Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to table the explanatory memorandum and have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

Australia needs a national container deposit scheme. This Bill proposes a 10 cent deposit on bottles, cans and cartons, and a national scheme to help us recycle much more of the waste that we are creating.

In 2008 I participated in an inquiry into CDL in which all the benefits were canvassed, evidence put on the table and quite a strong report produced. The recommendation was however to send the idea to COAG; specifically to the EPHC, from where very little has been heard ever since. That was a year ago. Since then, Australians have consumed over 11 billion containers in the last year – 3.8 billion glass bottles, 69 million steel cans, 3.2 billion aluminium cans, 2.6 billion polyethylene terephylene (PET) bottles, and 1.4 billion high density polyethylene (HDPE) bottles. Currently, 512,000 tonnes of containers winds up in landfill.

Other countries have shown how effective container deposit schemes can be in creating jobs, reducing litter, saving water and achieving behaviour change. Valuable lessons have also been learned from the South Australian scheme, which has been in operation since 1977 and works in conjunction with kerbside schemes.

South Australia has achieved a recovery rate of over 80% of containers, with 1.5 tonnes per person recycled per year. Some South Australian councils have reported incomes of up to $90,000 per year from the scheme, and community organisations that operate collection depots fund their numerous activities, with the Scouts earning approximately $9 million per year from recycling containers. This year, the South Australian environment minister was able to announce on Clean Up Australia Day an increase of 19 million containers returned in three months, compared to the same three months the previous year. ¹

Other jurisdictions have also recognised the merit of a container deposit scheme. The labour government in Northern Territory has recently announced it will introduce a scheme - their Chief Minister said he was sick of waiting for a national scheme. He said “I’m taking the lead and hope that other states will follow”.   Now there are Australian Greens’ private members bills in progress in Victoria and NSW. Almost all the community sector and industry have indicated that a national scheme will provide significant efficiency gains over individual state schemes and provide uniform market conditions across the country. With this in mind, The Greens believe that we need national leadership to provide some consistency and direction on waste and recycling. The greens, have ran out of patience watching the bungling and inaction that has characterised Minister Garrett’s tenure of the ‘so called’ Environment Protection & Heritage Council which has been unable to deliver on promises to phase out plastic bags, reduce packaging resources lost to landfill, and start to tackle growing mountains of e-waste. If the Environment Minister won’t act on an issue that over 90% of the Australian population wants and is prepared to pay for, the greens will.

A ten cent deposit means that we attach a value to a drink container, so it isn’t rubbish. And if someone does litter a 10 cent container, someone else will pick it up. This represents a radical change from how we view rubbish and recycling. A 10 cent deposit on bottles, cans and cartons turns people who litter into recyclers. It changes how they view the empty bottle in their hand. They are about to throw it out the car window, but they paid 10 cents for it. It is worth something, so it isn’t rubbish. You wouldn’t toss a silver coin onto the ground.

There are tangible economic, social and environmental benefits of the scheme. It will create a fund that will meet all of the government’s costs in the scheme, with money left over to promote recycling. It will create hundreds of new jobs. It will save ratepayers over $44.8 million annually. Every single municipality will benefit financially. Litter in our park, beaches and roadsides will decrease by 12-15%, recycling of drink containers will increase from around 50% to over 80%, and over 512,000 tonnes of reusable materials will be diverted from landfill.

This container deposit scheme will reduce Australia’s greenhouse gas emissions, reduce water use and improve air quality. Recycling container deposits will reduce our greenhouse gas emissions by nearly 1 million tonnes of CO2 per year – the equivalent of switching 135,000 homes to 100% renewable energy. The scheme will save enough water to permanently supply over 30,000 Australian homes. It will deliver the air quality improvements equivalent to taking 56,000 cars off the road.

These aren’t just figures pulled out of the air. They were calculated using government and industry sources.

The greatest boost in recycling from a container deposit system is that it creates away-from-home recycling. About half of our drink containers are used away from home, at cafes and food courts, at restaurants, in our public parks, at sports grounds, at the beach, and in offices. A container deposit system works in well with kerbside recycling. It decreases the volume of drink containers in the bin, but increases the value of those containers. This makes kerbside recycling more profitable.

In California, container deposit systems financially underpin kerbside by US $50 million per year. In Canada, kerbside collection and container deposits work side by side.

The public recognise that a container deposit scheme will mean payment of an upfront deposit. A 2004 Newspoll indicated a very high willingness to pay: 96% were prepared to pay 5 cents, 89% were prepared to pay 10 cents, and 75% were prepared to pay 20 cents. According to a 2006 Newspoll, 94% of Victorians want a container deposit system. Even when people don’t seek to redeem the deposit – they support it in principle . Most people who have attended community meetings organised by the Greens on container deposits want to donate their refund to charity.

It would appear that several very powerful packaging companies and drink companies do not want a container deposit scheme. While these are very powerful lobbies, who have been so powerful as to delay something sensible like this for a long time, they do not represent over 90% of the population.  

The packaging industry makes alarmist statements about the price hike on a slab of beer, yet beer drinkers also care about the environment and know they can get the deposit back, or they can donate it to the local footy club. For such a tiny up-front investment, the benefits are profound.

Across the country there is support for the concept of container deposits, and not only from environment groups, but from Probus clubs, the Scouts and many others.   Local government also supports the idea of container deposit schemes and across party lines too. Everyone supports it, except packaging companies, and drink companies like Fosters, Schweppes and Coca Cola, and their highly paid lobbyists.

The more comprehensive a scheme is, the better it works. Historically, schemes were set up by the beverage industry, and they naturally only wanted to capture the most profitable materials for resale, or their own materials. This makes the scheme confusing for the public to use, and as time moves on, those schemes need updating.

In this scheme, the intention is to capture all bottles, cans and cartons of drink. This means everything from a plastic water bottle, to a glass whisky bottle, to a carton of soy milk. It means every kind of fizzy drink, wine bottles and juice poppers.

The recent update in New York State is a good example. When their container deposit scheme was introduced, bottled water was a rarity, so it wasn’t included. It has taken years of campaigning to get the Bigger Better Bottle Bill through their legislature to include bottled water. In the Australian scheme proposed in this Bill, every container under 4 litres – that is, every bottle, can, carton or composite container - is included by default.  

The benefit of the Department of the Environment, Water, Heritage and the Arts holding the purse strings is that they will retain funds from unredeemed deposits which can be used to self-fund the scheme’s administrative costs as well as public education materials to promote recycling and increase awareness of its benefits.   The scheme is self-funding, and the unredeemed deposit fund is one of three main funding sources.   It also enables levy funds to be used for supporting kerbside recycling services, offsetting the collection industry costs for the operation of the Scheme, product development to improve the recyclability and reusability of beverage containers, and so on.

In California, the unredeemed deposit fund is administered by the state. The Californian unredeemed deposits fund pays for the container deposit scheme. It also underpins their kerbside collection to the tune of US $50 million dollars a year. The Governor’s budget also includes funding from the unredeemed deposit fund for education programs on recycling. They are even talking about expanding the scheme, so it will include food containers, and even non-food containers, like shampoo.

In New York, by contrast, they have a more old fashioned scheme, which is run by the beverage companies. Their recent legislation – the Bigger Better Bottle Bill – requires 80% of those unredeemed deposits to be given to the state. This has modernised their scheme.

The South Australian system uses a similar system to that in New York, where the beverage companies own the unredeemed deposits.

If we are setting up a new scheme, it should be in line with the best practice around the world. It should pay for itself, including all administrative costs, so there is no burden on the state.

A lot of the on-ground administration is handled by the largest recycling enterprises in the scheme. They are called authorised transfer stations in the Bill. That is a good description, because many existing transfer stations will adapt to a container deposit scheme without skipping a beat.

The transfer stations will do a lot of the on-ground administration of the scheme. They liaise with the authorised depots and the other large collectors, and they keep the Department’s administrative function to a minimum.

The transfer stations will make arrangements to pay transaction fees to the depots, and disburse refunds to the other large collectors, such as local councils, commercial and industrial and large community collectors, who would bring their containers directly to the Hub rather than via a depot.

Those commercial arrangements are not prescribed in this Bill.

The transfer stations also sell the recyclate – that is, the plastic, aluminium, glass, liquid paperboard and so on. The sale of recyclate is the second of the three funding streams for the scheme.

Every month, the transfer stations make a report to the Department on the number and types of empty beverage containers received and processed. The reports from Authorised Transfer Stations will provide the Department with the data it needs to report to the Minister.

The establishment of these transfer stations will have consequences far beyond beverage containers.

Once we have the transfer stations established, in time they can be expanded to service other extended producer responsibility schemes for TVs, computers, compact fluorescent lights, car batteries, and tyres. All the so-called priority wastes that the Environment Protection & Heritage Council, chaired by Minister Garrett has repeatedly promised to address, but continually fail to address.

The Department will approve premises to be an authorised collection depot, and the Bill sets out these arrangements, but after that, it is basically hands-off. The depots run themselves, and report to the transfer stations. The transfer stations will pay depots a transaction fee per item.

The Department reimburses the depots for all the 10 cent refunds they have paid out, but the scheme is flexible enough that the Department may choose to make arrangements for the transfer stations to perform that function, when they pay for the containers.

Depots are where people will take their used containers to get a refund. They will be everywhere. Business owners are keen to establish depots, at no cost to the ratepayer.

We need a drink container deposit scheme to create the transfer stations and make them profitable.  

Environment Victoria’s Green Jobs Report quotes the United States EPA: ²

“A commonly used rule of thumb is that ‘incinerating 10,000 tonnes of waste creates one job; landfilling 10,000 tonnes of waste creates six jobs; and recycling 10,000 tonnes of waste creates 36 jobs”

Using that rule of thumb, this scheme would create around 2,600 jobs by diverting hundreds of thousands of tonnes of drink containers from landfill to recycling. The Boomerang Alliance estimates that collection and sorting alone will create at least 1,000 new jobs.

The Australian Council of Recyclers and the Boomerang Alliance’s new estimates that every tonne of waste and reprocessed in Australia creates another $775 in new economic value along the recycling supply chain. Using these calculations this bill has the potential to deliver some $573million of economic growth – a substantial contribution to Australia economic recovery. ³

In this Bill, the Importer or Producer of a beverage container is liable to pay the beverage container environmental levy, unless they are granted an exemption. The penalty for not doing so is high. It is equivalent to the penalties for works approval offences, waste discharge offences, licence offences and pollution abatement notice offences under the Act.

In this Bill, drink container deposits are worth 10 cents. It enables a higher amount to be set by regulation. Ten cents is consistent with the 10 cent levy in the South Australian container deposit scheme. It is the levy amount announced by the Northern Territory Government on 11 March this year.

Manufacturers or importers must pay the levy in a timely manner, once the drink has been put onto the market. This enables the levies to be received by the Department’s Fund before refunds are reimbursed to authorised depots and transfer stations.

This Bill ensures that all beverage containers sold in Australia must be labelled as refundable. The labelling requirements are similar to those required by the South Australian beverage container scheme. The intention is that there are no new difficult labelling requirements. Grab an empty container off the street – there are plenty lying around – and you will see a label saying “10c refund when purchased in SA”. They could simply delete “when purchased in SA”.

Many depots will be Reverse Vending Machines – particularly in metropolitan areas.

Reverse Vending Machines are exactly what they sound like. You put in an empty container, push a button, and it gives you 10 cents. They read a bar-code, which tells them all about the product. They crush and sort the container, even separating them into individual colours significantly lifting the value of the recyclate. They deliver the containers and the data to the Hub, in return for a transaction fee.

They will be in the food court of your shopping centre, or in the car park. They will be in a strip shopping centre. They will be next to the general store. They will be at the service station. They will be at the beach.

South Australia is trialling reverse vending machines and NSW recycling company,   EnviroBank, recently announced they would be trialling 300 machines in schools and shopping centres across Australia.

Shopping centres and retailers are enthusiastic about the idea. Reverse vending machines are brilliant advertising. Everyone wants to associate their product with good environmental outcomes. They want to offer incentives and vouchers, as part of their advertising. Advertising and business incentives form part of the funding source for the reverse vending machines – it is the third of the three funding sources for the Scheme.

These machines can also be in schools, where they will reduce school cleaning and rubbish costs. The student puts in a container and presses the button and earns a point for their team in the school recycling competition. They may choose a voucher for the school cafeteria, or donate the refund to the school library or a charity supported by the school, and. The screen can then play a message – for example, about the Kidsafe helpline, or road safety.

The Department makes the initial agreement with all depots, so they can restrict the types of messages or vouchers allowed on reverse vending machines in schools.

Reverse vending machines can give out cash money, or a voucher. In reality, they will give out vouchers, and manual depots will make cash refunds. Once you have your container in the machine, you push a button to indicate whether you want a voucher, or whether you want to donate your 10 cents to charity. Then you will choose on the touch-screen which store you want a voucher for, or which charity. In this way, local sports clubs, environment groups or social justice groups can earn donations without even touching the containers.

Reverse vending machines are the polar opposite of pokies. Pokies make money out of misery and heart-ache, from family break-ups and addiction, from suicide and from crime. Fifty three cents out of every dollar stolen from not-for-profit groups in Australia and New Zealand goes to fund problem gambling. ⁴ By contrast, Reverse vending machines reduce litter and create donations for community groups.

Reverse vending machine depots may reject containers which are returned in a condition which prevents the machine from reading the label. We know that the machines can read a label that is a bit damaged, or containers that are a bit crushed.

The Department would review the amount of the refund value at least once every 5 years and must have regard to the minimum refund value necessary to maintain the appropriate level of incentive to reuse or recycle, ensure high rates of recovery, reduce litter and litter-related costs, reduce waste, disposal and recycling costs and conserve resources.

There are exemptions for some drinks not to be part of the scheme and would apply to companies such as Re-Wine that charge a premium for a reusable bottle, then refill it. Those bottles are reusable, which is better for the environment than melting down single use containers.

A phase-in period for the scheme is provided for in the Bill – drinks that are already in the shops may be sold without a levy, but new ones arriving on the shelves must have the label and the levy.

There is some opposition to this type of scheme. The Nolan-ITU study published by the Victorian EPA in 2003 is often cited. Its findings have been seriously questioned in peer reviews by Perchards and Marsden Jacobs Associates.

The Nolan-ITU report assumes the containers will be returned to the point of sale. That is, taken back to supermarkets, where the costs of retail space and retail staff time are prohibitively expensive. That is not the case in the scheme set out in this Bill. Secondly, it assumes that business runs the scheme, and that refunds will be paid by brand-owners. This has nothing in common with this Bill.

There are some hidden benefits relating to Advanced Waste Technology plants, which deal with organic waste. These plants that recover organic materials from mixed waste, and turn it into soil products are sometimes called wet MRFs. A container deposit system will simply make Advanced Waste Technology plants more efficient and cost-effective. It will pre-sort most of the waste, and create a separate stream of higher quality “dry” recycled materials.

Drink container contamination is a problem for Advanced Waste Technology plants. Glass bottles are a particular problem. Single use bottles are designed to be light-weight, so more than half of them shatter as they come into the plant, and it’s impossible to separate all the broken pieces out of the mix. There is an attempt to remove the broken glass pieces using a de-stoner, and the glass grinds against the expensive machinery, wearing it out.

The Australian Standards for compost, mulch and soil products only allow 0.5% glass. It is difficult for a plant receiving material with a 3-5% contamination to achieve that standard. There is also the issue that glass, plastic and paperboard pieces look like industrial waste. This limits the market for the final product.

There are many positive benefits of organic material being diverted out of landfill, towards agricultural land. It decreases the methane emissions from tips. It improves agricultural soil, so there’s less need for chemical fertilizers. But when the product is contaminated with glass, plastic and metal pieces from drink containers, these stay on the surface after the organic matter is absorbed into the soil. They don’t break down. Over time, they build up.

There would be fewer drink containers to remove from the mix and those containers that are removed would be worth 10 cents each – an incentive. The end product would cost less to produce, and would be of a higher quality.

Finally it is important to note that the fund will be entirely self funding – we estimate that the sale of recyclate will generate some $243 million in revenues to offset costs and unredeemed deposits (the fees people forfeit if they don’t return their containers) will generate another $179 million per annum – funding the roll out of 400 collections depots and around 2,000 convenience drop off points using RVMs.

On our estimates, the system will leave government with a surplus of some $89million a year. Money that can be spent towards assisting the roll out of new recycling and reprocessing facilities to deliver new jobs, new economic growth and a massive reduction in waste to landfill.

We, along with many other stakeholders from the community sector and across state and territory governments, have had enough of waiting around for the Commonwealth to get its act together and implement such a scheme. It is time we just got on with it – it may seem like a small step when considered against the vast legacy of waste that we are creating, but we have to start somewhere. Starting with CDL will have flow on benefits for organic wastes as I’ve described and will set down the foundation infrastructure for collection of many other categories of waste. There’s no better place to start than with container deposit legislation.

¹ Jay Weatherill, SA Environment and Conservation Minister, Press Release, 1 March 2009

² EVIDENCE report p.37

³ ABC National News – National recycling Initiative April 3, 2009

⁴ BDO Not-for-Profit Fraud Survey 2008, p.54

I seek leave to continue my remarks later.

Leave granted; debate adjourned.