Overview

In December 2005, the Ministry for the Environment commissioned an informal round of consultation on the issues around the introduction of a waste levy.  In March 2006 the Ministry announced that it would take a lead in considering potential models for a waste levy (tax) and facilitated meetings of a working group comprised of the metropolitan councils and larger waste management companies.  The Packaging Council attended as an observer. 

The working group drafted a proposal for a levy on all solid waste going to “final” disposal facilities (in landfills and waste incinerators, etc.) in New Zealand.   The Ministry for the Environment sought feedback on that proposal and made a formal proposal to the Minister for the Environment in July 2006.  The Ministry also employed a consultant to assess the impact that the levy may have on voluntary product stewardship programmes such as the Packaging Accord.

Click here to view a copy of the DRAFT PROPOSAL FOR A WASTE LEVY IN NEW ZEALAND prepared by the local council / waste industry working group.

A waste levy is also included in the Green Party’s Waste Minimisation (Solids) Bill which passed its first reading in Parliament in June 2006 and is now before the Local Government and Environment Select Committee.  Under the Bill, a levy of $25 per tonne would be charged to waste sent to landfill, cleanfill or to incineration.

This would equate to a tax bill to New Zealand of approx. $160 million per annum.

Government Policy on a Waste Levy

In February 2007, the Prime Minister announced her plans for improving waste management, which included some form of waste levy to help fund better waste minimisation infrastructure.  In September 2007, the government released details of its preferred waste minimisation policy, including a national waste levy of $10 per tonne on waste going to landfill. 

This would equate to a tax bill to New Zealand of approx. $30 million per annum.

50% of the levy funds would be given to local authorities on a population basis to fund waste minimisation activities and 50% would be made available to businesses, local authorities and community groups from a contestable fund.

Australian Productivity Commission's                           Recommendation on Waste Levies

Governments should discontinue using landfill levies because:

• the externalities of disposal to a properly-located, engineered and managed landfill are typically small, and the scope for applying levies without duplicating the effect of existing regulation is very limited;

• residual disposal externalities vary significantly according to waste type, location of disposal and type of landfill facility, and it would be impractical to vary the levy to reflect that variability; and

• using levies to achieve selected landfill diversion targets and revenue generation to fund environmental programs will not encourage outcomes which are in the best interests of the community, and may have perverse consequences, such as increases in illegal dumping and other forms of evasion.

[Recommendation 9.1]

Productivity Commission 2006, Waste Management, Report no. 38, Canberra

Click here to download the Productivity Commission's report

Packaging Council Position

The following is a summary of the Packaging Council’s submission on the waste levy proposals as set out in the government’s Supplementary Order Paper (SOP) to the Waste Minimisation (Solids) Bill:

• The Packaging Council reiterates its concerns about the introduction of a waste disposal levy (tax).  A levy is one form of economic instrument that may be used and we consider that there should be further investigation into the use of other economic instruments to ensure that the most appropriate and effective mechanism is selected.
  
• Raising revenue for waste minimisation activities solely by means of a waste levy is an inefficient way of providing funds for these activities.  This has been well researched and documented by the Australian Productivity Commission’s report and the NZIER ‘Waste or Rationality’ report.

Notwithstanding the above comments, we made the following recommendations:

• The Waste Advisory Board undertakes a national strategic and economic assessment of waste management to specifically identify where additional funding is required and at what level that funding needs to be to achieve the desired outcome.  These areas should then be ‘ranked’ based on strategic importance to New Zealand and consideration given to the best economic model to fund these projects, be that out of established tax regimes, a new waste levy or other appropriate economic instruments.
  
• Require local authorities who own or operate a landfill to demonstrate that their gate fees include all externalities associated with their landfill, including the long term management of the site.  Increased gate fees which include the full and real cost of disposal could in itself meet any local funding shortfall.
  
• Any levied funds should be 100% contestable.  Giving territorial authorities 50% of revenues raised as a right, will not, in our opinion, advance a national strategic plan aimed at waste minimisation or resource recovery or allow the level of funding required to be quantified.
  
• Waste generated from recycling should be exempt from any waste disposal levy, otherwise a levy would increase the cost of recycling and could make some recycling operations unviable.  Clearly this would be contrary to the intention of the SOP.

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Waste Levy Breakfast Workshop - May 2006

NIGEL IRONSIDE Manager within the Sustainable Industry Section Ministry for the Environment

Nigel's role at the Ministry involves responsibility for a number of programmes designed to implement the New Zealand Waste Strategy.  These include; the voluntary packaging accord from central government's perspective, improving the management of hazardous wastes, and diversion and reuse of large waste streams such as construction and demolition, and organic wastes. Nigel is also responsible for the recently initiated work programme to provide advice to the Minister on the issues of waste levies.

IRENE CLARKE Senior Policy Analyst Local Government New Zealand

As the organisation representing the national interests of all councils in New Zealand, Local Government New Zealand has an interest in the implications and opportunities of waste levies for councils.  Irene will be joined by Simon Collin, Planning Manager City Water and Waste, Christchurch City Council.  While there is not one local government position on national waste levies, Irene and Simon will provide a local government perspective to discussion on waste levy issues at the meeting.

SARAH GORDON Resource Analyst - TerraNova Caretaker Chair - Recycling Operators of NZ

Sarah has been involved with the recycling industry since 1991, initially working for the Christchurch City Council as a waste minimisation officer and since 1997 for TerraNova (previously known as the Recovered Materials Foundation) as publicity and information manager, and more recently as a resource analyst. Sarah has been on the executive of RONZ since 1996 and is currently the caretaker Chair.   Sarah will present on RONZ’s perspective on waste levies, with practical examples on how they have operated in Christchurch.  This includes a snapshot of a range of projects funded through the waste levy, including the Sustainable Initiatives Fund managed by TerraNova on behalf of the Christchurch City Council. RONZ supports the levies as both a means to make alternate options more financially viable (eg composting, recycling etc is often hard to compete with against low landfill costs), and also as a means to fund initiatives and R&D for waste diversion.  However, RONZ believes better definition is required on contestable and transparent allocation of funding and funding criteria.

	ALASDAIR THOMPSON Chief Executive Officer Employers & Manufacturers Association (Northern)
	Alisdair is a member of the APEC Business Advisory Council and Managing Director of Linrick Investments (NZ) Ltd.  Formerly the Mayor of the Thames Coromandel District Council, a member of the Waikato Regional Council Land Transport Committee, a director of Power New Zealand Ltd, Health Waikato Ltd and Commissioner – Waikato Area Health Board.

TOWARDS SUSTAINABLE PACKAGING

77 Greenmount Drive, East Tamaki, Manukau
PO Box 58899, Greenmount, Auckland
PHONE 09 271 4044, FAX 09 271 4041
EMAIL: pac.nz@packaging.org.nz