Plastic Bags - COAG Standing Council on Environment and Water

10. Implementation
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10.1. Implementing a mandatory charge
A mandatory charge would be best implemented in a nationally consistent way through state and
territory based legislation. A mandatory charge would not be a tax because the funds raised are
not used for a public purpose and are kept by the retailers. Therefore the Australian Government
taxation powers could not be used as a head of power to enforce such a charge. The states and
territories have the power to introduce legislation that would require retailers to apply a charge on
plastic bags provided. The Australian Government legislation would only apply to retailers that
are incorporated and therefore a significant number of retailers who are not incorporated would
not be covered.
A mandatory charge would be applied at the point of sale to be paid by the customer. The charge
would be applied in a transparent manner on a per bag basis and itemised on the receipt and
would be subject to GST.
To implement a mandatory charge in a nationally consistent way, jurisdictions would need to
agree on consistent regulatory requirements, including:
• the minimum level of the charge to be applied
• any review and/or increase to the minimum charge
• consistently defined exemptions.
Jurisdictions would have to implement these requirements through relevant state-based regulatory
tools. This may require changes to primary legislation (i.e. creation of a ‘head-of-power”) and/or
creation of subordinate legislation and therefore affect the time taken to develop and implement.
Should a decision be taken to pursue legislation, the start date for the legislation would be
1 January 2009 however for natural justice reasons, a phase-in period would also be required
before any enforcement could be undertaken (minimum three months).
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Inconsistent application of the charge could be problematic. A charge set in subordinate legislation
would be a minimum charge however some retailers may charge more. Consumers may, for the
most part, have a choice in whether or not they accept to pay for the plastic bags and also a choice
in where they shop if plastic bag charges vary between retailers. This would help to keep the
charge low. However, the range of choice of retailers may be considerably less for consumers that
live in remote or rural areas. This option may therefore benefit from monitoring to ensure retailers
apply a fair and reasonable charge if they chose to exceed the minimum charge. Generally though
where retailers are in competition for customers, this issue is expected to be managed by the
market. Consumers may become conditioned to buying bags and the size of the fee may need to be
revised over time. This has occurred in Ireland where the Plastax is to be increased from 15 to 22
eurocents (from $0.25 to $0.37 AUD). 129
Uniform application of this option by state and territories is essential otherwise the Mutual
Recognition Act 1992 would come into force, unless all states and territories implemented the
option in a uniform way.
129 Tracy Hogan, “More for plastic bags” 29 August 2006, The Irish Independent.
Consultation Regulatory Impact Statement: Investigation of options to reduce the environmental impact of plastic bags January 2007 88