Mr BARBER (Northern Metropolitan) -- The Greens will support this bill that is designed to assist the Melbourne City Council with its innovative financing mechanism to encourage energy efficiency upgrades for commercial buildings. This is a program that we have wholeheartedly supported from its genesis through to today. It is a great program that has been created by Melbourne City Council.
What I want to know is: where is the Premier's program to do this? Why is this state government not rolling out a program like this across the commercial building sector? After all, according to the government's own studies, $1 billion of energy savings could be had in the commercial sector between now and a few decades time for only a $10 million up-front investment.
Let me say that again to be very clear: if the government spent $10 million on energy efficiency in net present value terms, it could save $1 billion worth of electricity in net present value terms. Members may ask, 'Where does this amazing magic pudding of money come from, Mr Barber?'. It is quite simple: it comes out of the profits of electricity generators.
Where does the money tree come from?
It comes from the profits of electricity generators, as we can see at table 25 of the Department of Primary Industries regulatory impact statement (RIS) on the Victorian energy efficiency target (VEET). That RIS anticipated that small to medium enterprises (SMEs) would account for about 31 per cent of the activity needed to fulfil the 5.2 million-tonne target under VEET. Of that 31 per cent, 57 per cent was to be achieved from energy efficiency through water-heating measures, 19 per cent through stand-by power controls, which switch your appliances off when you are not using them, and also through installing efficient shower roses in commercial buildings where there are showers for employees and so forth.
As an aside to that, in that same regulatory impact statement savings in the residential sector were anticipated to be driven mainly by ceiling insulation, at 37 per cent of the certificates, to the point where that would largely be achieved and exhausted as a form of savings by 2015.
The energy minister has not yet approved ceiling insulation as a measure under VEET, which is the only program that this government has in place to try to reduce energy bills in any significant way. The minister is too scared to approve roof insulation as a mechanism to be funded under VEET because of what happened with the federal government.
Mrs Coote -- Just remind us what happened with the federal government.
Mrs Petrovich -- Yes, do you want to talk about it?
Mr BARBER -- I am absolutely confident that Mr O'Brien would not let that sort of debacle happen as part of a program that he was responsible for regulating through the Essential Services Commission. I am absolutely confident of that.
However, seemingly for purely political reasons and despite his own regulatory impact statement pointing to it as a major form of energy savings, he will not approve it under the VEET scheme, and those stand-by power devices that many of us now have in our homes -- I have been doorknocked and offered a stand-by power controller to switch off my TV and DVD and all the rest of it -- are not available to small to medium enterprises either. The opportunity for small businesses to make savings on their energy bills has been blocked by Mr O'Brien's speed-of-lichen approach to building up the VEET scheme.
As we see in the aforementioned table 25, under option 3, which is the option we ended up going with, the 5.2 million-tonne target, at net present value calculated using a 3.5 per cent discount rate, the costs of the program are: households to spend $86 million; small to medium enterprises to spend $10 million; and, the way this RIS looks at it, the cost of decreased profits to electricity generators.
Under this analysis if a power company does not get to sell you electricity, that is considered a cost to the economy, yet the benefit is to you. When we look at the benefits listed in the RIS we see that for large businesses it is electricity savings of $650 million, for households it is electricity savings of $1.7 billion and for small to medium enterprises it is just over $1 billion worth of savings in net present value terms to 2030.
What is this government doing with its time? We are 18 months in. Smart meters got a quick review and then a wave through. If the government is promoting clean coal, it is doing it in secret because every question I ask gets knocked off. On the absolute win-win for everybody except power companies, the minister is barely moving. Someone should confiscate his pogo stick, because he must be spending a lot of time bouncing around his office while small business, large business and for that matter households are desperately in need of some sort of support -- some sort of program to help cut their energy bills.
It should be a source of embarrassment to the government that Melbourne City Council has jumped ahead.
If a program like this had been in place five years ago, we would have had an alternative to the Brunswick electricity substation upgrade that has caused so much controversy because it is largely feeding the growing power demands of the Melbourne CBD. Yes, Melbourne City Council covers the CBD and therefore has a keen interest in this area, but the commercial sector, broadly, and the SME sector, as I have pointed out, from the government's own figures go much wider. There are huge savings to be had out there if only the government would act.
It seems that the only beneficiary of the government's inaction are the electricity generators. It is as if the Liberal-Nationals government is a wholly owned subsidiary of power generators in the state. I will have to go down to Business Victoria and see if there has been a change to the Liberal Party's records.
Perhaps next time I am reading through International Power's annual report I will see a note on the account -- 'wholly owned subsidiary, proprietary limited, the Baillieu government' -- because the decisions the minister has made on the quiet have all been to the benefit of power companies and he has very little to show that has been to the benefit of bill payers.
I commend the Melbourne City Council on putting forward this initiative. I am waiting to see how the Baillieu government can deliver anything that even faintly resembles it and, with all the mounting problems resulting from cost of living increases and the difficulties the SME sector is having with its own cost structures, particularly where it is export exposed, it would seem that the government should have all hands on deck and be offering every form of support that it can. Instead, every one of its decisions so far has been to the benefit of power companies, and that is something I am going to be talking about a lot in this Parliament in the coming months.