In an interim report titled ‘Australia’s Circular Economy: Unlocking the Opportunities’, the Productivity Commission has called for urgent reforms to incentivise and accelerate Australia’s transition to a circular, sustainable economic model.
The report highlights the need to cut red tape, harmonise standards across states and regions, and introduce new business and consumer incentives to drive sustainable resource use.
“The circular economy promises a world where products and materials are reused, refurbished and recycled, radically reducing waste and resource extraction,” Monash University director of circular economy labs and associate professor Martin Geissdoerfer said.
“This is about more than just recycling. Circularity means carefully using resources, designing things smarter from the outset, and ensuring every product has a second and third life.”
Building a sustainable economy
While the Commission’s report acknowledges that progress has been made toward a circular economy in Australia, it identified several key areas hampering progress.
The areas suggested to target policy reform include:
- Reducing regulatory barriers: Outdated and inconsistent rules are limiting circular innovations.The Commission suggests streamlining and modernising regulations to support greater use of recycled materials in construction and infrastructure projects.
- Encouraging new business models: Industrial reuse precincts and digital waste-matching platforms could enhance supply chain collaboration and promote circularity across industries.
- Strengthening product stewardship: Expanding and reforming national schemes for high-impact waste streams—such as textiles, batteries, and solar panels—would ensure businesses take greater responsibility for their products’ lifecycle impacts.
- Improving consumer awareness: Introducing mandatory labelling schemes on repairability and durability would help consumers make informed choices and encourage demand for longer-lasting products.
Government incentives absolutely necessary
Monash University’s Martin Geissdoerfer welcomed the Commission’s focus, noting that regulatory reforms and strategic investments could position Australia as a leader in circular innovation.
He stressed that successful implementation would require closer collaboration between government, industry, and academia.
Universities could play a key role in testing and refining circular economy technologies and business models, helping to de-risk investments and ensure a smoother transition.
“We also need to see policy incentives like tax breaks, rebates or levies that reward resource recovery and accelerate private-sector adoption,” Geissdoerfer said.
“Expanding public awareness for consumer engagement is pivotal – people can drive demand for repairable, upgradable products and participate in local reuse initiatives.”
The Commission is now inviting further public consultation before finalising its recommendations.
Submissions can be made via the inquiry website, with feedback helping to shape the final report on how Australia can unlock the full potential of its circular economy.