Packaging Council asks how much Bill will cost

1st March 2007

Packaging Council asks how much the Waste Minimisation (Solids) Bill will cost New Zealanders

The Local Government and Environment Select Committee will start hearing responses to the Green Party’s Waste Minimisation (Solids) Bill today. In its submission, the Packaging Council outlines why a waste levy would not be necessary if product stewardship programmes were implemented for the priority wastes identified in the 2002 Waste Strategy; namely organic waste, special wastes (e.g. oil, tyres, end-of-life vehicles, batteries and electronic waste) and construction and demolition waste.

Executive Director Paul Curtis will ask politicians to consider the cost of introducing a waste levy not just on business but on every New Zealander.

“The Prime Minister has already mooted a waste levy in her Statement to Parliament, but we believe that people need to know more about what it will cost them in rates and in the shops. We recommended that a full cost-benefit analysis be carried out before policy work on a waste levy progresses any further.

This hasn’t happened. What we do know is that under the Bill, a waste levy would be charged to waste sent to landfill, cleanfill or to incineration. This would equate to a tax bill to New Zealand of approx. $160 million per annum. We will be asking the Select Committee to think about the consequences of an increase in the cost of recycling and market distortion and will ask for confirmation on where the money will be spent. If money is being raised through taxes, levies or rates, we have a right to know what’s happening to it and that it isn’t simply funding another bureaucracy.”

“It’s easy to say that industry or the polluter will pay but people have to remember that increased charges on manufacturers and retailers will be passed on to the cost of goods and ultimately as TV3’s WA$TED programme shows it’s householders that make decisions about what they buy and how they dispose of it. We support voluntary agreements such as the Packaging Accord and the glass levy, which is being used to research alternative recycling uses for glass, because efficient resource management is the basis for good business.
The Packaging Council says that the Bill’s product stewardship demands are excessive and costly and will have a major impact on the packaged goods industry particularly as the Bill allows for the introduction of Container Deposit Legislation (CDL). Mr Curtis will ask the Select Committee to take a look at where the real problems lie:

“If you look at the content of a landfill, the big ticket items are organic wastes such as garden wastes, kitchen waste food processing wastes and sewage sludge which make up about one third of all landfill waste. On top of this over three million tonnes of waste from building and demolition activities are disposed of to cleanfill sites every year. These represent two thirds of the problem.

Whilst we continue to obsess about container deposit legislation, which would decrease waste to landfill by less than 3%, we are completely missing the big picture.

The Government has already identified the priority wastes in its 2002 Waste Strategy but four years later, packaging still appears to remain the single focus, despite the fact that the amount of packaging recovered has increased by a staggering 116% since 1994 and we have one of the highest paper recovery rates in the world.”

The Packaging Council commissioned an independent study to assess how much product stewardship will cost under the Bill and has circulated this to Select Committee members. This study concludes that the net impact of introducing a mandatory container deposit system in New Zealand could cost up to $121 million per annum. If a product take-back scheme were applied to all consumer product packaging as allowed for in the Bill, the net cost to the country would be of a similar magnitude.

The report estimates that the costs to New Zealanders of introducing an container deposit system significantly outweigh the benefits. Although such a system would increase packaging recovery rates by 90,000 tonnes, this would only equate to a 2.6% decrease in waste to landfill and would cause a massive upheaval for supermarkets who would be required to process all of the returned packaging.

“But remember that packaging waste represents only 12% of all waste to landfill. Industry is absolutely committed to achieving its recycling targets agreed under the Packaging Accord - and at a rate of 52% more packaging is now recycled than sent to landfill. However if we are seriously considering spending this sort of money wouldn’t it make more sense to focus on the waste making up the other 88% of the landfill?”

Mr Curtis will remind the committee that: “Whilst the campaign for Container Deposit Legislation (CDL) appeals to the emotional argument for introducing legislation into New Zealand, all the evidence from studies overseas points to the huge, additional costs of such a system particularly when it sits alongside an already efficient kerbside recycling system. Those countries which have introduced CDL have primarily introduced it as a litter management solution or have introduced it prior to a kerbside system When 95% of New Zealanders have access to recycling facilities, introducing container deposit legislation would make no sense as it would compete with our existing collection systems for recyclables.”

The Packaging Council does not support the Bill and will not recommend that it proceeds.

ENDS

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