SPEAKING ON A BILL | ELECTRICITY SAFETY AMENDMENT (BUSHFIRE MITIGATION CIVIL PENALTIES SCHEME) BILL 2017
Mr MELHEM (Western Metropolitan) — I also rise to speak on the Electricity Safety Amendment (Bushfire Mitigation Civil Penalties Scheme) Bill 2017. I want to join the other speakers in relation to why this bill is before this house. This February marked the eighth anniversary of the Black Saturday bushfires, in which 173 people tragically lost their lives. One of the main reasons that we are here and why this bill has been introduced is to make sure that that does not happen again. As we all know, the powerlines that started these fires were responsible for 159 of those 173 lives lost and they contributed to the loss of 2000 homes and $4.4 billion in property damage suffered by Victorians. That is the prime reason why this bill has been introduced.
We can argue about whether the government got it right or got it wrong and whether it is 100 per cent right. We believe we have got it right. We have heard the opposition say that they are supporting the bill but then they are saying that the government have not got it right, even though they cannot tell us where we have not got it right, and that we are basically just worried about the implementation.
A lot of work has gone into this to get the implementation right, to make sure that Victorians are safe and that we do not have a repeat of Black Saturday, when a single powerline incident caused so much devastation. As I said, there has been a lot of work done and a fair bit of consultation with the industry has taken place. It is not like some bureaucrat decided, ‘Okay. We’ll draft this and get on with it’. A lot of work has gone into it and a lot of new technology has been put together.
I get it that any businesses, including electricity companies, do not want to spend money. If they do not have to spend money, why would they spend money? They will not if they do not have to. The fact is that they have to. They even have to do it as a business decision. They have just paid a multimillion‑dollar settlement — I think it was close to half a billion dollars — to settle the bushfire litigation for the survivors. It is just a business decision; it is my understanding that half a billion dollars has been paid in settlement. I am pleased that the money has now been dispersed and given to the survivors, because it has made a lot of difference to their lives. I know many of those who went through the tragedy of Black Saturday, and I think it was part of closure for a lot of them.
My understanding is that the distributors should not be crying poor, because they are actually making good money, thank you very much. I think the return on investment for AusNet and some of the other distributors is actually pretty good and they can invest. My understanding is that they are not complaining; they are comfortable with the arrangements. They have raised some issues in relation to the implementation and some issues in relation to whether or not a compliance regime should be put in place. Like any other corporation, they would like to have voluntary compliance. No‑one likes having regulation in the law if you want to give a chance to most businesses. But in this case we do need to have a strict compliance regime put in place to make sure that the distributors actually do comply with the safety regulations being put in place, because we need to be certain that we do not have a repeat of Black Saturday.
The bill specifies that AusNet Services, Powercor and Jemena must demonstrate compliance with the enhanced fault detection and suppression standards at each of their owned and operated zone substations within the 45 zone substations covering the highest bushfire risk and loss consequence areas across the state currently listed in the Electricity Safety (Bushfire Mitigation) Amendment Regulations. It sets a higher value for each of the zone substations established by the regulations in zones of higher bushfire risk and sets a mandatory achievement of 30 points of zone substations by 1 May 2019, 55 points by 1 May 2021 and all residual points by 2023.
The bill also specifies that new or replacement powerlines in the 33 electric line construction areas should be compliant with the new standards — either undergrounded or constructed of covered conductor — upon inspection by Energy Safe Victoria.
That is another area which we should learn about from the tragedy of Black Saturday. We need to start exploring new methods. Some of the powerlines will reach the end of their natural life expectancy. They will need to be replaced, and so we need to start looking at other options, such as whether we have insulated cable or undergrounded cable. Mr Barber talked about other options as well, such as solar and batteries. They are other options that need to be explored. This is all about providing energy security to Victorians but also about protecting lives. The bill is designed to do both. We have to protect lives, and we have to learn from the tragedy of Black Saturday and make sure that we are not faced with the same situation. It is a hazard and we ought to eliminate it.
As far as I am concerned, costs should not come into it, because you cannot put a price on human life. That is why the government is determined to implement all the recommendations coming out of the 2009 Victorian Bushfires Royal Commission — to make sure that we have learned from events in the past and provided the safety which Victorians deserve.
In relation to civil penalties, as part of this bill there will be a civil penalty imposed for non‑compliance with these obligations. The bill provides powers to the director of Energy Safe Victoria and the Minister for Energy, Environment and Climate Change to prosecute non‑compliance in court. There has been a fair bit of debate about whether there will be voluntary compliance and whether we need to have regulation, and I covered that earlier. I again want to stress the point that I think it is important that an actual penalty is set in the act. Companies need to take into account that if there are any breaches, there will be consequences arising from those.
The bill sets a maximum penalty of a scale sufficient to overcome electricity distribution businesses incentives for non‑compliance as follows. One is a penalty of $2 million for every point under the total required for each delivery milestone for the 45 zone substations and $5500 for every day of non‑compliance following. There will be an initial penalty of $350 000 for every kilometre of installed powerline in the 33 electric line construction areas that is found to be non‑compliant with the new standards, with a $1000 penalty for every kilometre each day after, and a $50 000 penalty for each single‑wire earth return powerline automatic circuit recloser not installed and $150 for each day following. So basically there are a fair few civil penalties enshrined in the bill to make sure there is incentive for these businesses to actually comply with the requirements and the safety standards.
I say this: these companies have got that incentive. If they do not follow that, obviously there will be a price they will have to pay. Hopefully we will not have to prosecute any of these companies for any breaches, because the ultimate aim is to make sure we do not have a repeat of Black Saturday, where a powerline caused a lot of devastation in the state. So as I said, I think a fair bit of work has been done in relation to this bill. Some may argue that it is long overdue, but I think it is important that we get it right, and I believe we have got it right. I am looking forward to giving passage to this bill.
I will just finish off by saying why this bill has been introduced. I am pleased that it has been supported by all the parties, because no‑one can realistically argue against the intention of this bill. I think it is important that we provide Victorians with a sense of security and safety by demonstrating that we have learned our lessons from Black Saturday and that we are taking action to make sure we do not have a repeat of the Black Saturday tragedy. With these words, I commend the bill to the house.
11 May 2017