A Waste Disposal Levy is charged on all the waste that households and businesses send to landfill.
A Waste Disposal Levy is charged on all the waste that households and businesses send to landfill.
Opinion by Barney Irvine
THREE KEY FACTS
The Waste Minimisation Fund is tasked with supporting initiatives to change the way NZ creates and manages waste.
This includes reducing emissions from waste without causing other environmental harm.
The fund is currently closed as systems are updated to work towards the Government’s new investment priorities. It is expected to reopen “in the coming months”.
Barney Irvine is executive director of the Waste & Recycling Industry Forum, which represents New Zealand’s largest waste collectors, recyclers, and landfill operators. Its members handle close to 95% of NZ’s household waste and recycling, and 85% of municipal landfill waste.
OPINION
It’s not often a href="https://www.nzherald.co.nz/topic/government/" target="_blank">Government manages to get offside with everyone in a sector of the economy, but this one seems to have done it.
From big business to community organisations, every group we speak to in the waste and recycling sector has been left fuming by a set of changes that were rammed through as part of Budget 2024.
The changes relate to the Waste Disposal Levy, which is a levy charged on all the waste that households and businesses send to landfill.
The objective of the levy is to incentivise people to generate less waste and find opportunities to re-use and recycle, and the revenue – expected to reach around $260 million this year, following progressive hikes in the levy in recent years – is used to fund waste minimisation projects.
More specifically, the changes relate to the 50% of levy revenue that goes into the Waste Minimisation Fund (WMF), a contestable fund administered by central government (the other 50% of revenue is automatically allocated to local government).
The WMF is intended to be a primary funding source for national recycling and resource recovery projects – everything from larger-scale infrastructure (say, facilities for recycling plastic, glass and construction waste) to feasibility studies and community initiatives.
If New Zealand is to bridge an estimated $4 billion waste and recycling infrastructure funding gap in the years ahead, and achieve the dramatic improvement in waste minimisation that we all want to see, it will rely heavily on the WMF.
What the changes have done is open the WMF up to a whole lot of new activities. Some of these are broadly connected with the waste minimisation focus, like fixing up old landfill sites or cleaning up after natural disasters.
But other activities have nothing to do with waste minimisation at all.
In particular, the changes mean the levy will now fund “activities that reduce environmental harm and/or increase environmental benefit”. As far as we can see, this means that almost any environment-related investment is now fair game.
The question is not whether these new activities are a valid use of government money.
Rather, it is the extent to which loading them on to the WMF will crowd out investment into the recycling and resource recovery projects the fund was meant to help deliver.
What is clear is that opening up levy revenue in the way the Government envisages will leave little funding available for the existing programme and, as a consequence, strike a blow to progress towards national waste minimisation and emissions-reduction targets.
In short, our country will generate more waste, recycle less, and emit more in the way of harmful greenhouse gases.
This represents a significant environmental cost, and one that all New Zealanders will be concerned about.
The fact that the Government is imposing this cost in order to cross-subsidise other areas of the environment portfolio, and in turn help to balance its budget, is a classic case of robbing Peter to pay Paul.
In our view, a more practical approach would be to draw not just on the WMF, but on the local government share of levy revenue as well.
'The waste and recycling sector is not a cash cow – it’s time to start taking it seriously.'
Freeing up councils to invest in a wider range of waste minimisation initiatives, and allocating funding to them on the basis of need, rather than on the basis of population size (as it is allocated currently), would spread the additional funding burden and drive better returns from local government’s 50% share.
We would also insist that the amount of levy funding that could be used for non-waste projects be capped at a reasonable and realistic level.
That said, our view remains that projects that bear no relation to waste minimisation should ultimately be funded out of their own budget allocations – not just to avoid starving the existing budget, but also to avoid diluting the link between the activity the levy is charged for and the outcomes the levy delivers.
Had the changes not been rushed through in order to meet Budget 2024 timelines, with no consideration of alternative approaches and no stakeholder or community consultation, we would have had the chance to provide this feedback.
Regardless of the final form the changes take, they need to be accompanied by much more engagement from the Government with the long-standing, deep-seated challenges faced by the sector.
The fact that the changes have been actioned ahead of any steps to finalise and implement the national waste strategy, move ahead with a badly needed public education campaign to support kerbside recycling, or advance the product stewardship programme (which will guide many future infrastructure decisions) does not send a positive message about the Government’s priorities for our sector.
The impression it gives is that the Government is less concerned with minimising waste than accessing a new revenue stream.
The waste and recycling sector is not a cash cow – it’s time to start taking it seriously.
