Container Refund Scheme Bill 2021 (No 54)
Thursday 25 November 2021, Second Reading Speech
Ms ARMITAGE (Launceston) - Mr Preisdent, I would like to welcome and mention the minister is here. I was going to mention the minister in my opening to say how grateful I was for the time both Wes Ford and the minister gave me. I had about an hour's discussion with them trying to get my head around the difference between split systems and other systems, the wheres and whys and the reasons behind it. I thank the Leader for organising all the briefings.
I have had many individual briefings and last week with James Dorney, the CEO, and Markus Fraval of TOMRA Cleanaway, I spent about an hour with them via videoconference. I had telephone communication with Jeff Angel of Boomerang Alliance ‑ I think he is also a network operator - plus Senator Peter Whish‑Wilson. I have visited an operation in Western Australia when visiting family earlier in the year, but I will get to that later.
The bill to establish a Tasmanian container deposit scheme or refund - I remember the minister tells me refund is a much better word - has been a long time coming and is much anticipated. We all have an interest in keeping our state clean and green and having a scheme that promotes this is one of many ways we can do that. I agree with the member for McIntyre the container refund scheme is a no‑brainer and we heard that before from the previous member for Western Tiers, Mr Hall.
Ms Rattray - And the previous member for Rosevears, 2011, no‑brainer.
Ms ARMITAGE - Absolutely. How many millions of containers have gone into landfill, on our roads and in our waterways over those last years? I agree with the member for Hobart - it is a priority to collect as much litter as possible. As the Leader pointed out in her second reading speech, beverage containers make up a whopping 43 per cent of Tasmania's litter by volume. Departmental modelling indicates a container deposit scheme will cut this by almost half.
The difference this will make to the cleanliness of our cities, our parklands and bushlands and to our precious Tasmanian flora and fauna will be significant. I must admit on the occasions when I walk up to the pool I usually take a plastic bag with me and usually collect a very full bag of cans and bottles on the way. It is a real problem in our streets as well.
Although we are one of the last Australian jurisdictions to develop and implement a CDS, we can benefit from the learnings that have come from other similar jurisdictions. We can take notice of what has and has not worked elsewhere, and adapt it to our own abilities and needs.
The bill we are considering today has not been without debate. Even though we all share a wider interest in having this container deposit scheme, the way we execute that has revealed a number of other interests at play. Quite a significant amount of preliminary research and investigation occurred in the development of this bill. As I understand it, a number of reports were drafted assessing the types of scheme, their applicability to the Tasmanian context and the costs and benefits associated with their implementation. In briefings, we were told that the Western Australian scheme was not in place at that time and therefore was not included in the reviews.
As a result, the bill we are debating today espouses what is known as a 'split responsibility model'. This model currently operates in New South Wales, the ACT and has been announced as the Victorian Government's preferred model. It involves a scheme coordinator who will run the administration and finances for the scheme, while a network operator runs the network of refund coins and is paid per container returned.
The draft bill was open for consultation early in the year and during that time, I believe over 100 submissions were received. Charities, not-for-profits, individuals, interest groups and businesses all presented their points of view on a scheme that will become a large operation in our state.
Not all stakeholders supported this scheme. One of the most notable points of contention related to the split responsibility model itself. An alternative scheme, known as the 'community or producer responsibility model' was touted as an alternative and promoted heavily by a number of stakeholders, including TasRecycle, an organisation founded by Coca‑Cola Amatil online which is the owner of Boags.
Under this model, according to the TasRecycle website, a not-for-profit scheme coordinator is appointed by the government. It makes no profit, but incentivises all other participants to do so. It is accountable to government for increasing recycling, providing the most suitable refund points and ensuring ease of access.
The Government's announcement of the split responsibility scheme was met with praise from some, on the basis that it takes the administration of the CDS out of the hands of 'big beverage industry'. I have no doubt that the Government selected this model in good faith, believing that it would bring together the beverage industry and the waste and recycling sectors and deliver the best sustainable recovery rates, recycling jobs and charity income.
It was mentioned during the briefings that a multiple network operator would likely put the cost on government; but I wonder if it could also be said that a split system puts the cost on the community.
I believe there are compelling reasons to consider other options and I said as much in the op-ed I wrote for The Examiner on 29 April this year. I do an opinion editorial every fortnight, and I decided that the proposed container deposit scheme would be a good topic. At that stage I did not know a great deal about it so I decided to try to be fairly balanced and put forward both schemes. It was not critical of a split responsibility model, but questioned whether there might be other avenues to consider so that we could maximise the benefits to our communities, particularly to organisations like Self Help and charities that could have a more proactive hand in the collection, deposit and refund aspect of the scheme.
Imagine my surprise when this opinion editorial was met with vitriol in the media from a letter to the editor.
Ms Rattray - It suggested you had been drinking Kool-Aid.
Ms ARMITAGE - An advocate for the waste industry publicly declared that I was misleading the community, was mistaken in my beliefs and had partaken in drinking the Kool-Aid.
Mr PRESIDENT - I hope it was out of a recyclable bottle.
Ms ARMITAGE - In politics, I have learned that when you encounter such resistance, you are going the right way. This was one of those occasions. Far from putting me off the issue - and until then I had not been involved in it very much at all - this letter to the editor made me more determined to better understand why the split responsibility model was chosen, get to grips with how it would benefit our community's environment, and what sort of scheme would maximise these benefits.
At the end of July, I took a trip to Western Australia to visit my family, as I had a new granddaughter. Considering the vitriol around the container refund, I decided to take that opportunity to see how the CDS or CRS had been implemented there, based on the producer responsibility model.
I visited a Good Sammy store and visited a TOMRA. It was like a very large shed and they had mini-TOMRA reverse vending machines, leased and operated by a husband and wife team. It was excellent. I have nothing against TOMRA being involved. They produce some very good vending machines and I had a very good discussion with James Dorney of TOMRA Cleanaway. I also went to Fremantle Council, as they are involved as well.
Good Sammy is a charity, a bit like our City Mission. They told me that no-one in the Perth area has to travel more than two kilometres to go to a refund scheme centre, which is quite incredible considering the distances there.
Ms Rattray - Two kilometres? Isn't that out in the Pilbara?
Ms ARMITAGE - I did say Perth, the greater Perth area. While I was there, a car arrived and they had a big bag of clothes that they gave to the charity. They also had a big bag of recyclables. The people I saw working there had a disability of some type and it was lovely that they had increased their employment. They got the bag of recyclables and physically counted them. They wrote it down on a sheet of paper, and gave the sheet back to the person who was waiting in the car.
They drove to the next section where they were given a refund for the number of containers on the list. They were given money. They gave clothes and then they got the money for their containers.
Next, I went to the big shed with all the TOMRA machines. The TOMRA machines were fabulous. I checked with my sons who live in WA. One said he donates them and puts them in the recycling as he doesn't want to do it; but the other one had one of these big bags and takes it to the TOMRA machine.
There was a gentleman at a TOMRA machine - it was his first time and he let me take some photos, but it is a bit hard on Hansard. The member for McIntyre was talking about young people being enterprising, and his children certainly were. They had a yacht at a marina. They had gone around all the yachts, given them bags and offered to get rid of all their rubbish, all their bottles and cans and whatever. The children had collected them all - this was going to be their pocket money. The father had all these bins, and one side of the TOMRA machine took plastics and the other side took cans - they just went through the machines.
The beauty of this machine as opposed to the closed vending machines, is that it counted every item. Every item was paid for. I have been told that with some of the closed machines, the other vending machines, if items do not have a readable barcode or they have lost their label, they do not get counted and you do not get a refund for them. These machines simply counted per item going through, as opposed to needing to scan or read a label; they could even be crushed cans, it did not matter.
Ms Forrest - Through you, Mr President, if it was an ineligible container would it still go in?
Ms ARMITAGE - They did have people there keeping an eye on things, so it was not unmanned.
Ms Forrest - There was someone there watching?
Ms ARMITAGE - There were a lot of people around. Yes.
Ms Forrest - Okay, sure.
Ms ARMITAGE - It was not like a vending machine at the front of a shop. This was in a big shed and people were wandering around helping and keeping an eye on things. As material went through the conveyor belt, someone had to get it off the conveyor belt and sort it.
Ms Rattray - Through you, Mr President, a bit like they do at Kmart?
Ms ARMITAGE - Yes, very similar and people are helping you.
Ms Rattray - Self‑serve, but if you put your hand up someone will come.
Ms ARMITAGE - The father put all the containers through and pushed the button on the machine. A piece of paper popped out which told him how many containers he had and from there he went over to another hole in the wall and he put the piece of paper in and he could either choose for the amount to go into a bank account or could choose cash. He chose cash. I really liked those machines. I am not against TOMRA at all, I think they have some very good machines and it worked well.
Fremantle Council was different again. They work very hard towards recycling and they had quite a few people employed. They had a lot of different ways of working it. One of their approaches was almost like a garbage bin but it had a white lid and it had a little circle cut in the top to put the containers through, and a lock on it so that people could not take them out. The containers have the names of each restaurant or hotel on them. Council would collect the full containers and bring them back to the depot. I went to the depot and had a look. Each restaurant would get a certain percentage of that money back into their bank account, because the containers were tagged.
A certain percentage would go to the council for taking the containers and dropping them back, and a percentage went to the restaurants. They had huge cages with padded bottoms for people that could not get in during the day to drop off all their containers. In that case, you would go to the council and get bags with little tags, and register your bank account details. You could then drop the bags whenever it suited you into big locked cages with a slit at the top, inside a compound, so people could not get the bags out. Once your bag was collected, the little tag identified you and council then credit your bank account, less a certain amount for the work council was doing. That was an excellent system.
I accept that the beverage companies were overarching, but there was a totally independent board - Western Australia Return Recycle Renew Ltd (WARRL). Any money that was made went back into the system. One of the concerns I have with a split system, is that any money made will go to the shareholders and we know there is a lot of money to be made. We need to remember that plastic and aluminium has value and can be sold to the highest bidder. I believe proceeds should go back to the scheme, lowering the cost for the government and the public. Whereas I believe that in New South Wales, the network operator banks that money themselves. They might take it but someone is still going to do get money for what comes in. I really would like to see the money coming back into the community as opposed to going off to shareholders of the larger companies that are operating it. That is one of the concerns I have.
As I mentioned earlier, I had really very little understanding of how these things work, until I was publicly attacked which made me take much more interest. As you said, once that happens you realise you have touched someone's nerve.
Ms Rattray - I expect that now the member has gone down that path, look out to those people who attacked her.
Ms ARMITAGE - Yes, I would like them to contact me again. Actually, they did contact me, wanting to speak to me on a briefing. I did not really feel it was necessary. I had spoken to all the others.
The split responsibility scheme gives power to waste industries to manage and implement the CDS in Tasmania. Some advocates of alternative schemes call this a monopoly or for‑profit model, but I am not sure if that is entirely accurate. It provides waste industries with more power than, say, community groups, and not‑for‑profits to engage with that process and generate revenue along the way.
The producer responsibility model puts more power into the hands of beverage companies to administer the scheme and plan their business activities accordingly. That cannot be discounted.
Given the smaller scale of not‑for‑profit and charitable organisations in Tasmania, additional government intervention and support will need to be provided to assist these types of organisations to obtain the necessary resources and sustainably manage container recycling operations. I do not believe any organisations know what this sweet spot will be. I note that, when I was talking to the minister, he pointed out that they had tried to find out. I think we had it at the briefing as well. He had tried to find out from the Western Australian government how much they were putting into the scheme but I believe they had not been terribly forthcoming with the information.
As I mentioned, I do not believe anyone knows what the sweet spot will be, which makes implementing a producer responsibility a bit more difficult and will require a greater degree of government intervention.
I will read out a few of the emails and letters that we have received. One document is really quite interesting. This is the one that notes the objectives of the schemes and the jurisdictions:
In South Australia the objective of the scheme is to reduce litter.
That is a very good objective. I agree with the member for Hobart. That should be your priority.
In the Northern Territory, reduce beverage container waste by providing communities throughout the whole of the territory, as far as practicable, with access to facilities for the collection of empty containers and the payment of refund amounts. Also, to increase resource recovery, reuse and recycling.
In New South Wales, the objectives are to reduce litter.
In the ACT, encourage recycling, reduce litter and waste in landfill.
In Queensland, reduce the amount of drink containers that are littered and increase Queensland's recycling rate.
In Western Australia -
I have always thought Western Australia do everything very well. I know they do not always agree with Tasmania.
Ms Forrest - They have done the whole rest of the country over with GST.
Ms ARMITAGE - Yes, but they do tend to do things well. They are a bit like New Zealand.
In Western Australia:
· increase recovery and recycling of empty beverage containers.
· reduce the number of empty beverage containers that are disposed of as litter to land fill.
· ensure that the first responsible suppliers of beverage products take product stewardship responsibility.
· provide opportunities for social enterprise and benefits for community organisations.
· create opportunities for employment.
· complement existing collection and recycling activities for recyclable waste
· reduce litter
· increase recycling rates.
I believe they should be priorities.
· circular economy
· strive for circularity of beverage containers.
There is quite a long list. I know we are fairly limited on time on our last day so I will not read all of Victoria's. Product stewardship and best practice, deliver a best practice and cost-effective approach so it is adaptable and fit for purpose to Victoria's context. And it goes on by adopting a continuous improvement approach, responding to changing market conditions and ensuring a convenient easy-to-use and accessible scheme.
It does need to be easy to use and accessible. That leads me on to TOMRA. I had a long discussion with James Dorney, CEO and Markus Fraval, director of TOMRA Cleanaway. We had a video link and I did ask to send it on to members because I thought members would find it interesting, the overview they had about different states and how much and how they collect it. I am not trying to push one or the other, just trying to find which is the best way. I tried to include in my presentation both sides of the argument.
They provided many sheets with the comparison of global return rates and deposit values. How much they have collected. How many people they have working for them. The interesting one was the world-class container deposit scheme, they call it in New South Wales, which has collected over 6.4 billion containers since the scheme commenced. There are 620 plus collection points; 300 plus charities and small businesses; 77 per cent participation and 88 per cent support. They have had greater than 55 000 tonnes for recycling. They have world-leading technology where there are vending machines you put your things in and get them out and have created over 750 jobs.
The information provided was interesting and I appreciate the fact they allowed me an hour to speak with them and ask questions. They were very forthcoming with information and I was pleased they were able to send on the information to me and other members for consideration. It is important we have everything in front of us when we make the decisions.
Another interesting one is TasCOSS. On their website they still had the original submission they put up on 8 July, where TasCOSS wrote a public submission to whom it may concern:
TasCOSS welcomes the introduction of a Container Refund Scheme (CRS) and the potential it provides for social benefit beyond the environmental benefits of recycling.
Then it goes down to:
To realise these opportunities, TasCOSS considers the draft legislation could be improved by preferencing a Community Producer Responsibility model, similar to the models operating in other states (SA, WA, QLD and NT). The model design in the draft Bill lends itself to a large, monopoly, waste company operating as a single network operator, with a focus on profit rather than the schemes objectives.
A Community Producer Responsibility model is preferred by our industry members as it establishes a NFP entity as the scheme coordinator and enables community groups, charities and other NFPs to choose to take part by directly contracting with the scheme coordinator and receiving the full benefit of their participation. By contrast, the system proposed in the draft Bill will see the network operator determining the organisations it contracts with and sharing in their revenue.
We urge the Government to reconsider the operating model provided for in the draft Bill and further explore the potential for a Community Producer Responsibility model.
TasCOSS would be pleased to facilitate a meeting of our industry members ...
And it goes on. I looked at their website only half an hour ago and that is still on the website.
On 16 November we received addressed to ourselves:
I am pleased to confirm TasCOSS's support for the Container Refund Scheme Bill 2021. There has been extensive consultation on a Tasmania Container Refund Scheme and the Governments proposed split responsibility model provides for charitable, not for profit and community organisations to participate and benefit. Our engagement with our members and the community services industry has identified general support for the proposed model and an eagerness to see the legislation passed, so that implementation of the container refund scheme is not unnecessarily delayed. We are already working with organisations in our industry to progress their plans and support them to participate in the various elements of the scheme. We look forward to the bill's passage through the parliament and the commencement of the scheme.
I did not contact them, because I did not want to have to ask them to tell me. I do not know what changed their minds and I am not going to put them on the spot. It was interesting all of a sudden, they have had a great change of heart and wondered whether it is because they want the scheme implemented as soon as possible.
Ms Forrest - It could be the same reason some of the industry players were asked to write to us about the protest laws recently.
Ms ARMITAGE - Well it could be, but it is interesting only a few months ago they had a very different opinion.
Ms Webb - They are a research-based organisation, I am sure they had a reason to change their mind, rather than wanting to see it faster.
Ms ARMITAGE - Do not know. They did not actually make any comment about that, but -
Ms Webb - If you did not ask them we do not know.
Ms ARMITAGE - That is right, exactly and what I am simply saying is it was interesting. Grant Hinchcliffe, CEO, Tasmanian Independent Retailers writes to us:
I write to you on behalf of Tasmanian Independent Retailers -
And we know IGA comes under the Tasmanian Independent Retailers and they have quite a lot of stores in Tasmania:
to express our concerns with the container refund scheme legislation as is currently proposed and support a request for a further detailed investigation to be undertaken on this legislation by the Legislative Council. Tasmanian Independent Retailers is a co-operative and represents more than 180 independently owned and operated businesses across Tasmania, of which more than 80 trade under the IGA branding. In order to support our members we are a 40 per cent shareholder in Statewide Independent Retailers, which operates the State's largest distribution centre in Tasmania, at Breadalbane.
As a result of this, we will play a key role in administering any container deposit scheme in Tasmania. As for the purpose of the legislation, we will be the point of sale for a significant proportion of the container beverage drinks that are sold in Tasmania.
When it was announced that Tasmania would have a container refund scheme, TIR has been fully supportive of such a measure. Our philosophical approach to the State's container refund scheme has been simple. We want the easiest and most cost-effective scheme developed in Tasmania, that delivers the highest possible recovery rate, at the lowest possible cost to our members as well as consumers in Tasmania.
As it stands, we are concerned the current model does not deliver the cheapest possible scheme to our members, or consumers and while there is much talk of redemption rates and successes of other scheme interstate we are yet to see compelling evidence that the split model, which is being proposed, is superior to producer responsibility scheme. Given this, we would ask that this matter is properly investigated so that Tasmania can have the best possible container deposit scheme.
Similarly, a letter from the Tasmanian Small Business Council, it says:
Tasmanian Small Business Council is concerned that the bill as currently formulated does not provide the maximum benefit to Tasmanian Small Business sector and we therefore seek your support in undertaking a short parliamentary inquiry into the draft legislation.
I am not really sure whether there is anything such as a really 'short parliamentary inquiry.' However, it goes on:
From our perspective we believe that Tasmania's container refund scheme should aim to maximise participation from both consumers and small businesses. Many of our members are small retailers in regional parts of Tasmania and for this reason it is essential, in our view, that the scheme be opened to all retailers to join as collection points if they so choose. This would also be good for regional Tasmanians by providing accessible collection points. However, under the legislation, as drafted, we are concerned that small business will have to seek to sign-up via a contract with the monopoly network operator on such terms as dictated by the network provider. This would likely mean the network operator would charge a management fee. Rules of operation and on our reading of the bill have no obligation even to accept a small business to join as the collection point.
We are aware that the Tasmanian scheme is modelled on the New South Wales scheme but that in other states, such as Queensland and Western Australia small business are able to contract directly with the network operator. In our view, this would be a significantly preferable option for small business.
I am also concerned that the draft bill disadvantages small business as it requires a network operator to provide logistics as well as collection. This will effectively lock out any small business who wishes to only operate a collection point from tender indirectly and instead they will have to seek to sign up with a network operator who will presumably be a larger waste company.
This would seem to be inconsistent with the Government's buy-local policy, which is designed to support small business by requiring the disaggregation of contracts where possible. I should add for the record, the TSBC was a member of the expert advisory group and we put these views forward to the Government through that process. However, this group met infrequently and I was concerned then as now that the interest of small businesses was not adequately accommodated.
That was Robert Mallet, CEO, Tasmanian Small Business Council.
I met with the City Mission and had a discussion with them. At the time, they were not sure that they would be able to profitably run the road network area to do it. I note now that they have come out in favour of the scheme we had before. Their understanding at the time was that it was just too difficult for them to make a profit by running it themselves. That is fine. They have made that decision and obviously that would be useful for them.
I am sure that they will do quite well, as many of the network operators have under the TOMRA scheme, with the TOMRA Cleanaway as mentioned, having spoken to James Dorney. He showed me pictures not only of charities that had a certain amount of these - they were the size of a container, like a container that you would see on the back of a truck. They had been sorted out to basically be a distribution centre or a refund centre that you would bring your containers to. They would have a little area that spat out whatever it was going to be, whether it was going to be money or whether it went into your bank account.
Going back to the small business, TOMRA Cleanaway showed me, I think it was a fish and chip shop. I am not sure exactly where it was in New South Wales but it showed pictures of a lady bringing in her bags of containers. I thought it was a strange thing because you would think a fish and chip shop would be fairly busy trying to do their normal work rather than be taking bags of containers. They took them at a certain time on certain days at certain hours and they had a large container out the back. The stores did not count them themselves; they simply collected them. In the photos that TOMRA Cleanaway showed me the lady in the picture handed over the bag full of containers to the man behind the counter at a certain time. I cannot think of the time it was - whether it was between two and four or otherwise. He had a really huge container out the back. All he had to do was to collect it and put it in there.
She would say how many containers she had. It went on trust. I thought this was a little unusual that she would say she had 50 or 100 containers and he would pay her for that. He had a float that was provided to him by the network operator. He did not have to give out any of his own money. If a lady had a little slip that said there were 100 containers, he would give her the money. He would then put them in the big container out the back to be collected and it would be tallied. Generally, I was told, it came fairly close. Most people got to the stage that they knew that it would be checked somewhere down the track so it was pretty accurate.
The main point that was pointed out to me there was that the small businesses did not have to hand out money and get money collected back. That gentleman actually got a management fee basically from TOMRA Cleanaway for handling the bag. He handled them, he took them, he put them in the container, they came and collected them and took them away and gave him a float.
I am really trying to be fairly balanced. That was the split system. Looking at them both I was very impressed with the Western Australian model but I am not going to downplay the other model either. It is really important we do look at both because at the end of the day what we all want is something that is good for Tasmania and suits us but is also beneficial and collects as much as possible in the way of containers, recycling and litter.
Another letter from Chester Willock, Retail Area Sales Manager of the IGA. He said as an interested party in the container refund scheme, he had some concerns that it does not provide the most efficient outcome in terms of the split model being compared to a producer responsibility scheme.
Then we have a media release from St Vincent De Paul Society and Scouts Australia. It is really good to see whichever scheme gets up - and, at the end of the day, we all want a container refund scheme that the community can easily access. It can be beneficial to so many groups. It was really pleasing to see that some groups - I do not know whether they agreed on whichever model or whether they did not but, whatever it is, they have decided that they will team up and make it work for them. That is really important.
The St Vincent De Paul Society has joined with Scouts Tasmania to support the container refund scheme. It says that they formed an alliance with Scouts Tasmania to support the Tasmanian Government's container refund scheme. The association will see both statewide community organisations working together to collect recyclables to benefit the scouting movement in Tasmania and vulnerable people in need across the state. The CRS, which is intended to commence in late 2022, will provide groups and organisations like Scouts Tasmania and the St Vincent De Paul Society with urgently needed funds to invest back into the community. The St Vincent De Paul Society CEO, Lara Alexander, said:
The association with Scouts Tasmania will allow two of the state's most widespread organisations to access bottles and cans for recycling and turn them into donations.
It is really important that they can get donations. We all know that many people have gotten a lot of their pocket money collecting bottles and cans. I know of a young lady in Launceston who pretty well got the deposit for her house over a number of years going around cleaning up the streets and around the edges of the road collecting aluminium cans. Obviously, there has always been some money in aluminium cans. They go on:
The CRS is a brilliant and exciting initiative by the Tasmanian Government and one Scouts Tasmania and Vinnies hopes the public will support enthusiastically. Between Scouts Tasmania and Vinnies, we will have numerous collection points across Tasmania so people can donate their recyclable items to a worthy cause and do their bit for the environment.
It goes on:
Years ago, collecting bottles used to be a major fundraising opportunity for many groups. It's nice to return to our roots via such an effective and simple idea as the CRS. By participating in the scheme, it provides a fundraising source for our groups across the state to not just invest back into Scouts but into our community.
It goes on:
Scouts Tasmania is looking forward to the continued progress and rollout of the container refund scheme.
I also visited Self Help. I visited many businesses and charities in my electorate to get their opinions and find out how they were faring and what they were thinking about a variety of issues but also the container refund scheme. I met with general manager Donna Bain and I cannot think of the chap's name but I think he said he did accountancy work. He worked out the figures and the numbers for Self Help.
Their concern when I met with them was whether they could make it profitable under the split system. Apart from collecting and getting the 10 cents, as I think the average community person can, they did not really think they could make it profitable to be an operator to get enough money coming in and that it would end up costing them money. On 5 July we received a letter from Donna Bain. I have permission to read out all these letters.
The purpose of this letter is to set out Self Help workplaces' observations and suggestions to strengthen the container refund scheme proposed for Tasmania. Self Help workplaces are social enterprise -
I do not think I need to go into what they do; I am sure we all know what they do. I might just get to the pertinent information. Donna says:
In order for the scheme to offer substantial sustainable opportunities for our social enterprise, the scheme needs to include the following legislative features:
(1) Mandated minimum involvement of social enterprises, not-for-profits within the scheme, for example, as refund collection point operators and downstream processing, such as sorting, grading and preparation for freight, for example, compacting.
(2) A scheme arrangement in which none of the key players, for example, network operators or others have a conflict of interest that affects the capacity of other organisations to join the scheme. Self Help Workplace is concerned that the model proposed by government delegates considerable authority to network operators to decide who enters the scheme and the terms under which they participate in the scheme. For example, a network operator could decide to enter into an arrangement with one or two refund collection point providers in order to minimise the number of contractual arrangements they need to manage. This is not consistent with a decentralised model in which local communities have a strong say and role in the scheme.
(3) The scheme should prevent any organisation from mandating that refund point operators purchase certain models of equipment or enter into perpetual lease arrangements for equipment. Such anti‑competitive practices limit the capacity of organisations such as Self Help Workplace to develop a sustainable business model that serves our interest, not those of another organisation in the scheme.
(4) the scheme's arrangements, including the contractual terms, that are allowed between the various parties in the scheme should support the following principles:
(a) organisations will develop capacity to grow their involvement in the scheme. The financial returns from the scheme should match their greater involvement. Put simply, if an organisation collects and returns more containers as a refund point operator, its net financial return should be greater.
(b) the scheme should allow organisations to scale up and diversify over time. As noted in reports about the scheme, the maturation of the container refund scheme will take some time.
As the community learns more about the scheme, both consumers and manufacturers, the volume of containers in the scheme should increase. This should be matched by an increasing involvement of and benefit to organisations such as Self Help Workplace, as we strengthen our capability and capacity to be involved in the scheme. Self Help Workplace recommends that government amend the legislation in the following ways:
(1) Allow for direct contract arrangements between the refund point operators and the scheme coordinators. This will remove the cumbersome and costly middle player, the network operator. This arrangement facilitates refund point operators to then receive the full handling fee per container collected, rather than leaking some of this to the network operator. This is particularly important given the regional and thin market, which the CRS will operate in Tasmania, even at full rollout. Maximising the return for refund point operators increases the likelihood of modest size disbursed refund points being viable.
(2) Allow refund point collectors to pay the refund to the consumer through a variety of means, including cash, direct bank deposit and/or donations to the charity of their choice.
The full benefits of the scheme to local communities will be realised if refund point collectors can involve staff in receiving and receipting deposits and paying the refund through a variety of means. This model improves the likelihood that jobs will be created through the scheme and also respects some of the demographic characteristics of the Tasmanian community, such as low literacy rates and patchy access to the digital world.
A TasCOSS report in 2018 found if you are on a low income and not in work, are older and did not complete secondary school, you are more likely to experience digital exclusion than people who are employed, on higher incomes, tertiary educated and younger. There are significant gaps and, in some cases, increasing gaps between these population groups in Tasmania. People who live outside Hobart are also more likely to be digitally excluded, especially those in Burnie and the west. The report, Understanding Digital Inclusion in Tasmania, is reporting on research findings and they have listed the link here for it.
There has been much talk in the press and at the information sessions about the benefits to charities in the model. Self Help Workplace, while a charity, public benevolent institution, is not seeing this as a charitable fundraising endeavour. Rather, we are viewing this as a real opportunity to grow a new social enterprise venture that achieves the following:
(1) increases the employment opportunities for people with disability;
(2) realises a strong and sustainable financial return to the enterprise, which is then redirected to our mission;
(3) strengthens local community collaboration and cooperation; and
(4) results in a cleaner, greener Tasmania.
The legislation needs to be framed in order to maximise the opportunities for all of these objectives to be achieved. Tasmania has the highest rate of disability in the country. One in four Tasmanians identifies as having a disability. However, the most recent data reported by the Australian Bureau of Statistics in its Disability, Ageing and Carers Australia Survey 2018 reveals an unemployment rate of 4.2 per cent and a participation rate of 41.1 per cent for people with disability, compared with 5 per cent and 85.6 respectively for people without a disability.
The involvement of enterprises such as Self Help Workplace and the new container refund scheme has the potential to bring about a significant and ongoing change in the lives of people with disability. Employment supports people with disability to become more economically independent, make and sustain social connections and enjoy a life of good physical and mental wellbeing. It also improves the lives of their carers, who are then able to pursue work opportunities, take care of other family members and participate in their communities.
It goes on that Self Help Workplace would be pleased to provide further information about the involvement of social enterprises in the scheme and be involved in the design of the scheme.
I appreciated the container refund fact sheet. Some members mentioned that we only received it lately, but I found it in amongst some of my other information. I think we may have received it twice. We may also may have received it earlier on. I thank the Leader and the minister for the fact sheet.
With the split responsibility model there are two contemporary container refund scheme models operating in various states across Australia. The split responsibility model already operating in New South Wales and ACT and announced for Victoria, and a single governance model operating in Queensland and Western Australia.
A single governance model is where the scheme coordinator, generally made up of a consortium of the beverage industry, manages the whole scheme. This is the scheme proposed by TasRecycle. A split responsibility model is where the scheme coordinator controls the financial and administrative side of the scheme, a separate network operator then manages the network of container refund points. This is the model that has been recommended by the ministerial advisory group and is the Tasmanian Government's chosen container refund scheme model.
With a split responsibility model, the scheme coordinator works to keep the overall costs of the scheme down, while the network operator is incentivised to maximise the number of containers returned. Current publicly available information demonstrates that New South Wales, with a split responsibility scheme, has a higher redemption rate of 67 per cent compared with Queensland which has a single governance scheme with a redemption rate of 62 per cent.
We were told consultation on the scheme has been extensive to ensure it will best serve the Tasmanian community. A report by Marsden Jacob in 2018 started this conversation and made a number of recommendations. Building on this work an expert reference group made up of a wide diversity of organisations and companies, with CRS expertise and knowledge, was formed in early 2020. The Department of Primary Industries, Parks, Water and Environment also engaged heavily with other jurisdictions who have implemented a scheme, seeking information and advice. From the briefing we learned that they did not engage with Western Australia because at the time Western Australia - I am not sure how long the scheme had been going. I think it was in its infancy.
Following this, the minister appointed a Waste and Resource Recovery Ministerial Advisory Group, MAG, consisting of representatives from the Tasmanian government, local government, resource recovery sector and local business leaders. The MAG considered all the previous advice and evidence and recommended to government that a split responsibility governance model would be the best scheme for Tasmania.
Following this recommendation, the draft container refund scheme bill went out for a five-week public consultation period. The draft bill and explanatory paper and a regulatory impact statement were made available on the DPIPWE website for public review. Officers from DPIPWE also conducted webinars with the general public, local government, small beverage producers and the charity and community group sector to discuss the various aspects of the bill. A short online survey was also available with more than 3500 responses.
The beverage industry will fund the scheme, as it does in all mainland schemes. This aligns with the idea of product stewardship. The cost of getting empty containers back and into recycling is built into the price of the product. Therefore, whoever sells a product takes responsibility for minimising its environmental impact. The fewer empty bottles returned, the less money has to be paid by the beverage industry. This can be worth millions of dollars a year. It is important to note there is no evidence the split responsibility CRS model leads to higher cost of the container for the beverage industry. Publicly available information demonstrates the New South Wales scheme, a split responsibility model, generally has lower scheme operation costs than the Queensland scheme, which is a single governance model. In addition, the amount that beverage companies pay into New South Wales scheme per container is often less than they pay into Queensland scheme, meaning that the cost impact on business is actually less under a split responsibility model.
Opportunities for community and charity groups - all interested charities, community groups and sporting clubs around Tasmania will be able to benefit from the establishment of a container refund scheme. I feel I am almost reading the Leader's second reading speech. Charities and community groups will be able to run a donation point where they can receive donations of containers from the community and take these containers to a refund point to collect 10 cents per container for their organisation.
Further to this, all charities and community groups will be able to register for a refund account that will enable members of the public to donate their refund to any refund account. This means when you take your container to a refund point, you will be able to donate your refund to a charity or community organisation of your choice. Charities and community groups will be able to partner with a network operator to run a refund point if they are an appropriate business selected to do so. The network operator has the incentive to work with whoever is best placed within the network to maximise container return. If that is a charity or community group, they will have a fair and equal opportunity to operate a refund point.
That was the container refund scheme fact sheet provided to us. I do not know I can actually read that out without probably reading in the other side also. It is only fair to actually read the letter we received from Nathan Calman, the brewery director at Boag's Brewery. He says:
Dear honourable members, I am writing to convey to you very deep concerns about the cost impact on Boags Brewery of the Government's proposed container refund scheme as contained in the legislation which is currently before you. First and foremost I would like to confirm our support for the introduction of a container refund scheme in Tasmania. We think this is a very important initiative, which we, as brewers, are very keen to participate in. It is important to note that this introduction of a CRS will be a significant cost impost for us of around $8 million per year once it is fully established and redeeming 85 per cent of containers.
Contrary to popular misconception, we are unable to pass on all the costs of the scheme to consumers. Typically, brewers like us absorb 50 to 70 per cent of the total cost of a CRS. We have two particular concerns with the legislation before you; (1) the additional unnecessary costs of the Government's for-profit scheme design, and (2) the unfairness of the Government's 20 000 container threshold.
(1) Additional costs of the Government's for-profit scheme. As outlined above, the imposition of a CRS will cost Boag's Brewery around $8 million per year, a very significant cost, but one which we are prepared to carry. However, because of the for-profit design of the Government's proposed scheme, we estimate this will mean an additional cost of up to $1.5 million per year for our brewery. This estimate is based upon our careful examination of and comparison of the existing scheme to New South Wales and ACT for profit versus Queensland, South Australia, the Northern Territory and Western Australia not-for-profit.
For example, the 2019-20 annual reports for the Queensland and New South Wales scheme show a cost per container collected in New South Wales of 10.5 cents, including GST, compared to 8.6 cents, including GST in Queensland.
He goes on:
We would welcome the opportunity to provide detailed information about our costs and how the Government's costly for-profit CRS will affect our operations on a confidential in-camera basis.
I guess that is understood.
On top of this, we are confused as to why the Government has chosen to put in place a 20 000 container threshold, something that does not exist in any other state, which will fully exempt many of our competitors for any scheme costs, around 40 according to the minister, and which will instead shift that cost to larger employers such as ourselves. Despite the minister stating he consulted widely through the expert reference group, this feature was not included in any consultation, nor was it included in the public consultation explanatory statement and regulatory impact statement meaning that input and feedback on the impacts of this approach could not be provided.
Based on our calculations, we estimate that this will increase the cost of the scheme per container supplied by 0.7 cents, which will mean an additional $300 000 per year cost to Boags on top of the $1.5 million outlined above. In our view, the imposition of this threshold which effectively makes us pay the CRS costs of our some of our competitors is unfair and anticompetitive.
Honourable members, to our knowledge, the Government has not undertaken economic modelling on either the broad impact of your scheme design on businesses such as ours or of the impact of the 20 000-container threshold.
The higher the cost of the scheme, the higher the cost to our business and it is certainly not cost-neutral, as has been claimed by the minister publicly. You can, therefore, understand why we are so concerned about this matter. Boags is one of Tasmania's oldest breweries, recently celebrating our 140 birthday. We employ 70 Tasmanians and contribute significantly to the northern Tasmanian economy.
It is unfortunate that, in our view, the level of engagement by the Government with our concerns to date has been extremely disappointing. Variously, our concerns have been either ignored or arguments have been constructed to try to dismiss our legitimate concerns. We cannot help but feel that the Government made a decision very early on to proceed with the for-profit CRS and were not interested in considering or ameliorating its effects on our brewery.
As a member of the House of Review I, therefore, respectfully request that you support the move foreshadowed by Labor to have the bill examined by a parliamentary committee, so that its impact on our business and others can be fully understood and mitigated.
It is only fair I read out the Government's container refund scheme fact sheet to put the other side.
I have had discussions with Senator Peter Whish‑Wilson, who pointed out to me he thought it has been such a long time we have been waiting for this and we obviously should go with the scheme before us. I had a long discussion with Jeff Angel, who was really good and pointed out some areas to me as well as his opinion, and we had discussions with him yesterday in briefings.
Allow me to be clear and unequivocal. My support lies with removing as much litter as possible as well as with our community groups. I want the Tasmanian container refund scheme to maximise the benefits, not just for the environment but allow our community groups to best engage with it along the way.
What we have here, in my opinion, are two reasonably compelling arguments for alternative models.