Senate debates

Thursday, 22 November 2012

Committees

Environment and Communications References Committee; Report

12:21 pm

Photo of Helen KrogerHelen Kroger (Victoria, Liberal Party) Share this | | Hansard source

On behalf of the Chair of the Environment and Communications References Committee, Senator Birmingham, I present the report of the Environment and Communications References Committee, Operation of the South Australian and Northern Territory container deposit schemes, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

I move:

That the Senate take note of the report.

12:22 pm

Photo of Anne RustonAnne Ruston (SA, Liberal Party) Share this | | Hansard source

I rise to speak on the Environment and Communications References Committee report on container deposit schemes. The intention of this inquiry was to investigate the pricing and revenue allocation practices of the beverage industry in South Australia and the Northern Territory, which are the only two states in Australia where the CDS exists. The South Australian scheme is 35 years old and well established, and the Northern Territory scheme is brand new. As such, the South Australian community is largely accepting of this system of legislation. But I would just like to put on record that other states should be very, very careful before they consider going down this path, because there may well be better options available to achieve disposal outcomes.

I draw the attention of the Senate to a success story on this sort of management that does not have the overly burdensome requirements of the two container deposit schemes investigated in the inquiry. The success story to which I refer is the drumMUSTER, with 20 million containers safely disposed of since 1999. This scheme has been dedicated to helping farmers and chemical users keep their land free of waste. The plastic and steel from which these products are made is recycled and diverted away from landfill into new products. There have been pretty amazing results of this Industry Waste Reduction Scheme agreement. More than 25,000 tonnes have been diverted from landfill—465,000 cubic metres of uncompacted waste, enough to fill more than 120 Olympic-size swimming pools. That is 276 road trains packed to the top—almost 10 kilometres of road trains. If the waste were put into cotton bales it would be 110,000 bales. Laid end to end, that is enough containers to go from Brisbane down to Sydney, past Melbourne, across to Adelaide, past Perth and up to Broome, stopping at Kununurra—more than 8,200 kilometres.

The drumMUSTER is run by AgStewardship Australia Limited, an organisation established and developed to implement stewardship programs that reduce and manage waste for the Australian agricultural sector. AgStewardship Australia is rightly proud of what the drumMUSTER has achieved. The organisation is supported by the National Farmers Federation, CropLife Australia, Animal Health Alliance Ltd, the Veterinary Manufacturers and Distributors Association and the Australian Local Government Association. It has come a long way since the 4c per litre or kilogram was introduced. Today, 97 chemical manufacturers and 452 collection agencies or councils are taking part at 762 collection sites across the country. Since 1999, their programs have diverted more than 75 per cent of packaging that would have otherwise gone into landfill and has safely disposed of approximately 340 tonnes of unwanted chemicals. Most are managed by local councils at waste management sites and transfer stations and others by community groups, charities or even organisations like rural firefighters.

Because it is not overly bureaucratic, the drumMUSTER fits the different needs of a range of groups taking part. That is also a major reason the drumMUSTER has grown over time and continues to develop in individual ways. As the chairman of AgStewardship, Lauchlan McIntosh, has said, everyone from farmers, resellers, manufacturers and local councils have made the scheme efficient. Local governments are a key partner, recognising that the collection of the drums for recycling reduces landfill, besides providing a useful service for the taxpayers. The drumMUSTER has achieved a highly desirable outcome without the need for regulation. I know this is a foreign concept for many of those opposite, who see regulation as the answer to most problems. But the drumMUSTER has adapted in the flexible ways that government regulation just cannot do. I know the Greens in particular have an ideological hatred of agricultural chemical companies, yet it is by partnering with these firms that there has been proper disposal of unwanted chemicals. Research indicates that almost every farmer in Australia is aware of the drumMUSTER program, with more than 60 per cent having indicated that they have used the program.

Twenty thousand containers is a lot of drums. If more processors become involved, then hopefully we will end up seeing more and getting greater flexibility in our recovery rates. The challenge obviously is to get more sites. Overall, though, schemes such as the drumMUSTER mean a better stewardship of land, which is crucial to the health of the environment and to long-term prosperity. The CEO of AgStewardship Australia, Karen Gomez, who grew up in my home state of South Australia, attributes the success of the drumMUSTER to their pragmatic approach of owning and solving their own problems.

I commend AgStewardship Australia for what they have done so far and hope their example can pave the way for a concept of stewardship to replace some of the more outdated methods of regulation that currently exist. AgStewardship Australia sets a great example of taking responsibility for your own problems. By being proactive, this sector has saved itself a huge amount of time, money and angst. I would suggest that there is a lesson in this for all industry sectors: take responsibility for yourselves and you might avoid the burden of government intervention.

12:27 pm

Photo of Peter Whish-WilsonPeter Whish-Wilson (Tasmania, Australian Greens) Share this | | Hansard source

I am very disappointed in Senator Ruston's analysis of the container deposit scheme. She completely misunderstands the whole reason we had a Senate inquiry in the first place. To my knowledge, 20 million agricultural containers are not consumed outside the home by individuals and left lying around as rubbish, which was exactly the reason container deposit schemes were set up around the world in the first place.

I totally agree that anyone who uses a beverage container should be responsible for the disposal of that container. Unfortunately, human nature tends to intervene. No matter what fines and infringements we place on people—and I am sure Senator Ruston, coming from one of the cleanest states in Australia, would agree—they do not seem to work. We still get litter and we still get rubbish—and unfortunately that rubbish and that litter ends up not only in our environment but in our waterways and our oceans, and it breaks down into millions of pieces and finds its way into our sea life. Studies all around the world are now showing the ingestion of plastic from things such as plastic containers as far as the plankton food chain.

We know from packaging that 50 per cent of beverages in containers are consumed outside the home. It was fascinating to me, going to South Australia recently, to see how well kerbside recycling is working with container deposit schemes. South Australia—Senator Ruston's home state—achieves some of the highest recycling rates in the world: 84 per cent of containers consumed outside the home are recycled. This is a key point. We have kerbside recycling, and that is fantastic; nobody disagrees with that. But that is for containers consumed inside the home. I must say, my vineyard does not use chemical drums, because we are organic. I am a Green, but there are also non-Green people who are organic. I will make this point very clear: 20-litre drums of chemicals are not considered rubbish that people take to barbecues with them.

I have never seen someone turn up at a barbecue with a 20-litre drum of chemicals. I have never seen someone go to the football or a rock concert and dispose of a 20-litre drum of chemicals. It is an entirely inappropriate comparison to make and it shows a complete lack of understanding of our rubbish problem in this country.

It is not just Australia, Senator Ruston, that has implemented container deposit schemes. They have been successfully implemented all around the world. In fact, they started in the US to solve exactly this problem. How do we go from A to B and stop people from littering? We cannot. What we can do is work on the incentive that human nature responds to by putting a value on the rubbish that people leave lying around. Human nature lets us down on the left hand because people unfortunately litter when they are not supposed to and, on the right hand, people are prepared to go out and collect the rubbish. Why are they prepared to collect that rubbish? It is because there is an economic value on it. It is called a market based instrument. It is putting a price on pollution. It is using a market system. It is the most efficient system we have for solving our rubbish problem and it is a market based system. If you want to start sledging and throwing around comparisons about people who are on the left or the right and talking about regulation, that is using a market and a price signal to solve the problem. It is a very different point to what the senator was trying to make about the Greens being heavy on regulation. This is, in fact, not a regulation in the strictest sense of the word; it is an incentive. It is not a tax, as the Food and Grocery Council tried to make out. It is a levy that provides an incentive for people to do the right thing.

Let us talk about South Australia. I was very pleased to go there and see how proud they are of the container deposit scheme in their own state. Eighty-four per cent of all beverage containers are recycled. The Food and Grocery Council and other lobby groups for the beverage industry tried to make out that the packaging covenant, a co-regulatory approach that relies on volunteer agreements, is the best way to go. They could not provide any evidence as to how much packaging was consumed outside the home and how much of that was recycled, because their statistics relied on kerbside recycling, not rubbish outside the home. That is what container deposit schemes were set up for and that is what we were looking at in the inquiry.

It was also interesting for me to note that a state that was so proud of its scheme was surprised when the inefficiencies in that scheme were highlighted by a number of the key players. It is a lot worse in the Northern Territory, where a new scheme has been implemented and a large number of inefficiencies exist. I went to the Northern Territory and I sat and watched people stand in the sun and the dust for an hour with their children waiting to get their cans and bottles counted because people inside the depot were having to split 24 different ways every single container that came into their depot. It took people over an hour and a half to get their money before they left. That is a very inefficient system. All the participants we spoke to in the chain, including the beverage companies who own these supercollectors, agreed that the systems were inefficient and could be done much better.

In terms of rolling out a national scheme, yes, I agree with Senator Ruston: every state should take note of the existing schemes in the Northern Territory and South Australia. They should most definitely take note of what can be done better and what can be done more efficiently. There is absolutely no doubt from the Senate inquiry into container deposit schemes that we can do them a lot more efficiently. The use of new technology, only recently evident in both South Australia and Northern Territory recycling depots, will significantly reduce costs of the schemes.

It is also my view, and the view of the Greens, that beverage companies should not be part of this scheme. They should not be supercollectors. There is an inherent conflict of interest for companies that are fundamentally and ideologically opposed to using container deposit schemes being part of the system. It is like putting the fox in charge of the henhouse. There is no incentive whatsoever for them to improve the schemes. We believe that the inquiry has proven there has been profiteering in the South Australian scheme by Coca-Cola. That has been outlined in our dissenting report.

So, yes, future state schemes or a national scheme should be aware of the container deposits schemes in South Australia and the Northern Territory. There are things they need to know and there are significant ways we can improve the schemes. But the one thing that the EPA in South Australia and most South Australians I talked to, who are very proud of this scheme, pointed out is that in its environmental aim and objective—that is, increasing recycling and removing rubbish from outside the home—it is highly effective. Eighty-four per cent of all beverage containers sold in that state are recycled because of the scheme, because of this market based instrument that puts a price on plastic pollution and gives people an incentive to get off their backsides, pick up bottles and cans, and take them back to the depot. If they will not do it, kids will. Nearly everyone I saw at the depots in South Australia and in the Northern Territory were children with their parents. It is children making money. It is the Boy Scouts, church groups and community groups profiting from a scheme that distributes that income around the state.

It also provides a fantastic opportunity to aggregate other forms of waste. The South Australian container deposit scheme has revolutionised recycling in that state, and I believe it will do so for every state that adopts such a scheme. The packaging covenant at the moment does not provide an integrated scheme for integrating waste, particularly things such as e-waste and other types of waste that we saw being brought in by the same people who were there to cash in their containers. It could also be rolled out around this country by using private investment at no cost to the beverage companies and at no cost to the taxpayer. We believe there is a market solution to this right around the country. We also believe that new technologies that are being trialled will allow the schemes to run very efficiently and very cost-effectively. There is no doubt in my mind at all from my visits to South Australia and the Northern Territory that this could revolutionise the way we recycle in Australia.

I certainly like the reports that Boomerang Alliance have put out on a Tasmanian based scheme creating 300 new jobs with seven depots around the state. Hopefully, given all the awful garbage that I have seen lying around the Tamar River in the last two weeks, which we have done media on, we could also improve our recycling rates and take plastic out of our rivers and oceans where we know it is damaging marine life. It is the biggest source of pollution in our oceans. (Time expired)

12:37 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

I am delighted to have learned from listening to Senator Whish-Wilson that you and I, Senator Ruston and Senator Farrell live in some type of litter and recycling nirvana. Where we are is obviously heaven on earth compared to everywhere else—and it is. It is a wonderful place to live, as we know. But I am not convinced that everything we have heard from Senator Whish-Wilson by any means stacks up to the most basic of fact checks or proofing. Firstly, seeing as Senator Whish-Wilson decided to dedicate the first part of his speech to responding to Senator Ruston, I might dedicate a little bit of time to responding to Senator Whish-Wilson before I reflect on the report of the inquiry that I was pleased to chair.

Senator Whish-Wilson claimed in one part of his speech that this type of scheme is the most efficient system we have but then in a different part of his speech that it was a very inefficient system. There was a complete contradiction even within the same speech. Throughout this inquiry, in much of what we heard from Senator Whish-Wilson's questioning, his approach was to question the inefficiencies in the systems of container deposit legislation in place.

He claimed that it was a market based system, not a regulation but an incentive. That is really quite remarkable, I think, for anybody. It is not regulatory, not a regulation? This is a system where the state government legislates to require that a 10c deposit be paid to anybody who returns a certain type of container to a certain type of place. That sounds very much like regulation to me. There is no variance in the price. The state government legislates that it be 10c. It is a fixed price. There is no market in terms of recognising that some of the products returned—say, aluminium cans—are worth an awful lot more than some of the other products returned. Some of them have greater value to recycling than other products.

Senator Whish-Wilson also claimed that evidence provided 'has proven profiteering by Coca-Cola'. Of course, I have not seen the minority report put down by Senator Whish-Wilson. I look forward to reading that and seeing how he has demonstrated and proven his claim of profiteering through the scheme by Coca-Cola. I think anybody with a relatively simple analysis of what occurs in the food and beverages grocery sector would acknowledge that it is a pretty competitive sector. They would acknowledge that at the retail level retailers fight for market share and at the wholesale and manufacturing level there is equally a fight for market share that occurs to maximise profits but to maximise profits in the most effective way—by maximising your sales and margin combinations.

I do not think through this inquiry we saw any credible evidence to support the claim of profiteering through these schemes. If anything, analysis undertaken at all manner of levels indicates that these schemes cost. They come at a cost. There is a merit based argument that can be made about the treatment of litter and the benefits of recycling, and I acknowledge those merit based arguments. We should acknowledge, though, that much has changed since the South Australian scheme was first enacted in the 1970s. Kerbside recycling did not exist then. In fact, very little of the recycling activities that we see today existed then. The scheme was tackling a very different problem to those that we look at today.

In talking about Tasmania, Senator Whish-Wilson suggested that if such a scheme were implemented there it could create hundreds of new jobs. Yet he claims that it all comes at no cost. You do not create new jobs in a sector like this without there being some cost application to fund those jobs.

Senator Whish-Wilson interjecting

'It does not cost the taxpayers.' It costs the consumers—that is right, Senator Whish-Wilson. It costs the consumers, because the costs will be passed through to the consumers, who will pay more—

Senator Fifield interjecting

and who in large part are the same people as taxpayers. Thank you, Senator Fifield. Consumers, taxpayers, Australians, Tasmanians—whoever they are—will end up footing the bill through higher costs.

This inquiry did not, however, seek to take on board the merits of having a container deposit scheme or not. It really was a narrow inquiry that looked very much at the operation of the South Australian and Northern Territory schemes and some of these claims of profiteering that I think were firmly rebuked. The inquiry made some clear recommendations, though. In terms of claims of price impacts, anybody who decides to go down this path in future at a national or a state level should make sure that, just as was the case when the GST or the carbon tax was introduced, there are tests so that anybody who makes false claims as to the price impacts can be held to account for making such false claims. In terms of return rates of products, there should be transparency to give confidence and in terms of disputes that may occur within the scheme, there should be some clear dispute resolution mechanisms.

I particularly want to highlight the last recommendation of the report, which relates to the treatment of small containers—containers of less than 100 millilitres in size—that require refrigeration. I urge the South Australian and Northern Territory governments to exempt them. Perhaps the best known of these types of containers are the small Yakult products. They are consumed in the home, they have to be kept refrigerated and they will be captured through kerbside recycling without a container deposit scheme being in place. The committee has recommended that they be treated just as a litre of milk is treated because they are consumed, by and large, just as a litre of milk is consumed—that is, they should be exempt from the schemes. I would urge the South Australian and Northern Territory governments to look at that because it is placing an unfair cost burden on a number of small companies who produce these products. With that, I commend the report to the Senate.

Debate interrupted.