The so-called "recycling tax," aimed at waste exporters, was initially legislated by the Morrison government in 2020 to regulate waste exports following China's decision to stop handling Australian rubbish. The levy of $4 per tonne on waste exports was feared to be a tax on the recycling industry and was expected to be passed onto local councils and consumers. However, the Albanese government has now decided to reverse the legislated levy after industry feedback and concerns about the potential negative impact on recycling efforts.
Australia has been working to reduce its reliance on overseas recycling markets since China's "Operation National Sword" policy disrupted waste exports in 2017. While certain waste exports like glass, plastic, and tyres have been significantly reduced, paper and cardboard waste exports remain high. The government had invested $1 billion in a "Recycling Modernisation Fund" to upgrade facilities and meet new contamination requirements, with the last phase being the regulation of paper and cardboard exports.
The decision to scrap the recycling levy aligns with the government's broader strategy to enhance domestic recycling and reduce packaging waste. However, there are concerns from industry representatives about potential costs associated with licensing fees for exporting waste, which could undermine the efforts to boost recycling and reuse. Shadow Environment Minister Jonno Duniam expressed worries that without additional support and improvements in recycling capacity, Australia might continue to rely on exporting waste for recycling, rather than developing sustainable domestic solutions.