My take on the article is that it was the encouraging the use of recyclable plastic bags that's the problem. Various towns and retailers around Australia followed the same approach in banning plastic bags, replacing them with 'environmentally friendly' bags [1] which appear less disposable than plastic bags, so people don't get in the mindset that they should throw them out.

[1] https://upload.wikimedia.org/wikipedia/en/d/d8/GreenBag.jpg