Taxation policy pathways to support the circular economy in Australia

By international standards, resource consumption, efficiency, and waste levels in Australia are concerning.

Following international initiatives, federal and state governments in Australia have agreed to shift to a circular economy (CE) by 2030.

To achieve this, the focus has been on project design standards, product stewardship, and stimulating recycled materials markets. While these are promising pathways, taxation can be a powerful tool to complement and increase the efficacy of these levers.

Our research investigates possible changes to the Australian taxation system to incentivise the uptake of circular economy practices by Australian businesses.

The project seeks to contribute to emerging Australian regulatory and policy reform processes by:

  • Mapping and evaluating circular economy-focused taxation systems across leading jurisdictions, focusing particularly on recent developments in Europe; and
  • Synthesising key considerations for their potential introduction in Australia.

Researchers

  • A/Prof John Minas, Monash Business School Green Lab
  • A/Prof Anita Foerster, Monash Business School Green Lab
  • A/Prof Martin Geissdoerfer, Monash Sustainable Development Institute
  • A/Prof Glen Croy, Monash Business School Green Lab
  • Dr Mitzi Bolton, Monash Sustainable Development Institute
  • Dr Richard Taylor, Monash Business School Green Lab

Method

This is an interdisciplinary project, using a mixed methods approach:

  1. Desktop legal and policy research – to identify, analyse and categorise recent taxation measures aimed at increasing circular economy uptake in Europe and other relevant leading jurisdictions. The analysis focuses on the regulatory context, instrument design, and any available evidence on implementation and effect.
  2. Research interviews – to collect empirical data from government and industry stakeholders in Australia and in Europe on opportunities and barriers to the modification of taxation approaches in Australia to better support circular economy uptake by business.

The project brings together three disciplinary perspectives:

  1. Socio-legal and regulatory studies – legal research to understand comparative regulatory models, focused upon taxation incentives, and socio-legal methods (interviews and focus groups) to explore barriers to their design and implementation in practice.
  2. Management studies – organisational perspectives on sustainable businesses, and empirical methods (interviews and focus groups) to identify and understand organisational and institutional incentives and barriers to business transformations.
  3. Sustainability transition studies – strategic considerations on circular economy systems thinking and ecosystem innovation to identify tax-based transition pathways and deduct policy implications.

Outputs

An academic article is currently being prepared – details will be provided in due course.

Engagement

The project team contributed to the Monash University submission to the 2024 Productivity Commission inquiry into a circular economy.

Submissions were also made to the Australian Government’s Circular Economy Ministerial Advisory Group.

Acknowledgements

This study was funded by Monash University, via an Inter-faculty Seed Grant Scheme designed to support inter-disciplinary research and engagement activities.