The waste levy

With product stewardship proposals watered down, the main impact of the Waste Minimisation Act will be felt through the waste levy.

From 1 July 2009, all landfill operators are required to pay a levy of $10 for every tonne of waste that comes through their gates. This levy is being passed on to consumers and businesses through higher dumping fees.

If you put out your trash in an official council rubbish bag, the levy also means you’ll be paying more to buy the bags – though you probably don’t need to panic too much. Ministry for the Environment spokesperson, Martyn Pinckard, reckons an extra 20 cents per bag is all most consumers will pay – that’s an increase of around $10 a year for households that use a bag a week.

The aim of the levy is to increase the price of waste disposal and, ultimately, to help dissuade us from our wasteful ways. But whether an extra 20 cents a week will be enough to do this is debatable. The current economic climate is likely to have a more immediate impact on waste generation. There’s a well-established link between economic growth and waste. When growth declines, the amount of waste we produce drops. The reverse also holds: high growth rates mean more waste.

Where your money goes

The $10 tax will have at least one tangible outcome. The Act requires the money we pay through the levy to be spent on waste-reduction projects. Based on available data, a sizable amount of cash could be raised. Each year, we dump around 3.2 million tonnes of waste into landfills. With the levy set at $10 a tonne, that’s a potential income stream of $32 million a year.

However, this multi-million-dollar pie has to be split several ways. Half is earmarked for distribution to the country’s 73 local councils. Each council’s cut will be set according to the population it serves. The other half (minus administration costs) will go into a contestable funding pool administered by the Ministry for the Environment. Organisations can apply to this fund for money to set up their own waste projects.

What’s not clear is whether levy income will simply displace existing funding. For example, councils could use their share to fund services they already provide, such as recycling, rather than direct it towards new projects. There’s also a possibility that levy income may displace funding for the Environment Ministry’s own work on waste. Funding for the ministry has already dropped to $69.9 million for 2009/10, down from $83.7 million in 2008.

Just how effective the waste levy will be may not be known until it’s reviewed in two years. Decisions already made by the government are likely to impact on what’s achieved. Earlier this year the Minister for the Environment, Nick Smith, announced an end to “Govt3”, a waste-reduction and resource-efficiency programme operating across government agencies. 

Landfill charges

Exactly what you pay to dump a tonne of rubbish will vary depending on where you live. Wellingtonians pay $93.25 a tonne. Christchurch residents pay around double that: $194.50 a tonne. Waiheke Islanders are charged $181 a tonne to dump their household waste. How much you pay is influenced not only by your location but also by who owns the landfill. Some landfills are council owned; others are owned by commercial operators and their charges will include a profit margin.