Plastic bag levy jackpot
Income has proven lucrative for government, with state collecting R1.1bn in 11 years
THEY’RE dubbed our “national flower” because so many are seen flapping in the wind, entangled in fences, bushes and trees – the detritus of a consumerist society. In 2003, it was hoped the situation would be transformed with the introduction of the plastic bag tax. But our appetite for plastic packets has not dissipated; we’re quite literally throwing money away…
It started out, as many things tend to, with the best of intentions: the plastic bag tax would be introduced to reduce consumption and litter and be used for the greater good.
However, the levy has become a money spinner for retailers and the government.
Consumer behaviour has not been affected, which is what was hoped at the outset. Dr Linda Godfrey from the Council for Scientific and Industrial Research (CSIR) explained: “According to the Memorandum of Agreement that was put in place between the (then) Department of Environmental Affairs and Tourism, organised labour and business at the start of the plastic bag levy process in South Africa, the revenue generated from the plastic bag levy was to be reinvested in the plastic recycling sector, in support of increased recycling, and with it, job creation.
“However, Treasury is quite clear that funding cannot be ring-fenced, so the money collected from the plastic bag levy can be directed into any other government activity.”
The levies proved to be lucrative for the government and retailers: according to the latest available statistics, R1.1billion was collected by the state between 2003 up to the end of August 2014, in addition to about R5bn charged by retailers and suppliers.
“The plastic bag levy is increased by the government, as and when it deems necessary, having increased the bag levy again from 6c to 8c a bag from April 1.
“This increase in the levy is not typically done in consultation with the plastics industry, nor is the way in which the revenue generated from the plastic bag levy is spent,” Godfrey said.
Retailers charge (or sometimes don’t) as they please: Ina Wilken, the chairwoman of the SA National Consumer Union (Sancu), told me the costs range from 6c to 75c, “still being collected and nobody knows what is actually done with it – is it only a book entry and/or is the money really spent for what it was intended for?”
“The plastic bag scheme, eBuyisa, was closed by the department and “retailers still charge between 35c and 75c for a moribund fund filling the coffers in the National Treasury”, Wilken said.
Sancu believes the tax should be eliminated because “it’s a burden on consumers and nothing has been done to uplift the poorest of the poor”.
But to change behaviour, consumers should be incentivised. They should be educated in reusing bags or baskets and know what that levy is being spent on.
Plastic bags should also be more expensive because paying less than R1 for a packet is not viewed as particularly onerous.
Godfrey said: “The plastic bag levy is an economic instrument aimed at changing behaviour, a disincentive aimed at making consumers switch to reusable shopping bags. However, there was little to no communication to this effect following the implementation of the plastic bag levy, with the result that many consumers went back to their old ways and simply absorbed the cost of the bags in their grocery bill, with no resultant behaviour change.
“What we should have seen was ongoing awareness and communication by the government and industry reminding consumers why they were paying the plastic bag levy.”
On September 12, the government gazetted an intention to call for new “product taxes” for paper and packaging, electrical and electronic equipment and lighting equipment.
Godfrey said there was concern these taxes too would be absorbed within Treasury and that they would not flow back to support increased reuse, recycling and recovery of these products at end-of-life, as should happen through these planned extended producer responsibility schemes.
Despite the failure of the levy to change behaviour, recycling rates are increasing and it’s not because consumers are doing their bit.
“Recent data published by the CSIR (Strydom & Godfrey, 2016 WasteCon paper) shows that while the percentage of dedicated recycling households in large urban areas almost doubled from 2010 to 2015, the figure remains very low at only 7.2 percent of urban households that regularly recycle.
“It’s as a result of the work being done by the various plastics material organisations in South Africa, such as PlasticsSA, PolyCo, Petco, the SA Plastics Recycling Organisation, Polystyrene Packaging Council and others.”
Unlike other countries such as Eritrea, Rwanda, Morocco, Mauritania and Bangladesh, South Africa hadn’t banned bags – it only outlawed thin plastic bags and introduced a small levy.
(Bangladesh was the first to enforce a strict ban in 2002, after plastic bag litter choked its stormwater drains and waterways, causing severe flooding.)
Contrast the South African situation with Rwanda, which controversially banned plastic bags but saw much cleaner streets, or Ireland, which instituted a hefty tax on bags and saw real changes in consumer behaviour and reducing pollution.
In March 2002, Ireland introduced a €0.15 tax on bags, influencing 90percent of consumers to use long-life bags within a year. The tax was increased to €0.22 in 2007 and revenue is remitted into the Environment Fund.
Ireland’s Department of Housing, Planning, Community and Local Government said this had an “immediate effect on consumer behaviour with a decrease in plastic bag usage from an estimated 328 bags per capita to 21 bags per capita”. Making plastic bags so affordable – and failing to earmark the revenue for job-creation and green causes – is as effective in changing behaviour as hiding behind bushes to trap speeding motorists has been in reducing bad driving.