Circular Economy

The Hon. J.M.A. LENSINK (14:26): I seek leave to make a brief explanation before directing a question to the Minister for Sustainability, Environment and Conservation about the circular economy.

Leave granted.

The Hon. J.M.A. LENSINK: On 26 May, the Minister for the Environment, with his Premier, released a study commissioned by Green Industries SA highlighting how the circular economy could create economic growth and potentially 27,500 full-time jobs by 2030. Earlier this year, an Australian Bureau of Statistics report, entitled Employment in Renewable Energy Activities Australia, found that South Australia suffered a 17 per cent fall in renewable energy jobs from 2,360 to 710, and last week the disastrous job figures released by the ABS confirmed the dire job situation, showing South Australia's trend on employment rate had continued for a 30^th consecutive month and that South Australia has the highest youth unemployment in the country. My questions to the minister are:

1. Can the minister outline exactly when his circular economy proposal will generate the first jobs out of the 27,500?

2. What resources, if any, are the minister's agencies directing towards it?

3. Can the minister explain how he thinks this circular economy initiative will not go the same way as many of the other Weatherill government so-called job creation plans?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Climate Change) (14:27): I thank the honourable member for her most important question and for a very leading question in terms of the renewable economy, for example, and the jobs figure that she mentioned in terms of renewables. Of course she may have conveniently forgotten that it was the federal Liberal government that caused all of the concern in the private sector in terms of the renewable energy targets.

They were the ones who caused uncertainty in the private sector about investment. As I have said in this place before, these are investments of quite a large magnitude which have a long time to pay back. So, businesses that want to invest millions and millions of dollars in South Australia in renewable energy were held captive to an ideological battle and a fight occurring in the federal Liberal and National parties in Canberra over renewables. That is why there was a drop in investment or a stall while people left their projects in the pipeline on the basis of uncertainty and policy at a federal level.

What company would be able to go to its shareholders and say, 'Let's invest in this project because, well, there is uncertainty at a federal level but we are sure it will come good one day'? It was the federal Liberal National government that caused this uncertainty and this investment strike which we are now seeing just come back into the system. Let's not have any churlish comments about employment when it was their party in federal government that absolutely caused this problem.

Members interjecting:

The PRESIDENT: Order!

The Hon. P. Malinauskas: So, don't believe the science; drive up prices. It's a double whammy.

The PRESIDENT: The honourable minister, if you want to contribute to this debate you might as well get on your feet instead of interrupting the minister giving his answer.

Members interjecting:

The PRESIDENT: Order!

The Hon. I.K. HUNTER: To start out, I think it was important to remind the Hon. Ms Lensink about the liabilities of her federal party, her federal government, who do not understand how business works. They do not understand how business works in the long-term time frame of investment and renewables, and companies know that and they are telling us every day. They bemoan the fact that the former party that represented business, small business in particular, now has not the first clue about what small business needs in this community. It is a little ironic that they come to us now and see us as a natural party to support small to medium business enterprise. We are very happy to work with them.

In relation to the issue of the circular economy, it is worth noting that this principle of the circular economy was included in the guiding principles of the Green Industries SA Act 2004. A circular economy, of course, for those who have not been made aware of this recent announcement by the Premier—I think it was at the CEDA function recently—refers to the better use of materials within the economy and it essentially means that we want to keep those materials circulating in the economy for longer, rather than just use and dispose. It involves greater remanufacturing, repair and reprocessing activities. It is a generic term for an industrial economy that is producing no waste, or very low waste and pollution, by design or by intention.

The circular economy concept is gaining attention in Europe, particularly, I am advised, in the United Kingdom, with growing uptake in the United States of America and Asia. The European Commission has endorsed the circular economy action plan, including legislative proposals on new waste directions. The United Kingdom government organisations such as Waste and Resources Action Program and Zero Waste Scotland have also embraced the circular economy rationale, I am advised.

According to modelling by the Ellen MacArthur Foundation, the value of material savings associated with a circular economy globally is estimated to be $US1 trillion. The circular economy presents an opportunity to engage both the commercial and private community to seize new opportunities and address risks associated with the existing linear mode of our economies. The World Economic Forum has also recently created a platform for accelerating the circular economy.

By presenting design and alternative material ownership scenarios, the circular economy promotes substantive action rather than incremental change. Understanding the benefits of the material efficiency aspects of a more circular economy have not been explored in any great depth really in Australia or even in South Australia. It is part of our intention to start talking to industry about how designing into their everyday business practices more aspects of a circular economy is not only good for the environment, it is actually good for their own business.

An essential component of South Australia moving towards a more materials efficient economy is the need to reference reliable information related to the likely impacts and benefits of a circular economy in this state. In 2016, Green Industries commissioned a study to provide quantified, reliable information at a state level about the likely benefits of a circular economy.

On 26May of this year the Premier released the results of this study via the report 'Creating value: the potential benefits of a Circular Economy in South Australia'. The report provides quantified information about possible impacts on employment, carbon emissions, energy and materials use for South Australia if it adopted certain practices to become a more circular economy. The report is available on the Green Industries website at www.greenindustries.sa.gov.au.

A number of scenarios were examined in the report. I will not go into any of those details here—I could, if you asked me to. They are up there; you can find them for yourself. The assumptions used in the report were related to assessing the potential impacts that were benchmarked against other similar international studies, but were tailored to reflect South Australia's circumstances. Key assumptions, modelling techniques and results were peer reviewed by an international panel of circular economy experts.

Using broad assumptions about a more circular economy, the report's conservative estimate is that by 2030, compared to a business as usual scenario, a circular economy could create an additional 25,700 full-time equivalent jobs, 21,000 jobs by actioning material efficiency gains and 4,700 jobs by actioning efficient and renewable energy gains.

It's not beyond the realms of contemplation that these estimates could be brought to fruition because if you think of where we have come from just 15 years ago in our waste and recycling industry, it was a very low labour force type of industry, with not a lot of high-tech involved in it. Now, because of policy initiatives taken by the government, the waste management levy for example, that industry now employs about 4,800 people, in an industry that ranges from manual handling to high-tech computer design and industrial conveyor belt technology, using computers and air injections to sort through different sorts of waste. There is a whole range and step up in terms of skills and in terms of employment prospects.

That is a very large increase brought about by the government's policy to change behaviour in this particular industry. If we are to be involved in encouraging industry in South Australia to become participants in a more circular economy as we start out this process, it is not beyond the realm of possibility to think that we can actually create more jobs in this particular sector. Additionally, another benefit, of course, that has come out of the modelling is that a reduction in South Australia's greenhouse gas emissions by up to 27 per cent (7.7 million tonnes of CO₂ equivalent) is possible. That will be a 21 per cent greenhouse gas reduction by actioning efficient renewable energy gains and a 6 per cent greenhouse gas reduction by actioning material efficiency gains.

I have to say, formalising a future circular economy model for the state can help build upon current policy initiatives that we have already initiated, which I have spoken about very briefly, and activities designed to reduce waste, improve material and energy efficiency and decrease greenhouse gas emissions. Potential benefits are obvious. They align closely with the state goals and economic priorities, such as stimulation of employment and resilient local communities and the development of a low carbon economy.

It won't come into existence overnight. We need to talk to the local industries that may benefit from it most and help them to see what improvements in their business activities will mean, not just for the environment but also for their bottom line. And by the way, it may help them to employ more South Australians in a growing industrial sector.