[Not government policy]
6. Some conclusions and opportunities
6.1 General conclusions
The recent history of discussion about a waste minimisation levy, and it has nearly always been described by designation or purpose as waste minimisation levy, has left some parts of local government, industry and the NGO-community frustrated. Around this issue there is a cross-sector core of agreement that a waste levy would be effective and should be introduced.
This work leading up to the New Zealand Waste Strategy and engagement with the Minister for the Environment and officials following that, created an expectation that a national levy could be introduced. When it became clear that government was not actively pursuing a national levy, local initiatives spread. Local government officials believe they have been encouraged in this direction and use their powers under the Local Government Act to deliver it.
There is now a clear challenge to government from Local Government New Zealand to ensure the Local Government Act is able to deliver a local/regional levy, and from the major waste companies and some other parties in the waste business, to introduce a national waste levy.
6.2 A regional levy system
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. It seems to work for waste collections with a limited range of wastes types (ie ‘household’ wastes) and for waste collectors operating within single or small groups of local authorities, ie Territorial Local Authority boundary bound. The complex data collection process for collectors involved with a wider range of waste types associated with commercial and industrial waste collection and operating across local authority boundaries imposes so much additional time and cost on the waste collection businesses and is open to too many variables of compliance knowledge, competence or commitment to be reliable. Expanded in its present form it will only get worse.
A scheme based on waste disposal is considered more effective and is a more or less universal concept with a strong precedent. It gets the price signal in the right place.
A disposal levy system operated regionally is feasible. It could be used nationwide. It has three particular challenges: setting the regional boundaries, managing cross-boundary movement, and designing an efficient administrative structure and arrangements and getting acceptance for them. The first two could be/should be left to the waste operators (councils and business) to resolve. They know where the waste goes and why, and how to intercept it if needed. Administration is a greater challenge.
Existing regional council administration may be geographically sensible in some parts of the country but if a common administrative set-up is needed, the administrative needs of the upper North Island ‘mega’ waste region would need to prevail.
Could an Auckland mega-region waste levy arrangement establish itself by the co-operative individual Territorial Local Authorities? It is possible. However, in my opinion there is a strong likelihood that it will fall short of its objective. It is likely that some combination of market distortions and undesirable perverse waste disposal behaviour arising from the progressive cobbling together of Territorial Local Authority partners, sustained opposition from major waste companies, with NGOs and other chippings in favour of a national levy, and the strong logic of a national levy will push the issue onto the political agenda for central government action.
6.3 A national levy system
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 (and cross-party) commitment to continuing these arrangements must have a very high level of certainty.
A collection system from landfills [In some locations transfer stations may be a more efficient proxy], by weight, is possible and would capture the very great majority of waste disposed of. Some new weigh bridges may need to be installed. Agreeing the quantum, at least the initial sum, should not be difficult as a $10/tonne is a widely discussed figure.
Establishing guidelines or rules for the use of the funds is straightforward at the core and a bit contentious at the margin. There are practical means of doing this. I address them in section 7 below.
Repatriation of the great majority of the levy-generated funds to Territorial Local Authorities is necessary. Done on a population basis, it will introduce some distortions but they are unlikely to be great. Other formulas can no doubt be devised, and may be needed eventually, but the simplicity test is likely to be challenged. Administrating a bidding system for some part of the fund based on clear criteria poses no challenges.
The design question of most significance (to meet the simplicity test) is how to apply it. A strong argument runs like this. The present cost and price arrangement for waste collection and disposal, reclaim, recycling and reuse have a market equilibrium. This reflects contractual arrangements, past investment divisions, current business activities, and a range of subsidies or not, and levies or not, at publicly owned transfer stations and landfills. This is the waste market warts and all – the playing field with all its humps and hollows. If a levy was ‘draped’ across this playing field, adding say $10/tonne to the current landfill charge at every landfill (i.e. irrespective of whether or not local levies are in place), the underlying market relationship between collection and disposal activities would not be disturbed or distorted.
6.4 Are they mutually exclusive?
Are levies at local and national levels of government mutually exclusive? Under the scenarios described in 6.3 above, for existing levies, the answer is ‘no’ although there will be arguments against it. The argument to have both regional and national levies in place seems harder to conceive.
The more important question is: “could (or should) local/regional levies be introduced in the future when a national levy system is in place?” Simple logic suggests not, although the case for levies on selective wastes, or indeed bans, can be made and would sensibly be provided for.
In some locations transfer stations may be a more efficient proxy.
