Potential e-waste levy could hit SMEs

May 25, 2009

Prices of computers and other hardware products may soon be hit with a new recycling levy in an attempt to curb the growing amount of electronic waste, prompting warnings from some sectors of the electronics industry, particularly resellers of electronic equipment, that IT prices may increase to cover the cost of new recycling programs.

The Government is planning to introduce details of an electronic waste scheme by November. The Environment Protection and Heritage Council, chaired by Environment Minister Peter Garret, has organised a study regarding the scheme that will be released in July.

The study is likely to recommend that the Government should introduce a levy for recycling hardware, in a bid to stop the practice of shipping waste overseas to have it disassembled.

Earlier this year four ships containing computers and electronic materials were stopped on their way to Asia, and forced to turn back to Australia.

But the $100 billion IT industry is likely to be upset about any changes, with many groups pushing for voluntary codes of practice rather than established taxes.

Computer manufacturers such as Apple, IBM, Dell and Hewlett-Packard have voluntarily joined a recycling program, organised by Sustainability Victoria known as Byte-Back, but they are only some of less than a dozen companies to do so.

Many companies are concerned that any new charges would force them to raise prices on electronic hardware products.

But Josh Millen, Australian Information Industry Association social responsibility manager, says the move is a good one and is needed for the industry.

“We’ve been lobbying for over five years for schemes the government could run, and I guess there’s a view that no matter what scheme is run, it that it needs to be supported by strong legislation. The Government is now doing that,” he says.

Millen also says that any cost handed onto consumers by the levy would not drastically increase the general cost of hardware.

“No fee would be substantial, and it’s been proven that any cost would be pretty minimal. As we’ve seen from the Byte-Back program, we’ve seen prices in different items were a lot less than we thought they would be, averaging about $5 per item,” he says.

“Overseas models suggest the cost may be pretty insignificant. Consumers have it good and will continue to have it good in this product area.”

David Markus, chief executive of IT services company Combo, says that all computer companies should be part of a scheme, and that e-waste regulations are “an excellent idea”.

“E-waste is a massive problem where nobody will pay for the destruction of very short-term electronic equipment. Putting on a levy equates to roughly $30 a computer, and having a service to turn it into raw materials is a good idea,” he says.

Markus says a fee may amount up to $30 for computer equipment, but agrees with Millen that consumers will accept very small price increases.

“I don’t think people will notice the price fluctuating that much. It’s just a small change in pricing. My attitude is that it really comes down to being a small percentage of operating business,” he says.

Markus warns that the scheme would have to be carefully constructed, and that the Government would have to accept responsibility for breaking down the waste once collected.

“The concern is that the government puts the tax in place and doesn’t fix it up to break stuff up at the other end. They need to be responsible. That would be the biggest concern.”