Regrettably, there is now a bipartisan commitment in Queensland to what is very likely a costly bad policy, with the Opposition announcing its support for a container deposit scheme, otherwise known as a “cash for cans” scheme (see the Brisbane Times report). This is despite comprehensive and rigorous analysis from the Productivity Commission in its 2006 Waste Management Inquiry Report that should have killed off the policy idea for good. The Commission noted:
“Deposit-refund schemes are typically costly and can only be justified for products that have a high cost of illegal disposal. They are not warranted in the case of beverage containers.”
We will all have to pay more for drinks in cans and bottles than otherwise, perhaps 10 cents or so more, and we will have to take some action (e.g. transporting the bottles and cans to a collection point or reverse vending machine, or keeping track of the number of cans and bottles placed in kerbside recycling bins) to claim the money back (see the NSW Government’s overview of its scheme). So the scheme will result in labour and transport costs for Queenslanders and will involve costs associated with the administration of the scheme ($25 million the Opposition estimates), a scheme which appears unsupported by any cost-benefit analysis.
The scheme would not benefit the majority of the community, although it may benefit recycling businesses who would get a greater supply of recyclable material and some young people who may find they can earn some pocket money collecting cans and bottles. “Big Trev” Ruthenburg, member of the Government’s Container Deposit Scheme Advisory Group and GM of Scouts Australia, no doubt sees benefits for his young scouts.
It is claimed the scheme will create around 200 jobs. We all support job creation, but we are worse off as a community if the jobs are in inefficient activities. In this case, 200 people would most likely be more productively employed elsewhere.
There are kerbside recycling schemes run by councils, which the Productivity Commission has noted are more cost-effective at recovering recyclable materials than container deposit schemes. Rather than introducing a costly container deposit scheme, it may be more desirable and cost-effective to encourage people to put their cans and bottles in recycling bins. A cost-benefit analysis would compare alternative options.
The scheme appears motivated by a desire to have Queensland join other States, such as NSW and SA, in having a container deposit scheme. But harmonisation of policy across States is only sensible when it is good policy that is being harmonised, a point made by Deloitte Access Economics in a report prepared for the QCA in 2012.
The container deposit scheme is very likely bad policy and should be subjected to a rigorous, independent cost-benefit analysis, possibly by the Queensland Productivity Commission. I strongly doubt it would stack up.
“Cash for cans” scheme coming to Queensland, unless economists can stop it