European Union-style business tax on plastic packaging could raise almost $1.5bn per year

The federal government could raise almost $1.5bn per year with an EU-style business tax on plastic packaging, according to new research.

A tax on plastic packaging could raise almost $1.5bn every year, new research suggests. Picture: NCA Newswire/ Gaye Gerard.

A European Union-style tax on plastic packaging could raise almost $1.5bn every year, according to the Australia Institute.

Research shows the federal government could raise $1300 per tonne of unrecycled plastic through a levy on businesses that import or manufacture plastic packaging.

“Australia is facing a growing tsunami of plastic waste and is expected to miss every recycling target it has set,” Australia Institute circular economy and waste program director Nina Gbor said.

“We’re recovering less than a fifth of the plastic waste used each year, with consumption expected to more than double to nearly 10 billion tonnes by 2050.

“If recycling was the solution to the plastic waste crisis, it would have been solved by now. Instead, it just encourages the production and consumption of even more waste that is choking our landfill and oceans.

“Unless we drastically reduce or gradually phase out plastics altogether, in favour of compostable materials, this plastic waste problem will continue to grow.”

An Australia Institute survey found 78 per cent of respondents endorsed a ban on plastics that could not be recycled at home. Picture: NCA NewsWire / Brenton Edwards

An EU levy introduced in 2021 requires €800 to be paid per tonne of unrecycled plastic packaging waste.

In Australian dollars, that equates to $1300 per tonne.

That means with 1.179 million tonnes of packaging waste per year, the federal government could raise $1.46bn with a similar levy.

Australia Institute surveyed 1002 people, with 85 per cent of respondents supporting legislated waste reduction targets for producers, suppliers and retailers.

A similar number backed laws requiring plastic products to contain recycled material, while 78 per cent endorsed a ban on plastics that could not be recycled at home.

“We know that Australians support tougher action to curb plastic waste, and that taxes and schemes requiring producers to fund the collection and recycling of plastic they produce are working overseas,” Ms Gbor said.

“Australia’s plastic consumption is increasing, not falling. The government needed to act yesterday and should start by following the EU’s lead.”