Eco-contribution measure cannot be delayed - Pullicino

The government remained ready for further consultations on the eco-contribution but it could not postpone the introduction of this scheme, Environment and Rural Affairs Minister George Pullicino told parliament yesterday.

"We cannot wait any longer and we have to start implementing our plans to improve waste management in the interests of the people's health," the minister said at the opening of the debate on the introduction of an eco-contribution.

But Opposition finance spokesman Charles Mangion, who spoke immediately afterwards, said this was a new tax "pure and simple" as it did nothing to improve the environment. (See separate report).

Opening the debate, Mr Pullicino said the government was committed to solving the waste management problem. This was a problem which had been around for a long time and there were times when the country did nothing about it. On other occasions the government recognised the problem and started drawing up a multi-phased plan covering a number of years.

Clearly much had to be done, by everyone, to solve the waste management problem. This was not solely a government problem, but a problem which involved everyone.

Among the measures taken over the past months was that building debris started being dumped at quarries instead of rubbish dumps - with some 500 trucks dumping material every day.

A number of these former environmental scars had since been rehabilitated.

The next step had been the closure of the Maghtab and Qortin dumps, which had been replaced by a facility that met international standards and which protected the environment from contamination.

But many more actions needed to be taken. For a start, the former dumps at Maghtab, Qortin and Wied Fulija needed to be rehabilitated after they were made safe from gas emissions such as dioxins. Some 600 wells had to be sunk at Maghtab alone to remove and burn gases.

Improvements needed to be made to the Sant'Antnin waste recycling plant so that a higher percentage of waste could be treated there.

In order to encourage waste separation, the number of bring-in sites needed to be raised from the current 50 to 300 by next year.

Then waste separation should start in homes. The government expected to receive a report shortly on how this process, divided over several phases, would take place. But one needed to be realistic. In Germany, where waste separation was most successful, only 40 per cent of waste was actually separated.

There was also need for civil amenity sites where people such as tradesmen could dump their debris.

Mr Pullicino said that capital spending on these facilities would be no less than €32 million in three years, of which the EU would contribute €24 million. But the balance had to be met by the Maltese, along with recurrent expenditure, which even now reached Lm4 million annually. All had to understand that a modern waste management system cost money.

In order to be able to sustain its ambitious waste management problem the government had taken the difficult decision to introduce a revenue collection system whose purpose was not only to partly finance waste collection but also to encourage consumers to use products which caused less harm to the environment.

The system the government was introducing was a first step for the adoption of the polluter pays principle and the government was ready to hear suggestions to further improve the system. But it was impossible to postpone the introduction of the eco-contribution because the need to improve waste management was urgent.

Mr Pullicino said consultation about the new system had taken place with the Federation of Industry, the Chamber of Commerce and the Malta Chamber of Small and Medium Enterprises, GRTU, and this would continue. In the case of the FOI, talks with the bottlers started even before the budget, the aim being for the bottlers to introduce a return system, but the bottlers had not been able to agree among themselves.

The government had agreed to set up a commission to further discuss the details of the eco-contribution and a report would be submitted by October.

Mr Pullicino said the government could have taken the easy way out and introduced a tax calculated on the basis of projected costs divided by the number of households. But instead, for social considerations, the system being introduced was based on consumption.

The eco-contribution, he stressed, would not be paid by retailers but by producers or importers when a product was put on the market.

This was not a sales tax. One could not be charged, say, 1c every time one bought a soft drink in a glass bottle. Such glass bottles were normally used 10 times. The 1c would apply per bottle put in the waste cycle, and therefore the contribution would actually work out at 1 mil for that bottle, once it was used 10 times.

Mr Pullicino said there was no denying that the government needed revenue to pay for the waste management system, but it also wanted, through the eco-contribution, to bring about a drop in waste generation.

The government was being careful not to increase bureaucracy. The contribution would be calculated on the basis of a return submitted by producers or importers along with their VAT return.

Discussing the rates, Mr Pullicino said the government had stuck to what it stated in the budget - bottles and cans would have a contribution rate of 1c, wine bottles, 5c. The contribution for toiletries and cosmetic products excluded the most common items.

The rate for batteries and car oil would be 10c, oil filters, 5c, white goods such as air conditioners and water heaters, Lm3, air conditioners Lm12, TVs and monitors between Lm5 and Lm15. Such rates were set after consideration of the social aspect and waste disposal costs. For example, the costs to collect a TV set, separate its components and go through the system of disposing of it was much more than the rate that was being introduced.

Mr Pullicino emphasised that these measures were being introduced to safeguard the people's health and safety, and not to meet EU requirements.

He said that following complaints from the sector of SMEs, the bill would be amended so that those guilty of violating the eco-contribution law would be liable for the same penalties as the VAT Act and there would be no jail term.

The eco-contribution would not be charged on products for export, but only on those disposed of locally.

He noted that a complaint had been made that the same rate would be charged for eco-friendly and non eco-friendly fridges. But one had to have a system which was not cumbersome to operate, or had loopholes that were so big, even he could go through them.

In this case, HS codes were not different for eco-friendly and non eco-friendly fridges. And it made no difference for the cost of waste disposal whether a fridge was eco-friendly or not. A fridge was eco-friendly only in the way it operated.

Mr Pullicino said he wanted to reiterate that the government wanted to encourage the private sector to itself introduce return and recycle systems. Where such systems were introduced, those involved could be excluded partly or fully from the eco-contribution requirement.

Indeed, the bill also laid down that five per cent of revenue from the eco-contribution would go towards producers and importers as a grant to encourage them to introduce return systems.

It was calculated that the impact of the eco-contribution on the retail price index would, at the maximum, only reach 0.84 per cent. Clearly, the government was not abdicating its social responsibilities. This system was very different from the taxation systems introduced by the Labour government. This was not a tax on every door and revenue would be far lower than actual costs.

Concluding, Mr Pullicino again said it was everybody's responsibility to contribute towards a solution to the waste disposal problem, which also involved shouldering part of the burden. Unless a waste management system could be sustainable, one could only dream of having proper, modern, waste disposal systems.