MBA Australia report (July 2010) – taken from national website.


What’s optimal, what’s not

Central premise: there is no economic benefit increasing from 5 Star to 6 Star.

Executive Summary      pg 11

Optimal star rating is generally around or below 5

Apart from one particular house design with several site advantages, most other typical new designs in most locations have optimal star rating below 6 and many are below 5.
These results are consistent with the recent Regulation Impact Statement (RIS) which assessed the benefits and costs of the Building Code of Australia (BCA) being revised
to raise the minimum required star rating from 5 to 6 stars. It found that a shift to 6 stars would impose net costs on the Australian economy.

Chapter 1 Introduction   pg15

The Issue

The economic dimensions of relentlessly pursuing higher star ratings are poorly understood politically and within government.
The Productivity Commission has previously expressed concern about how the star rating system is applied.
It has also recommended that a detailed, ex post, economic analysis be conducted on the previous decision to move to the 5 star rating.
This has not occurred. In addition, the Final Regulation Impact Statement and benefit cost analysis behind the recent decision to move to 6 stars
showed that economic losses would be imposed on most states should it be adopted, but the Ministers Building Forum decided to proceed anyway.


The credentials of the Authors of the MBA report below

The Centre for International Economics

With over 20 years of experience, The CIE is a highly respected private economic consultancy providing advice and analysis to Australian
and foreign governments, international organisations, and the private sector.

Our work is about applying the tools and techniques of economic analysis to help solve problems for our clients. We have built a reputation
for analysing difficult and complex economic issues, and producing well researched, comprehensive and credible economic assessments.

We work in a wide variety of fields including trade and investment policy, climate change, water, health,
aged care and human services, development economics, industry and competition policy, regulation, macroeconomics, and government policy analysis.
The experience and expertise of our consultants and network of associates is reflected in our wide range of reports published on our website
and available upon request.

Energy-efficiency: building code star rating: what's optimal, what's not?

25 Nov 2010

Residential building energy star ratings are widely perceived within the community to be a measure of economic efficiency.
A higher star rating is perceived as innately desirable. However, energy efficiency is not economic efficiency.
Findings in this report are that, generally it pays to achieve a 5-star rating for new houses. However, above this point,
for most houses in Melbourne, Sydney and Brisbane (representing 80 per cent of Australian city residential houses),
forcing home owners to build houses with higher star ratings will be detrimental to the community.

To view this report on CIE's website [pdf, 1602KB]

To view this report on the Master Builders Association website, click here