Legislative Council, Thursday 25 December 2021

Ms FORREST (Murchison) - Mr President, I have previously spoken in the past in support of the introduction of a container refund scheme. As the member for McIntyre said, the former member for Rowallan, Western Tiers and McIntyre was a strong advocate for this scheme. It is a no-brainer in modern society. We should all be doing whatever we can to reduce litter and waste and encourage recycling in our communities. I do not think anyone's motivation should be questioned, by asking questions about whether this is the right model. This will be in place for a long time. In a small state, it is important to get it right.

Schemes are now in place in all other states and territories other than Victoria; however, Victorians are looking at a scheme. We know that these schemes are not all the same. This legislation has generated a high level of communication, correspondence and emails - similar to two of the other bills we have debated during this last couple of weeks. Again, many are quite polarised in their views about the model. The emails started some months ago, when it first became apparent we were finally going to progress the scheme and a body of work commenced.

Soon after that, I contacted the minister, Mr Jaensch, to say that I wanted to understand the proposal - I supported the principle, but was starting to hear conflicting views. I asked for a briefing. That was some time ago. We organised a meeting, but I failed to put it in my diary. It was entirely my fault, my responsibility; I double-booked myself to meet with Greg Farrell from Federal Group because we were dealing with the pokies bill that week. I failed to turn up to meet with the minister. I am telling you this, to explain why I am not very happy.

As I walked back from the meeting with Mr Farrell, I rang the minister. We talked for 15 to 20 minutes about the information I needed from a briefing. It was pretty clear in our discussion. I said I wanted a briefing to understand the proposed model; and that I was confused, with different points of view coming to me. I said I needed time to understand the proposals; I could see what was coming, with other legislation and commitments, including Public Accounts Committee, rural health inquiry and so on.

The minister agreed, and said he would organise it. I said we need to get on with it because I can see what the schedule looks like ahead. I did not hear back for a period, but eventually he offered me the option to talk to some of the members of the ministerial advisory group, and really get my head around it. I said that would be great. I texted him dates and times I was available in what was a pretty full diary; then, no response, nothing. A little later, getting close to this week, he rang me to ask whether I needed anything. I said, 'Yes, I need the briefing you promised me.' And he replied, 'We are going to have that next Wednesday.' It was last week we had this conversation. I said. 'Next Wednesday, the day you want us to start the debate, potentially'.

At that stage we thought we would be starting it on Wednesday because we thought we would be done with another bill. I said 'That's not entirely appropriate or effective. It was hard to get these people together. You offered it.'. He said, 'Is there anything else that you need?' I said 'What I would really like is a two-page cheat sheet comparing the models to explain why this was chosen to give me some guidance about where I need to look for the answers I need to decide on whether this is the right model for Tasmania for a long period.'.

So, when did we get that?

Madam DEPUTY PRESIDENT - Yesterday, I believe.

Ms FORREST - Yes. We got it yesterday during the briefing. Not entirely what I was after but it gave me some guidance.
I have gone out of my way to try to get an early briefing on this. Here we are, the last sitting week, a day before we start this debate, having a briefing. Again, there were some members on, one would say the opposing side perhaps, who wanted to brief us but there was not time. I believe there would have been time if we had got on with briefings and the like earlier in the piece.

It is not a criticism of the Leader here at all; it is a criticism of the minister if I am to make a criticism. He desperately wants this through this week so he can get on and get things started. If he was that desperate, he should have been a bit more desperate.

Mr Duigan - You did stand him up.

Ms FORREST - I rang him. I was prioritising that I had a meeting with someone directly involved with a bill we were dealing with that day. I rang him and I had the conservation with him that I would have had in that meeting. Yes, I did. I took full responsibility for that. I apologised when I rang him and said it is entirely my fault. I am not blaming anyone else for not putting this in my diary. Since then, I have made every effort to secure that. That is the point. You can defend him all you like; I will not.

I do not know whether or not the members of the Labor party intend to move a motion to refer this to a committee. If they are attempting to agree to that - it has been very difficult to get all that information I can then sieve through.

It is okay for the Government and the minister to tell us that we have had these people look at it and other people look at it and they have all agreed this is good, this is the way. But, our job here, in this place, is to ensure that legislation that passes through the parliament is the best it should be. Particularly when there are significant investments.

If there is one thing that I am certain about it is that there is a large degree of vested interests in this area. We have on one hand, big beverage and on the other hand, big waste. There is a lot of money in both of those. We always need to remember that there are vested interests here and then overlay that with the interests of the people of Tasmania. What is best for them?

When you go to the policy intent of this bill - as I understand it, it is in the documentation. When I failed to get the briefings, I went searching for more information myself looking at the report from Marsden Jacob Associates and also the regulatory impact statement that was done by the Department of Primary Industries, Parks, Water and Environment. I read them. I understand from those that the predominant principle or policy position is litter reduction and increasing recycling.

You could argue that both models could achieve that. So, which is the best? Because of my desire to fully understand the different models and why some of the players in the debate are not playing in the sandpits they usually do, my head is spinning a bit on this. I have been working hard to see through the noise and understand how and why the Government landed on this position. I go back to the point: is it the best model for Tasmania and will it meet the key objectives of reducing litter and increasing recycling, and whether one will do that better than the other? That was what I was trying to get from the minister. That is what I was asking for.

It has been a bit frustrating to try to understand the real differences. I have had lots of conversations with what I believe to be both sides. Sometimes it is hard to know which side people are on until you dig down and say, who are you with again? The vested interests in this are incredible. There is money to be made, make no mistake.

In my view, any scheme must be predominantly focused on what the public policy sets out to achieve. In this case, it should be all about the reduction of litter and increasing recycling and ensuring, as much as we can, in regard to the containers we use, that they can be repurposed and recycled.

To achieve these policy settings, we should carefully consider how a scheme will promote community engagement with it, which is an important part of making it work. If the community is not engaged, it will not work. I accept the figures, that 98 per cent of people support a scheme -

Mrs Hiscutt - I have clarification on that, too, because that was from a different model.

Ms FORREST - Right. A lot of people support a scheme -

Madam DEPUTY PRESIDENT - I did say that by the end of this it will be 100 per cent.

Ms FORREST - Who knows? I think 100 per cent of people in this place probably support a scheme -

Mrs Hiscutt - It is well over 90 per cent.

Ms FORREST - Okay. It is important to compare apples with apples and not compare Granny Smiths with Red Delicious. The reality is that when people respond to the surveys, they are responding to the question: should we have a container recycling scheme? The question is not: which model should we have? It is only whether we should have one. It is our job to work out which is the most appropriate, likely to be effective and meet the objectives.

After reducing littering and increasing recycling, the community engagement, it should seek to enhance employment in the state, promote innovation in recycling and repurposing materials and grow our own industry sector, so we are not relying on shipping product off the island for recycling.

As a small island, these things are important. I have not heard much in our briefings in the debate to date about how we are doing more of that in our state. Surely, the benefits that come from any recycling system that creates increased employment, more recycling I will get to some of them, as you raised in your speech, Madam Deputy President. While we may not achieve all of these things in the first year or two - this is going to be here for a long time they must form a key part of our decision making with regard to the most appropriate scheme for Tasmania.

Table ES6 in the EPA's final report, A Model Framewwork for a Container Refund Scheme in Tasmania, informs us that the total consumption of containers in Tasmania is 301.7 million in 2017. According to the Regulatory Impact Statement for the Container Refund Scheme Bill 2021, undertaken by DPIPWE in May 2021, in the two documents I referred to it is expected to increase to 350 million by 2042. That is figure 4 in the RIS. Therefore, it is pretty clear that consumption of containers is increasing.

This leads me to more general questions. I am happy to provide these to the Leader in a summary of questions for her to get answers to.

Mrs Hiscutt - Are there more than two? We will see how we go.

Ms FORREST - Yes, there are a few questions. I will give you the list.

What other things are we doing about reducing the amount of waste we generate? Clearly, we have identified it is going to increase. What other measures are we taking besides that? That may come into a bill we deal with later. I am asking that first and I am happy to give these questions through.

The second question - if we have or introduce other programs to reduce waste for container generation to try to reduce the overall waste created, how does all this impact on sustainability for the container refund scheme in the state?

If we have a really effective way of reducing the use as in our household where I refill a lot of containers at a local wholefood shop - laundry detergent, dishwashing detergent, all of those things. All my kids do the same. They use a various range of companies where you buy the initial container, they then send you a sachet to refill. You return the sachet and it is cleaned by the company and returned to you. There are two containers - one you hang on to and the sachet goes to and fro. If those sorts of things are taken up in a significant way you would see the overall reduction of containers, not necessarily containers that would fit into this scheme, but you have to look to the future.

These questions are not seeking to undermine the scheme, rather they are seeking to understand the full cost and the ongoing sustainability of such a scheme.

In 2017, the environmental impact assessment framework I referred to in table ES6 informs 96.7 million containers recovered or recycled using existing kerbside recycling bins in public places like pubs and clubs and other places. There are 197.4 million containers going into landfill and 7.7 million, or 2.5 per cent, go to litter - they are the ones you were talking about on the side of the road.

Based on the expected performance of the container refund scheme, as noted in the RIS, in 2045 these figures will look like 200 million containers recycled or recovered, under the container refund scheme. 145 million containers go into landfill and 4.6 million into litter. Assuming these figures reflect the reality - they are projections and the best you can do - the scheme certainly will deliver in terms of demonstrating a 40 per cent reduction in litter. That is a great achievement if that is how it proves to be and a significant increase in recovery and recycling. I believe that counts kerbside recycling as well as container deposit recycling.

What are we going to do with twice the number of containers in our recycling system when we are struggling to manage what we currently have? How do we maximise opportunities in the state for recycling of these containers that will dramatically and positively be recycled?

I hope this is where the policy objective of building and growing our own recycling businesses and industry here in Tasmania where the job creation, innovation and community engagement are the focus in concert with litter reduction. If we end up shipping them off to some other place to be dealt with, then we are losing some of that benefit.

The EPA framework tells us in the same table that the ticket price - the cost seen by the consumer - impact increases from 10 cents to 16 cents over the first 14 years of the scheme. At the start, the impact is 10 cents a container. The outlay for the community is $30.17 million. That is 301.17 million containers at 10 cents, rising to $56 million in 2042 - 350 million containers at 16 cents.

The theory is if you redeem your container you get your 10 cents back at the start of the scheme, but over time costs will increase and even if you do get your 10 cents back, you will lose 6 cents.

To focus on the costs from the RIS, we are informed that included in the costs are: the administration funding the scheme and network costs - these costs accrue to the beverage company and may be passed on to the customer or consumer; the regulatory costs, including compliance and auditing. I am unsure as to whether the state Government recovers costs from the scheme or if this is to be funded from government resources. This is what informs us of the cost. Cost to businesses, including compliance and participation costs and household participation costs, that includes the cost of taking containers to a drop off or redemption location. There are costs associated with that. Most people will have to get in the car, go to a deposit location, deposit them and so on. That is what good citizens will do, but there is a cost. You cannot say there is no cost.

Excluded from the cost assessment in the RIS are the startup costs. A couple of other questions for the Leader. Will the operating capital for the startup of this be provided by the state Government and if it is, will this be done by way of a loan? If so, when will the payment be required in full?

The figure provided as the present value cost over 20 years is $121 million. The bulk of this figure relates to administration and funding of the scheme. Very little detail is provided in the documents I have referred to but I would assume this refers to the money received from the 10 cent deposits, less money that has to be refunded, less the cost of running the scheme. $3.7 million of the $121 million is regulatory costs.

Over 20 years this is $185 000 per year. This does not seem like a lot of money to regulate this industry and assume those figures are sound. That is $185 000 a year to run the whole scheme and I doubt it can actually be done with that. I would ask the Leader to clarify some of these costs. They are in the regulatory impact statement. That is the expectation.

One of the criticisms of the New South Wales scheme or schemes was that early in the scheme there were really low return rates and a claim industry were pocketing around $400 million and, therefore, profiting from the scheme. We did hear in the briefing some other information about the New South Wales scheme, that they tried to rush the implementation and that created inefficiencies and potential costs. The RIS stated:

Under CRSs implemented in Australia the beverage industry only pays per drink container that is returned for recycling, so when the industry runs all elements of the Scheme it is not necessarily incentivised to maximise container returns.

That was given in the briefing. They said they were incentivised. In the RIS it says:

Under a split-responsibility model, the Network Operator is paid per container collected, so is incentivised to maximise returns. Meanwhile, the Scheme Coordinator is incentivised to keep the Scheme costs low.

Again, left hand, right hand - competing views. It is worth noting as the scheme progresses the return rates increase. There are less funds available for the manager of the scheme if that is the case because it is the unredeemed money that funds the scheme. Is that a double negative going on here in that?

If 90 odd per cent of people actually do return their eligible containers, the money all goes back to the people and there is less money to run the scheme. This shortfall appears to be paid by the consumer by increasing the price on beverages above 10 cents, as was illustrated in the RIS. For example, in New South Wales the increase in the cost of a carton of beer is $3.20, which is effectively an increase of 13.6 cents per container and this was put in an article, 'Passing on the costs' in The Guardian. In this article it is clear this is still a contested matter in New South Wales with big and vested interests on both sides of debate. They were both quoted in the article. The article says:

'The [container deposit scheme] is clearly a debacle and needs to be either delayed immediately or scrapped altogether,' Waters said last month.

Speaking on behalf of Liquor Stores Association of New South Wales.

But a spokesman for the state's environment minister, Gabrielle Upton, said, '27 million drink containers have been returned showing a positive level of support for the scheme. That included one million containers per day in the past week alone,’ he said.

… The NSW Office of Fair Trading has previously expressed concern about price rises being imposed on consumers. The office has had reports of price rises that exceed the scheme's costs. In other cases, manufacturers were increasing costs for products not even eligible for the scheme.

'This misleading conduct could be a breach of Australian consumer law,' the fair trade commissioner, Rose Webb, said last month. 'NSW Fair Trading will take a stand against any traders who take advantage of consumers to make an unethical quick dollar.'

Upton's office said the government was keeping a keen eye on price rises. The Independent Pricing and Regulatory Tribunal [IPART] is planning to report on the matter.

'If anyone believes they are being ripped off they can report it to IPART or Fair Trading', the spokesman said.

Again, vested interests, people trying to game the system.

I believe Tasmania will be alert to such behaviour as the framework identifies a rise in prices as part of the ticketed price with an increase from 10 cents to 16 cents, over 14 years.

I would appreciate it if the Leader could respond to these questions and confirm the date detail will be provided on the cost to the Tasmanian community of the scheme. In particular, the expected increase in beverage prices over time, as the return rate increases and less funds are available for managing the scheme, as I alluded to. Can more detail be provided on the breakdown of the scheme, in particular the administration and funding of the scheme, and whether this includes the cost of setting up the deposit points. I am interested to better understand how the scheme will be designed to incentivise a high return rate early in the implementation period. Will the Government support an amnesty period of, say six months, to promote the return of ineligible containers that are currently littered, and if so how will this be funded?

Mrs Hiscutt - Are you going to provide those to me?

Ms FORREST - Yes, I will.

A lot of people out there, in general public land, believe that once this starts, all bottles they might have in their shed, or every other container, is eligible. It simply will not be. They will go and pop it in and there will be no return. This has been suggested to me by people who are the deep thinkers in this area, that that would be a really good thing to do. If you are very serious about litter reduction and increasing recycling, that you would provide maybe a six month amnesty.

The question is, if you do that, that would be fabulous, but we need to understand how it is going to be funded. Maybe the beverage industry might help fund that. I do not know. Or the Government might. Maybe you can do it together. I would like some feedback on that.

I would like the Leader to indicate who decides the number of deposit sites and where they will be constructed or placed. What is the state Government doing to incentivise the early involvement of grassroots organisations as part of the rollout of the scheme? What public education programs are set to be rolled out involving all matters related, including the fact that you have a lot of ineligible containers? You might have - including wine bottles which have been mentioned.

Glass is the biggest issue in our recycling system currently, and that of other states too, and that is one of the reasons why wine bottles are being left out of it. Broken glass contaminates other products in our recycling system, including getting embedded in cardboard in kerbside recycling, and devalues what are some of the most valuable and easiest to recycle products. Victoria has introduced a fourth kerbside bin to manage the glass issue.

I know with parliament now, our offices have a separate bin for putting glass in, but then if all gets lumped into the same recycling bin after that, and some of it breaks, then you have completely destroyed the value.

I acknowledge they do not have the container refund scheme yet but are looking to implement one in a couple of years.
I am not sure what South Australia is planning to do with the implementation of their container refund scheme. The amount of glass in kerbside will reduce significantly. I understand from the briefing that South Australia is looking at including wine bottles. That would actually assist, I am sure. Mind you, I do not think wine bottles are as likely to break when they hit the bottom of the bin as some other things are. Broken glass in the system is one of the biggest contaminants.

I understand the operators of the materials recycling facility, which separates all the kerbside recycling, say the easiest way to solve the glass problem is to remove glass from kerbside recycling. This would be fine if you could recycle all the glass through another process or a separate bin. As mentioned, wine bottles are excluded from the Tasmanian container refund scheme currently, or in the proposal. I understand this is mainly because it is rarely found in litter. People do not tend to throw the wine bottle out the window of the car. It is more likely beer bottles and cans and other plastic drink containers. That is the reason. It is predominantly recycled through the kerbside recycling.

There is a great opportunity, as part of the implementation scheme, to think about how we can maximise its efficiency, in particular downstream processing, and create other re-use options for the products we collect. I note the review clause in the bill requires a review within five years. These matters I have raised could and should be considered then, if not progressed in the initial rollout, including questions as to whether the implementations can provide an opportunity to remove glass from the kerbside recycling in order to maximise the quality of other recyclables, such as cardboard. This will be on my list of questions.

With most of the glass being removed from the container refund scheme, I would suggest this is an opportunity that should be considered rather than another kerbside bin. Compliance is an issue with kerbside recycling. My understanding is that this will provide significant benefit to the operation and materials recycling facility and reduce the contamination of cardboard and other recyclables. The community would then have clear alternatives as part of the container refund scheme, to recycle or this inert product could go to landfill.

The Leader stated that the scheme will promote better environmental outcomes, create employment and provide opportunities for local businesses whilst also enabling charities and community organisations to raise money to fund their valuable work. Thus we have before us a bill to give effect to a governance model for the scheme, a split responsibility model, building the beverage, waste management and community sectors, bringing them together to deliver the best scheme for Tasmania. That is according to the Leader.

I guess no system is perfect, but the views on the best model have been poles apart at times and very difficult to fully appreciate the likely outcome of either with all the noise and self-interest thrown in. The members of the minister's advisory committee themselves said what a complex issue this is. Other people I have talked to who have been looking at this for years say how complex it is and how difficult it is to hear through the noise.

The split responsibility model involves a scheme coordinator who will run the administration and finances the scheme, while a network operator runs the network of refund points and is paid per container returned. In this model each sector plays to its strengths. The scheme coordinator is incentivised to keep the costs low and the network operator is incentivised to ensure as many containers as possible are returned through the scheme, as noted in the readings I quoted earlier.
I am pleased to note that there will be a network of refund points reaching to all parts of Tasmania, including King Island and Flinders Island. Often the islands are not fully considered. Then you still have the issue of getting them off the island. Either way they have to come off, as litter or waste if they do not go off as recycled products or products for recycling.

I note the Leader's comments that people will get an immediate refund for their empty eligible containers at the refund points, whether it is from a reverse vending machine over the counter in your local shop or at a depot. I know there are some other jurisdictions - I mentioned this in the briefing - where you can get a credit to be used, say, in the local supermarket if the collection point is in the local supermarket. Pop your bottle in on the way in, get a credit at the supermarket on your bill when you leave, assuming you bought something, or credits for your train ticket at the train station. If we had trains here, we could do that. But not much use here, currently.

Is this form of reward being considered, as it maximises the return? I think it avoids the need for handling of cash, which may be the preference of some. If you could use that money to go and buy the food that you need if you are a vulnerable person, it still provides that. So, I think we need to keep our minds open.

People are going to the supermarket. Even women who are victims of family violence are usually allowed out to the supermarket. So, that gives them the opportunity to have some money returned to them if they are being financially abused.

I know that all charities and community groups will be able to run donation points where they can receive donations of containers from the community and collect 10 cents per container for their organisation. All charities and community groups will be able to register for a refund account. So, members of the public can donate their container refunds directly to the charity or community group of their choice. I think that would be a popular option. It would be a boost to those community organisations. I am happy to pay an extra 10 cents on a drink container if it was going to a local service organisation in my community.

I note that there will be no fee for container approvals and a grants program to provide for small beverage producers to reduce the administrative and transitional costs of entering the scheme, such as adopting barcodes for the products for the first time. I think that is a necessary and important inclusion. In addition, all beverage companies will be exempt from paying into the scheme for the first 20 000 containers sold each year.

Those are the thoughts that I have put together with a few additions prior to the briefing. Up until that point I had struggled to be assured that this is the most appropriate model. And I still do, to a point. I will listen to the rest of the debate. I can see swings and roundabouts in all of this. I can hear vested interest everywhere. It makes it very hard to see through, bearing in mind that there is a strong desire to see this sort of scheme implemented. I think the desire to have it implemented correctly and the most effective, efficient and appropriate way for Tasmania is more important than getting it put in place quickly, even though it has been going on for years.

Do you want me to adjourn the debate before we finish, Leader? Or do you want me to sit down?

Mrs Hiscutt - I am not sure because we haven't defined where we are going yet with the amendment bill. We can decide after lunch.

Ms FORREST - I am conscious of the time, that is all.

One point I wanted to make is that the ministerial advisory group told us that the Tasmanian design features have considered our dispersed population and hence the attention to King Island and Flinders Island, on a relatively small scale. On the basis of that, it's all the more reason to get it right.

Capacity for downstream processing. We have not heard much about that. One of my questions relates to where is the evidence for that and how will it work. Local business and charity groups benefit. I think that could be apparent in either scheme, quite frankly, through the model.

Without question, I support the principle of the bill. I think it is important to have answers to the questions I have put to the Leader. In broad terms, this is an important thing for the state, if we can reduce litter and we can increase recycling and also in the downstream processing in Tasmania in innovative and different ways. There is huge opportunity. I know we are a small state, but if we work not just in Tasmania but with mainland Australia. I do not want it going over to the big island to the north.

Mr Duigan - There was talk of plastics recycling underway in Tasmania as we speak.

Ms FORREST - Not necessarily for some of the plastics we are talking about here. That is all good. We are also talking about crumbled rubber for roads.

Ms Rattray - Glass goes in roads.

Ms FORREST - The reality is that most of our recycled glass goes in landfill. It is inert but it ends up in landfill. I am sure we can do better than that. I am sure there are many other uses for it. Through this system, whatever system it is, I think that can be achieved. We have to get people to understand the principles of reducing litter and recycling. We have to make this as easy as we possibly can for people. Inherently, some people do not want to go out of their way to do it.

 

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