This submission responds to the Treasury Laws Amendment (Improving the Energy Efficiency of Rental Properties) Bill 2018.  This Bill, which was introduced by the Independent Senator Tim Storer, seeks to improve the energy efficiency of low-cost rental properties by allowing landlords to claim a tax offset of up to $2000 per year for energy efficiency upgrades to rental properties leased at $300 per week or less. 

The need for decisive action to improve the energy efficiency of low-income housing is clear and compelling, and the St Vincent de Paul Society strongly supports the intent of this Bill.  Among those we support, we see first-hand the hardship and poverty arising from spiralling energy bills. The burden of rising energy costs is compounded by the poor energy efficiency of most low-income housing, particularly low-cost rental. Renters on low incomes have little control over efficiency improvements, while landlords have little incentive to invest in upgrades because the benefits largely accrue to tenants. This is leading to a situation where tenants are spending too much on energy, landlords are spending too little on energy saving features and, without policy intervention, there is little hope of the situation being rectified.

We welcome the Bill's focus on these issues. However, the proposed tax offset is unlikely to result in significant improvements given the voluntary nature of the measure, the persistence of landlord disincentives and the limited scope of eligibility. We also believe further consideration needs to be given to the potential for unintended consequences and adverse effects, such as increases in rental costs and misuse of the offset. If the benefits of the Bill are to be realised and the risks minimised, a range of complementary policy and regulatory measures would need to be in place at the state and territory level, including mandated minimum energy efficiency standards for rental properties. Ultimately, meaningful improvements in the energy efficiency of low-income housing will require a mix of measures, with better coordination and cooperation between different levels of government.