As the Commonwealth works on a new national waste policy there is growing pressure for Australia to follow France’s lead and lower tax rates on recycled materials.

A strong economic approach, including a tax overhaul, is needed to boost Australia’s domestic recycling industry, says Peter Schmigel, CEO of the Australian Council of Recycling.

He points to France’s announcement this month that it will introduce a plastic packaging tax in 2019, which will see virgin plastics taxed at a higher rate than recycled plastics.

Waste reduction policy needs a focus on cost reduction by minimising contamination in waste as well as revenue generation through tax cuts on recyclables that would incentivise resource recovery investment, Mr Schmigel told the Australian Waste and Recycling Expo on Thursday.

This tax overhaul would simultaneously drive investment up and the costs of processing waste down, which in turn would bring waste processing back onshore, he said.

“Waste always follows the line of least economic resistance,” he said.

“We have a whole range of options before us to incentivise resource investment. Changing tax is one of them. It’s time for us to develop domestic reprocessing capacity. Rather than worry about China, we should be China,” he said, referring to China’s recent restrictions on the foreign waste it accepts.

Tax cuts would facilitate this self-sustaining circular economy and must be seriously considered by the Commonwealth as it brings forward a review of Australia’s National Waste Policy, which Mr Schmigel says is currently inadequate.

“The Federal Government has decided on behalf of the states and local government to write a waste policy in eight weeks. Eleven stakeholder groups have said it’s not realistic. So far, from the draft, it seems to be all about targets and not implementation. The debate we need to have in this country is about the economics of waste,” Mr Schmigel told Government News on the sidelines of the event.

Landfill levy burden 

A sharper focus on domestic waste processing would need to be supported by a loosening of landfill levies to enable councils to better recover waste, Mr Schmigel told Government News. 

“Thirty per cent of landfill levies are collected from councils, that’s around $300 million. Councils get back about $30 million. Loosening up some of those purse strings would enable councils to have greater access to revenue to do resource recovery,” he said.

Mr Schmigel is also calling for procurement of recyclables to be mandated in government, following a recent Senate inquiry recommendation for governments to adopt so-called green procurement.

“We need to be thinking about setting a national procurement policy. As an example, if we mandated the use of recycled products in Snowy Hydro 2.0 – the biggest infrastructure project in the country – we would clear 300,000 tonnes a year we stockpile in glass and double the demand for plastic packaging reprocessing in this country,” he told Government News.

His comments come after the Victorian Government last month announced a $37 million boost to stimulating the recyclables market through green procurement in government.

David Baggs, CEO of Global Greentag, a global eco-label provider, also argued that procurement of recyclables needs to be mandated in local government.

He says that governments need to “get serious” about a hard-line policy on non-recyclables – such as restricting the import of non-recycled glass.

“Ultimately they need to take a holistic view and engage in the whole circular economy discussion to improve the quality of the materials going into the source separation process and maximise the ability of pure materials to come out of the recycling process,” Mr Baggs said.

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