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Should Govt be taxing plastic bags?

30th March 2009

Packaging Council questions whether Government should be taxing plastic bags

The Packaging Council says that the current discussion about whether the Government should introduce a levy on plastic bags needs to be put in the context of the facts.

A voluntary campaign to reduce the use of plastic shopping bags is on target to hit 20% by July this year. Along with The Warehouse, grocery retailers Progressive Enterprises NZ and Foodstuffs NZ signed the Packaging Accord in 2004 committing to reduce the use of plastic shopping bags in a 5 year initiative.

Paul Curtis, Executive Director of The Packaging Council which represents the packaging lifecycle from manufacturers through to recyclers says:-

“We’ve actually taken 100 million bags out of circulation over the four years of the Packaging Accord most of which (86 million) has been achieved in the last two years as the campaign to involve shoppers has gained momentum. This has been done voluntarily by retailers working with their staff and customers.”

“Our message is very simple; if you don’t need a plastic bag, don’t take one. If you do take a bag, then re-use it.”

“We encourage all retailers to focus on ways to encourage shoppers not to take a plastic bag if they don’t need one. Internationally there are many different ways to achieve this including bag charges, loyalty points, promotion of ecobags and other incentives.”

“However it is also important to realise that as people reduce their plastic bag consumption they start buying bin liners and kitchen tidies. Research by AC Nielsen for the Retailers Association finds there had been a 16% growth last year in unit sales of these often heavier gauge plastics last year.”

This is supported by a report for the Australian National Retailers Association which last year trialled a ten cents charge on plastic bags at selected supermarkets around Victoria. The four week trial found that whilst 79% of people would reduce bag use because of the 10 cents charge, 57% of customers who re-used their bags as liners would buy more kitchen tidies as a result of the charge .

This follows the 2006 Australian Productivity Commission report on waste management in Australia, which on plastic bags found that:

“A cost-benefit study commissioned by the Governments shows that the benefits of a phase out or a per-unit charge would be significantly outweighed by the costs. This is because the policies would penalise most uses of plastic retail carry bags, whereas the potential benefit would only come from the small proportion of bags that are littered. A more cost-effective approach would be to target littering directly.”

Mr Curtis says that we face a similar challenge in New Zealand:

“Plastic bags represent less than 0.2% of waste to landfill. They are in great demand by recycling operators as a “clean” plastic which can be reused to manufacture a variety of products such as hygienic pallet slip sheets and underground cable covers. When they do end up in landfill it’s because they are intended to go there because they have got people’s domestic rubbish in them!”

“We need to be much smarter in New Zealand about closing the loop and recognising that one person’s packaging waste is another person’s raw material. And from an environmental perspective, there is also no point taxing plastic bags only to let other, heavier gauge, plastic containers fill the vacuum.”

“All these issues would need to be taken into account before introducing a mandatory bag levy through the Waste Minimisation Act, which requires a cost benefit analysis be undertaken to determine that the environmental harm caused by bags is greater than the cost of implementing the regulations.”

“We must also be very careful not to confuse two, quite separate discussions; one being about sensible plastic shopping bag use, the other being concerns about litter.”

“The main reason given by those favouring a ban or tax on supermarket shopping bags is they are perceived to be a litter nuisance. But the bags which tend to be litter items are not supermarket bags. Most bags in the litter stream are takeaway bags or those used from dairies – should we tax those as well, and if we do, how would we police it and what would it cost?”

The Ministry for the Environment has recognised that the Packaging Council is committed to developing a further voluntary product stewardship scheme to replace the Packaging Accord when it concludes this year. Plastic bags will continue to be part of the overall scheme and we look forward to presenting the scheme to the Minister later in the year.


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