John Key shot down Nick Smith's idea of a plastic bag tax, much to the delight of the citizens of Palmerston North. But should he have given it a bit more thought?

Brian Edwards is right. New Zealand's press is having a prolonged love-in with the prime minister.

My favourite recent headline was, "Baby born with help of John Key." I fully expected to read that Key had snipped the umbilical cord himself. We've had "John Key gives own car to community volunteers" then "Key's old car goes on crime patrol", no doubt soon to be followed by, "John Key's car foils bank robbers".

I also quite liked, "New super mayor should have 'John Key-like experience'".

There was the story that revealed that Key had made a fortune for the ANZ-National bank by simply talking to the Wall Street Journal: "Analysis: How John Key secured a US$1 bln loan for New Zealand with a newspaper interview," blared that headline. (Do you think they added the word "Analysis" to make it seem a little less fawning? Good commentary from David Cohen here.)

Now I read in the Manawatu Standard that: "Palmerston North ratepayers will be relieved Prime Minister John Key yesterday ruled out a compulsory charge of at least 5 cents on plastic shopping bags."

Palmerston North residents are made by their local council to put their recycling into plastic bags. The newspaper calculates that ratepayers would have to pay a full $10.40 more a year to recycle if an idea being floated by Nick Smith of looking into compulsory plastic bag charges had gone ahead. John Key told Smith to shut up.

That was $10.40 a year. Stand by for reports of relieved Palmerston North ratepayers partying in the streets.

With the greatest respect to John Key's powers of reason – and his ability to deliver a baby, conjure billions by sweet-talking reporters, and capture crooks singlehandedly – I feel obliged to point out: plastic bag taxes change behaviour much faster than the industry-led moves currently taking place.

I live in Denmark, a delightfully quirky nation that delights in taxing the last gasp out of everything. One friend hooked on Coke Zero zips to Sweden for crates of fizzy drinks to avoid the high Danish sugar tax.

A plastic bag at a Danish supermarket costs – prepare for outrage in the leafy boroughs of Palmerston North – more than NZ$1.00. Retailers pay a compulsory charge on plastic bags, then decide how much to hit up consumers. This being Denmark, many of them charge a lot.

As a consumer, I carry a stash of plastic bags. I have a big bag especially for Ikea goodies, and a highly valuable supply of plastic at home.

According to plastic bag tax advocates, Denmark's plastic bag tax has resulted in paper and plastic bag use dropping 66 percent.

A plastic bag tax seems rational, then. Open and shut.

Unfortunately, when you look into it, things unravel.

First of all, changing public behaviour is an inexact science. In Denmark, plastic and glass bottles are even more valuable than plastic bags, because you can exchange your used fizzy drinks or beer stubbies for cold, hard cash (technically the return of a "deposit" you pay when you purchase a bottle). People line up with bags of bottles, exchange their bottles for cash, and then chuck out the bags that carried them.

If even Denmark's steep $1 charge fails to eliminate a lot of unnecessary plastic bags, then clearly a ridiculously high tax is required to make a real difference: one that only the most trenchant environmentalist would promote.

And, according to the plastic bag industry, retailers and advisors to the UK government, such taxes can increase waste, reduce employment and hike bureaucracy. There are claims that the taxes on supermarket plastic bags in Ireland have driven people to use more rubbish bin-liners and other, equally environmentally-unfriendly, bags.

No doubt, the concerns of plastic bag makers did not feature when John Key shot down his environment minister's idea. He did so because any new tax in these tough financial times is not a winner, even one that costs just $40 million. A charge that will line the pockets of New Zealand's unpopular supermarket duopoly is even less likely to excite Palmerston North's fickle rate-payers.

Those who advocate a plastic bag tax as a response to global warming are kidding themselves. A minuscule proportion of crude oil consumption is used to create New Zealand's plastic bags. Minor decisions like using a few less plastic bags are basically inconsequential. The much more important issue for governments is speeding up research and development into green energy alternatives – something that is going at a snail's pace.

In my opinion, the Labour-led government – and John Key – have not so much "tossed in the towel" on plastic bags, as Claire Browning wrote in a great piece here on Pundit, as they have put off dealing with a problem that is being tackled – albeit pretty slowly – by the market.

The voluntary, industry-led approach to reducing plastic bag consumption is making steady progress, and without any of the hassle that comes with a plastic bag tax.

Surely it's only a matter of time before New Zealanders are asked to pay a dollar every time they want to use a plastic bag. This will produce outrage in Palmerston North... but the rest of New Zealand's consumers will adapt.

Which returns us to where we started. It turns out that crime-busting, billion dollar-raising, birth delivering John Key was probably right on this one, too.

Comments (6)

by Andrew Geddis on April 14, 2009
Andrew Geddis

David,

Why faff around with a tax? South Australia cuts right to the heart of the matter:

"Under the Plastic Shopping Bags (Waste Avoidance) Act all retailers, including supermarkets, will face on-the-spot fines for distributing single-use, light-weight polyethylene shopping bags."

http://www.gmagazine.com.au/news/427/south-australia-bans-plastic-shopping-bags

Alternatively, local communities could take the lead on this, like Coles Bay in Tasmania has;

http://plasticshoppingbagfree.org.nz/global-news/coles-bay-tasmania

Something resort towns like Rotorua/Queenstown/etc could well consider - imagine the marketing opportunities in terms of eco-awareness.

by Don Donovan on April 14, 2009
Don Donovan

Why not give plastic bags the same treatment as cigarette packs? By law, they must carry such messages as 'Plastic Bags give you cancer.', or 'Plastic Bags make you impotent.', or, better, 'The person carrying this plastic bag is an eco-unfriendly arsehole!'

by Claire Browning on April 14, 2009
Claire Browning

This is worth a look too: http://savetheplasticbag.com/ReadContent609.aspx#Blog611

Not that I'm at all anxious to "save the plastic bag" ... but it does at least a superficially plausible job of debunking some myths, eg: effect of plastic bags (as opposed to other forms of plastic) on the marine environment; impact of paper bags vs plastic on CO2 emissions; bureaucracy associated with trying to enforce plastic bag taxes and bans. It refers to what are clearly some genuine sources, like this report done for the Scottish Government (scroll down to conclusions at p 48): http://www.scotland.gov.uk/Resource/Doc/57346/0016899.pdf

John Key's instincts were sound. If only one could feel confident that he was driven by a robust grasp of the detail, as opposed to backing away from doing something unpopular ... or maybe I expect too much. If instinct simply tells him "this is a stupid idea", does it matter why, and does he need to articulate it? Am I the only person who wishes that he would?

by Gwilym on April 15, 2009
Gwilym

Cripes, you guys sure now how to obfuscate a topic by talking circles around it. Surely this conversation can be summarized by something like the following:

  •  Less plastic in the environment is good

  • Creating a business environment where the consumer (not the ratepayer) bears the cost of a products post consumer life is preferred

  • Nick Smith is right when he said "free things tend to be over used"

  • Supermarkets giving away bin liners disguised as bin liners is competitively unfair to bin liner manufacturers

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