Labor quietly shelves promise to mandate more recycled material in packaging
Posted Tue 8 Sep 2026 at 5:01amTue 8 Sep 2026 at 5:01amTue 8 Sep 2026 at 5:01am
In short:
The federal government promised to introduce a mandatory scheme that would see minimum rates of recycled plastics being used in packaging back in 2023.
The government cited cost-of-living pressures as the main reason it abandoned the scheme.
What’s next?
The Greens have promised to campaign with conservation and sustainability groups to try to put pressure on the government to reverse its decision.
The federal government has quietly shelved a 2023 promise to implement national packaging standards aimed at curbing plastic waste, citing concern for increasing cost of living pressures.
In an email to stakeholders, the Department of Climate Change, Energy, the Environment and Water last week said the mandatory standards would not go ahead in this term of government.
Instead, it will work with the states and territories on “opportunities to improve” packaging standards.
“The Minister is looking at the pursuit of reforms in a way that balances environmental outcomes with the broader needs of the economy, with the Government looking closely at its policies to ensure it does not exacerbate cost of living pressures,” the email said.
“The Minister has communicated that a new Commonwealth scheme for packaging will not be introduced in this term of government and is now focused on working with state and territory governments on opportunities to improve Australia’s packaging regulations and policies in the nearer term.”
Federal Environment Minister Murray Watt told the ABC in a statement that the Albanese government remains committed to “delivering stronger environmental outcomes”.
“Our immediate focus is to work with state and territory governments to reduce waste by harmonising packaging and recycling policy in Australia,” he said.
“By working together across jurisdictions, we can reduce waste while also reducing inconsistencies for businesses, and minimise cost impacts on consumers.“
State and territory environment ministers struck a deal in June 2023 with then federal environment minister, Tanya Plibersek, to implement packaging standards, including minimum targets for recycled products in packaging and limiting the use of harmful chemicals in food wrappers.
A press release issued at the time said it was “clear that voluntary targets and design guidelines aren’t working”.
The minimum standards for the Commonwealth packaging scheme had not been finalised prior to the plan being scrapped.
But national targets set in 2018 included having an average of 50 per cent of recycled content in packaging.
Only 28 per cent of rigid plastics and 9 per cent of soft plastics were reused, recycled or reclaimed in the most recent Australian Packaging Consumption and Recovery data, from 2023-24.
Recycling industry ‘devastated’ by broken promise
Many in the recycling and sustainability industries say they were blindsided by the decision, which followed years of consultations and sustained pressure by the states and territories.
Managing director of sustainability and waste management consulting firm MRA Consulting, Mike Ritchie, said the national standards had been agreed to multiple times by different levels of governments.
“[We’ve] gone down different paths of intergovernmental agreements and looking at how to do it,” he said.
“It was a great surprise that Murray Watt then just said, ‘too hard, we’re not doing it in this term of government’.“
Mr Ritchie said failing to have national standards could mean different packaging and labelling rules in all eight states and territories.
CEO of the Australian Council of Recycling, Suzanne Toumbourou, said a lack of certainty around packaging reforms left Australian manufacturers at risk of closure.
“Australian plastic recycling facilities are operating at around half their available capacity on average,” Ms Toumbourou said.
“Without those obligations, Australian recyclers are left competing on a vastly uneven playing field with cheap imported plastic.”
Last week one of Australia’s biggest recycling businesses, Recycling Plastics Australia, went into voluntary administration, leaving around 60 jobs up in the air.
The company received $20 million in federal funding in 2024 to accelerate the recycling of soft plastics, under the Recycling Modernisation Fund.
“It’s devastating to see the government break its promise at precisely the point when investment, jobs and Australia’s plastic recycling capability are most exposed.“
“Without packaging reform, we will continue throwing away plastic packaging while importing more of it, even as the domestic recycling capacity Australia has worked so hard to build begins to shrink,” Ms Toumbourou said.
Independent MP Kate Chaney said the government’s decision to walk away from the proposed reform was “deeply disappointing”.
“Industry wants certainty, communities want the pollution to stop, and both point to the same reform. This is a rare moment of alignment, and the government is letting it pass.”
Fellow independent MP Sophie Scamps said the federal government has “broken another promise” by backing down on the proposed reforms.
“The government’s decision is nonsensical. With both industry and environmental groups on board this would have been an easy win.
“Instead they’re jumping at shadows,” Dr Scamps said.
Cost of living argument questioned
Mr Ritchie said the federal government has not conducted a regulatory impact statement on a proposed Commonwealth packaging scheme.
A regulatory impact statement looks at the economic, social and environmental costs of proposed government regulation.
“[The government] can make no prognostications, no arguments, no pros and cons of packaging reform without having done it,” he said.
Mr Ritchie said modelling he had done with the Australian Packaging Covenant Organisation found mandatory recycling standards would cost around 0.3 cents per packaging item.
“So in a weekly shop of say 60 packaging items — your beetroot, your chips, your [chocolate] bars, your drink bottles — that weekly shop might go up by 20 cents.“
Minister Watt’s office did not respond to questions from the ABC about what economic modelling the government had undertaken to determine cost of living pressures would increase under a mandatory packaging scheme.
Greens spokesperson for waste and the circular economy, Steph Hodgins-May, said any costs associated with the scheme may be offset by the environmental benefits.
“We’re also hearing that there would be significant cost savings to be made through council rates because there would significantly less waste to be collected,” Senator Hodgins-May said.
Independent MP Kate Chaney said kerbside collection and council clean-ups cost ratepayers between $70 and $95 a year.
“The government points to cost of living, but the numbers don’t support that,” Ms Chaney said.
Senator Hodgins-May said the government has failed to provide evidence that cost is a barrier to implementing mandatory standards.
“Until they do, we think that there is no excuse to continue letting these corporations pollute and plunder and making that responsibility fall onto consumers.”
Senator Hodgins-May pointed to public support to act on plastics pollution.
Polling from the Australian Marine Conservation Society released in June this year found that nine in ten people surveyed want stronger action to curb single-use plastics, and more than six in ten (63 per cent) want mandatory packaging laws to replace voluntary targets.
“We [Australia] are doing appallingly comparatively to other OECD nations. We are one of the biggest polluters and one of biggest creators of waste.“
“It’s one of the many areas where the public are demanding action and they are scratching their heads saying, why isn’t the government acting?” she said.
Senator Hodgins-May said the Greens will be campaigning alongside conservation and sustainability groups to get the government to reverse its decision.
“We’re at a time now, I think, where all of the ducks are lined up. We’ve even got industry and the Food and Grocery Council and the like lining up with everyday people saying, now’s the time to act.”