Eight years since its introduction, the current waste disposal levy has failed to cut the amount of rubbish sent to landfill. In fact, the latest review of the scheme shows an increase in the amount of landfill and a drop in the percentage of waste that is being recycled or re-used after being sent to the dump.
The levy was introduced in 2009 as a result of a Green Party private member’s bill. Landfill operators pay $10 per tonne on rubbish disposed of at their facilities. It currently only applies to consented class 1 facilities that receive household waste, meaning most waste disposal facilities (89 percent of them) are exempt.
The scheme was designed to both raise funds for waste minimisation initiatives (more than $192 million since its introduction) and reduce the amount of waste sent to landfill.
But the latest statutory review of the levy, released by new Associate Environment Minister Scott Simpson this morning, reveals the amount of rubbish sent to levied landfills increased by 16.4 percent since the last review in 2014. The amount of waste “diverted” (removed, recycled or re-used) after being sent to landfill dropped by 6.3 percent.
The $10 per tonne flat levy compares with $144 per tonne for certain types of waste in the UK. The Ministry for the Environment says “a conservative approach was taken to setting the levy” to avoid triggering an increase in illegal dumping, as well as to reduce the impact on businesses and households and the “risk of inefficient spending of the revenue.”
Pressure to expand and increase the levy
The release of the review coincides with a report commissioned by a consortium of councils and recycling companies that says dramatically increasing and expanding the levy could create 9,000 jobs and $500 million a year in economic benefits – and see a significant rise in the amount of waste being recycled. The councils and recycling companies recommended quadrupling the total levy income to $200 million per year.
The report by UK-based Eunomia Research modelled different scenarios for the levy and says the greatest benefits would come from increasing it to $140 per tonne for active waste (such as wood and plastics), $15 for inert waste (such as concrete, brick and soil) and $40 for incinerated waste. It says it should be applied to all landfill operators.
This would bring our levy roughly into line with that charged in the UK – and almost certainly increase the cost of hiring a skip or taking rubbish to the dump.
Eunomia chairman Dominic Hogg said overseas experience suggested there were significant benefits from higher levies.
“Whilst other countries ask how they can make progress towards a circular economy, the low rate of the levy in New Zealand entrenches a ‘take-make-dispose’ model of production. New Zealand’s levy rate, set at $10 per tonne of waste, is among the lowest of any country with a landfill levy in place,” he said.
The proposal is backed by Auckland Council. Penny Hulse, chair of the environment and community committee, said a higher levy “would be the single most effective way of reducing waste to landfill”.
Hulse said the impact on households “should be minimal’, as the Council provided alternative options to taking rubbish to the dump or hiring a skip. This includes larger recycling bins, maintaining the annual inorganic rubbish collection (funded by rates) and setting up community recycling centres where residents pay less for disposal if they separate out reusable and recyclable items.
Hulse said Auckland Council was also working on a rates-funded kerbside food waste collection service which would cut the contents of the average rubbish bag or bin by 40 percent.
“We just can’t make it work commercially to pull it out.”
Recycling companies also back a major increase in the levy.
Grahame Christian, managing director of Smart Environmental, described as New Zealand’s largest privately-owned waste and recycling company, says a higher levy would make it cost-effective to hire people to separate out the waste being sent to landfill.
“Lifting that levy would allow us to recover 30 percent more from our waste streams because we’ve got wood waste, rubble, green waste all going off to landfill but every time you do the [costing] exercise there is just not enough commercially in it to activate us to go and pull it out of those waste streams.
“Someone will have a skip at their place and it will be full of green waste and rubble and timber and we just can’t make it work commercially to pull it out. But once the levy starts climbing we can engage more people, we can invest in more infrastructure and processes to recover it.
“But if you look at the avoided disposal and transport costs plus the increased levy it just works perfectly.”
Government looking at expanding the scheme
Christian said the industry was hopeful the appointment of new associate minister Simpson would result in progress on the issue.
“We’ve been trying to lobby the Ministry for the Environment and the Minister for years around the levy with little response, so we are absolutely delighted that Scott Simpson is now the minister appointed for waste and recycling, and I think the neat thing is that he is also the minister for statistics.
“Everything that we do in our industry is around measurement and metrics and data so it’s the perfect combination of hats.”
Recyclers may be even more hopeful after today’s release of the Government’s review, with a foreword by Simpson acknowledging that “there is still plenty to be done” on the levy.
“The levy has only been applied to disposal facilities that receive household waste – a limited portion of the total waste created. More information will support the development of a staged approach to expanding the levy to additional disposal facilities,” Simpson said.
Today’s interim review recommends work on a strategy “for the future direction of the levy” and the development of a staged approach to applying it to “additional classes of landfill” before the major review of the levy, which is due in 2020.
