COAG report rejects container deposit scheme

The highly contentious container deposit scheme (CDS) has been rejected by a Council of Australian Governments (COAG) report as being excessively expensive, vindicating arguments against the scheme made by an alliance of Australian food and beverage industry bodies. The report rejected the $8 billion CDS in favour of an industry-led national recycling and anti-litter program.

The report examined 10 different options to improve recycling rates and reduce litter and found that an extension of the successful Australian Packaging Covenant was the most beneficial as it would generate $285 million in recycling and litter reduction benefits, while having no negative impact on consumers or jobs.

Community impact

The CDS plan would increase the retail price of every beverage bottle, can and carton by up to 20 cents, according to Geoff Parker of the Australian Beverages Council, who is the spokesperson for the industry alliance.

“To participate in a CDS people need to store cans, bottles and cartons at home and then drive to a handful of depots in Sydney and scan them into a container one by one to receive a portion of their own money back,” he said.

“The operating costs of the scheme are so high that it would cost NSW families an extra $300 a year at the checkout and threaten hundreds of jobs across the state.”

He said lower-income families would be hardest hit by the scheme and that the current recycling system works perfectly well.

“The CDS is an outdated and discredited scheme and has already been rejected by Queensland and Victoria and has now been dismissed by COAG analysis,” he said.

Detractors of the scheme say it would lead to 1800 job cuts nationally, including 400 in NSW, predominantly from Sydney’s Western suburbs where Sydney’s manufacturing and distribution industries are centred.

In addition, up to 450 Victorian jobs could be threatened in drink manufacturing, distribution and packaging hubs, particularly around Shepparton, Niddrie, Altona, Broadmeadows and Carrum.

COAG findings

The COAG report found that the CDS demonstrated a net economic cost with negative net present values. Under COAG guidelines for best practice regulation, it could not be recommended for implementation.

COAG found the industry’s Extended Australian Packaging Covenant provided a number of key benefits over other options including:

The design optimises outcomes because it targets all packaging and covers all participants along the supply chain, from design and manufacture to end-of-life disposal.

• It is non-prescriptive in how outcomes can be achieved, with a flexible and adaptable approach that is better able to respond to changes in the market and operating environment.
• No new regulations are required.
• It has demonstrated that it can operate alongside a range of existing regulatory arrangements
• It has more moderate impacts for consumers and business when compared with some of the higher-cost options.

Among a string of new initiatives, the Extended Australian Packaging Covenant would:

• provide funding and support to local councils to target local litter hot spots and further improve already successful kerbside recycling by reducing contamination;
• partner local community groups, including Keep Australia Beautiful, on targeted litter reduction projects, tailored to local needs - including marine and roadside strategies;
• fund a long-term behavioural change program, to embed an anti-litter culture;
• invest in new recycling infrastructure, to increase the amount of packaging that can be recycled;
• extend away-from-home venue and business recycling.

The next step

The industry alliance members have called on all governments to accept the findings of the COAG report and to work with industry to implement its recommended solution.

The alliance includes the Australian Beverages Council, Australian Food and Grocery Council (AFGC), the Brewers Association of Australia & New Zealand, the Australian Dairy Products Federation and the Australasian Association of Convenience Stores.