Environment Protection Amendment (Landfill Levies) Bill
Tuesday, April 13, 2010
Second Reading I am pleased to lead the debate for the coalition
on the Environment Protection Amendment (Landfill Levies) Bill 2010. At the
outset I thank the minister, his staff and the department for the very
comprehensive briefing we had; it was greatly appreciated. I would like to make
it clear from the outset that the coalition is entirely supportive of measures
which promote recycling and resource recovery and which reduce waste landfill.
We also support measures that positively engage with families, communities,
businesses and governments to improve the management of recyclable materials and
to reduce the amount of reusable resources that are being delivered into
landfill.
The coalition has a proud history of supporting and strengthening the management
of waste in Victoria. The Kennett government created EcoRecycle Victoria, which
has now become Sustainability Victoria. We introduced the prescribed waste levy,
signed the national packaging covenant and expanded the geographic application
of landfill levies across Victoria. Let us not forget the Environment Protection
Authority was an initiative of a former Liberal government.
However, there are some aspects of the bill that we do not support in terms of
this government's approach, and they include the lack of consultation and the
lack of transparency and clarity when it comes to handling important legislation
such as this and handling public policy matters. Victoria has one of the
cheapest landfill disposal costs in the country. In simple terms Victoria is a
cheap place to dump waste. Environment Victoria chief executive officer Kelly
O'Shannassy welcomed the increased levy and stated:
... for too long the cost of dumping waste in Victoria has not reflected the
costs for the environment and the community;
Reducing the amount of waste going into landfill will create better
environmental, economic and health outcomes for many Victorian families and
communities and for the Victorian environment as a whole.
In 2007-08 Victoria generated just over 10 million tonnes of waste. Of that, 4
million tonnes went to landfill and 6 million tonnes was recycled. The highest
percentage of waste has as its source construction and demolition, predominantly
concrete, and then commercial and industrial waste, particularly steel and
paper. The third highest source of waste is municipal waste, but interestingly
nearly half municipal waste is organic waste.
However, the highest proportion of waste going into landfill is municipal waste,
and as I said, a significant portion of that is organic. It is a big generator
of methane gas emissions. It is important that we reduce these emissions to
ensure we can meet broader greenhouse gas targets as well. The government has
promised that an increase in the landfill levy will increase efficiency and
recycling by up to 33 per cent and will also create up to 700 additional jobs.
A reduction in waste going to landfill is expected to occur for two reasons.
First, if households, industry and local councils are paying higher costs to
dispose of waste to landfill they will be encouraged to reduce or better manage
their waste through other means such as recycling, reuse or other cost-saving
measures. The second important point is that local councils and the recycling
sector are now to be better funded to manage waste. Education and awareness
programs should be funded in tandem with improved waste management
infrastructure, research and development.
The government will collect approximately $200 million over the next five years
from the landfill levy. The money will be directed towards initiatives which
promote the environmentally sustainable use of resources and waste management,
particularly via the Sustainability Fund. A proportion of funding has already
been committed and will assist councils, the community and industry to reduce
waste to landfill and increase recycling activities.
The government's $54 million announcement will provide $14 million for
businesses to reduce waste generation, $14 million for councils and recyclers
for increases in recycling rates, $8.5 million for councils for improved waste
collection, $6 million to combat illegal dumping and $5.7 million for
environmental agencies and waste management groups. This pool of funds is
intended to encourage lower landfill disposal and assist communities, businesses
and governments to work towards positive waste management solutions. I will talk
a little more about that later.
The objectives of the bill are to increase recycling and reduce the amount of
waste delivered to landfill. To fulfil this objective the Environment Protection
Act 1970 will be amended to increase municipal and industrial landfill levies.
To summarise, municipal landfill levies in metropolitan Melbourne will increase
from $9 per tonne to $40 per tonne by 2011-12. In rural areas municipal levies
will rise from a current rate of $7 per tonne to $20 per tonne by 2011-12.
Industrial landfill levies in metropolitan areas will increase from a current
rate of $15 per tonne to $40 per tonne by 2011-12, and rural areas will also see
a rise in their industrial landfill from $13 per tonne to $35 per tonne in
2011-12. Levies in metropolitan Melbourne will experience an initial increase of
233 per cent for municipal waste and 100 per cent for industrial waste in the
first year. For rural areas the increases will range from 114 per cent for
municipal waste and 92 per cent for industrial waste.
The bill is very short; there are only four clauses. I do not know whether that
sets a record in terms of the shortness of a bill. Importantly there is a lot of
detail to be found in a government press release which was issued on the same
day the bill was introduced. I will take a moment to talk about the levy
increases. While the legislation projects levy increases for the next two years,
the press release sets out landfill levy charges for the next five years.
According to the minister's press release Victorians should expect an annual
increase in their landfill levy each year for the next five years.
The increases for the next two years are in the bill. According to the press
release, the increases represent a 10 per cent rise each year from 2011-12 to
2014-15. The government has promised an interim review into the impact of the
levies. Many of the people I talked to in the process of consultation about the
bill believed there would be two years of increases and then the review would
determine subsequent price rises. However, the fact is that the subsequent three
increases are set at 10 per cent. The government is not required to return to
the Parliament to do this, as it is permitted under the regulations to impose
increases of up to 10 per cent.
Those increases will happen as a matter of course and not as a result of the
review in two years time, so it is absolutely critical that this review is
genuine and transparent. Future increases must take into account the outcomes of
this review and the way waste is being managed in Victoria. I certainly
encourage and look for the commitment of the minister to that review being
genuine, open and transparent so that it may assist in ensuring that those
future rate increases -- which have already been announced and are able to be
enacted -- have the desired outcome.
To reiterate my earlier point, we are entirely supportive of measures which
reduce waste to landfill. Having said that, we do have some reservations and
concerns about the government's handling of this legislation. I will use this
opportunity to present the views of many individuals, businesses and local
government bodies which I have approached and which have approached me. I thank
them all for their very thoughtful contributions to this legislation and policy.
The first area is local government. The government's decision to increase the
landfill levy has unfortunately angered local councils right across Victoria.
Councils and councillors see this levy as yet another attempt by the state
government to interfere in local government matters and impose more costs on
currently cash-strapped councils. The president of the Municipal Association of
Victoria, Bill McArthur, believes that, and I quote:
...
the majority of landfill levies collected by councils through garbage charges
for kerbside collection services and gate fees to dispose of waste have not
been reinvested by the state into local waste management and resource recovery
initiatives.
While councils will be responsible for the collection of the levy, the reality
is that the funding from the increased levies will end up back in state
government coffers, with the intention of being reinvested into state government
programs and initiatives. Elected councillors fear that any resulting community
disapproval will end up having heavy political repercussions in their
municipalities. The mayor of the City of Banyule, Wayne Phillips, stated:
When we collect that charge it will read as a municipal charge so people will
think that we are getting the money ...
The state government should be collecting its own taxes and not us.
Similarly, the president of the Municipal Association of Victoria stated that
councils:
... faced the brunt of community backlash for the hidden costs of complying
with state policy, regulation and levies.
Another major concern for councils is the timing of this legislation, which has
left them with very little time to plan their upcoming 2010-11 budgets. Most
local councils maintain that they first heard of the proposed increase in the
landfill levy when the minister introduced the bill into the Parliament in the
last sitting week.
Given that councils are currently in the process of finalising their budgets for
the 2010-11 period and they are about to go out for public consultation, as they
are required to, many will be forced to make hurried changes which will result
in last-minute rate rises for Victorian families and increased gate fees at
transfer stations.
I have in front of me a copy of a letter addressed to the Premier and signed by
the mayor of the City of Knox on behalf of the eastern region mayors. The letter
states:
... in some municipalities there will be a need to increase rates by more than
1 per cent in 2010-2011 to offset the increase, together with the significant
increases in gate charges at transfer stations.
While the government estimates that household charges will increase from $4 to
$13 a year in the first year, many councils believe families will be paying
close to $20 a year, a 400 per cent increase. And of course these charges will
become higher in later years as further increases flow through. The mayor of the
City of Whittlesea is also concerned. He stated:
Whittlesea's current socioeconomic disadvantage will be augmented further by
the state government's major increase to the landfill levy ...
The minister should seriously consider whether financial compensation should be
provided to councils for the upcoming budget year given the inappropriate time
frames for the 2010-11 budgets in terms of understanding the costs the
municipalities will have to bear.
My colleagues and I have received many emails, letters and press statements from
upset councillors who are frustrated with the government. The sad reality is
that this backlash from local government could have been avoided if the state
government had bothered to consult. In the bill briefing we asked what had
happened with the consultation. What is very clear is it has been a passive
process. Any council or organisation that contacted the minister's office or the
department was happily dealt with and included, but there was no proactive
consultation asking for people's views, particularly those of people who will be
affected by this legislation. I have to say that, in reading the history of
these debates on the environment and particularly landfill levies, failure to
consult has been a very common theme over the course of this government.
Too often we see Labor ministers trying to impose laws with little or no
consultation, or with the pretence of it. We have seen some spectacular examples
of that in the other chamber.
The government seems to be surprised when the parties do not then necessarily
fall into line. We must stop this dictatorial approach. This legislation makes
the councils a key agent in implementing the government's waste policy, and the
government should have consulted them appropriately.
I want to talk briefly about the impact on the recycling sector. In my process
of consultation on this legislation I realised that the government's reluctance
to consult on the levy increases was not confined just to local councils but
also included business and industry groups. Victoria has a number of companies
which recycle and treat material that would otherwise go to landfill, yet major
companies were never formally approached by the government despite the obvious
impact of the legislation on them. For example, the Australian Industry Group
(AIG), the peak body for many businesses in Victoria, approached the government.
As a result it played an important part in the negotiations and in achieving
this result, but it was not formally consulted and it required its then
approaching the government for it to be included.
In relation to the proposed increases, Tim Piper from the AIG stated that they
were not unacceptable but said:
What we got was only satisfactory to an extent. The $30 we can live with ...
but we will be concerned when it increases well beyond $30. In this climate,
with the dollar as it is, these types of increases will hit some companies
very hard.
The AIG and the opposition will be watching the government to ensure that
Victorian businesses do not become uncompetitive as a result of the levy
increases that we will be seeing under this legislation. The impact of levies is
also covered in a report to the Environment Protection Authority (EPA) by Warken
Ise and Marsden Jacob in 2007. The report examines the impact of landfill levies
on the steel recycling sector in Victoria. The metal recycling companies across
the state are taking positive steps to significantly reduce the amount of waste
that ends up in landfill, but excessive increases in the landfill levy without
sufficient investment in research and development and improved waste management
infrastructure could be damaging for the industry.
The report to the EPA found that the doubling of the levy on industrial waste
from $15 to $30 per tonne could impact adversely on aspects of the steel
recycling sector and lead to an increase in some materials that would otherwise
be recycled going to landfill in regional areas. Increases beyond that would
have an increasingly severe impact on steel recyclers' operations.
The steel recyclers are also concerned that the increase in the landfill levy
will result in an increase in illegal dumping as people try to avoid the higher
costs of disposing of waste material and that it will no longer be viable,
particularly for waste from more remote parts of the state which requires
significant transportation, to be recycled as part of their processes. Another
concern is about the shipping of materials such as car bodies to cheap and
poorly managed landfills offshore, and there are no levies on these exported
unprocessed materials.
It is important for the government to ensure that the increase in the industrial
levy does not adversely impact on the material recovery rates or result in waste
being diverted from recycling companies to cheaper offshore landfills. Fraser
Brindley from Environment Victoria also raised the need to consider providing
recycling industries with a rebate in the event of substantial levy increases.
He claims that if you have a high landfill levy and a recycling business that
has a high amount of residual material, it can provide a disincentive for
industries to recycle and cut across the economics for running a recycling
business.
Similarly the campaign director of the National Recycling Initiative, David
West, last year wrote to the Premier warning that an excessive increase in the
landfill levy could act as a deterrent to recycling if the cost of sending
residual material to landfill outweighed the income from those recycled
materials.
He points to New South Wales, where the cost of disposing of recycling residuals
has become so high that waste levies are starting to render some recycling
initiatives unviable. The government must ensure that a significant amount of
the funding collected from the levy is reinvested into the recycling industry to
better support it in developing sustainable waste management infrastructure and
processes.
That gets me to the use of the funds raised. As I have said, the state
government will receive approximately $200 million over the next five years from
landfill levies. The reality is that the levies will be collected from many
landfill sites and transfer stations right across Victoria, and it will be
difficult to accurately track both the amount of money collected and the
subsequent use of those funds. This Labor government has a track record on
failing to reveal where taxpayers money is being spent, and we do not have to
look too far for examples.
The government did an embarrassing backflip on the Hattah-Nowingi toxic waste
facility, and this resulted in Labor increasing the levies on the prescribed
industrial waste. This created a pool of funds equalling tens of millions of
dollars. The vast majority of that money is sitting with the EPA, and there has
been little or no transparency when it comes to revealing where the money has
actually been spent.
I am seeking assurances from the minister that the millions that will be
collected from household and industry waste will be invested in a way that is
both appropriate and transparent. So far we have had announcements in relation
to $54 million of funding, which leaves approximately another $150 million on the table.
The government has said it will be used to tackle climate change and
to protect the environment, but we want to make sure it is not just a licence
for the government to fund its pet projects; it needs to be reinvested to ensure
we achieve our recycling objectives and reduce our waste to landfill.
The other thing to be concerned about in relation to this funding is that the
government will use it to fund core government processes. For example, part of
the commitment of government has been $6 million from the levy for a strike
force to address illegal dumping. We certainly need to attack illegal dumping,
and there are concerns that the increase in the levy will increase the amount of
illegal dumping. Surely the policing of the laws of this land is core government
business and should be funded through core government revenue, not from this
increase in the landfill levies.
We need to make sure that innovation, retooling, new investment, new collection
and sorting, kerbside collection and consumer education are supported to achieve
our next level of recycling and waste reuse and that the money is spent well to
achieve that.
One of the key objectives of increasing the landfill levy is to reduce the
amount of waste going to landfill. The government expects to see a 33 per cent
reduction in the amount of waste that goes into landfill. Much of this is based
on modelling from the EPA. This is a commendable target, but there is little to
suggest that the levy increase on its own will lead to a change in attitudes and
a change in management, particularly among households, which is going to be
needed.
The Towards Zero Waste strategy of the government produces a progress report.
The report for 2007-08 shows that not only has Victoria stagnated in recent
times in terms of getting any real reduction in the amount of waste going to
landfill but also that current trends indicate we are not on target to meet the
government's 1.5 million tonne reduction in solid waste generation. It also
shows that in the last year our resource recovery rate dropped and there has
been an increase in the solid waste disposal to landfill. If we have any hope of
achieving the 33 per cent reduction in waste to landfill, we need everyone to be
focused on waste minimisation and on ensuring that householders particularly are
educated and assisted in managing their waste.
A second objective of the legislation is the creation of 700 additional jobs
over the next five years. This figure is based on research conducted by Access
Economics which indicates that for every 10 000 tonnes of material that is
recycled more than nine jobs are created.
Victoria has a dynamic recycling and resource recovery industry, and we need to
draw on this growing industry to leverage job growth, new skills and innovation.
The government can make all the commitments it wants about green job creation,
but without any detail or genuine frameworks it is hard to imagine how those 700
jobs will materialise. Labor's much-touted Jobs for the Future strategy is now
more than a year overdue, and without a clear vision for green jobs Victoria is
at risk of being left behind and of not taking advantage of potential green jobs
for the future.
I want to take a moment to have a look at the impact of this legislation on
regional landfills. My colleagues -- and I am sure we will hear from them in
more detail later -- from electorates that border New South Wales have raised an
important issue regarding the implications for northern Victoria of the increase
in the landfill levy. Even after the levy increases Victoria will still have
lower landfill charges than does New South Wales.
Just last week the New South Wales government increased its waste levy even
further.
However, this levy only applies to landfills related to the Sydney region and
surrounds. Landfills in southern New South Wales do not charge levies at all. A
concern for many regional Victorian recycling businesses is that the increasing
cost of waste landfill in Victoria will make it more tempting for people to
cross the border to New South Wales and dispose of their waste in New South
Wales landfills where they will not have to pay the levy.
As attractive as it might be to send our waste over the border, what we know is
that New South Wales landfills, particularly in country areas, have lower level
EPA requirements and regulations, and as a result we will achieve poorer
environmental outcomes.
The Victorian government needs to work with the New South Wales government to
address these differentials in cost and make sure that our waste is being dealt
with appropriately.
Over successive years progressive state governments have done much to manage
waste in a better and more sustainable way, but one idea that has been rejected
by this government is container deposit legislation. Container deposit schemes
are proven to boost recycling rates and reduce litter, and one has been
operating effectively in South Australia for 30 years.
Last year the coalition supported legislation introduced in the other house
allowing the use, sale and recovery of beverage containers to be regulated and
funded through a levy. This bill was passed by the Legislative Council, but
Labor vigorously opposed it and arrogantly refused to debate the legislation in this chamber.
This government has spent a decade neglecting Victoria's waste deposit industry,
and it has repeatedly opposed any attempts to implement container deposit
legislation. The national litter index shows that Victorian local councils spend
more than $70 million cleaning up litter, and drink containers comprise about 30
per cent of the total volume of litter. A national container deposit scheme
would be not only greatly beneficial to the environment but also incredibly
positive for the communities and community groups across the country that would
generate funds as a result of it.
To sum up, I reiterate the coalition's support for positive measures to promote
recycling and resource recovery and to reduce the amount of waste going to
landfill. Victorians should be proud of their efforts as recyclers.
As a community we have made considerable progress towards increasing our
recycling and resource recovery efforts to better protect the environment and
ensure it is sustainable. We support further measures, particularly the
investment by the state government, alongside councils, businesses and community
organisations, to make sure this can be achieved.
However, we have a number of concerns about the way the government has
introduced the bill and about its potential impact. We will not oppose the bill,
but we think it is important that the government considers carefully the
concerns I have raised and those that will be raised throughout the course of
the debate. We hope that in this chamber members opposite will respond
positively and thoughtfully to the concerns raised and that the minister in the
other place can provide some of the assurances that we have sought through this
process. I commend the bill to the house.
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