenants, however, the biggest outgoing is wages, so energy savings would be a “minor” difference in operating costs.
But in the case of the federal government, every dollar they save is a dollar the taxpayer saves. It’s a different equation, particularly given the focus in the 2017 federal budget on punitive measures towards welfare recipients, university students and users of the public health system that are all couched in the language of saving money for taxpayers.
Federal government tenancies – breakdown by location
|Australian Capital Territory||161|
Tenancy scorecard for commonwealth departments
|Department||#of tenancy ratings||states||Star range of ratings held|
|Australian Taxation Office||15||Qld, NSW, Vic, Tas, ACT, SA||3 Stars - 5 Stars|
|Australian federal Police||5||ACT, NSW, Vic, QLD||1 Star - 3.5 Stars|
|Australian Financial Security Authority||1||ACT||5 Stars|
|Centrelink||5||Qld, NSW, WA, Vic||4 Stars - 5 Stars|
|Civil Aviation Safety Authority||2||Qld, ACT||3.5 Stars - 4 Stars|
|Commonwealth Director of Public Prosecutions||1||Vic||4 Stars|
|Defence Materiel Organisation||1||NSW||4 Stars|
|Department of Education and Training||1||ACT||5 Stars|
|Department of Health||1||Northern Territory||3 Stars|
|Department of Human Services||26||ACT, NSW, Vic, QLD, SA, WA, Tas||2 Stars - 5.5 Stars|
|Department of Industry Innovation and Science||3||ACT, NSW||5 Stars - 6 Stars|
|Department of Social Services||2||NT, NSW||3.5 Stars - 4.5 Stars|
|Dept of Immigration and Border Protection||7||NSW, Vic, SA, QLD, WA||4 Stars - 5 Stars|
|Dept of Infrastructure and Regional Development||2||ACT||3.5 Stars - 4.5 Stars|
|Dept of Prime Minister and Cabinet||2||ACT, NT||4 Stars - 5.5 Stars|
|Indigenous Business Australia||1||ACT||5.5 Stars|
|National Health and Medical research Council||1||ACT||5.5 Stars|
|Office of the Commonwealth Ombudsman||1||ACT||5 Stars|
Top 10 space users - federal government tenancies
|Department||number of tenancies||NLA m2||useable m2|
|Department of Human Services||183||544,951||411,606|
|Australian Taxation Office||22||383,426||335,450|
|Department of Defence||37||275,830||260,381|
|Department of Immigration and Border Protection||41||242,512||196,513|
|Department of Health||17||108,807||91,948|
|Australian Federal Police||13||122,889||81,851|
|Department of Foreign Affairs and Trade||12||74,021||63,132|
|Australian Bureau of Statistics||9||60,956||56,556|
|Department of Industry, Innovation and Science||15||89,346||46,038|
|Department of Agriculture and Water Resources||13||66,751||57,069|
|Total top ten entities||362||1969490||1600544|