Australia – stand-off looms over waste levies

The Sydney Morniong Herald reports that Australian local authorities may refusE to pay the state-imposed waste levy introduced in 1993 to encourage recycling. The idea was that a A$4.20 levy on every tonne of rubbish delivered by a council or a business to landfill (on top of direct landfill charges) would force greater resource recovery.



In 2000 the Local Government and Shires Associations got a commitment from the NSW Government that 55 per cent of these levies would go to a Waste Fund for five years to support waste and litter reduction programs and public education.



But councils have seen the levy rise to A$21.20 a tonne in Sydney and $13.20 in Newcastle, the Central Coast and the Illawarra and most of the money collected siphoned off into consolidated revenue. It has become largely a state tax collected by local government. Last year not one cent of the levy went to the Waste Fund. This year A$102 million will be raised from the waste levy but only 28.4 per cent will go into the fund and Treasury will retain A$73 million. Since 1993 Treasury has taken in A$550 million of which councils have contributed more than a third.



The president of the Local Government Association, Councillor Genia McCaffery, calls it betrayal. Councils are threatening to refuse to pay the levy, a stance which would attract sanctions under the Waste Avoidance and Resource Recovery Act. "They removed vital funds for consolidated revenue and broke the trust the community placed in their leadership. We‘‘ve investigated the possibility of simply refusing to pay the waste levies," McCaffery says.



To rub salt into the wound, while the State Government is making money from its recycling policy councils are losing money from their recycling operations. In the mid-90s the market for recyclables – notably polyethylene terephthalate (PET) plastic and glass – faltered and the cost of collection began to exceed the returns on collected materials. The shortfall borne by councils is estimated at A$50 a year for every household in the state.



McCaffery says the introduction of the levy in 1993 was justified but circumstances have changed. "Our analysis of domestic waste indicates that levy increases have not had any significant effect on the amount of domestic waste diverted from landfill," she says.



"The State Government steadfastly maintains the waste levy is an economic instrument for reducing the amount of waste going to landfill. It is our belief that the impact on the waste stream has been limited, particularly in the area of municipal waste."



The private recycling giants such as Smorgon and Visy have joined the fight against the levy. "In NSW our members pay in excess of A$4 million in levies and over A$20 million in landfill fees disposing of contaminants accompanying the primary materials we are trying to recover," says Anne Prince, the chief executive of the Australian Council of Recyclers. "The levy may no longer be encouraging recycling as it planned to do."



Some councils with no landfill tip of their own are copping a triple whammy – haulage costs to another council area, tip fees and the waste levy. "We didn‘‘t need the levy to encourage [recycling]," says David McGowan, the general manager of one such council, Wingecarribee Shire. "The levy was supposed to be invested back into the community to support waste reduction. But this isn‘‘t happening."

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