The Debate: Should Australia have a national container deposit scheme? (Part 1)

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Whenever and wherever the idea for a container deposit scheme (CDS) surfaces, it precipitates a political and emotional discussion. At the risk of being dismissed as an ‘old antagonist’, I bring a unique perspective here. I’ve been involved with industry associations and on the board of a super collector in South Australia that is part of that state’s container deposit scheme. I’ve seen the numbers, the politics and the emotion, and I want to put forward the reality.

There’s no doubt, on face value, most people would say a CDS is a great idea. We can fix a problem and all go off and do something else. It’s a great sound bite for politicians.

But this belies the actual advice governments are receiving. Indeed, when state and federal governments got the Office of Best Practice Regulation to do a regulatory impact statement on the various schemes around container litter and recycling, it found that, of around 10 options, container deposit legislation was the worst by far in terms of its cost-benefit analysis.

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Packaging Council of Australia’s David Carter

The debate is raging again because, in New South Wales, Premier Mike Baird made a CDS part of his re-election platform. There are some easy lines for the politicians: big companies just want to make profits, they’re ‘mean spirited’, they should be ‘forced’ to pay for their containers that end up as litter. That’s reinforced when we see a branded container in the streets. We believe that organisation is somehow failing in its corporate responsibility.

But it belies the fact that a CDS is a very expensive option for the community and it doesn’t give any additional benefits ahead of the other options canvassed in the regulatory statement, such as the packaging covenant, product stewardship or a semi-voluntary code. These are just as effective and a lot less costly.

Basically, CDS is thought to be a simple and effective solution to litter. This is markedly misunderstood. For a start, it’s an expensive way of addressing away from home container waste and it also has the potential to create a negative impact on kerbside collections for recycling from household waste.

If the New South Wales Government does introduce container deposit legislation – and it has a plethora of working groups now proving why it should be in place – it will be because, politically, it’s seen as a good thing to do, rather than the best cost-effective outcome for consumers.

Recently, I met a large manufacturing company to talk about the cost impact on its business and products should the legislation be enacted. The company believes the costs will run into millions of dollars, just in New South Wales alone. Those costs will be passed on to consumers, but governments don’t like to hear that kind of language because it sounds like a tax. The community gets angry and industry and governments start facing off against each other. The debate becomes irrational.

[quote style=’1′ cite=”]There’s no doubt, on face value, most people would say a container deposit scheme is a great idea. We can fix a problem and all go off and do something else. It’s a great sound bite for politicians.[/quote]

Don’t get me wrong, we need to do something to reduce the number of containers ending up in landfill but we’re advocating for the ‘best cost’, not ‘no cost’. The packaging covenant spent over $120 million to encourage packaging recycling and litter reduction over the last 12 years in Australia; container deposit legislation only addresses eight percent of the waste stream and will cost around $100 million.

Let’s look at the South Australian CDS – it’s horrendously expensive and there’s no real incentive for it to be any other way, but governments love it because the numbers look good and they’re not paying the bill. It’s not just the 10-cent deposit on the container – there’s a handling fee involved to get the containers to a super collector for recycling, which is equivalent to or greater than the deposit.

If you’re lucky, the deposit gets back to the consumer, but the handling fee never gets back to anyone – it’s just a cost and one that gets passed on to the original purchaser.

There’s a need to work with industry across a lot of waste streams, not just containers. But this is something that requires patience and a long-term relationship. A CDS is a popular outcome for politicians who only have to worry about their three-year election cycle.

The industry needs to work to provide governments with a sensible alternative and it has tried to do that through the COAG (Council of Australian Governments) process and by engaging with the regulatory impact statement work. It’s a laborious process – we are trying to develop litter improvement, recycling improvement and better use of materials. All the CDS will do is make consumers spend more money on containers for something that won’t fix the problem.

And that problem is litter. Containers, for example, end up in two streams – we currently recycle about 75 percent of our materials at home, so I’d say with all sincerity that’s an issue that’s not broken and doesn’t need to be fixed.

But what’s consumed away from home is something that needs to be addressed. Do we seriously think that people, once they’ve finished their can of soft drink or bottle of juice are going to walk around with it until they can find a recycling depot? The incentives put in place are not sufficient to make people do the right thing all the time. The real issue we need to look at is education, behaviour, and industry and community working together.

I believe a more sustainable solution can be achieved at best cost.

The packaging covenant supports school education programs, so we can train kids to adopt a different attitude to litter and take it through to their adult years. Environment is now on the school curriculum and drives the messaging to recycle responsibly.

The author, David Carter, is the chief executive officer of the Packaging Council of Australia. This article also appears in Issue 1 of Corporate Waste Solutions.

Read Part 2

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