SENATOR BIRMINGHAM: (South Australia) (11:30 AM) -It is a pleasure to rise to contribute to this debate on the Environment Protection (Beverage Container Deposit and Recovery Scheme) Bill 2010. I thank the Greens for bringing this bill forward and ensuring continued discussion on this important topic. As a South Australian Senator, which Senator Moore alluded to, I have grown up with container deposit schemes. They are part of day-to-day life in South Australia and have been in place since 1977. Many, many people in South Australia, including Senator Hanson-Young, have grown up with such schemes and in many cases have known nothing other than the container deposit scheme.

But it is important when we consider this legislation that we remember the genesis of that scheme-what brought it about-and how things have changed and moved on since 1977. Indeed, at the time the scheme was introduced it was very much an anti-litter provision. It was a littering initiative and it was designed to ensure that we reduced the amount of roadside waste and rubbish from beverage containers. Yes, it had recycling principles underpinning it, but recycling was not at that stage the primary objective of the scheme. Over the years, the recycling principles and benefits have in some ways come to provide a more significant benefit than perhaps the anti-littering principles do in the South Australian scheme. It is certainly a scheme that operates to the benefit of both of those areas.

Since 1977 we have seen, in South Australia and in all states and territories, a great surge in recycling activity. No longer do we require householders to take their waste to a depot to have it recycled. Householders in metropolitan areas in every state of the country can recycle simply by sorting their containers at home and putting them out on the kerbside. Thankfully, that is what most people do. Local government has done a very good job in promoting and developing kerbside recycling initiatives that have in many ways reduced the recycling benefit of initiatives such as container deposit legislation.

That said, the recycling industry still faces some real challenges, in particular the away-from-home recyclables-those resulting from things consumed in the workplace, in public places and in other areas where people consume food, beverages and a whole variety of other goods, but especially in workplace situations. It is in those places where recycling rates are far lower than they have been in households, and it is in those places that we need to see some focus on change and changed behaviour.

Container deposit legislation, as introduced in South Australia and applied there, has had some benefit on the littering front and therefore on public places and roadsides. As I said, that that was its initial intention, and it certainly has provided some opportunities to reduce the littering in those community areas and spaces. Again, we have seen local and state governments really up the effort in public spaces to provide for recycling of recyclable materials. We are now seeing an increasing effort in many public places to enable, as you do at home, the separation of those recyclable materials that are the focus of this bill.

In the workplace, much more remains to be done. I do not see particular efforts of container legislation having any real impact in workplaces in most instances. As I see it, container deposit legislation has not changed many workplace practices. Indeed, although workplace recycling has perhaps made some steps in the area of paper recycling, it has to make many greater steps in areas from industrial waste in industrial workplaces right through to consumable waste in office workplaces and the like.

This is where we need a comprehensive approach to recycling and product stewardship. Senator Moore certainly highlighted the need for such a comprehensive approach. Getting a better approach to product stewardship has been talked about for some years. In the electronics area we see huge challenges of what to do with electronic waste and how to make sure that that waste is actually recycled-the roles and responsibilities of the manufacturers, the importers, the wholesalers and the retailers in line with the householders, the businesses and the consumers. These are the issues to be decided. Who pays is always a very significant issue.

But, again, in electronic waste we have seen some progress-not enough, but certainly some. I hope the work of the Environment Protection and Heritage Council can bring some more progress over the next few years than it has over the past few. I know it was a commitment of the Labor government prior to the 2007 election to take issues of container deposit to the Environment Protection and Heritage Council and to try to get them resolved at that council. Unfortunately, the government failed to satisfactorily progress these issues at that ministerial forum. I think it is important that if we are to take steps forward they are done in unison with the states for a national approach in all of these areas of product stewardship and waste management.

I note that there have been moves and steps, some of which Senator Moore alluded to, in other states and territories than South Australia, and the Northern Territory parliament is currently debating a container deposit legislation scheme. There are discussions in other states, and indeed I see news reports today of the New South Wales coalition being open-minded to the adoption of such a scheme, but again highlighting that if it is to be adopted, especially in a state like New South Wales with its close borders to the ACT and Queensland and the significant flow of people across those borders, it needs to have some decent national management protocols in place. So there is every reason to be hopeful that these issues can be constructively and productively discussed and addressed at these ministerial fora.

Equally we should not overlook the fact that these schemes come with costs, and those costs are passed through. That is why I highlighted the significant change that has taken place in South Australia. The reality is that in every other state and territory household recycling rates, and therefore the recycling rates of beverage containers, have increased dramatically over the years, without the need for a container deposit scheme such as this bill proposes. So we need to be confident that, if this is to be implemented in other states or if it is to be implemented at a national level, it is going to provide some level of net benefit.

In noting the work that has been done already by the ministerial council there are questions as to whether the net benefit is actually there. The ministerial council commissioned some research and it was provided in May 2009. It is highlighted in the committee report into this proposed bill. That report, prepared by consultants BDA Group and Wright Corporate Strategy, has attempted to quantify the costs and the benefits of introducing a scheme of this nature. In its quantification of these costs and benefits it has reported a total national annual net economic cost to government, industry and the broader community when it takes into account all of the compliance and administrative cost, some of which Senator Moore mentioned, and highlighted some of the questions as to exactly how the proposal in this bill would work. The BDA report estimates those costs to be around $492 million per annum in net terms. Overall it sees economic costs of $763 million versus economic benefits of $294 million. Those costs stretch from the administrative costs of operating a scheme like this through to the costs for the packaging industry and others involved in its implementation.

On the other side of the ledger, the benefits do relate to the fact that you will get some level of further increase in recycling rates, but it is a case at the margins whether that level is going to offset the costs involved. It is important to understand that there are consumer costs at play here as well. Broadly speaking, the South Australian scheme that has operated since 1977 is subsidised by consumers across the rest of the country. The national producers of goods which sell within South Australia in that scheme tend not to vary their prices for South Australia and tend not to pass through the increased container deposit to consumers in South Australia. They actually absorb them at a national level but South Australians enjoy the opportunity to reclaim that deposit. That is a nice situation for consumers in my home state but a national scheme would, of course, remove that cross-subsidisation that occurs at present. In removing that cross-subsidisation it would mean that all consumers would end up paying more for these goods. Yes, they are deposits, yes, consumers get them back, but there are other economic costs built into the way it operates, costs that manufacturers will pass through in the pricing structure and costs that consumers will have to pay. So these are things that we need to bear in mind in debate about the costs and benefits of a scheme such as this one.

I am sympathetic to the objects the Greens have in presenting this bill. I do believe that so far as possible we should be seeking to ensure that all recyclable goods are recycled. We should be ensuring we have the right strategies in place. I am willing to consider with an open mind the best discussions that can be had around container deposit legislation. But it does appear at present on the evidence that the costs of implementing such a scheme nationally, given the extent to which the recycling industry has moved and motivated itself and developed over the last few years, may well outweigh the benefits of such a scheme. We need to be clear that there will be distinct benefits if we are going to go through the cost and the time of implementing something along those lines. We need to ensure that all the states and territories are willing to sign up to it. We need to ensure that local government, which has a very significant role in the way recycling works in this country, is on board and sees benefits in this. There are concerns from local government and from recyclers generally that a container deposit scheme incentivises households to take the beverage containers out of the waste stream and return them to get the deposit back. In particular with aluminium products that has a real impact because some of those are the most profitable products that go through the waste stream and that provide a return to those councils and to those recyclers to make kerbside collection viable.

These are factors that will need to be considered. I know full well that in my childhood growing up, in the shed out the back there was a hessian bag and in the hessian bag all the cans and bottles would go. I am sure Senator McEwen’s children have done the same over the years. Indeed, it is a great source of pocket money for children growing up in South Australia.

Senator Ludwig -I am jealous.

Senator «BIRMINGHAM» -Senator Ludwig is jealous. The government could do with all the extra pocket money it can get as well, Senator Ludwig. Whilst it is great for young people and it is a great incentive, what happens is that those cans and those bottles do not go into the kerbside collection. When they do not go into the kerbside collection there is a cost there in terms of the operation of that kerbside collection and there is a duplication of resources as well. Let us not forget that if we are incentivising people to be making separate drop-offs of recyclable goods, rather than going through the one kerbside collection scheme, there are other flow-on costs to having people divert their activities and their resources to do that when there is a far more efficient mechanism at work. All of these factors will have been considered in the BDA report. It is why it shows there is a net economic cost to this proposal and it is why it needs to be treated with due caution.

But I do encourage the Greens and welcome the fact that on this they are ensuring the discussion continues. They are holding the government to account in this area. As I said, it was a 2007 election promise of the government to look at a scheme like this. We are now in 2011, but we have not seen much progress. We have seen some of the modelling which I have referenced. We will now see a newly structured ministerial council, some of the members of which have indicated their openness and willingness to look at these issues. I hope we can address these issues. If this is not the way to go forward, I hope we can see the ministerial council outline alternative strategies for how we actually get the right product stewardship in place for all products of recyclable standard, including beverage containers. I hope we see the ministerial council progress that with industry to a point where we have appropriate standards and, importantly, we can ensure that we get the same types of recycling returns outside of residential households that we have managed to develop as a country inside residential households. The growth in residential recycling is something of which all Australians should be proud. Let us strive to get recycling done better throughout the rest of the community. I am not convinced as yet that this legislation is the way to do that, but we certainly look forward to seeing more discussion, more analysis and, importantly, more action in the next year or two to ensure that all of those areas that have potential are addressed and fixed.