COLLIER, Ms Sarah, Director, Membership and Sustainability, Australian Food & Grocery Council DOHERTY-ANDALL, Ms Shannon, Sustainability Manager, Australian Beverages Council KOLOFF, Ms Kalina, NSW Small Business Commissioner, NSW Small Business Commission [by audio link] McGRATH, Mr Scott, Director, Stakeholders, Engagement and Policy, Australian Food & Grocery Council MITSCH, Mr Damian, Executive Director, Accord Australasia [by audio link] PAPACOSTA, Ms Veronica, Chief Executive Officer, Australian Fresh Produce Alliance SEMPLE, Dr Jennifer, Senior Manager, Sustainability & Education Programs, Accord Australasia [by audio link] [09:55] CHAIR: Welcome. I understand that information on parliamentary privilege and the protection of witnesses giving evidence to Senate committees has been provided to the witnesses. Given the nature of this, I'm not going to seek an affirmation, but if it hasn't been, please speak now or forever hold your peace. I'm going to invite each of our witnesses to make a short opening statement. At the conclusion of any remarks, I'll invite members of the committee to ask questions. We'll go first to the Australian Food & Grocery Council. Ms Collier : Thank you for the opportunity to appear today. The AFGC is the peak body representing Australia's food and beverage and grocery manufacturing industry. Our sector is Australia's largest manufacturing industry, employing hundreds of thousands of Australians and producing essential goods every day. Our members and consumers rely heavily on packaging to ensure food safety, product integrity and national supply chains to operate efficiently. Our industry is committed to improving the sustainability and circularity of packaging. We recognise the intent behind the proposed extended producer responsibility framework and support the role of EPR where there is market failure. However, it is critical that any reform is, firstly, nationally consistent; secondly, practical and efficient to implement; and, thirdly, designed in partnership with industry. A key risk we are seeking to avoid is regulatory fragmentation across jurisdictions. Divergent approaches at the state level are already increasing costs and complexity for supply chains and manufacturers. These costs ultimately flow through to higher prices for households and reduce capacity for investment and innovation. A well designed national framework can deliver strong environmental outcomes, provide certainty for investment and support a practical transition to a circular economy. The AFGC has consistently supported industry led product stewardship mechanisms, clear harmonised national policy settings and proportionate regulation that recognises the essential role of packaging, including in food safety and supply chain resilience. Previous work of the Senate in this area has already highlighted the importance of a coordinated national approach and avoiding duplication and inefficiency in regulatory design. Our overarching message today is simple. We share the objective of better packaging outcomes, but reforms must be carefully calibrated to deliver environmental gains without unintended economic impacts. We welcome the opportunity to work constructively with government and the parliament to achieve that outcome. Thank you, and I look forward to your questions. Mr Mitsch : Thank you for the opportunity to appear today. Accord represents the companies making the personal care, cleaning and cosmetic products that Australians use every day. We have a significant global presence within our membership, and we are very much at the end of a global supply chain in which Australia represents less than two per cent of product sales for many of our members. Global companies don't redesign packaging for two per cent of the market. They either participate or don't. Our position is that the voluntary system has not delivered. We accept that, and we're not here to relitigate that. But we believe that this bill gets the design wrong in almost every respect. The timeline makes it unworkable. Three months from royal assent to a functioning national scheme is simply not achievable under any circumstances. Recycling content targets are structurally impossible. Thirty per cent Australian recycled content in all packaging by 2030, when a domestic supply doesn't exist, is impossible. You can't legislate an ecosystem into existence. Our products are contact sensitive. We need contact-sensitive grape recyclate, which is scarce and expensive globally, let alone in Australia. Products packaged offshore can't be repacked at the border. It would be commercially absurd and environmentally counterproductive to do so. Governance fees, enforcement and interaction with state laws are all referred to rules that would have to be written within three months. We simply don't believe that that would be possible. A mandatory scheme without enforcement is not mandatory. We are in the middle of a cost-of-living crisis. We're already seeing packaging costs increasing by upward of 10 per cent, simply as a result of the current global environment. There's nothing in the bill that was presented that wouldn't lead us to having significantly higher costs. There is a better path. We have very much supported the government's own process. We've been working with DCCEEW through all of the consultation processes to progress the work that the government is doing, and we would argue that we should finish that work and legislate properly. We would ask the Senate to decline to pass this bill at the end of the day. Thank you very much. Ms Doherty-Andall : Thank you, Chair and members of the committee, for the opportunity to appear today. The Australian Beverages Council strongly supports the intent of the bill and the move towards a national framework for extended producer responsibility. Representing 95 per cent of the non-alcoholic beverage industry's production volume, we are uniquely positioned to provide insights into existing product stewardship schemes in Australia. Through container deposit schemes, the beverages industry is the only primary packaging type fully covered by EPR. We have learned that a decentralised, state based approach leads to fragmented and misaligned regulatory settings, creating significantly complex administrative processes for manufacturers to navigate. Despite operational challenges with state based CDS, our industry is supportive of the stewardship model, with legislated obligations and financial and reporting requirements. However, a national scheme cannot duplicate this at both the state and federal level. The ABCL supports recycled-content mandates where they are practical and feasible. Currently, the Australian recycled-content market does not contain enough recycled material to sustain the proposed domestic recycled-content thresholds for both food-grade and non-food-grade use. Our industry has already invested to do our part, partnering with the packaging sector and leveraging government co-investment to establish dedicated PET plants in Albury in New South Wales and Altona North in Victoria. Currently, the lack of consistent, high-quality recycled outputs means that parties from all consumer product sectors, even ones which don't need food-grade material, seek to use the outputs from CDS to ensure a recycled-material supply that will perform consistently in their manufacturing processes. Failing to address this overall market shortfall will deliver perverse outcomes, with the beverages industry subsidising, through levies paid through CDS, for use of this material by other sectors. This impact will be felt hardest by small and family businesses that have weaker purchasing power in the recycled-material market. Overall, again, we do support the intent of this bill and progress towards a national EPR scheme but submit that it is critical that any move to a national approach is careful in its drafting and does not mandate a domestic recycled-content amount that is not feasible or duplicate existing legislated EPR schemes. Sensible adjustments to the proposed bill will ensure its success and deliver a better outcome for the environment, the circular economy and the elimination of plastic waste. Ms Papacosta : Thank you, Chair and committee members, for the opportunity to appear today. We represent the Australian Fresh Produce Alliance, which is made up of 11 of the nation's largest fruit and vegetable growers and suppliers. We support practical and nationally consistent packaging reform. The fresh produce supply chains operate across states and territories, and fragmented regulation will create unnecessary cost complexity and uncertainty for growers and suppliers. However, the AFPA does not support this bill proceeding in its current form. We have three main concerns. The first is that the bill's stated objective for the EPR scheme is focused solely on packaging outcomes without consideration for broader environmental issues. This may be unique to fresh produce, but in our sector packaging has a clear functional purpose. It helps protect product integrity whilst we ship it from the farm to be sold. It extends shelf life while it's on the shelf and also while it's sitting in your fridge at home, waiting to be eaten. It improves food safety while it's travelling from the farm to home, and it improves traceability, importantly allowing for food recalls to be actioned and responded to, which can dramatically minimise the impact and protect people's health. And it minimises food waste. Packaging in fresh produce is designed to minimise food waste. This matters because Australians already generate 7.6 million tonnes of food waste each year, with households being the single largest contributors to that. In many cases, packaging is the only tool we have that can prevent that product from being wasted once it leaves the farm. A scheme that reduces packaging but increases food waste would not deliver a better overall environmental outcome. It would drive up food prices and reverse the improvements on food waste that we have made. Our second concern is the definition of 'responsible person'. Fresh produce packaging decisions can involve multiple parties across the supply chain. Under the current definition, there are clear examples where a grower is likely to be considered the responsible person and will therefore wear the cost without having control over the packaging design and specifications, meaning they have no ability to respond to the scheme's intent. Therefore, the current definition risks misallocating responsibility and should not proceed without further consultation and consideration. Our third concern is the bill's proposed three-month implementation timeframe, which we don't think is sufficient to resolve some key design issues and others. These issues would need to be worked through before obligations apply and not after. We are not trying to delay reform. We are trying to ensure an effective and fair EPR scheme is implemented. Thank you, and we welcome the committee's questions. Ms Koloff : Thank you, Chair and committee, for the opportunity to speak today. As you would be aware, the Small Business Commissioner in New South Wales is an independent statutory authority, and we provide advocacy and advice and dispute resolution services for small businesses across New South Wales. I'll just note we provided a written submission to this inquiry. On balance, the commission supports the bill and the objective of reducing packaging waste and improving sustainability outcomes. However, as a number of other parties have mentioned, the design of the scheme will be critical to ensuring it operates effectively and proportionately, especially when it comes to small business. In addressing some of the key points from our submission, I'd like to firstly note that the scope of the scheme and the definition of 'producer' will be central. Key elements include thresholds and exemptions. They are not yet defined. It will be important that these settings appropriately target businesses placing a significant volume of packaging into the market and note that many small businesses operate as importers, brand owners or, importantly, franchisees or other online retailers and cannot otherwise be captured despite relatively low volumes and limited resources. So it's going to be important that clear turnover based thresholds and packaging volume thresholds are considered as part of the reform, with the potential, obviously, for some graduated or tiered obligations. Secondly, I think there is probably a risk of disproportionate administrative burden for small business. Small businesses do not currently collect detailed packaging data and often rely on suppliers. With limited visibility of the packaging composition, new reporting requirements may require changes to the systems and processes. In particular, there is a risk there for duplication where similar information is reported across multiple frameworks or up and down a supply chain. The cost impacts will also be a key issue for small business at a time when small business confidence is low and insolvency rates are rising. Even where the obligations primarily apply to larger producers, it is likely that costs will be passed through the supply chain and impact small business significantly. Again, I would note that there is a particular vulnerability there for franchisees, and they may face increased input costs without any ability to influence packaging decisions. Lastly, the transition and implementation of the bill, if passed, is critical. A phased implementation, clear guidance and tailored support will be important to provide opportunities for small businesses to adapt. Tailored education and guidance relevant to the different sectors,    and any threshold compliance settings that may be implemented, will be important. Simplified or alternative reporting and record-keeping arrangements, with no additional implementation or introduction of red tape for small business in supporting this important bill, would be something that we consider important to our stakeholders. Thanks, Chair. CHAIR: Thank you very much. I will now go to Senator Whish-Wilson. Senator WHISH-WILSON: I must say that, in all my time in politics, I've never had five significant witnesses at one go, so this is going to be an interesting one for me too. What I plan to do is ask you all very similar questions so everybody gets to provide a response, and I'll try and keep it to things that I think are relevant to you all individually as well as collectively. Before I do that, I just want to clarify a couple of things. Obviously, this bill mandates an EPR. We've had a voluntary scheme in place, so I just want to be really clear. I might start with the Australian Food & Grocery Council. I didn't get any sense from your submission of whether you support a mandated scheme. Do you support a mandated scheme rather than a voluntary scheme? Ms Collier : Yes, we do support a mandated scheme where there is market failure—for example, with plastics. Senator WHISH-WILSON: Great. Thank you. I will now ask the NSW Small Business Commissioner. Kalina, do you support the concept of a mandated scheme versus a voluntary scheme? Ms Koloff : We certainly have support for a mandated scheme. However, I think it is absolutely critical to reflect the needs and the impact on small business as a discrete cohort with respect to supply chain, their ability to influence packaging or marketing, and also any impacts or implications for additional red tape or reporting. Senator WHISH-WILSON: Thank you. I certainly know the Food & Grocery Council and the Beverages Council have been involved in this discussion for a long period of time, as have, I presume, Accord Australasia. Damien, you mentioned in your submission that you've been talking to the government since their process began in 2022. Mr Mitsch : Yes, that's correct. Senator WHISH-WILSON: Could I just clarify: has Accord Australasia had input into this prior to that, going back to when national targets were set in 2018? Mr Mitsch : Yes, we've been involved in the process for quite some time. Senator WHISH-WILSON: Great. What about the Australian Fresh Produce Alliance? Ms Papacosta : We have had some contact individually with our members and as the AFPA, but we would welcome more engagement. Senator WHISH-WILSON: Great. My first question is: why do you support a mandated scheme now? Certainly, the Food & Grocery Council and the Beverages Council never used to, having the benefit of going back to 2012 when I started campaigning on this in parliament. There's obviously been a change of heart, which I think is a very good thing, by the way. Could I perhaps start with the Australian Food & Grocery Council. Why do you now support a mandated scheme? What's changed for you? Ms Collier : We are looking at what's happening globally and thinking about our membership, many of whom are supplying into other global markets where we can see EPRs working. In terms of the challenges if it is not mandated, you will have the issue of free riders. The cost of food and grocery manufacturers is about 28 per cent of total retail, and so if you have an EPR for, say, soft plastics and they are paying the cost of others outside of food and groceries, say for Kmart and others, you will see an impact on cost. It's really about having an equitable system that will, I guess, advance a circular economy and packaging reform. Senator WHISH-WILSON: To the Beverages Council—I have something I wanted to read from your submission, which, by the way, Shannon, made me very happy when I read it. Page 3 of your submission says: Container deposit schemes deliver recovery outcomes that are unmatched across most other packaging materials, supported by dedicated collection infrastructure, clear producer funding arrangements and established pathways for material recovery. You talk about the success of EPR. Long before your time, I suspect, the Beverages Council were ferocious campaigners against an EPR for beverage schemes, and my first campaign, going back to 2007, was to get container deposit schemes up around the country. It's been 20 years for me, and I'm very glad to see they've been rolled out. So, yes, what's changed for the Beverages Council in terms of EPR schemes? Is it because you recognise that they've worked really well around the country? Ms Doherty-Andall : Yes, it was certainly before my time. I've been in this chair for just about five years. When I came, I started with Victoria and Tasmania, rolling out the full scheme across states and territories. My experience with our members, which range from large companies that everyone knows down to small family businesses and businesses in the regions, is that everyone's always been really constructive and positive about the scheme. It's not without its faults. The small businesses in particularly really struggle with the state and territory system. I know companies that have had to put on full-time people to deal with the administrative obligations of those schemes. It's not to say that it's always been easy, but the pleasure of working with our membership is that it has always been about how we can practically bring it to a place that it can be the easiest to engage with. I think that now it is really a point of pride. Also, coming with those schemes is the work we've done to phase out PVC and various materials that aren't recyclable. The industry now is in a place where they're just looking for parity across different categories. We always say that we want everyone in the supermarket trolley to come join us. It has gotten to a place, at least in my experience, where it's quite positive, and we see that food grade material that comes out and we are very happy and proud to use it. Senator WHISH-WILSON: But, just as a side question before I go to the other witnesses, do you feel like, as you said in your in your opening statement, beverages are an example of an EPR working in Australia? Do you think that's helped change sentiment within the industry that this can work for other kinds of packaging apart from beverages? Ms Doherty-Andall : Yes, absolutely. South Australia in 1977 was quite ahead of its time. It's a very different scheme framework to what we see now around the country. They're working to bring in a more traditional scheme coordinator, which draws parallels to what is happening with federal EPR. We do a little work in Europe with the UN plastics treaty, and we see all the countries now coming online, and we can learn from that as well. After everything has gotten in, it probably hasn't been the kind of doom that people might have thought when they were— Senator WHISH-WILSON: The sun has risen in the morning, hasn't it? We all got on with life, and we've managed to recycle lots of bottles and cans and containers. Ms Doherty-Andall : Yes, absolutely. I think that now there's a very proactive and very positive attitude to where we're at, and we're just looking to improve that now. Senator WHISH-WILSON: Excellent. Veronica, why do you think things have changed in your— Ms Papacosta : For many of the reasons already stated, it is becoming a much more—I think the literacy around it is becoming obvious. For the Fresh Produce Alliance and its members, it is about the options and having the option to be able to change. Even under the voluntary scheme, there has been a lot of movement that I've witnessed in fresh produce to try to find better solutions. We got to the position of using plastics in the way we did because that was what was available, so obviously we're trying to work with the developers and packaging companies to try and find better solutions. I think there's a lot of commitment to doing better in this space, so long as we take into account the practical nature of packaging for fresh produce. Senator WHISH-WILSON: Damian, I don't know if Accord has always had a position of supporting mandatory schemes versus voluntary schemes, but could you comment on that, please? Mr Mitsch : Accord for quite some time has accepted that we would be supporting a mandatory scheme. I would say a couple of things. We always look to see the least level of regulatory intervention in the market to achieve the policy outcomes. I would say that everybody has gotten behind the voluntary schemes, and those voluntary schemes have done great work, yet we haven't quite achieved the policy outcome of improving the circular economy and EPR to the extent that we are after. So we naturally now need to make the next step. In terms of why we support the mandatory scheme, the market is changing, consumer expectations are changing, and consumer willingness to put their hand in their pocket to pay a bit more to support products with high levels of recyclability and cleaner and greener products is improving. That gives our members more confidence that, if we do go down the path of improving our circular economy, we are going to be supported by Australian consumers. Therefore, our secondary question is what is the minimum that we need to achieve that policy outcome? Senator WHISH-WILSON: Kalina, would you like to respond? Ms Koloff : I would reiterate two points here. One point is that small businesses often find themselves at the end of a supply chain. So, where additional regulatory impacts are required or there are changes to processing or packaging, in particular, for those small businesses that rely on importing some of their goods for resale, their ability to influence is very limited. They are largely price takers in the establishment, so the impact on small business is likely to be disproportionate if indeed costs are fully borne by business and then passed through the supply chain. The second thing I would reiterate— Senator WHISH-WILSON: Sorry, Kalina, could you answer my question about your view on voluntary schemes versus mandatory schemes? Ms Koloff : I don't have an additional comment on that. Senator WHISH-WILSON: That's fine. I'll come back to you on your other issue. A number of you have submitted that we should continue the process that the government has underway or amend this bill to include your, I think, quite sensible suggestions. Starting with Australian Food & Grocery Council, where are you at with the government in terms of current negotiations or input into processes for establishing a mandatory EPR scheme for packaging in Australia? Mr McGrath : Before Sarah answers that one, can I pick up a little bit on the previous one. To echo Shannon's comments, probably the biggest and one of the most significant changes to go from voluntary to mandatory with the CDS as an example is the community's interest in that. I think you'd probably agree that, around the 20-odd years that you've been in this space, the community has played a massive role there. We'd call that out going forward. Certainly, our members see the role of their customers and consumers as fundamental in what it looks like going forward. Ms Collier : Obviously, we've been very involved in both DCCEEW and speaking to Minister Watt as well around packaging reform. This has been going on through two governments. We've very much been providing as much information and feedback from our members on what EPR could look like. We have also taken these global insights, and we really think that the advantage of looking at what is happening overseas in other jurisdictions, what's worked and what hasn't should form up how we build out the plan for Australia to be best in class. We have been heavily involved in providing case studies and insights around some of those challenges and recommendations, as you will have seen in our submission, on what a path forward would look like. Senator WHISH-WILSON: Are you confident that we're going to get a federal, nationally harmonised EPR scheme, and do you think it's advanced based on your participation in the process? Ms Collier : I think we could get one. I think there's a lot of work that needs to be done in the detail around that. You heard earlier from APCO around what that regulatory instrument would look like and the things around targets and how that roadmap fits. I think we have to think about packaging and the role that it plays—so understanding some of those restrictions and where we can phase in EPR. We would like to see this moving faster for our confidence. It's very difficult when we think about our members making decisions on packaging formats without clarity on where regulation is going. The other challenge would be that, obviously, as the federal pace has slowed, we're starting to see further fragmentation across state and territory jurisdictions. We've talked about CDS, we've got single-use plastics, and now we're seeing what's happening in New South Wales with their act— Senator WHISH-WILSON: Potentially on packaging. That's a concern for you, as it was APCO as well. Ms Collier : Absolutely. Mr McGrath : You've heard, and you'll hear more from everyone today that has a multinational membership, that they have been very willing and probably proactive in sharing those global insights with government from way back when. That continues to be something that Australia is well placed to take advantage of, and we have seen others globally do this well and not. I think that's probably a really good thing in Australia's court at this point. We can pick what's worked and avoid what hasn't as we go ahead. It's a really good question as to whether we're going to see one soon, but I think we're so well placed because others have done it so poorly and some have done it really well. Senator WHISH-WILSON: If I get time, I'll come back to some questions on that issue in particular. Would you like to go next, Veronica? Ms Papacosta : What I would say, if I take the first part of the question, is to categorise the conversation we're having at the moment around different types of plastic. It's quite focused on the material. We are really keen to start having a conversation, before we go further, around that whole environment and functional versus unnecessary. We're very comfortable that, when there are options, we can move to better options. I've just come from an industry conference where a lot of the footprint was about packaging and how to improve it, and that's really positive—how to find better materials while maintaining the functionality. Senator WHISH-WILSON: We had some good submissions from compostable businesses. Ms Papacosta : That's right. It's a really positive movement. We would like to move the conversation with government around material at the moment to a whole environmental assessment. If we think there will be a scheme, we are supportive of a scheme. I echo the points that we want it to be national— Senator WHISH-WILSON: Are you confident? Ms Papacosta : I think there's definitely support from industry, which is what you're seeing on this very big panel. You're seeing support for that—there is an opportunity to be fulfilled, but we really need to make it practical, and we need to need to keep cost and the whole of environment in mind. Senator WHISH-WILSON: Do you feel the process has advanced? Are we getting close to a scheme that has a phase or staged process attached to it? Do you feel confident— Ms Papacosta : Potentially one that carves out fresh produce would be fantastic! Senator WHISH-WILSON: I thought you said you didn't— Ms Papacosta : I can't make any commitments, obviously, but depending on the timescale we use, to the points made earlier, there is a momentum there that we recognise. Senator WHISH-WILSON: Shannon, would you like to go next? Ms Doherty-Andall : Yes. You used the term 'negotiation' in your question. I wouldn't categorise our involvement as that. I think that we come and we provide— Senator WHISH-WILSON: I should have said 'consultation'; you're probably right. Ms Doherty-Andall : It's definitely consultation. We come and we provide insight from CDS and various other things. We haven't touched on design standards. I think a lot of our push to tell DCCEEW and the federal government that we do support a federal approach is that we are in a remote—I guess that's the word—part of the world. We're not next to Europe—we're a small market—and we've learned from things like plastic straws that a lot of those solutions and machines sit in Europe. Without an entire country approach—knowing that this market is a national market—it is very difficult to attract those kinds of solutions down here. We always say that we need there to be that full push to indicate to these machinery manufacturers and solutions manufacturers that we're a market that's worth being in. We are confident something will come through. My CEO participated in the ministerial roundtable recently. I think that that was very encouraging. There are a lot of people in the industry space that are really behind this. We just come to be constructive. We just want to ensure that it's as harmonised as possible and that people find this market attractive enough to bring those solutions. Senator WHISH-WILSON: Thank you. Damian, would you like to go next? Dr Semple : I'll take this one. In terms of Accord's engagement, we've got the government process. We have supported EPR, in the 2024 submission to the consultation. We've been engaging actively with other associations in support of government taking action. And we've been eagerly awaiting announcements from government in line with their original timelines. I suppose we've also, in this time of waiting for movement from government, been advising our members to engage constructively and effectively through the APCO process and to take actions in light of an anticipated future EPR scheme. So I echo what other people have said about strong support and encouragement to see other associations also getting behind government's proposed plans. We look forward to seeing that progress further. Senator WHISH-WILSON: I have some brief questions around the APCO process for the other witnesses as well. Kalina, are you involved in discussions with the government around a nationally harmonised EPR scheme? Ms Koloff : We have been consulted on the scheme. We would represent the views of small business in New South Wales, but I would signal that there is an opportunity for small business commissioners across Australia, who come together regularly, to be involved in any settings for a national approach. And I would welcome sponsoring that conversation in that forum. Senator WHISH-WILSON: Excellent; thank you. The next point comes to costs. To varying degrees, you've all talked about the potential costs of the scheme, especially if it's not managed in the way that you've outlined in your submissions. I'll start with the Food & Grocery Council. Do you accept that there are costs in not having an EPR scheme? Some of the witnesses appearing this afternoon—including the big players in the resource recovery industry, or the recycling sector; the environment groups; and consultants that have worked on this kind of thing—talk about the cost to ratepayers of contamination in the system, And local government associations have made this point, too. That cost is ultimately passed onto consumers—not to mention environmental costs and health costs. Do you accept, in terms of the cost paradigm, that there are other costs as well that we need to consider here? Secondly, do you have any modelling or any evidence around the potential costs of the scheme? Ms Collier : In terms of cost, when we think about the cost of fragmentation, we're already seeing this in national supply chains where, for example, you may have the east coast-west coast divide on single-use plastics compostability versus recyclability. Without that national consistency, we will see costs not only hitting the supermarket shelves but also, as you've noted, at councils, when we have fragmentation on collections. The other thing, thinking it through, is: when we have design standards on packaging, that's very, very important, but it's also important to have design standards across the value chain. We have more than 500 different councils in Australia, all with different collection schemes. We have MRFs, all with different processing. So, when we think about that cost of where we don't have standards across the value chain, that will be impacting. Your last question was? Senator WHISH-WILSON: Obviously, there are a number of costs to be factored in. It was just whether you had done any modelling or if there was anything you could provide to the committee in relation to costs. I appreciate the logic behind some of the concerns outlined in the submissions, but we have had some modelling done by other witnesses today that shows the cost would be very negligible for a nationally harmonised EPR scheme—and we're talking about costs to consumers or any increases in cost to small businesses or in packaging. Mr McGrath : We can come back to you. We're happy to take that on notice. Senator WHISH-WILSON: Yes, if you would. Mr McGrath : But you do have some high quality submitters this afternoon that have some good modelling, so we'd probably have a variation on that. We're happy to come back. As Sarah mentioned, the longer the lead time, the easier it is for industry, regardless of which one it is, to manage that likely cost impact on consumers. So that's what we'd just call out at the top. Senator WHISH-WILSON: Thank you. Veronica. Ms Papacosta : I think you make really good points around the different costs that you can weigh up. But, because we represent one particular sector, we look at the cost to that sector, and it's harder to take the cost mitigations in other parts of the economy into account, although we accept that they exist. The challenge in fresh produce is that our margins are really thin. The 'responsible person' definition that we called out is really important for us. We are price takers in a supply chain where 70 per cent of our produce goes into retail—to major supermarkets. They have very clear specifications on how they want things to be. So, when we talk about that overall cost position being negligible, it doesn't feel like it to us, and where this cost will be applied will really matter in terms of any modelling that we can do. Senator WHISH-WILSON: Thank you. Shannon. Ms Doherty-Andall : I'd echo Sarah's comments. Again, we can remind, as to CDS, that we see the fragmentation costs. We see the costs of non-harmonisation that really don't improve the system at all. It's simply issues with administration. We consider a federal EPR to be inevitable. But, again echoing Sarah's comments, particularly with food-grade material: food-grade material obviously needs to be at the highest specifications. It also works the best in machines. So it's a hot commodity. Many people do want to use it. And I completely understand that. So, when we think about shared responsibility across the value chain, we really need to see, at the collection level and at the MRF level, a consistent standard that produces food-grade material as well as it can, for reintegration back into our products and into the circular economy, because, if the food-grade material is there and it's domestically available, it will be used. We understand a federal EPR will have ecomodulation. There will need to be price settings to encourage that kind of material, and we're completely comfortable with that. But we need to see that recognition of the need for that high quality of product through the entire chain. Senator WHISH-WILSON: Just as a matter of interest, the Greens did have a bill in 2012-13 to have a national container deposit scheme, which got defeated. Ms Doherty-Andall : I've been reminded— Senator WHISH-WILSON: I'm sure you wish you had one now. But how would it work, do you think, with a broader EPR scheme? Do you think your state based schemes would sit side by side with CDS, or do you see this eventually being folded into an EPR or us having a separate national scheme? That's just as a matter of interest. Ms Doherty-Andall : It really depends on what the federal EPR design is. You have systems where it is one organisation that contracts the machinery, contracts the transport and manages all the materials, or you have ones that sit more as a clearing house and then PROs sit under it—maybe it'd be batteries, or mattresses, or us. And there are two different ways to integrate into a federal EPR, based on how that structure ends up playing out. It'll be hard to unwind the legislation we work under; that will take time. We recognise the fact that, ultimately, we may fold into a federal EPR. But, because of the material we're creating—and we have such a good clean stream of source separated material—we would be cautious about going into that scheme too fast and possibly unwinding some of the gains we've made. Senator WHISH-WILSON: It'll be interesting to see how that plays out. Damian, do you or Jennifer want to comment on the cost. Your submission, especially, made a lot of acute points about the cost of living and the timing of a bill impacting the cost of living. I'd be very interested in your views on ACOR and APCO's modelling on negligible costs to a scheme. Mr Mitsch : The reality is that, when these types of schemes are introduced, if they're done quickly and without companies having the opportunity to adjust to these supply lines—and these are global supply lines, so it's not just about what's happening locally; it's also about what's happening internationally—then the cost of packaging and the like increases exponentially, relative to a scheme that is done over time where the industry can adjust within its ordinary limits. I would also flag that we don't see a lot of cost offset in this shift. We see a fairly material opportunity cost that we're not currently capturing. Most of our members are already using recyclable materials in packaging, and a lot of those are going into kerbside collections but we know that they're not getting picked up by recyclers, often because the size of the components—the difficulty in sorting small-format cosmetics, in particular, is they will often have multiple components. Some might be aluminium. Some might be recyclable plastics. There might be a spring and a pump. It is all very difficult to deconstruct and recycle under the current models, despite the fact that everything that's included is recyclable today. There are some opportunity costs that we're not capturing. The timing and the scalability are going to make a huge difference to how we adjust. If we can get scale, if we can get consumer mindset right and if we can get supply lines right, I expect the cost to consumers is not going to be massive and is going to be within acceptable limits. If we get it wrong, the reality is it will drive a significant cost-of-living issue. Senator WHISH-WILSON: Kalina, would you like to comment on the question on costs? Ms Koloff : Just two quick comments from my perspective. One is around the potential impact of pass-through costs—so small business being at the end of the supply chain, and additional costs for the supply or recyclability of particular goods and services, particularly during the scale-up phase of any new system. As the system becomes more mature and more suppliers are in the market, those costs per unit are likely to decrease. But in that scale-up phase, in the initial bid, I suspect there will be a disproportionate impact on small business. The second thing with respect to costs that I don't think we've discussed yet is that the additional administrative burden for reporting, particularly for small business, may also have a cost attached. Whether that's additional administrative people hours for the reporting or whether it's the purchase of new reporting systems, and those sorts of issues, I think it should be considered as part of the cost impact. Senator WHISH-WILSON: We had APCO present earlier; I'm sure you heard the evidence and you've read the submissions and you all know each other very well—you may even be members of APCO. To the AFGC: do you support their suggested pathway forward around ecomodulated fees and other parts of their proposition? Ms Collier : In terms of ecomodulated fees, we would be looking to see what's happening overseas as a learning point. They've looked at those markets and jurisdictions to get the learnings. In terms of having an administrator, we support that 100 per cent. As to how that looks, we would need to get more detail around that. I think that it's important that it is industry led in providing support into what those product stewardship schemes look like. You can see what's happening with, for example, SPSA. Senator WHISH-WILSON: Do you accept the view that a fair bit of work has been done already in terms of preparing for an EPR scheme? They list the outcomes they believe they've achieved in recent years. I suppose my question goes to timing. How quickly can we get this scheme up and running given what's been done? Do you accept that there's been work done already that would help more quickly transition us to at least begin an EPR scheme? Ms Collier : I think there's been a lot of work done by a number of parties involved in the value chain. You can see what we've been doing and what APCO's been doing. In terms of timing for transition, I think what is involved and what the regulatory setting would be, as well as targets et cetera, would need to be clearly set out. But we would need to look at a phased approach for EPR. Otherwise we will have an issue where we don't have the infrastructure and current capacity that's fit for purpose for some of the targets that have been set out. Senator WHISH-WILSON: My next and last question was whether you supported a phased approach, and, yes, you do. Mr McGrath : Just to pick up on that, I think they dropped your name off the credit list on the work done to date on this. We would probably point to the foundational work of the National Plastic Recycling Scheme. The NPRS is under Soft Plastics Stewardship. A phased approach—absolutely. I think it goes back to what it is that Australia's got in its corner right now, which is global mistakes and global best practice. Picking those up and running with them would be a really good way of going, and we'd be happy to play a role there. Senator WHISH-WILSON: Do you feel like at least the announcement of a phased approach about getting things up and running quickly would give the public confidence that especially the packaging industry is on board with solving a lot of the problems that we've had over the years? Mr McGrath : I absolutely think so. Both industry and consumers are indicating they are ready to go on this one. Our industry would hate to start again, as opposed to what we've done in the past arguably 10 years, if we're calling it conservatively— Senator WHISH-WILSON: Let's go 20. I'm on board. Mr McGrath : Why not? It was 2007. Senator WHISH-WILSON: It's 20 years for me. Mr McGrath : There's a lot that's been done. We don't need to start again. Senator WHISH-WILSON: Alright. Veronica. Ms Papacosta : While acknowledging all the work that's been done, in particular the APCO work that you've pointed out, and appreciating the work that's been done, there are real questions about whether it's been ground-truthed. We can build a system that's great to take learnings, but then you need to ground that system into our environment, the current timing, the industry that we have and those complex supply chains. I can't comment yet on whether I think it's fit for purpose for what we need. I think it needs some more work to be ground-truthed. I think a phased approach makes a lot of sense. We could touch some areas; let it settle; understand what the unintended consequences are, whether they be cost or other complexities; and then we take it from there. I think a phased approach is probably the only way to approach it. Like I said, it's really easy to build systems on paper, but, when you actually activate them and get them on the ground, it can sometimes bring up consequences that you need to monitor. Senator WHISH-WILSON: Veronica, do you support what the Food & Grocery Council said earlier about the need to get on and at least legislate the beginning of this because of the uncertainty it's causing to business now? Ms Papacosta : But a bit of the detail has to be worked through. You're not getting a 'yes' shout. A lot of the detail has to be worked out. Senator WHISH-WILSON: Okay. What are your views on this, Shannon? Ms Doherty-Andall : We've worked with APCO a lot. We have great affinity for them. It's been many years. We have not personally seen the ecomodulation methodology that they're going to be putting forth, so it's hard to comment on how well it hits the mark. We have great confidence in them, but, just like scheme coordinators for CDS and like when APCO started as the co-regulatory body, we would expect there to be a tender to see what would be the best group to do this national EPR scheme. It's a lot of detail and it's a lot of work, and, as everybody knows, it's not simple. We would just expect that process to go how any process would go through the government when something like this goes up. Senator WHISH-WILSON: And do you agree that not having legislation on this yet is causing uncertainty for business? Ms Doherty-Andall : One thousand per cent, yes, but understanding that there does need to be a phased approach. Packaging reform has so many different aspects, and to flash them all on a business at the same time would be quite difficult. Senator WHISH-WILSON: Indeed. Jennifer or Damian, would you like to comment? Mr Mitsch : I would characterise the court's support for APCO as strong but not unqualified. Senator WHISH-WILSON: Very sensible. Mr Mitsch : It would be fair to say that this is going to be a critically important shift in policy, and the risk when you go down these paths is that you build bureaucracies and overshoot the mark significantly. We would hate to see that happen, but so far we are very much backing APCO and the work that we've done. Senator WHISH-WILSON: Do you have any views on a phased or a staged process? Mr Mitsch : It absolutely needs to be phased. To be really honest, I don't know if it's phasing is the right word for it. Senator WHISH-WILSON: Staged? Mr Mitsch : It would be fair to say that we are going to continue to need to move forward on packaging and recyclability and circular economy, and that's probably never going to end. We need to keep taking steps in that direction for as long as it takes, probably until time ends. If we want to call that phasing, yes, that's what we would support. Senator WHISH-WILSON: Do you also agree that not legislating this is causing uncertainty for business, which is creating a whole set of its own problems? Mr Mitsch : Absolutely. To qualify it, we need fast. Well, we need good more than we need fast, but sooner rather than later is important. Senator WHISH-WILSON: Kalina? Ms Koloff : To reiterate, those comments around timing and ground-truthing of any proposed legislation or thresholds, and ensuring that how it rolls out for small business, would be of interest to our stakeholders, as would be the differences in how regulation affects small business rather than bigger, more industrial-style stakeholders. I would also want strong support for a phased implementation, and consideration of a tiered approach depending on the size and scope and touch point of the particular business that is to be regulated. Senator WHISH-WILSON: I have one last question, but if you want to come back to me— CHAIR: No, if you've got one last question, why don't you ask it? Senator WHISH-WILSON: It was just specifically to Veronica. There has recently been a Senate inquiry that has looked at the impacts of microplastics on health. It has obviously become a much bigger issue since I started work on this many years ago. You talk about balancing the environmental costs with food waste versus packaging waste; where do the human health impacts of plastic with food now come into your thinking? You may well have submitted to the inquiry—I wasn't involved in it. Ms Papacosta : I'm relatively new in this role, but you might remember I was in the seafood industry— Senator WHISH-WILSON: That's right, yes. Ms Papacosta : engaged on country-of-origin labelling. I'm really close to microplastics from a marine environment space. Senator WHISH-WILSON: And that's where I started my— Ms Papacosta : That's right. Obviously, in a marine environment there are different impacts of microplastics with seafood and consumption. In the fresh produce lines, we note there are a variety of different environmental impacts. I think they all have to be weighted and they all have to be weighed. In terms of consumption, I think consumers are becoming clearer that there is a role for the food-waste minimisation impacts that packaging has. In terms of consumption, I haven't seen any data on plastics in fresh produce in the same way that I'm familiar with it with seafood. Senator WHISH-WILSON: I'd refer you to the report that's just been released. Thank you. CHAIR: Senator Walker. Senator WALKER: I had a look across your submissions, and quite a few of them have raised duplication. I'm wondering if anyone has any contributions to make on what sorts of risks they think there are there. Ms Papacosta : I think that, for us, it was in reference to a national scheme versus a state-by-state scheme. There are so many instances in fresh produce where we—when you're moving fruits and vegetables across a border, you are navigating different biosecurity schemes, sometimes different labelling schemes and supply chain impacts. It is incredibly difficult, and the cumulative impact of that is difficult. In the situation we have now, I think what most of us are calling out is, when we are approaching a new scheme, it's critically important that it's nationally consistent. To exacerbate and continue to start a new scheme but not learn from any of those state based challenges would be really ineffective, and we're just not supportive of it. To Damien's point, we would rather have a good scheme than a quick scheme, to avoid that in particular. Ms Doherty-Andall : When we think about duplication, we think about duplicating the data and cost requirements within container deposit. There is a way that the data from container deposit schemes can feed up into a national EPR and prevent our companies from having to double report that information. Building on what you've just said, when we look at a specific piece of CDS, which is export—when something is paid for in one state but then gets moved, usually by a distributor or retailer, into another—there are all sorts of processes and differing processes between the states that are undertaken. It's oftentimes quite complex and hard to navigate. That's another big positive for national EPS—if everything is being paid up into one scheme, then you will not have to deal with those cross-border issues of having to, say, take money back from a New South Wales scheme and give it to a South Australia scheme. Mr Mitsch : To add, we seem to forget that regulatory complexity drives a massive cost at the company end. We need regulatory people. There are the risks associated with noncompliance. It drives a whole audit system. If we can get to the point where a national scheme is clear and straightforward so that you don't need unnecessary complexity and unnecessary regulatory costs as a result, that would be great. Ms Collier : On the duplication, for us, I think it's more around making sure that there is that national harmonisation when we think about national supply chains and the impact on them. When we talk about some of the reporting that's already happening with our members and with APCO members who would be reporting into systems, their systems are set up within their businesses to report that way, so I think that idea of looking at leveraging what is already there in terms of system reporting so that data sets can be broadened to cover EPR reporting as well is good. Ms Koloff : New South Wales has a broader legislative framework for waste and product stewardship. There's the Waste Avoidance and Resource Recovery Act 2001 and also the Product Lifestyle Responsibility Act 2025. They both provide powers to regulate products and packaging across their life cycle. So, if there is to be a national framework, then how that relates to, supersedes or otherwise existing legislation at the state level will be critical. Senator WALKER: For the for the New South Wales Small Business Commissioner. Can you talk us through what some of the compliance obligations are going to mean for small business. If you've got any contributions as well, I know you would have a number of small businesses— Ms Koloff : For compliance, the devil is going to be in the detail. There isn't sufficient detail in the materials as presented. From where small business ends at the bottom of the supply chain to how it is regulated right at the top of the tree is going to be really important. How regulation intersects with goods or services that might be imported will be important. How small business as a discrete stakeholder cohort is consulted as the detailed regulation or legislation is further developed—I think somebody made a comment earlier about running to ground the impacts as the reform rolls through—will be very important. I would encourage, or campaign for, additional consultation with small business, noting that there are a number of small businesses, from both the retail side but also things like construction and other sorts of contractors, that may also be impacted here. Senator WALKER: Is there anything else from anyone? Mr McGrath : For us, it's a supply chain piece. They're often serving the bigger members that we represent—and further up the supply chain. I think the commission has covered it well. Senator WALKER: I have one last question for the Fresh Produce Alliance. In your submission, you note packaging's role in food safety, shelf life and the reduction of food waste. How should a scheme weigh packaging reduction against food waste, and do you think that that balance is reflected in the bill? Ms Papacosta : To answer the second part first, no, not at this point—so we think it needs to be weighed carefully. My favourite example is a cucumber example. For a continental cucumber wrapped in plastic, the emission cost of wasting the cucumber is worth 93 wrappers. The research is really clear. Food waste can have a very high toll—a high emissions cost. From an industry perspective, the use of packaging has evolved over a serious amount of time. We want to be able to take the time to assess how we move to packaging options. We're waiting for better plastic materials or other practical options to bring into our supply chain to try and minimise food waste and keep that focus. We think, to the Food & Grocery Council's earlier point, the community is there. They're really starting to look at this and be much more literate in the landscape and in their purchasing decisions. But they are also impacted by food waste. Food waste impacts the price of food. We're under a lot of pressure at the moment on the price of food, from cost of production and into the supermarket chains. We are navigating the price of food on a regular basis. We want to weigh up all of these different areas. We understand that it's of particular concern for fresh produce. It definitely needs to be taken into account. Ms Collier : Can I make a point on the impacts on food waste and the role that packaging plays? It's a really important weighting that we need to think about in terms of, yes, national consistency—national standards—across the value chain but also in terms of looking at those life cycle impacts and those unintended consequences. That can be food waste. It can also be that, for some packaging—if you think about making packaging changes—there are some limitations depending on what the actual product is. It's about making sure that that is built into the bill. I would also note that food and grocery manufacturers have put an enormous amount of time, energy and investment into innovation of packaging format improvements, including things like lightweighting, reducing size and putting in more recycled content. But, as I mentioned, there are limitations, and I think that needs to be built into the process when we're talking about targets as well. Ms Papacosta : The producers and the growers aren't always the decision-makers. There are other people in the supply chain who make decisions around how they want to receive product and what they'll pay for it. This needs to be taken into account. Senator WALKER: Thank you. CHAIR: Thank you for your evidence today. I appreciate all of you giving evidence—and in the format we've done this in. Senator Whish-Wilson interjecting— CHAIR: I was worried, as you were, Senator Whish-Wilson, about how this would work, but it speaks to the cooperation and the quality of the witnesses that it has worked fine. We thank you for your evidence today. If you've taken any questions on notice, please provide your answers to the secretariat by the due date. I'm not sure you have taken any questions on notice, but, if there is any information that flows from today that you'd like to share, please feel free to supplement submissions or add it by the relevant due date. You go with the committee's thanks..