Question NW437 to the Minister of Finance

Reply:

Question 1

The total revenue collection from the plastic bag levy since its introduction in 2004 amounted to R5.3 billion. Table 1 below shows the revenue collections for the period 2004 to 2023.

Table 1: Plastic bag revenue collection (2004 to 2023)

Fiscal year	2004	2005	2006	2007	2008	2009	2010	2011	2012	2013
Revenue (R million)	41,2	61,4	75,1	86,3	78,6	110,5	257,1	160,6	150,8	169,2
Fiscal year	2014	2015	2016	2017	2018	2019	2020	2021	2022	2023
Revenue (R million)	174,3	183,3	231,9	241,3	300,4	317,9	579,8	658,2	679,8	778,4

Question 2

In 2004, government introduced the plastic bag levy as part of a package of measures to promote the reduction, reuse, recycling and diversion of plastic bags away from landfills. These measures included a regulation on the minimum thickness of plastic bags; disclosure and transparency of the costs of plastic shopping bags by retailers; regulation of the type and amount of ink to be used for printing on bags; awareness and market promotion for recycled materials; and prohibition of plastic bag imports.

The levy gives effect to the polluter pays principle and is aimed at internalising the negative environmental and health costs of plastic bag production, use and disposal into the retail price of plastic bags. It contributes towards government’s goal of zero waste to landfill as set out in the 2020 National Waste Management Strategy and target for 100 percent recycled materials in plastic bags by 2027.

i) The ringfencing of tax revenues is not supported. Ringfencing introduces rigidities into the budget process and breaks the link between a budget allocation and efficient spending. Such practices prevent the continuous evaluation and modification of tax and spending programmes and could result in a misallocation of public funds where there may be too much or too little spending on a particular government priority.

ii) Revenues raised from taxes flow into the National Revenue Fund and are allocated to government priorities as part of the budget process. Although the plastic levy is not ringfenced, public funds are allocated to environmental protection and waste management initiatives of the Department of Forestry Fisheries and the Environment (DFFE). Details on the expenditure allocations to the Environmental and the Chemicals and Waste Management programmes are provided below.

• a) Programme 6: Environmental Programmes

The DFFE coordinates the implementation of green economy projects in the environment sector under the Expanded Public Works Programme and provides monitoring and evaluation support to the programmes. This includes the War on Waste, Working for the Coast, Working for Wetlands, People and Parks, open space management, and the Working for Water, Energy, Fire, and Forests programmes.

Table 2 below shows the spending allocations to the different subprogrammes amounting to about R11.2 billion from 2020/21 to 2023/24 and estimated allocations of R8.7 billion over the medium term up to 2026/27.

Table 2: Environmental Programmes expenditure trends and estimates by subprogramme and economic classification

Subprogramme (R million)	2020/21	2021/22	2022/23	2023/24	2024/25	2025/26	2026/27
Environmental Programmes Management	109,5	293,5	1 057,1	7,9	6,9	7,8	8,1
Environmental Programme Region 1	446,8	471,5	2 041,3	919,5	913,2	987,7	1 119,9
Environmental Programme Region 2	1 557,4	1 249,4	6,1	1 064,6	1 214,9	1 150,7	1 180,9
Environmental Programme Region 3	446,8	471,5	61,9	815,9	553,7	626,1	614,2
Sector Coordination and Quality Management	56,8	100,4		112,2	104,8	110,5	117,9
Total	2 617,3	2 586,3	3 166,3	2 920,0	2 793,4	2 882,8	3 041,1

Source: National Treasury

 

• b) Chemicals and Waste Management Programme

The objectives of the Chemicals and Waste Management programme are to oversee, monitor and evaluate the performance of the waste sector, ensuring that less waste is generated, and existing waste is better managed. Seven (7) subprogrammes for chemicals and waste management, including Integrated Waste Management, Hazardous Waste Management and Licensing, Chemicals and Waste Economy Programme Coordination and the Waste Bureau are implemented.

For the period 2020/21 to 2023/24, about R2 billion was allocated to the chemicals and waste programme, with R1.4 billion allocated to the Waste Bureau, accounting for about 68 per cent of the total budget, as shown in Table 3 below. The estimated allocation to the programme over the medium term from 2024/25 to 2026/27 is R2 billion.

Table 3: Chemicals and Waste Management expenditure trends and estimates by subprogramme and economic classification

Subprogramme (R million)	2020/21	2021/22	2022/23	2023/24	2024/25	2025/26	2026/27
Chemicals and Waste Management	6,1	5,9	26,3	7,1	7,6	7,9	8,2
Hazardous Waste Management and Licensing	26,0	29,8	27,1	33,4	37,9	39,5	41,1
Integrated Waste Management	17,3	46,5	113,0	47,3	47,9	49,9	51,1
Chemicals and Waste Management Policy and Specialized Monitoring Services	14,9	60,9	27,8	50,4	52,7	53,8	57,6
Chemicals and Waste Economy Programme Coordination	11,2	16,5	16,7	21,3	21,0	22,1	23,0
Chemicals Coordination	20,6	15,8	–	18,6	23,2	24,5	25,9
Waste Bureau	300,3	312,6	406,3	406,1	468,9	489,9	512,3
Total	396,3	488,1	617,3	584,2	659,2	687,6	719,2

Source: National Treasury

The Recycling Enterprise Support Programme was established to provide support to small and medium sized enterprises for establishing recycling businesses. Transfers to the Recycling Enterprise Support Programme over the period 2020 to 2026 are estimated at R380,5 million, as shown in Table 4 below.

Table 4: Transfers to Recycling Enterprise Support Programme

R'000	2020/21	2021/22	2022/23	2023/24	2024/25	2025/26	2026/27	Total
Recycling Enterprise Support Programme	2,749	-	92,824	74,506	67,084	70,088	73,309	380,560

The on-budget allocations to the Environmental and the Chemicals and Waste Management programmes of the DFFE exceed the revenue collection from the plastic bag levy.