Divert money to recycling, ACCI tells Scott Morrison

Scott Morrison is under pressure to redirect some of the CEFC’s remainin­g $2.8bn from the ­renew­ables sector to the waste industry.

Scott Morrison is under pressure to redirect some of the Clean Energy­ Finance Corporation’s remainin­g $2.8bn from the ­renew­ables sector to Australia’s much smaller waste and recycling industry, as part of a broad reform agenda designed to boost prod­uc­tivity and economic growth.

The Australian Chamber of Commerce and Industry has made the proposal in its pre-­budget submission to the government, obtained by The Austral­ian, as it ramps up calls to develop the capacity to manage waste and recycle materials on home soil.

“With renewable energy (particularly wind and solar) now at a point where it is economically ­viable without subsidies, there is an opportunity to redirect some of the remaining ARENA (‘Australian Renewable Energy Agency) and CEFC funding to support the transition to a circular economy,” the submission states.

ACCI’s chief economist Ross Lambie said the business group had not nominated how much funding should be reallocated to the circular economy but the CEFC and ARENA had been very effective in triggering a major uptake­ of renewable energy.

“We’ve had experience with doing this in one aspect of envir­onmental policy, maybe we can draw upon that experience and approach with respect to the circular economy?” Dr Lambie said.

“You’ve got to be able to have the right incentives in place to stir that technological innovation.”

The CEFC has invested $7.2bn of $10bn in federal government funding into clean energy projects since its inception in 2012. As CEFC investments are repaid, the funding is recycled to be lent to new projects.

ARENA has $194m available to commit to new projects, with the government to consider extra funding in the near future.

The push to urgently develop the circular economy — to reduce, reuse and recycle materials — follows increased scrutiny on Australia’s recycling industry after China banned most plastic imports, Malaysia and Indonesia took a tougher line and started returnin­g contaminated containers, and Victorian recycling giant SKM collapsed.

The Prime Minister has announced that he would introduce a ban on recyclable waste exports from July 1 in the wake of the growing backlash from Asia, making it a top priority.

ACCI’s proposal was panned by the Grattan Institute’s director of energy Tony Wood but seized on by Environment Minister Sussan­ Ley, who pointed out that the government had already set aside $100m of the CEFC’s funding for new initiatives to manufacture recycled products.

Mr Wood said it was clear Australia’s waste management had been an issue but did not see the public policy argument in using taxpayer money from the CEFC and ARENA to fix the problem.

“A better alternative is to take the money back (from the CEFC and ARENA) and if there’s a case for government to invest, then build the case to do so,” he said.

ACCI’s economic blueprint and suggestions for the May budget­ also included a “coherent overarching energy and carbon emissions policy”, expanding the instant asset write-off for small and medium businesses, and restorin­g the permanent annual migration intake to 190,000, up from the current level of 160,000.

Major infrastructure projects the government was accelerating should be broken down into a number of smaller projects where possible, to widen the pool of contractors able to bid on contracts.

ACCI noted the government had initiated several “major electricity market intervention” polic­ies over the past year — such as the big-stick laws, which could resul­t in energy companies being forcibly broken up for egregious conduct — which it said could distort­ the market and have un­intended consequences with long-term adverse impacts.

“It is important that energy policies focus on market-based solutions that stimulate private sector investment, and promote and support a competitive market,” the submission states.