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Part 5: Improving the operation of the waste levy

Introduction

The Waste Minimisation Act 2008 imposes a levy of $10 per tonne of waste. Landfill operators will start paying the levy from 1 July 2009. The levy currently applies to all waste disposed of at municipal landfills (landfills accepting household waste), including material used for environmental management purposes such as landfill cover material.

The issues we want you to consider for Part 5

We want your feedback on a proposal to exempt cover material from the waste levy. Such material is vital to enable landfill operators to manage odours, wind, vermin and other environmental problems.

What is the problem?

A certain amount of relatively benign material, such as soil, is needed for landfill management purposes each day and as parts of the landfill are filled to cover waste to prevent odour and other environmental problems. The levy would apply to this material if it is sourced off-site.

Landfill operators have indicated that imposing a waste levy of $10 per tonne on this material may compromise their ability to manage the landfill as it may make it difficult to obtain this material. That is, people wanting to dispose of cover material are likely to find places that do not charge the levy, such as cleanfills and other landfills that do not accept municipal waste.

Inequities also arise as some landfills are able to source cover material from within the site, and this will not be subject to the levy because it is not waste. Other landfills accept waste suitable as cover material (such as certain types of construction and demolition waste, and sawdust) at a reduced charge.

The status quo of leaving the material subject to a $10 per tonne levy would create an incentive to leave unsanitary material uncovered and for there to be other risks in landfill operation. This could compromise the safe option of the landfills.

Objective

The objective is to ensure that imposing the levy does not cause a reduced level of environmental management at landfills that need to import cover material.

Options

The first option is to rely on the process set out in the Act where landfill operators can apply to the Secretary for the Environment for a waiver for an amount of levy. Each application would need to be considered on a case by case basis, imposing administration costs on the landfill operators and the Ministry.

A second option potentially available under the Act is for landfill operators to apply for levy refunds for material used as cover. However, this would require regulations to allow for refunds of levy paid on cover material.

The third option is to make regulations exempting cover material from the waste levy. Section 26 of the Act provides for regulations to exempt a waste stream from the levy.

However, the Act specifies that the Secretary for the Environment must be satisfied that exceptional circumstances justify any waiver or provision for refunds, or exemption regulations. It is difficult to justify the use of daily cover material for environmental management purposes as an exceptional circumstance.

Proposed option

The preferred approach would be to prescribe a zero rate for the levy for specified cover material. The Ministry is considering making regulations under section 41(d) or (e) to provide that cover material required for environmental management purposes (up to 10 per cent of the weight of material deposited in the landfill) has a levy rate of zero.

Effect of the proposal

The proposal to set a zero levy rate for cover material used for environmental management purposes (up to 10 per cent of the volume of the landfill) will impact on the revenue from the levy. The reduction will be in proportion to the tonnage used. Some of this material, but not all, has been included in the waste tonnages included in the various landfill surveys.

Questions for Part 5

Use the following questions to guide your feedback on improving the operation of the waste levy. You do not have to answer every question.

  1. What is the maximum amount of cover material required for effective environmental management purposes (up to 10 per cent of the weight of waste deposited in the landfill)?

  2. Should material used for environmental management purposes be exempt from the waste levy? If not, why not?

    If so:
    • What should be the maximum allowable percentage of cover material exempt from the levy?
    • What are the benefits of a zero rate for cover material?
    • Would this impose any additional operational costs?
  3. Are there any other options for addressing the potential perverse effects of applying a $10 per tonne levy rate?

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