25th September 2007

A packaging tax is a tax too far

New Zealanders do not want to pay container deposit taxes on top of the raft of new taxes proposed recently, delegates at a conference to discuss the proposed Waste Minimisation Legislation were told today.

Paul Curtis Executive Director of the Packaging Council said that a poll on people’s attitudes to container deposit taxes conducted by the New Zealand Business Council for Sustainable Development showed initial support for a container deposit charge disappears when people are asked to pay for it.

“It’s no surprise that 84% people prefer using kerbside and more bins in public places rather than paying an extra charge because they are already paying through their rates for a comprehensive system of recycling with 95% of people having access to recycling facilities.”

“Moreover we can’t look at the costs of a container deposit system in isolation. New Zealand food prices have risen by 3.4% this year on the back of rising global food and commodity prices which have been exacerbated by grain shortages; a combination of poor weather and, perversely, more farmers growing crops for biofuel and not for food.”

“Aucklanders are facing a 10c tax on petrol, adding $6 to the cost of filling an average 60-litre tank. Many of us have seen double digit growth in our land and water rates over the last three years. And last week the Government won cross party support for its climate change emissions trading scheme. Costs are expected to be passed on to consumers eventually with estimates that the cost of petrol will increase 4c a litre from 2009, when oil companies join the scheme.”

“With a steady stream of companies moving their manufacturing offshore due to ever rising overhead costs, leading to a 7% decline in New Zealand packaging manufacture over the last year, we have to think very carefully before imposing a further 1 billion dollars of cost over 10 years on industry”

“The net impact of introducing a mandatory beverage container deposit system in New Zealand could cost up to $121 million per annum. Supporters say that costs would be borne by the brand owners and retailers. But everyone knows there is no such thing as a free lunch and if producers have to pay they will have to pass on the costs to shoppers. That’s how the economy works and, put simply, our economy cannot afford this.”

“New Zealand continues to slip down the OECD ladder of successful economies. World growth is robust at 5%; Australia will grow at 4 per cent but New Zealand is only half this rate. The stark reality is that an Australian will earn 30 per cent more than his Kiwi counterpart and 500 Kiwis are leaving each week for better opportunities overseas. So why do we want to add another tax burden?”

“We signed up 3 years ago to a voluntary product stewardship programme called the Packaging Accord along with local and central government and the Recycling Operators of New Zealand. This year we have reached a record 57% recycling due to the efforts of industry in designing better packaging along with improved kerbside collections and new markets for recovered materials. We compare well with Europe, UK and Australia.”

“The Packaging Council urges the Parliamentary Select Committee considering the Waste Minimisation and Resource Recovery Bill to take notice because there has been so much emotive lobbying for container deposits that it is easy for politicians to be persuaded that this is what people really want.”

ENDS