Tanya Plibersek urged to scrap new ‘recycling tax’

Australians will be slugged as the exporters of recyclables warn ­Anthony Albanese a new regulatory crackdown will force them to pass on millions in extra costs while leading to more landfill and higher emissions.

Environment Minister Tanya Plibersek. Picture: NCA NewsWire / Gary Ramage

Australians struggling with the cost of living will be slugged by a “world-first recycling tax” as the exporters of recyclables warn ­Anthony Albanese a new regulatory crackdown will force them to pass on millions in extra costs while leading to more landfill and higher emissions.

The body representing recycling contractors – responsible for servicing 80 per cent of Australian households – is urging ­Environment Minister Tanya Plibersek to carve-out paper and cardboard from regulations proposed for recyclables exporters from July 1.

The National Waste and ­Recycling Industry Council informed the expenditure review committee of cabinet in early 2024 the proposed changes amounted to a “government ­imposed tax on the recycling industry in Australia.”

In a January 22 letter, council chief executive Rick Ralph ­advised all ERC members – including Mr Albanese and Treasurer Jim Chalmers – that the government’s proposed cost recovery model for administering a new waste exports licensing scheme proposed for recyclables exporters from July 1 should be “scrapped in its entirety”.

Mr Ralph told The Australian the proposed changes would exacerbate the cost-of-living crunch and “leave all ratepayers with a world-first yellow bin ‘recycling tax’ if this goes ahead”.

“A recycling tax is yet another increase to the cost of living and another breach of trust to the Australian community,” he said.

Of the recyclables collected from yellow-top bins in Australia, about 48 per cent is paper and cardboard, with Mr Ralph saying there was no compelling reason for these items to be included in the new regulatory regime alongside plastic, glass and tyres.

Visy and Opal are the only Australian buyers of paper and cardboard recyclables, meaning that each year there is a surplus of about 1.2 million tonnes – about half of the total – that needs to be exported for recycling.

The proposed July 1 changes will set a new quality standard limiting the allowable prohibited content in each shipment of recyclables to 5 per cent before reducing to 3 per cent over time, meaning this limit can no longer be negotiated between businesses. To cover the costs of enforcing the new standard, the government will impose a fee of nearly $4 on every tonne of recyclables exported overseas.

The industry has said this “recycling tax” was proposed without any regulatory impact statement by the Department of Climate Change, Energy, the Environment and Water in a 2022 consultation paper.

While Mr Ralph said there was no evidence that meeting this standard would contribute to better social, economic or environmental outcomes, he warned it would require Australian waste exporters to spend vast sums.

In addition to a $30,000 ­licence fee under the proposed scheme, Mr Ralph said the combination of these imposts would mean tens of millions of dollars in extra costs would be passed back to the Australian community within 12 to 18 months.

Ms Plibersek said Labor was “cleaning up the mess of the ­Coalition government”.

“They announced a ban on the export of cardboard and paper with a levy scheme but had no plan to implement it,” she said. “In coming to government it was apparent Australia’s domestic recycling capacity was inadequate.

“That’s why we are investing $1bn in recycling infrastructure to recycle an additional one million tonnes of waste every year … We’ll keep working with industry on a sensible pathway to implementation.”

In his January letter, Mr Ralph warned the ERC “any tax imposed by government will be directly transferred by our industry to all local government and other contracts along with the additional industry charges that will be added to this government fee to recover our own business administration costs”.

The higher costs to the recycling industry would also lead to “more landfilling and higher greenhouse gas emissions”. Mr Ralph said the industry had “always accepted a modest fee structure for its export permits”.

But he told The Australian that Labor’s proposed cost recovery model had ambushed the ­industry.