Taxpayers might wonder how many tens of millions of dollars have been blown on a failed attempt to revive a six decade-old blast furnace at the Whyalla Steelworks in South Australia.
The state’s premier Peter Malinauskas didn’t leave listeners any wiser during a morning cross to ABC’s RN Breakfast, joining federal industry minister Tim Ayres earlier in the program, in not revealing how much of its $1.9 billion “sovereign steel package” they had burnt through.
“It’s a really old piece of equipment,” Malinauskas ventured. “The fact that it’s been able to run as long as it has is an extraordinary credit to the people who work on the ground here.”
“And it had to close.,” he went on. “Now, ideally, that closure would happen later when the sale [of Whyalla was] complete and the new technology is installed.”
What we do know is that the SA and federal governments will tip a joint $10 million – perhaps another dip from the same deep money well – “to assist Whyalla workers, their families and the broader Whyalla community” affected by the furnace fail.
That some industries can rely on a seemingly infinite support spring – think, Rio Tinto’s $2.5 billion aid to salvage Tomago Aluminium in NSW, or its $2 billion “lifeline” for its Gladstone smelter in Queensland – has less well-connected sectors understandably envious.
The recycling industry has to be one of them. Their representatives, crossbench MPs, an environmental group and companies held a media conference in Canberra on Tuesday ahead of a Friday meeting of federal, state and territorial environment ministers. More on that below.
The recyclers can’t boast so easily of “sovereign” importance, of course. Whyalla steel had, after all, built the Alice-Darwin railway, among other notable projects, Paul Barry writes in his new book, “The Big Steal”, on would-be steel tycoon Sanjeev Gupta.
But that doesn’t mean serious private and taxpayer funds aren’t about to be torched by federal government ineptitude. Companies are beginning to fail and promises of future “industry certainty” are being taken with a truckload of salt.
The government has championed its claim to be investing in Australia’s waste and recycling infrastructure. Indeed, “[t]he Australian Government is providing over $200 million towards new and upgraded recycling infrastructure through the [Recycling Modernisation Fund]. With state, territory and industry funding, this will total $1 billion of investment.”
Its dashboard claims 129 projects are in the works for the RMF, with government co-funding put at $331 million, with “third-party funding” roughly twice that, at $653m.
Ongoing jobs from the fund’s operations tally 1284 with 1702 construction jobs. (Whyalla Steelworks’ staff will drop from 1700 to 1200 after the furnace’s demise, ABC reported.)
Those numbers may well shrink, following a series of meetings and announcements concerning, in particular, the plastics technology waste stream. This sub-group covers about $137 million in federal funds alone.
A couple of dozen attendees at a meeting in Canberra on 12th August of the Australian Council of Recycling (ACOR) were shocked to hear the Albanese government would renege on it promise to mandate recycled plastics in packaging during this term.
The bearer of the ill-tiding was environment minister Murray Watt. Renew Economy has been told by those in the room that the minister was apologetic in his tone, saying the decision had been made by higher-ups.
The key reason for the delay was simply the government wouldn’t wear any addition to the cost of living because it would be “weaponised by the Opposition”, one of the sources said.
That verdict compared with Watt’s clarion call to cut waste last November during national recycling week.
“Since the Albanese government launched Australia’s Circular Economy Framework last December, we’ve seen strong momentum across governments, industry and communities,” Minister Watt said in a statement at the time.
“We’re working with state and territory governments to drive this – including cutting waste, boosting resource recovery, and reforming packaging regulations, particularly for soft plastics, to create a more sustainable future,” Watt said.
Estimates range of what the cost would be of requiring packaging tap into the soft plastics than can be hard to recycle. So-called “virgin plastic”, mostly imported, is cheaper with almost all the material presently ending up in landfill.
ACOR members weren’t happy at this unexpected decision to postpone a plan the industry had been led to expect would be in place by the end of 2025 at the latest. Those making this call “need to be hung, drawn and quartered” was the response of one.
Even then, what passed as a formal announcement only circulated to industry on September 1st, via an assistant direct of the circular economy division, within the Department of Climate Change, Energy, the Environment and Water.
That official said, in convoluted sentence, that Minister Watt was “looking at the pursuit of reforms in a way that balances environmental outcomes with the broader needs of the economy, with the Government looking closely at its policies to ensure it does not exacerbate cost of living pressures”.
“The Minister has communicated that a new Commonwealth scheme for packaging will not be introduced in this term of Government and is now focused on working with state and territory governments on opportunities to improve Australia’s packaging regulations and policies in the nearer term,” the staffer said in an email shared with Renew Economy.
“The Department is currently considering the updated Framework and how it could potentially be implemented to provide clear guidance to industry while increasing packaging recyclability and recovery, including as part of the current mandatory co-regulatory arrangement for managing used packaging materials,” the email stated.
“To date, no decision has been taken by the Government regarding the Framework and its use and application.”
Renew Economy sought comment from Minister Watt and DCCEEW.
Other recycling sub-sectors, such as solar panel recyclers, have been gummed up for other reasons, as Renew Economy has reported.
In anyway, industry insiders say it is unclear how “clear guidance” can be convincing communicated in the future. Indeed, they worry about how many firms – which had invested in equipment, premises and staff hiring and training in anticipation of past promises – will stay in business..
The packaging industry this month lost one major player – Recycling Plastics Australia – which went into administration a day after the email was circulated.
That venture, based in Adelaide no less, had been backed by $20 million under the federal RMF stream, matched by its own owners, PKN, an industry publication, reported. An earlier government funding round had tipped in $8.89m.
The industry anticipates further announcements of retrenchments, possibly within days.
At one level, politicians will always tilt their spending plans with an eye to polling. They hear about households being under the pump and assume the environment will always rank lower on the list of what vexes voters.
The counterpoint that leaders would make is that trashing the environment doesn’t come cheap either. ACOR has estimated the cumulative costs of plastic packaging – totalling more than 1.3 million tonnes annually – could top $32 billion by 2050.
And it’s an industry that contributes almost $19b a year to the Australian economy, supporting 95,000 jobs across the country, according a report released by ACOR in August – roughly around the time Watt dropped his bombshell on the sector.
And to blow $137m or so in federal funds without ongoing income generation is hardly cost-free.
As for the media conference, Jeff Angel, director of the Boomerang Alliance, urged state and territory environment ministers to launch a “rebellion” at Friday’s gathering. “This is going to be, I hope, a fiery meeting of environment ministers, because the community deserves a real solution.”
WA independent MP, Kate Chaney, said “they’re throwing away the $200 million that the federal government has already invested in recycling infrastructure”.
“This industry will die if there isn’t some certainty,” Chaney said, adding the government was also throwing away the $900m a year in single-use soft plastics that could actually be recycled, and turned into valuable material.”
Any cost of living saving was also illusory because “we’re already paying these costs through council rates”, Chaney said. “This is about shifting costs from one area to another, not paying new costs.”
“I think the government is gutless, not acting when it has this unique moment where everyone’s lining up, saying that they need the same thing-an extended producer responsibility scheme,” she said.
Suzanne Toumbourou, chief executive officer of the Australian Council of Recycling, said about 1.3m tons of plastic packaging is put into the Australian market every year, wit only about 300,000 tons recycled.
“So a million tons is going to waste, whether landfilled, or littered, or burnt for energy,” Toumbourou said. “It’s a real priority that we should be able to recover and remake more of that.”
“Ironically, instead of the recycling sector for plastic growing as it should, it is stagnating,” she said, adding that plants were only running at about half capacity.
“It’s not too late to see packaging reform delivered in Australia to solve the problems that we are seeing with plastic waste,” Toumbourou said.
Independent senator David Pocock, similarly, didn’t mince words, calling out the government for “a tragic lack of leadership and long-term thinking”.
“We have to actually start to make decisions in this country, like we planned to be here for a long time,” Pocock said. “And that makes means making sure that we are good stewards of the resources we’re using.”
Paul Barry has some scathing words to say about the gullibility of the media in swallowing the “Man of Steal” guff about Sanjeev Gupta.
“It was a classic example of how journalists could fall for the glowing PR and report the hype, while ignoring the dull reality,” Barry wrote.
When it comes to government hype, don’t expect investors in the recycling industry to be falling for it so easily next time around.
