Waste levies are a financial contribution required to be paid by
licensed waste facilities for each tonne of waste received at the facility.
Waste levies are intended to encourage the diversion of waste from landfill to
This chapter examines the evidence received relating to issues arising from
the implementation of waste levy schemes. This includes issues such as how the
harmonisation of levies across jurisdictions could help address the
inter-jurisdictional transportation of waste, and the hypothecation of levies
for waste management programs.
Waste levies are imposed in New South Wales, Victoria, South Australia,
Western Australia and the ACT. In Tasmania, the waste levy is voluntary.
Currently, there is no waste levy in Queensland
and the Northern Territory. Levies vary between states as well as within
jurisdictions according to the type of material being sent to landfill. An overview
of the different levies applied by the states and territories is below.
Australian Capital Territory
Municipal solid waste (MSW) costs $90.55 per tonne to dispose of
Construction and industrial (C&I) costs $146.20 per tonne to
dispose of at landfill.
Mixed C&I waste with less than 50 per cent recyclable
material costs $199.20 per tonne to dispose of at landfill.
New South Wales
A waste levy of $138.20 per tonne applies in metropolitan areas
and $79.60 per tonne in regional areas.
A range of levy rates are in place for particular materials, such
as virgin extracted natural material, shredder floc, trackable liquid waste,
and coal washery rejects.
A landfill levy of $35 per tonne for construction and demolition
(C&D) waste, commercial and industrial (C&I) waste, and contaminated
soil was introduced in 2011 and removed in 2012. In March 2018, the Queensland
Government announced that it will be reintroducing the waste levy.
In June 2018, the Queensland Government released a Directions
Paper 'Transforming Queensland's Recycling and Waste Industry' detailing the
proposed waste levy. The paper details that the waste levy will apply to a
designated levy zone which includes 38 of the 77 local government areas in
Queensland and will be applied at rates of between $100 and $150 per tonne for
regulated waste, and $70 per tonne for C&I, C&D and MSW.
A metropolitan levy of $87 per tonne and a non-metropolitan levy
of $38 per tonne are in place. Discounted levy rates apply for materials such
as asbestos and shredder floc.
A waste levy of $65 per tonne for putrescible waste and
$90 per cubic metre for inert waste applies to waste generated in the
Perth metropolitan region which is disposed in either landfill in Perth or
elsewhere in the state.
A state-wide levy is not in place, however, a voluntary levy at
rates of $0 to $5/tonne has been adopted in some regions.
Submitters that expressed support for waste levies highlighted the
beneficial outcomes of such schemes, including that appropriately designed
schemes provide a disincentive for disposal of waste by landfill. Further, they
noted that levies provide an important source of funding for investment in
waste and recycling management initiatives.
Tyrecycle, which described landfill levies as a 'blunt economic
instrument', stated that waste levies provide an incentive for waste collectors
to find the most economic method to dispose of waste material. By way of
example, Tyrecycle provided evidence on the impact of the New South Wales levy
on tyre disposal in that state:
The waste management sector is profit driven, and as such
waste collectors will look to find the cheapest point of disposal for waste
materials. The landfill levy aims to set a price on disposal to landfill
that is higher than the cost of recycling, such that recycling becomes a more
attractive end-point. We see this successfully applied in NSW, where landfill
costs (within the regulated zone) are in excess of $250/tonne, which makes the
landfilling of tyres uneconomical when compared to recycling alternatives.
In contrast, the disposal of tyres in Queensland, the Northern Territory
and Tasmania is mainly to landfill. Tyrecycle commented that in those
jurisdictions, the costs associated with disposing items such as end-of-life
tyres to landfill, even where there is a requirement for shredding first, are
generally lower than those associated with recycling. Tyrecycle stated that
'national data shows high rates of landfill disposal in these three
jurisdictions, supporting the contention that levies are an effective means of
increasing landfill diversion'.
Other submitters similarly commented on the use of levies to encourage
the diversion of waste from landfill. For example, the Western Australian
Government noted that in Western Australia, there has been a significant
diversion from landfill for C&D waste and C&I waste since 2011 when
levy rates were substantially increased.
Similarly, Re.Group noted that New South Wales' relatively high recovery rate
for C&D waste and household waste has been driven by the landfill levy.
The South Australian Government submitted that, in South Australia,
'the waste levy has progressively increased since its initial introduction'.
Over this time, 'resource recovery has increased significantly' from around 2
million tonnes in 2003–04 to almost 4 million tonnes in 2015–16'. This
represents an increase in the rate of recovery from around 60 per cent in
2003–04 to 81.5 per cent in 2015–16, which is the highest recovery rate in
Australia. The South Australian Government also noted that the total volume of
waste sent to landfill reduced by 29 per cent from 2003–04 to 2015–16.
The Western Australian Local Government Association (WALGA) commented
that there is evidence that the Western Australian Waste Avoidance and Resource
Recovery (WARR) levy has been responsible for diverting inert material from
landfill. In support of this, it pointed to the reduction in levy payments for
inert material, as well as other reporting mechanisms. WALGA added,
however, that it is not known where this material has been diverted to.
The benefits of levies are not limited to the diversion of waste from
landfill. Submitters commented that the funds raised by levies can 'finance
waste and recycling initiatives', encourage waste avoidance and recycling, and support
local economic activity.
The Australian Tyre Recyclers Association (ATRA) explained that these outcomes
create 'jobs and economic activity, tax revenue and other economic multiplier
effects'. ATRA also submitted that:
Landfill levies can additionally help to force up the
collection price charges to tyre retailers (levy avoidance is a primary driver
for alternate used tyre disposal/recycling options). This in turn can alleviate
some of the challenges of lack of capital and investment as outlined above.
Submitters also pointed to the beneficial outcomes associated with the
investment of waste levies in the recycling industry. Mr Tony Khoury, Executive
Director, Waste Contractors and Recyclers Association of NSW, (WCRA), told the
committee that the waste levy in New South Wales has 'done many positive
things' for that state. Mr Khoury explained that:
...we've seen a lot of investment in recycling because of the
waste levy. There are many facilities that now operate because of the waste
The committee also heard from submitters that argued low waste levies
can have negative impacts on the rate of recycling. Outcomes in Tasmania, which
as noted at paragraph 4.3 does not have a state-wide levy (although voluntary
levies are in place in parts of the state) were put forward to support this
conclusion. The Local Government Association of Tasmania (LGAT), which supports
the introduction of a statewide landfill levy in Tasmania, submitted that 'the
absence of a levy has created a market environment where resource recovery has
a limited capacity to compete with landfill'. The LGAT went on to comment that:
The low landfill pricing in Tasmania is a financial barrier
to recycle, invest in resource recovery and implement practices which reduce
waste generation. The existing regional local government levies are not
adequate to significantly encourage investment in resource recovery.
The LGAT further highlighted that 'resource recovery operations employ
more people and require greater investment in infrastructure per tonne of
material compared to landfills'.
The LGAT's position was also supported by evidence from a recycled
plastics manufacturer, which submitted that 'landfill levies in Tasmania are at
the very bottom of the National Waste Levy Scale' with some sites not charging
for waste disposal while those that do charge 'so low that it does not cover
the administration cost'. Envorinex stated that, as a result, it has been
'forced' to collect waste in Tasmania as a free service in order to obtain
'valuable waste plastic' for use in manufacturing. It submitted that 'this
has impeded our ability to expand due to a very tight cash flow situation'.
Envorinex highlighted that in Victoria four tonnes of waste black poly
pipe would cost $600 dollars to dispose of at a landfill site, but in Tasmania,
disposal would only cost $40. Envorinex concluded that 'landfill levies should
be priced high enough to encourage major business to send their waste to
recyclers and not to landfill sites'. 
Perverse outcomes and limitations
While submitters acknowledged the benefits accruing from levies, this
view was tempered by the need to ensure that levies are 'appropriately
designed' so that there are no perverse outcomes.
Many submitters raised concern that current waste levy schemes have also led to
a number of unintended and undesirable consequences.
The National Waste and Recycling Industry Council (NWRIC) submitted that
market distortions are occurring because landfill levies vary across
jurisdictions. In addition to price disparity, there are variations in the
application of levy mechanisms and definitions of leviable waste. It submitted
that these variations are causing 'undesirable consequences', such as:
the unnecessary transport of waste between jurisdictions to avoid
levy costs, most notably between metropolitan Sydney and south-east Queensland;
an uncertain regulatory environment that undermines the ability
of private investors to create recycling infrastructure;
high administrative costs, particularly in the application of
complex schemes; and
the potential for fraud created by mislabelled waste.
The Law Council of Australia (LCA) also commented that levies can
encourage stockpiling and illegal dumping.
The following discussion canvasses the evidence provided to the
committee on a number of perverse outcomes that have arisen following the
implementation of waste levies.
Cross-jurisdictional transport of
Submitters noted that differences in regulatory arrangements between
jurisdictions, particularly landfill levies, create an opportunity for the
transport of waste between jurisdictions to avoid or reduce the amount of levy incurred.
For example, it was submitted that the lack of a landfill levy in
Queensland has provided a major commercial incentive for waste to be
transported to Queensland from New South Wales because it is cheaper to
transport and landfill in South East Queensland than to landfill or undertake resource
recovery in New South Wales.
Indeed, the incentives are such that Mr Max Spedding, Chief Executive
Officer, NWRIC, commented that one or two companies are mining their landfill
and transporting the mined material to Queensland, 'creating more airspace in
their Sydney landfill and making a profit'. Mr Spedding added that this is 'not
illegal, as it stands, but what is driving it is the disparity [in levies]'.
Mr Spedding went on to state that the volume of waste being transported
from Sydney to South East Queensland is 'enormous' and cited an estimate that
700,000 tonnes of waste per year is being transported.
Similarly, WMAA stated that, on average, 60,000 tonnes of predominantly C&D
waste is being transported from metropolitan Sydney to South East
Queensland each month.
GCS Consulting stated 'that the "leakage" of C&D material
to Queensland represents a small but growing portion' of the New South Wales
market. It estimated that the C&D material being moved to Queensland
represents approximately 7 per cent of the total C&D waste
generated in New South Wales.
The NWRIC put the view that the transport of waste to Queensland occurs
'entirely because of the landfill levy in Sydney—that central core area'. Mr
In New South Wales there are
three levy areas. There's the central area [Sydney]
at $138, the North Coast at $78 dollars and the rest of New South Wales
at zero dollars. From that central area with a $138 levy, you can take
construction and demolition material—not putrescible waste and not domestic
waste but the material that's relatively easy to cart, because you can put it
into a normal truck. You can run it up the Pacific Highway and the cost of the
cartage, the cost of landfill and the cost of transfer is less than $138, so
you can do it and actually make a profit.
In addition to the absence of a waste levy in Queensland, submitters
argued that the interstate movement of waste is encouraged by the metropolitan
New South Wales levy being higher than the cost of transport. For
example, Visy explained that at inception, the New South Wales
metropolitan waste levy was approximately $50 per tonne, which did not provide
an incentive to transport waste interstate due to the additional transport
cost. Over the past eight years however, the New South Wales waste levy has
increased by over 260 per cent, with significant increases of between 10 and 25
per cent per annum from 2010 to 2016. Visy explained that 'this now provides
the necessary arbitrage that makes transportation across state borders
The Victorian Waste Management Association (VWMA) submitted that 'it is
instructive that the cost of the landfill levy in some jurisdictions [has]
reached a point that makes it cheaper to move material out of the state of
Submitters also pointed to how the difference in levies within some
jurisdictions has resulted in the transport of waste over long distances.
The Local Government Association of Queensland (LGAQ) noted that the City of
Gold Coast Council recently increased its waste disposal charges for waste originating
from outside city limits to $200 per tonne. This stemmed the flow of waste
from New South Wales to the Gold Coast, but the waste was then diverted to
other South East Queensland landfill sites.
Some witnesses were very critical of the interstate transport of waste. Mr Mark
Venhoek, Chief Executive Officer, SUEZ Australia and New Zealand, for example, commented
that the interstate transportation of waste for landfill is an 'unsustainable
practice, driven purely by profits, and is, in our view, clearly unethical
behaviour that should stop as soon as possible'. Mr Venhoek added:
With the majority of the volume going straight to landfill,
it completely disregards the importance of resource recovery and puts
unnecessary safety risks on our roads. SUEZ, clearly, is opposed to the
unnecessary interstate long-distance transportation of waste to landfill and we
are committed to managing our customers' waste and resources reliably,
responsibly and locally, and we are not engaging in any of those activities.
While averring that it is 'not advocating for the end of landfill
levies', the VWMA also commented that the original intent of levies has been
undermined and could result in an adverse impact on recycling:
...we believe it shows that landfill levies which were meant to
support recycling, are now being used as a blunt tool of revenue collection by
Government. The loss of confidence by the public in the role of the landfill
levy will ultimately undermine recycling as people look for cheaper ways to dispose
Evidence of the impact of the New South Wales levy on recycling rates
was provided by GCS Consulting. It argued that as levies are raised, there are
diminishing returns. GCS Consulting submitted that for example, during the
period when the amount of the metropolitan New South Wales levy doubled, the
New South Wales C&D industry was found to have reduced its recycling rate,
which is contrary to expected market behaviour.
GCS Consulting stated that in New South Wales, the efficacy of the
levy as a pricing mechanism was achieved when the levy was at much lower
levels. It submitted:
It was becoming apparent that by 2012–13 the continual
increases in the waste levy were possibly having a negative effect on C&D
recycling rates and certainly were not encouraging further recycling in the NSW
market. It is notable that the C&D sector was already recycling 64% of
all material as early as 2002–3 when the levy rate was around $25 per tonne suggesting
that the efficacy of the levy as a pricing mechanism may have already had a
majority of its effect at much lower levels and well before the dramatic
increases from 2006 onward.
Mr Gregor Riese, GCS Consulting, stated that while 'state-based levies
are okay', levies should be kept at 'a reasonable level, such that your entire
waste and recycling system does not become fixated on levy avoidance rather
than creating a useful recycled product'.
Mr Riese argued that benefits associated with levies occur on a bell-curve and unless
levies are appropriately managed benefits become outweighed by negative
consequences. Mr Riese described New South Wales as now being a jurisdiction
where the benefits of the levy have been outweighed by the negative
In addition, Mr Khoury, WCRA, pointed to the negative impact of
long-distance transport on the environment and stated that it is a major cost
to the economy.
Submitters argued that to reduce the movement of waste across state
boundaries either landfill levies should be reduced to less than the costs of
transport or a consistent approach to levies should be introduced across all
Levy harmonisation is discussed later in this chapter.
The Department of the Environment and Energy indicated that it is
currently in discussions with states and territories regarding regulatory tools
(including landfill levies) that may be leading to increased transportation of
solid waste across state boundaries.
The impact of levies on changing
The committee received evidence indicating that waste levies have a limited
impact on reducing the waste generated by ratepayers, as they have no direct financial
incentive to reduce waste going to landfill.
Local councils are responsible for paying waste levies on behalf of
ratepayers, and this is then recovered through household rates. GCS Consulting
stated that the estimated household contribution to the New South Wales waste
levy payment is between 10 and 20 per cent of the total rates liability.
It cited a 2012 KPMG report on the New South Wales waste levy which stated
Because home owners are charged a flat fee for their waste,
they do not receive any financial benefit from reducing the amount of waste
they produce at the individual household level, even though all households
would benefit if they collectively reduced waste.
The Northern Sydney Regional Organisation of Councils (NSROC) submitted
that the New South Wales waste levy does not provide a 'reward or incentive for
better waste management behaviour, other than a minor reduction in the waste
charge for using a smaller red bin in some council areas'. This is because:
Waste management charges to residents reflect the actual
costs to councils of delivering waste services. These charges are applied
across the entire community and are not adjusted for actual consumption of
waste services by an individual household.
Similarly, the Brisbane City Council, in considering the introduction of
a waste levy in Queensland, submitted that:
A levy is not effective on domestic waste generators as the
price signal is not able to be passed on through the rates directly...Applying a
landfill levy to domestic waste is challenging as residents cannot avoid the
levy in a domestic setting. Council does not have a pay as you throw style of
charging so residents are all charged equally.
Other local government authorities support this view with the Adelaide
Hills Region Waste Management Authority (AHRWMA) arguing that waste disposal
levies do 'not act as a direct driver for the community to reduce waste
generation or increase recycling habits' because any increase in waste levies
is 'covered by general rate revenue'.
GCS Consulting recommended that any jurisdiction seeking to introduce a
waste levy should, at a minimum:
...require local governments to introduce weight-based charging
to permit its ratepayers to reduce their rate liability. This is based on the
user-pays principle where the more a household throws out, the more they
contribute to disposal charges and the state government tax.
Impact on recycling
The committee received a range of evidence on the sometimes negative
impacts that waste levies can have on recycling. This includes evidence on the
increasing economic pressures on recyclers due to high levies; poorer quality
recyclable material entering the market and driving up the cost of treatment;
and changes to the market.
Submitters argued that waste levies are having a detrimental impact on
traditional recycling processes such as those for metals, paper, glass and
cardboard. The Australian Sustainable Business Group (ASBG) highlighted the
findings of the Victorian EPA commissioned report Impact of Landfill Levy on
the Steel Recycling Sector in Victoria, which concluded that for every
$15/tonne increase in the levy rate, an additional $738,000 per annum cost is
incurred by the steel recycling industry in Victoria. The report suggested that
to counter the impact of the landfill levy, options such as the provision of a
partial levy exemption for the steel recycling industry, better funding and
grants to support the steel recycling industry, and the use of Product
Stewardship programs, should be considered.
Similarly, in noting that high levies can undermine the recycling of
some types of material, especially steel, the NWRIC stated that the 'levy on
the disposal of recycling residuals reduces the competitiveness of materials
sold into the international market'.
GCS Consulting submitted that in New South Wales, the metal recycling
industry has been 'heavily impacted by the waste levy increases'. It noted the
findings of the Centre of International Economics which indicated that in 2011
the waste levy of $120 per tonne would reduce the profit margins of metal
recyclers by 3 per cent relative to no levy. GCS Consulting stated that the
levy puts existing recyclers with capital infrastructure in hammer mills at a
competitive disadvantage to operators who export unprocessed scrap metal
directly to international markets. GCS Consulting noted that the quantity of
ferrous container exports from New South Wales more than doubled over a five
year period during which the waste levy increased. It stated:
While minor in terms of the overall waste tonnages, this 'leakage'
from the metal recycling system is symptomatic of broader pressures on all
material recyclers operating in the NSW market and the potential commercial
penalties that the levy can impose on existing industry players.
The ASBG also submitted that recycling facilities are under pressure from
international prices and the comparatively lower cost of shipping driving the
export of collected materials to overseas markets. This, combined with
increasing waste levies, creates 'tough economic conditions' for recycling
facilities. The ASBG warned that 'if closures occur they [recycling
facilities] will be very difficult to re-establish given the large economies of
scale and similar levels of investment required'.
As a consequence of concerns that metal shredders in New South Wales
would have to close due to competitors exporting scrap overseas, they have been
given a 50 per cent reduction in waste levy. The ASBG submitted that the New
South Wales Environment Protection Authority also offered funding to metal
shredders to find alternative methods to deal with their floc.
Submitters highlighted that waste levies also impact the recycling industry
when recycling businesses are forced to pay the levy for the disposal of
contaminants which have entered the recycling stream. The Australian Council of
Recycling (ACOR), for example, commented that although it supports landfill
levies, the impact on recycling companies can be such that it is a
'disincentive towards being involved in the recycling industry'.
Some of Australia's largest recycling companies—Re.Group, Visy,
Owens-Illinois and SKM Recycling—provided the committee with additional information
on this issue. Re.Group explained why recyclers need to dispose of material:
There are residual waste components from recycling
facilities, which require disposal. The amount of residual waste depends on the
specific type of facility; for example, a 'yellow bin' recycling facility may
10–15% residual waste, compared with a 'red bin' recycling facility with circa
30–40% residual waste. The disposal of residuals generally represents a
significant cost for recycling facilities, which can obviously create
commercial incentives to seek lower disposal cost options.
Mr Stuart Garbutt, Director, Operations, Re.Group, outlined further the
concerns of the imposition of the waste levy. Mr Garbutt noted that Re.Group
does not experience a 'vast impact' from the levy as only the material
processed at Re.Group's material recovery facilities (MRFs)
that is unrecyclable is landfilled. In addition, the Re.Group considers that
levies are 'an important part of diverting material from landfill'.
However, Re.Group suggested that the application of the waste levy to
New South Wales recyclers seeking to dispose of residual contaminants provides
a commercial incentive to transport waste to interstate locations. It submitted
that, despite its commitment to managing waste as close as possible to its
source of generation, it is competing with organisations which minimise
operating costs through the interstate transport of waste. Re.Group commented:
If other organisations are able to undercut our operations
due to disposal savings via transport to Queensland (or elsewhere), then
Re.Group will need to evaluate its options to remain competitive. At present,
we are aware of several of our competitors that do transport waste to
Queensland, and we do risk competing against this practice in the future.
Re.Group concluded that 'the introduction of a Queensland price signal
is the best (if not only) way to ensure that waste is not unnecessarily
transported interstate for disposal'.
Visy also expressed concern that landfill levies penalise the recycling
industry for the disposal of residual rubbish that enters the recycling stream
when householders place non-recyclable items in recycling bins. Visy submitted:
Rather than being incentivised for providing this
environmentally sustainable essential service of landfill diversion, the
recycling industry (as distinct from the waste disposal industry) is being
penalised by being charged excessive waste levies for their disposal of
residual rubbish that inadvertently ends up in the recycling stream due to
householders incorrectly placing it into kerbside recycling bins.
Visy recommended that reforms to current policy and regulatory
frameworks should include 'a waiver of landfill levies on the disposal of
residual waste from recycling operations'. In addition, landfill levies should
not apply to 'companies that utilise kerbside recyclable materials for raw material
feedstock in further re‑manufacturing activities'.
Similarly, Owens-Illinois, which has 11 glass making plants and one
glass recycling plant in Australia, submitted that:
Companies that are being proactive and investing considerable
capital into recycling facilities should not be penalised with landfill levies
to dispose of material that has been incorrectly disposed of in kerbside
Further, Owens-Illinois stated that 'companies who actively use recycled
materials in their manufacturing process should be rewarded and provided with a
benefit that recognises their contribution to recycling and waste minimisation'.
SKM Recycling submitted that 'the imposition of landfill levies on
recyclers imposes an undue cost burden on the recycling industry'. It went on
to comment that:
By undertaking costly sorting processes, SKM is performing an
essential public good, enabling both government and business to achieve
landfill diversion targets, and promoting the development of the circular
economy. After bearing the costs of sorting, it is unfair that SKM should have
to pay a landfill levy with respect to any residual materials, the cost of
which would otherwise be borne by the suppliers of SKM's feedstock. This is
effectively a pass-through of landfill charges to SKM.
SKM Recycling recommended that the Australian Government should
'consider the systemic impacts that landfill levies have on the recycling
industry'. As such, it argued that the Australian Government should:
...support the exemption of landfill levies for resource
recovery industry operators in relation to the small percentage of waste
contained within residential recycling materials those operators receive (or
the introduction of a reduced levy), by engaging with state governments to
reform landfill levy regimes.
Some submitters expressed concern that waste levies can result in
increases in illegal dumping. To mitigate this risk, it was argued that waste
levies should be allocated to the management and clean-up of illegally dumped
Local Government New South Wales (LGNSW) submitted that since the
introduction of the waste levy in New South Wales, 'regional and rural councils
in the regulated area have seen a noticeable increase in the incidences of
illegal dumping...[including] the illegal dumping of asbestos'. The LGNSW
submitted that the costs of cleaning up illegally dumped waste where the
offender cannot be identified rests with local councils. It stated that 'some
councils have seen a tripling of the funds they must set aside for this purpose
since the levy was introduced'. The LGNSW also submitted that:
NSW councils are being charged the levy for the proper
disposal of large scale, illegally dumped waste. Councils have said that it is
a disincentive for public land managers to clean up these large piles of waste.
Councillor Linda Scott, President of the LGNSW, told the committee that,
in particular, the LGNSW has campaigned for the New South Wales Government to remove
the waste levy on asbestos. This is due to concerns that the levy acts as a
disincentive for people to manage asbestos responsibly, safely and legally,
resulting in councils incurring significant expenditure to clean up asbestos
that has been illegally dumped.
The Hunter Joint Organisation of Councils also highlighted the impact of
the levy on councils already bearing the costs associated with the detection,
collection and transport of illegally dumped material. It submitted that
'member councils request the review of levy charges for the disposal of
illegally dumped material' in New South Wales.
The Law Institute of Victoria similarly submitted that in Victoria,
increases in landfill levies have seen an increase in illegal landfilling in
rural areas. It stated:
...the increase in landfill
levies has caused an increase in the amount of landfill being disposed of
illegally on rural land, under the guise of the fill being deposited in
association with a rural land use purpose, a practice designed to avoid the
In considering the impact of the introduction of a Queensland waste levy,
the Brisbane City Council observed that 'a levy is likely to increase the risk
of illegal dumping and levy funds would need to be allocated to management of
such activities for clean-up, education and enforcement'.
However, South Australian Government officers stated that it has found
that there is 'no apparent correlation' between increases in the South
Australian levy and changes to illegal dumping. Ms Tiana Nairn, Waste Reform
Policy Program Manager, South Australian Environment Protection Authority (SA
EPA), told the committee:
We're aware, for example that, whilst Queensland has had no
levy in place, they have continued to have illegal dumping. Often illegal
dumping relates to being a convenience factor. It is certainly a significant
issue for state and local government. Our government has focused on increasing
and improving the powers of both the environment protection authority officers
and local councils to be able to respond...
The Western Australian Government also submitted that it had not
detected an increase in illegal landfills related to the waste levy. It stated:
Western Australia has not
detected an increase in illegal landfills. There is an increase in stockpiling
of material awaiting a market. The creation
of a dedicated illegal dumping enforcement area has seen an increase in the
number of offences detected. It appears that
offences are primarily committed by individuals as a matter of convenience and
to avoid landfill gate fees rather than as a means of avoiding commercial waste levy
Strategies to mitigate negative impacts of waste levies
Multiple submitters suggested that to eliminate these perverse outcomes,
waste levies should be harmonised across jurisdictions. In addition, they
argued that governments must do more to combat illegal landfilling. Some
submitters also advocated for the hypothecation of waste levies to fund waste
It was also emphasised that there are limits to what can be achieved
through levies. The Hunter Joint Organisation of Councils submitted that 'a
waste levy alone cannot solve waste and recycling issues'. It noted:
As a market mechanism, it
requires a range of complementary approaches such as land use planning,
education and compliance, regulation and a range of market incentives to
recover the resources in 'waste' streams.
It's our view that there's not a direct linear relationship
between increasing the landfill levy and reducing waste. It's a more complex
problem. As has been shown, it can lead to perverse outcomes such as interstate
movement and illegal dumping. The industry believes that the reliance on the
landfill levy to drive change is now outdated and should be re-examined.
Submitters outlined a number of strategies to mitigate the negative
consequences of waste levies. This included the enforcement or implementation
of the 'proximity principle', the national harmonisation or inter-jurisdictional
portability of levies, and the hypothecation of waste levies to recycling and
waste management programs. The following sections provide an overview of the
evidence received in relation to each of these strategies.
Submitters argued that the enforcement or implementation of the
proximity principle, which requires waste to be disposed of within a distance
proximate to its place of generation, would prevent the movement of waste
between jurisdictions to avoid or minimise waste levy liabilities.
In New South Wales, the Protection of the Environment Operations (Waste)
Regulation 2014 (NSW) prohibits the transport of waste more than 150 kilometres
from its place of generation. It should be noted that since its inception, this
regulation has been subject to significant criticism. For example, in 2016, the
New South Wales Government settled a challenge to the regulation's constitutional
validity. The removal of the proximity principle is being
Mr Khoury, WCRA, told the committee that the proximity principle in New
South Wales had been 'an absolute failure' because there had not been any prosecutions.
Mr Khoury did however express the view that a federal proximity principle could
be effective. Mr Khoury stated:
Perhaps there is a role for the federal government to play
with the proximity principle. If the federal government were to introduce a
proximity principle that would apply across the whole country, that might work.
Other submitters expressed support for the broad application of the
proximity principle. The LGAQ submitted that:
Waste should not be transported unnecessarily long distances
and all tiers of government should assist local communities to manage their waste
as close as practicable to its place of generation and should clearly support
the principles of the waste management hierarchy.
Ms Gayle Sloan, WMAA, told the committee that the WMAA called for its
members to cease the practice of long-distance transportation of waste. Ms
So we do not agree with
long-distance transportation; we actually agree there has to be a proximity
principle in place to stop the excessive and unnecessary movement of waste
across distances, particularly if there is the infrastructure in place. You
can't actually invest and develop infrastructure if you haven't got certainty
about what's coming through the front gate. In Europe you do have a proximity
principle, so we need to solve how we do that.
The AHRWMA expressed its support for the proximity principle. However it
also stated that any legislation to manage the transport of waste between
states should be considered carefully to ensure that it does not prevent
improved environmental outcomes resulting from the transport of waste, such as
national schemes for the disposal of certain types of material. The AHRWMA
submitted that for 'controlled wastes, interstate agreements or principles for
transferring of such waste streams across state should be established to appropriately
regulate the disposal/treatment/recycling of such waste'.
The Law Council of Australia (LCA) suggested that the Australian
Government could implement a federal proximity principle. It acknowledged that
it is unclear whether any head of legislative power in the Constitution could
support such a proposal. The LCA noted, however, that the power to implement
such a principle could be referred to the Commonwealth by the states under
section 51(xxxvii), as occurred for the implementation of the Corporations
Act 2001 (Cth).
The LCA also commented that the proximity principle could arguably
breach section 92 of the Constitution, which provides that 'trade, commerce and
intercourse among the States...shall be absolutely free'. It noted that section
92 does not operate with unqualified effect and that the High Court has upheld
numerous laws restraining trade between states. The LCA submitted that a
federal proximity principle must be considered in light of section 92, but that
section 92 does not necessarily preclude the enactment of one.
The LCA went on to suggest that a national and uniform proximity
principle could be constituted by complementary federal and state law, and that
this would be unlikely to contravene section 92. The LCA submitted that precedent
generally suggests that a uniform federal scheme is significantly less likely
to contravene section 92 than legislation enacted by the states individually. The
LCA concluded that 'these considerations provide compelling reasons for the
Commonwealth to consider enacting a national proximity principle and for the
States to consider referring the constitutional power to do so'.
Harmonisation and portability
In exploring the causes of the interstate transport of waste, it was
suggested by a number of submitters that the national harmonisation of waste
levies would remove the incentive to send waste to other jurisdictions. For
example, the NWRIC submitted that 'the national harmonisation of landfill
levies is essential to prevent unnecessary waste transportation (market
distortions) and to provide regulatory certainty for investors'.
The Maitland City Council submitted that the 'harmonisation of landfill
levies across states and territories along the eastern seaboard must be
considered as a matter of urgency'.
SUEZ suggested that the harmonisation of waste levies should occur as part of a
broader strategy which prioritises the reuse and recycling of materials, and
the disposal of waste within jurisdictions. SUEZ submitted that as part of this
strategy, 'the harmonisation of levies will encourage waste to be managed at
the closest location of origin'.
Some submitters argued that the Australian Government should establish
waste levies. For example, Envorinex submitted that 'landfill levies and
incentives should be set at a federal level to overcome' the issue of
transporting waste between jurisdictions to avoid levies.
Similarly, the LCA submitted that:
...the Federal Government could consider implementing uniform
landfill levies. The primary motivation for interstate waste-dumping appears to
be the avoidance of relatively high landfill levies in the waste's place of
generation. This advantage would
disappear if uniform levies are introduced. Introduction of uniform levies may,
however, be less politically feasible than a national proximity principle.
However, other submitters argued that rather than a Commonwealth waste
levy being established, levies could instead be harmonised between
jurisdictions. For example, the Australian Landfill Owners Association
The current system of landfill
levies, whereby adjoining states have significantly different levies,
encourages the interstate movement of large volumes of waste for the economic
benefit of the transport and waste facility operators. Harmonisation of
environmental legislation across the states would provide a great environmental
benefit for the community.
Similarly, the LCA submitted that:
Inconsistency in landfill levies and over-aggressive waste
management regulations can create increases in illegal and environmentally
irresponsible activities. A consistent, national approach would reduce such
The WMAA noted that it 'strongly advocates for a common approach to
levies nationally'. The WMAA recognised that any reduction in levies would
undermine existing infrastructure investment, so it instead advocated for other
states to follow the lead of New South Wales in providing 'strong market based
instruments to encourage investment in resource recovery'. The WMAA went on to
explain that in the absence of a common approach to levies and the proximity
principle, alternatives such as levy portability should be explored.
ResourceCo noted that the harmonisation of waste levies would 'eliminate
unnecessary interstate transport of waste'; however, it also submitted that 'harmonisation
of levies in a state based EPA structure is a long-term ambition that will take
time to achieve'. ResourceCo suggested that in the short term, 'states should
move their landfill levies at least closer together to negate the financial
incentives to transport waste between states'.
Levy portability, that is a waste levy determined by where the waste is
generated rather than where it is landfilled, was also suggested by other
submitters as a mechanism to prevent the inter-jurisdiction movement of waste. The
NWRIC told the committee that it has advocated for landfill levy portability to
be introduced. Mr Max Spedding, Chief Executive Officer, NWRIC, stated:
What we as an association have put forward is that we believe
we should have what we call landfill levy portability. In other words, say a
state government applies a landfill levy of $138 to waste in Sydney. When it
creates that levy legislation, the legislation should clearly state that if
that waste goes to landfill, wherever—including the moon, if it were landfill
on the moon, as one of the consultants said—the levy should be due. So you
shouldn't get a situation where you can get to the border and suddenly the
rules change with respect to levies. If the levy applies wherever the material
is landfill, whether it's in the home state or in a non-levy area or whether it
applies in another state, the levy should be paid.
Mr Spedding noted that levy portability already occurs within states but
'the problem is that it doesn't apply if you go...over the border'. The
NWRIC submitted that levy charges based on point-of-waste-generation occur in
New South Wales, South Australia and Western Australia (within state
boundaries). Further, several large operating landfills currently use
point-of-waste-generation levies. For example, Veolia's Woodlawn Facility
is not located in the Sydney Metro Levy Zone, but because it receives the
majority of its waste from this region, it charges a levy accordingly.
Similarly, the Cleanaway landfill located southeast of Bunbury charges the
Perth Metro Levy for waste received from that area.
Mr Spedding, NWRIC, explained that the NWRIC has had discussions
with state environmental protection authorities and is:
...now working state by state to have discussions in each state
as to whether they will change their legislation so that levy portability will be
added to the package of legislation that covers the creation of a landfill
The NWRIC submitted that levy portability could be introduced by
reciprocal agreement between states. It suggested that the process could begin
between New South Wales and Queensland, and then extend to other states.
The NWRIC submitted that 'this process will strongly incentivise waste being
processed as close to its point of generation as possible'.
The NWRIC submitted that the process could be 'legally achieved by aligning
the levy legislation within these states, and then by inserting additional levy
licence conditions into all landfill licences in the relevant states'. The
NWRIC suggested that any landfill levies collected for interstate waste should
be initially remitted to the host state. Further, reporting obligations should
remain with waste generators while levy remittance obligations should remain
with landfill operators. The NWRIC also suggested that landfill operators could
request a statutory declaration to confirm the point of waste generation.
The NWRIC told the committee that preliminary legal advice suggests that
levy portability would not be in conflict with either sections 90 or 92 of
Waste levies which are hypothecated are 'returned to, or reinvested in
environmental and waste management activities rather than directed back into
consolidated revenue'. The Hunter Joint Organisation of Councils noted that:
Hypothecation can be investment back into state-based waste
management activities...or directly back to local government for use in local
waste management activities such as waste avoidance, reuse, recycling,
education and enforcement activities.
This section explores the evidence received by the committee in relation
to the benefits of waste levies being hypothecated to waste and recycling
management programs, and whether the current rates of hypothecation are
adequate. In particular, submitters highlighted that hypothecated levies can be
used to invest in technology, research, infrastructure and the development of
markets for recycled material. Submitters also expressed concern that waste
levies are being treated by state governments as general revenue, and that insufficient
investment in waste and recycling is occurring.
Current approaches to hypothecation
Ms Gayle Sloan, WMAA, noted that currently, the rate of levies being
returned to industry varies between states, and that 'anywhere between 10 and
50 per cent...goes back to industry'.
Mr Andrew Tytherleigh, Executive Officer, VWMA, explained that waste
levies in Victoria are collected by the Sustainability Fund, which is tasked
with determining how the money should be spent. Mr Tytherleigh stated that
there are a number of criteria for determining spending including that programs
must 'improve resource recovery and reduce waste'. Mr Tytherleigh
explained that 'in that sense it is a hypothecated fund' and that it has been
used to fund waste management groups such as Sustainability Victoria, and to
run small grant programs. Mr Tytherleigh stated:
...there are a number of waste programs by Sustainability
Victoria, which is the program delivery government organisation here in
Victoria, that they have utilised over the years, and there have been some
positive outcomes from that. The programs don't tend to run for more than the
length of a government. The processes of getting those grant programs up,
getting the criteria developed, calling for expressions of interest, getting
the grants out, getting the activity generated and then getting the grant
acquitted often runs for longer than three or four years. These are long-term
The South Australian Government submitted that the hypothecation of
waste levies in South Australia is established by the Greens Industries SA
Act 2004. Fifty per cent of collected levies are paid into the Green
Industry Fund, 5 per cent are paid into the Environment Protection Fund, and 45
per cent directed to the SA EPA to deliver its regulatory and administrative
functions. The South Australian Government noted that since 2003, $107 million
has been spent from the Green Industry Fund on programs 'that have stimulated
councils, businesses and the community to reduce, reuse, recycle and recover,
thereby cutting the amount of waste going directly to landfill'.
WALGA submitted that in Western Australia, 75 per cent of funds
collected through waste levies go to consolidated revenue with the remaining 25
per cent hypothecated to the Waste Avoidance and Resource Recovery (WARR)
Account managed by the Waste Authority.
Stakeholders' views on the need for
In advocating for levy hypothecation, witnesses suggested that waste
levies should be used to ensure the future of recycling in Australia. For
example, Mr Stuart Garbutt, Re.Group, told the committee that levies 'provide
the opportunity for building infrastructure and processing that waste...we
certainly see a levy as being an important part of the waste strategy'.
Similarly, Mr Tony Kane, Executive General Manager, Visy Recycling,
told the committee that levies should be used to develop the market for
recyclable material. Mr Kane stated:
We would suggest that the levies on landfill waste, the waste
levies generated, should be put back into the market, whether it's low-interest
loans or incentives—and R&D was talked about earlier; a couple of previous
witnesses talked about that as well. So we would support those landfill levies
being used to support and generate new end markets. From our position, the end
market is the key issue. It is having an end market for the material. How can
we get plastics into roadways? How can we get glass into roadways? How can we
use other materials and generate new markets?
The WMAA submitted that it 'supports hypothecation of landfill levy
funds to support the development of alternate and more sustainable management
approaches for waste, whilst not necessarily advocating for 100% hypothecation
of funds back to industry'.
Ms Sloan told the committee that it is not 'realistic to expect government to
hand over 100 per cent' of the waste levy, but the WMAA advocates for a 'great
proportion' to be returned to industry.
The LGAQ argued that funds raised through the implementation of waste
levies 'should be fully returned to the resource recovery industry', as this
would provide industry with 'the confidence to invest in new waste management
and recycling infrastructure and technology'.
Similarly, Brisbane City Council, in considering a possible waste levy in
Queensland, submitted that:
Funds collected through a landfill levy must be hypothecated
to the waste and resource recovery sectors (including local government) in the
first five to 10 years
post levy introduction to ensure the sector is robust and able to provide
genuine alternatives to landfill.
Mr Bryce Hines, Acting Chief Operating Officer, Works, Parks and
Recreation Department, Ipswich City Council, told the committee that
hypothecation of a waste levy in Queensland for 'looking at alternative waste
treatment is critical to enabling us to truly address the issues that we have'.
Mr Mark Venhoek, Chief Executive Officer, SUEZ Australia and New Zealand
commented that 'it is important to use those levies as support measures for new
technologies, new infrastructure, new innovations'. Mr Venhoek stated:
They could be used to support communication in order to get a
better understanding of source separation. But I think reinvesting the majority
of that back into new infrastructure is the absolutely the way to go.
ResourceCo similarly submitted that 'waste levies should be used for the
purpose of improving the waste and recycling industry'. Further, levies:
...should be hypothecated back to the industry for enforcement
and improvement rather than be used as just another tax by State Governments
and included in general revenue.
The Maitland City Council argued that waste levies should be used to
establish markets for recyclable materials. It submitted:
A significant proportion of the levy received by the EPA must
be diverted to encourage the establishment of markets for recyclable materials
and demand by end users. This could occur on a similar basis as the Australian
Renewable Energy Agency (ARENA). Most importantly state governments must be
fully transparent on how the landfill levy is used as well as the hypothecation
The committee received evidence from witnesses who submitted that waste
levies have already been used to support more sustainable waste management
approaches. The WMAA commented that the New South Wales waste levy has
supported the development of five mixed waste processing facilities in that
state. By comparison, other states have either no mixed waste processing
facilities (Victoria) or only one (Queensland) or two (Western Australia).
Other witnesses also provided evidence of investment made possible due
to hypothecated waste levies. ResourceCo, a fully integrated resource recovery
business, stated that it had invested heavily in waste to energy plants that
sort C&D and other waste into its constituent parts. This investment (up to
$30 million per plant) was only possible due to the waste levy and the
ability to divert high calorific material to energy use rather than landfill. ResourceCo
Waste levies should be used
for the purpose of improving the waste and recycling industry and should be
hypothecated back to the industry for enforcement and improvement rather than
be used as just another tax by State Governments and included in general
Similarly, Tyrecycle, a subsidiary company of ResourceCo, submitted that
it has 'been the beneficiary of hypothecated landfill levy funding,
particularly in Victoria'. This included grant funding provided by
Sustainability Victoria for improvements to Tyrecycle's tyre crumbing facility,
and for the development of a mobile tyre shredding unit.
The VWMA, however, submitted that it is not in favour of hypothecating landfill
levies. Rather, it supported levies being made available for low
interest/subsidised business loans to create new markets for recycled and waste
Similarly, the NWRIC supported landfill levy revenue being made available for
low-interest loans, modelled on the Clean Energy Finance Corporation's
approach. Mr Spedding told the committee that 'if you were able to do that, you
would then encourage value-adding and more material being used in Australia
rather than it all going to China and then being bought back at a discount'.
Concerns about the degree of levy
reinvestment by state governments
Evidence provided by key stakeholders identified that state governments
may choose to use landfill levies to fund other priorities rather than
reserving the revenue for waste management and recycling programs. The Hunter
Joint Organisation of Councils acknowledged that although waste levies are
primarily designed to encourage diversion of materials away from landfill, they
can also become a source of general income 'to which the state quickly becomes
addicted'. It noted that these competing interests are a 'crucial element to
the administration of a waste levy in any jurisdiction'.
Several submitters noted that levies were raising substantial revenue
for state governments, however, only limited amounts of funds are being
returned. For example, the ASBG stated that hypothecation of all landfill
levies towards waste management purposes, especially to assist recycling, is generally
non-existent with often only small fractions of revenue allocated to waste.
ASBG argued that most waste levies are for revenue collection and stated that
levies in most jurisdictions are well above external costs of landfill
Mr Craig Mynott, Regional Cullet Director, Owens-Illinois, told the
committee that Owens-Illinois considers that the waste levy in Victoria 'is not
being spent as best as it could be'. Mr Mynott noted that Owens-Illinois 'had
the advantage of having some funding to help establish our glass-recycling
facility in Queensland' and concluded 'there could be a lot more done in
Victoria and in New South Wales'.
Tyrecycle expressed concern that, in Victoria, although significant
revenue has been collected through landfill levies, 'there has been a notable
decline in the degree of levy reinvestment'. Tyrecycle submitted that there is:
...more than $500 million in levy revenue [which] remains
locked away in the Sustainability Fund where it is used as a budget offset
mechanism. Only a small portion, less than 5% is, currently reinvested back
into waste and resource recovery initiatives.
Tyrecycle went on to explain that in Victoria, grant funding initiatives
and funding for enforcement and waste education activities have decreased.
Tyrecycle noted that funding for Sustainability Victoria has decreased 56 per
cent from almost $70 million in 2009–10 to around $30 million in 2015–16.
Tyrecycle commented that 'Victoria is not unique in this regard' with levy
reinvestment in other states such as New South Wales and Western Australia
remaining 'significantly lower than the total amount collected'. Tyrecycle
stated that 'South Australia stands alone as the only state to commit to fully
reinvesting levy revenue back into waste, environmental and climate change
The Hunter Joint Organisation of Councils stated that the waste levy has
increased 501 per cent over 12 years for councils in the Sydney Metropolitan
Area, which includes six of the ten councils in the Hunter/Central Coast
region. During 2016–17 the Hunter/Central Coast Region councils collected
approximately $60 million in levy payments, of which only 10 per cent was
hypothecated through the New South Wales Waste Less, Recycle More Initiative.
The Hunter Joint Organisation of Councils submitted that:
Individual Councils, and local
government more broadly across NSW, have consistently argued the case that a
major portion of the waste levy, which is collected and administered by them on
behalf of the state, should come back to the communities who generate that income.
The Northern Sydney Regional Organisation of Councils also commented
unfavourably on the rate of hypothecation and stated that 'the high rate of the
levy has had the perverse effect of creating a Budget dependency issue, as only
about one-third of the total collected through the levy is returned to local
government or industry through waste policy and programs'.
In Western Australia, WALGA noted that of the 25 per cent of funds
collected through waste levies that is hypothecated to the WARR Account, over
60 per cent is used to fund the activities of the Department of Water and Environmental
Regulation. It submitted that in recent years, this practice has resulted in
unexpended funds exceeding $30 million and, in the 2015–16 financial year, only
58 per cent of budgeted items received funding. It concluded that
'overwhelmingly, expenditure was directed towards the activities of the
WALGA advised that:
The use of, and access to, WARR Levy funds is a constant
source of concern for Local Government. Local Government's support for the WARR
Levy is predicated on the funds being used for strategic waste management
activities—and that is currently not the case.
WALGA went on to comment that the current rate of investment is
insufficient to encourage local councils to make changes to municipal waste
management. WALGA submitted:
The Better Bins Program provides up to $30 per household to
Local Governments that move to a three bin system. This is only a fraction of
the cost associated with such a service change, and may not be enough of an
incentive to encourage Local Governments to progress this option.
The Northern Adelaide Waste Management Authority (NAWMA) submitted that
in 2016–17 it 'contributed approximately $6 million in levy payments', but was
only 'successful in one infrastructure funding round of $300,000, a return of
5%'. NAWMA described the continued increase of waste levies in order to drive
waste diversion and enable new recycling technologies as a 'well used
justification...[that is] difficult to swallow for most Councils' in South
Australia. It concluded that:
NAWMA supports 100% hypothecation of the landfill levy back
to local government and industry to support further resource recovery services
and infrastructure, and to develop a local remanufacturing sector which would
reduce the need to export recyclable commodities.
Other witnesses, however, urged caution in relation to the hypothecation
of waste levies. Mr Jeffrey Angel, Director, Total Environment Centre and
Boomerang Alliance, told the committee that governments may need to extend the
tender and assessment processes to ensure that funding is given to successful
projects. Mr Angel stated:
New South Wales certainly has
been quite adventurous in its application of funding. I understand the need to
be cautious about allocating public funds. There are businesses out there who
take $5 million and nothing happens. They just wander off into the sunset with
the $5 million. I think we are at the point where we have to start picking
winners. If the bureaucracies haven't been particularly good at allocating
those funds to projects that have been successful and continue to be
successful, then I think you have to extend the tender and assessment process
for some other people. I know it's important not to waste public money, but I
also know that it's incredibly important not to let recycling collapse.
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