Page 4712 - Week 13 - Tuesday, 31 October 2017
For a craft brewer or small beverage manufacturer, under this legislation there is a requirement to report sales volumes to their larger corporate competitor. There are no safeguards in this bill to give any confidence to anyone in the beverage industry that once this information is provided to the scheme coordinator it is not passed on, either formally or informally, to the parent companies, being the big corporate beverage companies. Let me emphasise this point again: this law will require businesses to disclose confidential sales information to their competitors. This is a slippery slope and a very dangerous precedent to be setting.
The agreement that is entered into by the scheme coordinator and suppliers of beverages is effectively a tax—a tax of 10c per bottle or can, plus the administration and transport costs of the scheme. The administration levy may amount to an additional 5c to 10c per container over and above the 10c deposit. This will have to be passed on to the consumer, adding around $4 to $5 to a case of beer. The assumption that this kind of additional cost can be absorbed by suppliers is ludicrous and would demonstrate a complete lack of knowledge of how tight profit margins are for businesses, particularly dealing in this grocery line sector, and the practice and price sensitivity of many consumers buying these products.
The opposition is also concerned that, given the make-up of the joint venture that operates the scheme, it would be in their commercial interest to have a low rate of recycling, allowing the 10c deposit that they are paying into the scheme ultimately to remain on their balance sheets through the joint venture. There is also an issue that the opposition poses as to what happens to a deposit that is paid in to the scheme if a container is never returned, in order to have the deposit refunded.
The main businesses that will be affected by the container deposit scheme in the ACT are not big beverage companies such as those forming the joint venture. They will be the little guys—the craft brewers, the home-grown local businesses that this government is consistently sending mixed messages to. Canberra currently has a very rapidly growing and vibrant craft brewing industry. Those in the industry are taking the risk to grow a business, employ local Canberrans and promote our city through their brands. The Chief Minister continually wants to call Canberra the “cool little capital” and pays lip-service to supporting these businesses, but at every opportunity, and often in the name of the environment, his government come up with a new tax and more red tape to place in the way of these businesses thriving and maintaining Canberra as the most competitive place to go into business and grow your business.
For a local craft brewer to enter the container deposit scheme that is before us today, we are talking about an up-front cost that could run into the hundreds of thousands of dollars—and this is before a product even hits the shelves. The deposit is paid by manufacturers prior to the product being sold. This imposes a significant drain on the cash flow reserves of businesses; and, for every business, cash flow is critical to their life.
While there is not any evidence to suggest that the fledgling scheme in New South Wales has been a success, the New South Wales government did have the foresight to put in place interest-free loans through an alternative scheme to support businesses to