Australian Waste Levies – something needs to be done

By Ron Wainberg, MRA Consulting Group

Australian landfill levies are on the move, with significant changes in Queensland and South Australia. The trouble with waste disposal, however, is that it tends to flow to the point of cheapest disposal. Just like water, waste flows downhill to the lowest point. This has led to unintended outcomes in recent years such as hundreds of thousands of tonnes of waste sent from Sydney to South East Queensland for landfilling.

Landfill disposal is relatively cheap, and the waste levy was introduced as a financial instrument to encourage resource recovery by making disposal of waste in landfill more expensive. The following table shows the current status of waste levies across the entire country.

  Solid Waste Levies 1st July 2019 ($/tonne) Applicable Area
QLD MSW: $75
Category 1 (high risk): $155
Category 2 (moderate risk): $105
Coastal and Inland councils from Port Douglas to Coolangatta, Longreach to the west
The area surrounding Mount Isa
NSW Metro: $143.60
Regional: $82.70
Metro: Newcastle to the north, Penrith to the west and Shellharbour to the south
Regional: Coastal and Hunter LGAs (broadly)
ACT Levy introduction under consideration Details not available yet
VIC Metro (MSW): $65.90
Metro (C&I): $65.90
Regional (MSW): $33.03
Regional (C&I): $57.76
Metro is defined as Mornington Peninsula to the south, Wyndham to the west, Whittlesea to the north and the Yarra Ranges to the east
Tas Voluntary local Government levy
State levy planned, however details not available yet.
Details not available yet
SA Metro (solid): $110 [$140]
Regional (solid): $55 [$70]
Metro (shredder floc):  $62 [$70]
Regional (shredder floc): $31 [$35]
Metro is defined by Gawler to the north, Bridgewater to the east and Sellicks Beach to the south
[SA levies will change on 1 Jan 2020 to the values in brackets]
WA Metro: $70 Metro is defined by Wanneroo to the north, Serpentine-Jarrahdale to the south and Swan to the east

There is a lot of debate about what should be done with the funds raised, with many believing that 100% should be hypothecated back to fund infrastructure development and education programs. Unfortunately, in some jurisdictions the sheer size of the revenue generated has resulted in a significant portion of the funds collected being directed to consolidated revenue. While building hospitals and schools are core functions for government, failure to hypothecate levy funds has led to a situation where state treasuries have a vested interest in actually landfilling as much as possible.

There is another issue which needs to be addressed as a matter of urgency.  The difference in the levy quantum and its geographical coverage between all Australian jurisdictions has served to encourage long distance transport of waste for disposal. We have seen this in the Sydney region for nearly 10 years with waste being transported to SE Queensland. It is to be hoped that the new Queensland levy will discourage this practice. However there are other examples which have not grabbed the headlines, such as waste transport from northern Victoria to regional NSW.

The cost of transport and the lack of availability of a suitable local landfill are important factors that influence a decision to dispose of waste remotely. Nevertheless, the cost of disposal is a critical factor, and it is strongly influenced by the levy. The pricing differentials above demonstrate  there is a financial incentive for alternative disposal pathways such as:

  • NSW metro area to regional Queensland or Victoria;
  • Victoria regional areas to unregulated NSW areas;
  • SA to regional Victoria, or unregulated NSW areas (as of 1 January 2020);
  • ACT to unregulated NSW areas (if a levy is introduced).

None of this waste transfer is illegal, however from an environmental or social equity perspective, it does not make sense. It would be absurd if a situation were to arise such as the simultaneous transport of NSW metro waste to regional Victoria and from regional Victoria to unregulated NSW – just to avoid paying the respective state’s levy.

The only sensible remedy would be for the jurisdictions to cooperate and recognise each other’s levy regimes. The levy would effectively travel with the waste and become due regardless of where the landfill is located.

This brings me back to the treasuries’ vested interest mentioned earlier. Failure to curtail this type of long distance waste disposal is actually reducing the ability to invest in the new schools and hospitals, to say nothing of waste infrastructure. It really is time for action.

This article has been published by the following media outlets:

Inside Waste, 20 August 2019