In a new report, global financial analyst Credit Suisse says Australia’s waste crisis is set to deepen with an “impending plasticide” and predicts that the Federal government will intervene within two years with new policies, including an emergency tax on plastic.
According to ‘The age of plastic: at a tipping point’ report, China’s drastic restriction on importing recyclable waste has had a “colossal” effect on Australia’s waste problem.
“Investors are not short of warnings of the impending plasticide and our headline view is that things will get worse before they get better,” Credit Suisse said.
“Plastic packaging has become one of the most intractable environmental challenges of our age. There will be more plastic than fish in the ocean, by weight, in 2050.”
Credit Suisse believes that the build-up of illegally dumped or landfilled waste in the country – coupled with much stronger consumer awareness – is likely to result in a “more active Federal response by financial year 2020-21”.
“This could include an emergency tax on virgin resin, tariffs on imported plastic goods, bans on single-use plastics and tax incentives for products with recycled content,” Credit Suisse added.
“The Federal government is poised to announce six national targets to tackle the crisis precipitated by China’s import restrictions on recyclables, including the diversion of 80 per cent of waste from landfill by 2030, as well as pledging that all packaging will have 30 per cent recycled content by 2025.
“Australia’s historical reliance on China, which has imported an average of 81 per cent of Australia’s plastic waste over the past decade, there is a new-found urgency and the government’s new waste strategy represents a major shift in strategy.
“Though, the long lead time from policy approval to implementation is highly problematic, particularly for new waste infrastructure.”
The report stated that to curtail the situation in the short-term, it is a matter of when, not if, we see reactionary policy measures.
Credit Suisse‘s analysis of global policy indicated a shift towards serious consideration of resin tax. It believes the policy for all packaging to have 30 per cent average recycled content will have to be supported with tax incentives.
The report also analysed the impact on publicly listed Australian companies of policy measures, such as resin tax, GST on non-recycled packaging and broader bans on single-use plastic.
It predicts Coca-Cola Amatil, which uses plastic in both its primary packaging and secondary packaging, would be among the hardest hit by a tax on plastics and recycled content requirements.
Meanwhile, the report indicates that the waste management sector, especially Cleanaway, would be the clear beneficiaries of the overall national waste strategy, with a large increase in demand for infrastructure.