STRATA SCHEMES MANAGEMENT AMENDMENT (SUSTAINABILITY INFRASTRUCTURE) BILL 2020

Dogs_in_politics_day.jpg


I was pleased to speak in Parliament this week regarding the Strata Schemes Management Amendment (Sustainability Infrastructure Bill) 2020 which amends the Strata Schemes Management Act 2015 to reduce the voting threshold for strata owners corporations to approve the installation of sustainability infrastructure in their strata scheme. 

The Bill also passed with an amendment by the Animal Justice Party which is designed to stop strata schemes from being able to pass by-laws that unreasonably prevent owners and occupiers from having animals in their homes. 

My contribution on the remainder of the Bill is below. 

I speak in enthusiastic support of the Strata Schemes Management Amendment (Sustainability Infrastructure) Bill 2020. The bill delivers on the election commitment made by the Government in early 2019 to progress initiatives with a view to boost renewable energy usage and reduce power bills for the people of New South Wales. In fulfilment of the election commitment, the bill reduces the voting threshold in the Strata Schemes Management Act 2015 required for owners' corporations to approve the installation of sustainability infrastructure in strata schemes.

The Government believes in making New South Wales more sustainable and resilient to combat climate change. I repeat: to combat climate change. The bill empowers more than one million people living in strata properties across New South Wales to play their part to achieve these goals. Sustainability infrastructure is critical to increasing the usage of renewable energy in the State. It also uses water and other limited resources more efficiently and reduces pollution and waste. As the recent drought has shown us, the ability to use water more efficiently is crucial in New South Wales. Following the drought, I think that lesson has sunk in for our general population. It is estimated that less than 0.5 per cent of strata schemes in Australia have installed solar power infrastructure, compared with 20 per cent of non‑strata housing. In 2019 a report published by the University of New South Wales City Futures Research Centre revealed that there is a strong appetite for renewable energy to combat rising electricity costs, with solar being the technology of choice.

The strata community is rapidly growing in New South Wales and it is forecast that within 20 years 50 per cent of Greater Sydney's population will be living in a strata scheme. The change to make it easier to install sustainability infrastructure is the first step in addressing this gap in the uptake of sustainability infrastructure by strata schemes. If steps are not taken, strata residents will be left a long way behind and unable to reap the full environmental and financial benefits of installing sustainability infrastructure. Over the past 10 years improvements in solar infrastructure have made it more efficient, less expensive and more accessible for more households. Home owners can run appliances in their homes with solar power, which significantly reduces their power bills and energy footprint.

Sustainability infrastructure can benefit strata schemes in a number of ways. It can benefit an owner or resident of a lot directly, for example, by providing cleaner and cheaper energy to power their household or to heat water for their lot. Strata schemes can also use a significant amount of energy and water in common areas outside lots—for example, power for lighting, ventilation, pool pumps and heating, and lifts, and water for common property gardens—the cost of which is ultimately paid by lot owners. The Government is also taking the opportunity with this bill to make some other practical changes to improve the operation of the Act—which my colleague the Hon. Scott Farlow went through in some detail—and to correct unintended consequences that have arisen with other provisions of the Act.

The bill therefore provides welcome assistance to owners and owners' corporations that wish to install sustainability infrastructure, like solar panels, in their strata scheme. To take up the point raised by Mr David Shoebridge, we know that there is an appetite to do this. These changes will, in fact, result in more sustainability infrastructure being built in strata schemes. Sustainability infrastructure can help to power homes and common areas in strata schemes more effectively, efficiently, cleanly and cheaply. It can also help to reduce water consumption, waste and pollution. Currently, an owners' corporation must pass a special resolution to approve the installation of sustainability infrastructure in its strata scheme—that is, at least 75 per cent of votes cast must be in favour of the resolution for it to pass.

The bill reduces the voting requirement for a sustainability infrastructure resolution to a simple majority, requiring over 50 per cent of votes cast in favour. This change will make it significantly easier for owners and owners' corporations to obtain the approval required to install sustainability infrastructure. Importantly, the voting threshold reduction only applies to a sustainability infrastructure resolution, which the bill clearly defines as a resolution to finance sustainability infrastructure; add to the common property, alter the common property or erect a new structure on common property for the purpose of installing sustainability infrastructure; or change the strata scheme by-laws for the purposes of the installation and/or use of sustainability infrastructure. Getting this definition right is important, as it sets the parameters of what a sustainability infrastructure resolution can be. A clear definition will minimise the risk of misuse and disputes amongst voting members.

The definition is sufficiently broad to ensure the new voting threshold applies to the different types of resolutions that may be required in relation to sustainability infrastructure installations. It is important to note that the bill lists three minimum factors that owners' corporations must consider before approving a sustainability infrastructure resolution. They are, first, the cost of the sustainability infrastructure and works, including expected running and maintenance costs; secondly, who will own, install and maintain the sustainability infrastructure; and, thirdly, the extent to which the use of the sustainability infrastructure will be available to all or some of the lots in the scheme. These are important and necessary considerations for a strata scheme when making a decision about installing sustainability infrastructure. There are differences between individual strata schemes and a range of different products and solutions are on offer.

It is not necessarily a case of "one size fits all". Requiring owners' corporations to consider these crucial issues as a minimum will help owners make an informed decision. This will help minimise the risk of misuse of the lower voting threshold, as well as uncertainty and disputes down the track. The bill does not limit the matters that strata schemes can consider before passing a sustainability infrastructure resolution; rather, the bill prescribes minimum requirements. This ensures that there is flexibility for each strata scheme to determine any other relevant considerations for their particular circumstances. To ensure the legislation itself is sustainable and flexible, the bill allows for other matters to be prescribed by the regulations in the future if considered necessary. That is a relevant point in regard to the rapidly changing technological environment we are in. It makes the bill almost futureproof.

These reforms are an important step to empower strata communities to implement sustainable infrastructure in their buildings and reduce the environmental impact. This bill will help unlock greener and more cost‑effective options for strata schemes that are already available, as well as options that will become available in the future. By allowing a simple majority of owners in a strata scheme to approve the installation of sustainable infrastructure, the bill will help strata owners who wish to pursue the benefits of renewable energy and other more sustainable options. This is a good reform and an exciting one. It is about sustainability and addresses climate change and equity within our communities. It is a sensible reform not only for owners and residents in strata schemes but also for improving our State's environmental sustainability and resilience and responding to climate change.

I congratulate the Government on bringing this bill before the House and I am excited to be participating in this debate tonight. The Government is delivering on its election commitment to boost renewable energy usage and reduce power bills for people in New South Wales. The summer bushfires and extreme weather events experienced by our country, the COVID-19 pandemic and the financial pressures affecting so many households at the moment demonstrate the importance of resilience and sustainability for us all in these changing times. I commend the bill to the House.

The Hon. CATHERINE CUSACK (21:40:25): I speak in support of the Strata Schemes Management Amendment (Sustainability Infrastructure) Bill 2020. As honourable members have heard, the bill delivers on the Government's election commitment to boost renewable energy usage and reduce power bills for the people of New South Wales. I commend the Minister for Better Regulation and Innovation for bringing this bill before the Parliament. It is a sensible and smart reform and shows the Government's commitment to make New South Wales more sustainable and resilient in a changing climate. Sustainability infrastructure is critical to increasing the usage of renewable energy in this State. It also uses water and other limited resources more efficiently and reduces pollution and waste.

Members will recall that throughout drought there is one resource that needs to be used more efficiently, and that is water. These reforms will empower strata committees. The uptake of solar infrastructure in non‑strata housing in New South Wales has boomed over the past 10 years and all over New South Wales home owners continue to make better choices for their energy consumption and the environment. A 2019 report published by the University of New South Wales City Futures Research Centre revealed that there is a strong appetite for renewable energy to combat rising electricity costs, and that solar is the technology of choice. I would say that it goes back further than 10 years. When Premier John Fahey and his Government secured the Olympics for Sydney and redeveloped Homebush Bay, the suburb of Newington was developed for the athletes. Newington was a fully solar‑powered suburb. Those solar panels continue to generate electricity and income for the people who subsequently bought that housing.

Solar power is a great thing that New South Wales has embraced. There has, however, been a limited uptake of solar infrastructure in strata schemes. It is estimated that 0.5 per cent of residential strata schemes in Australia have installed solar, whereas for non-solar housing it is roughly 20 per cent. That is a striking difference; more so if we consider that over one million people live in strata buildings in New South Wales. Strata schemes present unique challenges compared to other housing. Often they are tall apartment blocks. However, the fact that some strata schemes have installed solar and reduced their power bills as a result indicates that it is a viable option for apartment buildings and strata schemes in general. Solar panels are an obvious example of sustainability infrastructure but the options for sustainability in strata go well beyond solar. For example, they may encompass infrastructure that can reduce water consumption, waste and pollution.

Strata buildings all over New South Wales could start using innovative infrastructure to reduce their environmental impact. Just two kilometres from here, the Central Park apartment building at Broadway in the Sydney CBD uses its own recycling plant to produce recycled water, which it then shares with the nearby University of Technology Sydney [UTS] building to use to flush toilets and water gardens. Sustainability infrastructure can benefit strata schemes in a number of ways. It can benefit an owner or resident of a lot directly, for example, by providing cleaner and cheaper energy to power their appliances to heat water for their lot. There is substantial common area infrastructure where this would be of benefit. Strata schemes can also use a significant amount of energy and water on common property areas outside of lots—for example, power for lighting, ventilation, pool pumps, heating, lifts and water for common property gardens. The cost of these is ultimately paid for by the owners.

I pause here as a former Chair of one of the larger strata schemes in the Sydney CBD. The issue of retrofitting some of these older apartment buildings, which are incredibly energy inefficient, with the new technologies—for example, in car parks, which are lit 24/7 and use a massive amount of electricity, as well as all the ventilation and air-conditioning systems and lighting systems inside the buildings—makes you realise that these buildings have no opportunity to take advantage of modern technology to reduce lighting bills when, as we know, halogen lights use about 5 per cent of the energy used by incandescent lights. What is required is a resolution for a significant energy initiative.

I give a shout-out to the energy Minister that we do need better schemes that target strata buildings, so that the volunteers on the owners' corporation can come to grips more easily with accessing programs and get the support needed for ordinary home owners to be assisted to retrofit their buildings with energy‑efficient technologies because, let me tell you, this is an overwhelming area. To me, the massive benefit and big money savings in terms of the cost of living for residents of these buildings will be in the opportunity that this legislation creates for retrofitting older buildings to be more energy efficient. This will bring massive savings because many areas of these buildings, such as waste rooms, are lit 24/7, whereas now you can install lighting that comes on as required. Multi-unit apartments occupy a relatively small area of land, given the number of people they house. However, they can also have a significant environmental footprint.

I will briefly talk about the definition of "sustainability infrastructure" in the bill. The bill defines "sustainability infrastructure" broadly as changes to part of the common property for any one or more of the following purposes: to reduce the consumption of energy or water or increase the efficiency of its consumption; to reduce or prevent pollution; to reduce the amount of waste sent to landfill; to increase the recovery or recycling of materials; to reduce greenhouse gas emissions; and to facilitate the use of sustainable forms of transport. This sends a very clear message to the community that the definition is broad and, although we have spoken a lot about solar panels, people need to understand that sustainability is a much, much bigger opportunity than that, particularly for owners' corporations.

Importantly, the definition that a change to a part of the common property includes the installation, removal, modification or replacement of anything on or forming part of that property is to ensure consistency throughout the New South Wales statute book. This definition draws on the existing definition of environmental upgrades under local government legislation. The definition therefore not only covers the installation of new infrastructure but also the replacement of existing infrastructure—so important—for example, with something that is more energy efficient or produces fewer harmful emissions.

The breadth of the definition means it could potentially encompass a wide range of sustainability infrastructure. It could include, for example, electric vehicle charging stations or more energy‑efficient air conditioning or lift upgrades, which would be a big help to owners' corporations wanting to invest in such infrastructure. Technology has come a long way in a short time and it is reasonable to expect development of new and improved sustainability infrastructure solutions in the future—I would add to that, also more affordable solutions. The definition of "infrastructure" is sufficiently broad and flexible to enable strata schemes to benefit from new innovations and solutions that help improve that sustainability, and I thank the Government for this flexibility to enable owners' corporations to do that.

I now refer to some interesting statistics in this space. The total number of strata schemes in Australia is 340,601. In New South Wales it is 81,224. The total number of Australians living in apartments is 2.2 million or 9 per cent of the Australian population. The total number of New South Wales citizens living in apartments is 1,124,464 or 15 per cent of the New South Wales population. Some 50 per cent of Greater Sydney is forecast to live in strata by 2040. Strata living is an important part of the New South Wales housing landscape. In its previous term in 2015 this Government had the vision and drive to implement once‑in‑a‑generation reforms to the State strata law. It is not only in Greater Sydney where there is impressive growth in strata developments. In recent years notable growth in strata scheme developments has taken place in regional centres such as Port Macquarie, Hastings, MidCoast, Ballina and the Illawarra. I am one of those people in Ballina living in a strata scheme of two. It is a bit of paperwork, but it works well and is a good incentive to get along with your neighbours.

The bill provides strata schemes with a sufficiently comprehensive, yet flexible, set of tools to navigate the often complex and evolving landscape of sustainability infrastructure. Increasingly, people are conscious of the environmental footprint they are leaving and the impact they will have on future generations. A range of things can be done to lower the footprint of the average apartment building and make it greener and more energy efficient. Some of those steps will also have an impact on the amount of money that the building saves. The Government supports making New South Wales more resilient to our changing climate. The bill empowers more than one million people living in strata properties across New South Wales to play their part to achieve those goals. The bill will make it easier for strata schemes to access the financial and environmental benefits for a wide range of sustainability infrastructure and help improve the environmental footprint of this growing part of housing in our State. I commend the bill to the House.