Interview with Kirsten Aiken, ABC The Business

KIRSTEN AIKEN, HOST: The Environment Minister is Murray Watt. He joined me earlier. Welcome.

Dairy co-op Norco has told The Business it's worried it won't be able to bottle its milk come September. Do you accept Australia's plastics industry is in structural crisis? MURRAY WATT, MINISTER FOR THE ENVIRONMENT AND WATER: Well, as a government, we're certainly aware that the impact on plastics is one of the consequences we're seeing from the global fuel shortage right now.

I actually spoke with the CEO of Norco myself last week and he outlined the situation that they're facing, particularly around the increasing price of plastics that they require for manufacturing those milk bottles that we all take advantage of. I think it's fair to say that we're not seeing the same levels of shortages when it comes to plastics as we have seen, for example, with fuel, petrol and diesel.

But that's not to say that if this crisis continues that we wouldn't see very serious impacts on plastic supplies and prices into the country. KIRSTEN AIKEN: Would the Federal Government be open to using its new powers to underwrite oil cargoes to also underwrite food grade resins that go into packaging? MURRAY WATT: Yeah, and in fact the way we designed that methodology for underwriting did allow for similar underwriting to occur of plastic resins and other products as well.

Obviously, most of the attention went to fuel and diesel supplies, understandably, but the opportunity to use that mechanism is much broader than just that and could apply to plastics as well. KIRSTEN AIKEN: How quickly could the Federal Government move to do just that? MURRAY WATT: Well, we're certainly open to working with manufacturers about this.

My colleague Tim Ayres, as the Industry Minister, has been in regular contact with manufacturers who are relying on plastics about these kinds of issues. My understanding, in fact, is that there are some manufacturers who are seriously looking at taking advantage of that right now. KIRSTEN AIKEN: Would Australia's packaging sector be less vulnerable to the supply shocks we have seen since the war broke out if the Government had mandated amounts of recycled material in plastics?

MURRAY WATT: Well this is certainly something that we're working with industry on right now. This is something that began under my predecessor, Tanya Plibersek, and I've taken up now as the Environment Minister. We've certainly heard the calls from plastics recyclers that they want to see a mandated content level of recycled plastic.

We do need to work through a range of issues around that, such as exactly what kind of products that recycled plastic could be used for; what the cost would be to manufacturers and consumers. But we continue to have very productive discussions with plastics recyclers and manufacturers right up until today. You know, I think this whole fuel crisis has been a wake-up call for the country about the need to ensure that we do have strong sovereign capability.

And of course, if we were to move to greater recycling levels of plastics, there would of course be very strong environmental benefits that I'm interested in as the Environment Minister, but also very strong economic benefits as well by making us more resilient for these kind of global shortages that we might see in the future. KIRSTEN AIKEN: The voluntary targets currently in place haven't been met for many years.

Why hasn't the Government moved earlier on mandating recycled amounts? MURRAY WATT: Yeah, well, I understand that many people are supportive of moving towards these kind of recycling measures. We do need to recognise, though, that it would have potential consequences, whether it be for consumers or manufacturers as well.

And that's what we've been trying to nail down, is what those cost impacts would be. As I say, what kind of products this could be used for and couldn't be used for. It's a little bit more complicated than it may seem at first blush.

KIRSTEN AIKEN: We've had recyclers like REDCycle collapse and now the financial reports of other recyclers, including Raphael Geminder's Pact, show they're running at a loss. Is inaction risking Australia's recycling industry? MURRAY WATT: Well, again, I've certainly heard the calls, through direct meetings that I've had with Mr Geminder and a range of other bodies in this industry, that some of the recycling companies are under severe financial pressure.

And that's because of a couple of things about some of the difficulties at times that they have in sourcing the plastic that they then want to recycle, but also sometimes a lack of demand for recycled plastic. I guess why things are a little bit different now in the wake of this global fuel shortage is that, historically, importing virgin plastic resin from overseas has been significantly cheaper than using recycled plastic here in Australia.

But of course, now that the price of that plastic that that we're importing has gone up as a result of the fuel shortage, it does make recycled plastic a bit more competitive than what it was before – not necessarily cheaper, but certainly more competitive. And I think that is causing all of us to take a renewed look at the opportunities that we have around recycled plastic.

As I say, both the environmental and the economic benefits that can come from that. KIRSTEN AIKEN: Murray Watt, thank you. MURRAY WATT: Thanks, Kirsten.

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