[Not government policy]
Executive summary
Levies on the disposal of waste are used more or less successfully in many parts of the developed world. The possibility of a levy featured strongly in the work of the Waste Management and Minimisation Working Group in 2002, referred to as a waste minimisation levy. A commitment to investigating the possibility of a waste levy was made in the New Zealand Waste Strategy.
Waste levies have been used in New Zealand since 1998 when Christchurch City Council introduced one. In 2005, three Auckland Territorial Local Authorities (Waitakere City, Rodney District and North Shore City) introduced a similarly worded by-law to require all waste collectors operating in their areas to be licensed. The by-law made provision for a waste levy in line with Waitakere’s then practice. A judicial review of the power to set by-laws for this purpose has been initiated by two major waste companies and a decision is pending.
Local Government New Zealand and some Territorial Local Authorities have been pressing Government to take actions to more clearly provide for the legal imposition of levies by by-law. Strong representation has been made to the Ministry for the Environment from large waste companies seeking a national waste levy.
This report sets out to provide the Ministry for the Environment with an understanding of the current opportunities and risks associated with the further use of local/regional waste levies and with the use of a national waste levy. It is based on interviews with thirty people involved in the waste sector.
Different viewpoints on the desirability of a levy on waste, the means of collecting and using it, and its quantum are influenced by a wide range of variables. These include the nature of the person’s/organisation’s business, the degree of public and private (company) involvement in waste activities in a particular location and existing arrangement for waste management, including charging.
The reasons for having a waste levy that came through the Waste Minimisation and Management Working Group work are still current. They are to generate revenue to assist waste minimisation (reclaim, reuse, recycle) activities, and to incentivise alternative waste generation and disposal behaviour.
A common view is held that the use for waste minimisation of money collected through a landfill levy for waste minimisation purposes is an important ‘paired’ or connected signal. Thus the signal given by the levy is not so much a price signal (at least at the start) but a signal that waste minimisation is being taken seriously and ‘waste’ sourced money is being used for this purpose.
Territorial Local Authorities want control over the funds raised by a levy. Large industry players are concerned that a local government operated system will follow local political and administrative agendas to use the money for a wider range of waste related and even non-waste activities and to garner more money over time. Industry believes that the initial design and subsequent management of a national system is more likely to be professionally developed and narrowly prescribed.
Waste movements are dictated by commercial arrangements, influenced by trucking times, and unaffected by local authority boundaries. The message is that waste collection and disposal arrangements and behaviours define their own region and they do not coincide with single or groups of regional council boundaries. They are also likely to change over time as older landfills close and others open.
All parties agree that from a ‘narrow’ efficiency point of view, collecting a levy by weight of material to be buried at the landfill is the most sensible approach. However, in the present situation of fewer, larger, and more widely dispersed landfills, often in private ownership, the Auckland by-law based levy must rely on waste companies collecting the levy, noting its city of origin. This presents significant practical challenges for all collectors with a business involving a wide range of waste types and that crosses Territorial Local Authority boundaries.
In its present form, with charges based on waste collection, the local Auckland North-West Alliance scheme does not appear to be a suitable model or basis for a regional levy arrangement. However, a disposal levy system operated regionally is feasible. It could be used nationwide. This has three particular challenges: setting the regional boundaries, managing cross boundary movement, and designing and getting acceptance for an efficient administrative structure and arrangements.
There was wide agreement that money collected through a levy should be repatriated to the local authorities. A population-based formula was accepted as reasonable, notwithstanding it would possibly penalise Territorial Local Authorities with industries generating large waste volumes. All organisations are informed and influenced by the recent history of the New South Wales waste levy which was hypothecated at a rate of 55% at the time it was established but subsequently completely absorbed into the state government coffers.
To gain wide, cross-sectoral support a national levy system needs to be simple, efficient and deliver substantial percentage of its income to the communities from whence it was raised. In respect of the last point, the long term commitment to continuing these arrangements must have a very high level of certainty.
If government were of a mind to develop and introduce a national waste levy, it should be done without delay. Uncertainty and indecision had bedeviled this subject to date and has caused enough unnecessary work for different parties. The work could be undertaken alongside a refreshed mandate to address other parts of the New Zealand Waste Strategy such as a more determined approach to the large waste streams that are not being reduced, such green wastes and putrescibles.
If a decision was taken to support the emergence of local/regional levies, it needs to be clearly signaled and acted on, also without delay. The actions that are needed are essentially to actively assist where asked.
