IN THE holidays between school and university I had a job at a soft-drink factory in Beechworth, Victoria. On Day One I began the task of sorting used empty bottles – crown tops, screw tops, bottles with ceramic labels, bottles with paper labels, large bottles, small bottles, medium bottles and so on.
After a time I graduated to the bottle-washing machine. The bottles went upside down on to brass rings on a conveyor belt and through the washers and thence to the water-syrup-gas filling machine.
Of course, for a soft-drink factory to reuse bottles, it had to retrieve the bottles. So in the 1960s (and for time before and after) they made buyers of their products pay a deposit on the bottle. If they returned the bottle they got the 5c or 10c deposit (in today’s money, a dollar or two). If they discarded the bottle, some urchin would inevitably snatch it up and return it to a shop to claim the deposit.
You never found a soft-drink bottle polluting the environment then. Beer bottles, yes, because they did not have a deposit scheme. They used new glass.
Eventually, everyone used new glass, or cans or plastic for drinks and there were no deposits. So you see the containers all over the place.
There is no market force, as in the 1960s, to encourage people to return them.
Deposit systems are very effective. The factory where I worked had brown bottles for its non-alcoholic beer – Ecks Beer. They were similar to ordinary deposit-free brown beer bottles. Nonetheless, the urchins distinguished them and returned all the Ecks Beer bottles.
South Australia legislated for deposits in the 1970s but after a time the value of the 5c deposit eroded with inflation and it was not worth anyone’s while to collect bottles.
Now deposit schemes are back on the agenda. Federal and state ministers are to consider a deposit scheme next month. In the lead up, expect a vigorous propaganda campaign against it from vested interests. Indeed, it has already started.
The Australian Food and Grocery Council has issued a swag of press statements. A lot of the material has been regurgitated in the media without much questioning.
Of course, the council is calling the scheme a tax. It is not. It is like speed cameras: if you don’t speed you don’t pay. If you return your containers, you don’t pay. The council is correct, however, in saying that there will be some costs to the scheme. But they will be more than offset by the savings by the community at large of the costs of picking up litter and environmental costs.
However, the council plays on people’s fears, uses worst-case scenarios, and presents only one side of the argument. And like most industry groups has engaged a so-called independent consultant to study the question and come up with conclusions favourable to its point of view. Ask the right question you will get the right answer.
The result has been an assertion that a new “tax” on groceries will add $300 to the average family’s grocery bill.
True, the across-the-counter cost will go up, but if you return the containers it is neutral. The council does not mention the healthy wealth redistribution as wealthy consumers chuck out containers and poorer children and the homeless seize on them and convert them into cash.
The beauty of the deposit scheme is that society gets for nothing the substantial labour of tens of thousands of poorer people to clean up discarded drink containers.
It is a beautiful market solution. Polluting users pay and less-well off container-collectors get the benefit. Put a price on something and people’s behaviour changes. The Liberal Party should embrace it.
But so often, good public policy can be subverted. It does not suit drink manufacturers to have a deposit scheme. Their marketing people tell them that shoppers only look at the advertised price. If it is higher because there is a deposit, they will buy less.
They fear loss of profits. So despite the obvious merit of the policy they will fight against it.
This is a classic case of the application of public policy in Australia. Very often good policies get junked because of the power of lobby groups. They can put quite a lot of money at undermining good policy through and array of public-relations and propaganda techniques which beguile the hapless masses upon whose votes governments can fall.
We can either have strong governments which explain good policy and implements it – like a container deposit scheme. Or we can have governments which buckle at the first hint of any big, powerful industry group pushing a line.
“Great big new tax” must be the most effective propaganda lie of the decade. It must be countered.
In Europe most countries have what the Germans call the “pfand” scheme. Most stores have a machine at the back where you feed in bottles and the deposit is read. The machine then spits out a receipt with the number of euros deposit credited. You present the receipt at the checkout and get the deposit money back.
You see far fewer discarded drink containers in Germany than you do in Australia.
The Greens want to legislate for a deposit scheme. Labor says it will not impose the scheme nationally, but seek the co-operation of the states. That is a standard way of doing nothing.
Maybe South Australia should just put some teeth into its existing deposit scheme by increasing the deposit to a level that encourages kids to scavenge for bottles.
Oddly enough, about the only way the Commonwealth could impose such a scheme within its constitutional powers is to use the corporations power in the same way as it was employed by the Howard Government in its Work Choices legislation.
The High Court’s response to the challenge by unions and others to that legislation was to widen the corporations power to enable the Commonwealth to legislate about the finest details of corporate activity.
The Work Choices case opened the door for Commonwealth regulation of corporate activity in a way that is bound to suit the political left than the right – right down to whether a corporation can sell a drink container without first collecting a deposit for it.
This article first appeared in The Canberra Times on 21 July 2012.