Victoria’s Waste Levy Increase: The Key Statistics

The waste levy (previously ‘landfill levy’) is set to increase in Victoria from 1 July 2021. Originally planned for 2020, this levy hike was delayed for 12 months as part of the Victorian government’s Covid-19 response Business Resilience Package.

To understand the background behind the new landfill levy rates and what the Victorian government is aiming to achieve, we need to take a look at the status quo for waste disposal in Victoria.

The success of landfill levy schemes in South Australia and in the European Union have no doubt contributed to this change in policy in Victoria.

Here are the key statistics you need to know to understand Victoria’s new waste levy.

Waste Levies in Victoria: Then and Now

When was Victoria’s waste levy introduced?

Landfill levies were first introduced to Victoria in 2011-2012, at the following rates:

  • $22/tonne for rural municipal waste
  • $38.50/tonne for rural industrial waste
  • $44/tonne for metro municipal & industrial waste

Rates were indexed over the next decade, with less than 10% increase per year.
All this changed in 2019, when new changes to landfill levy rates were announced.

The Recycling Victoria report & Victoria’s levy increase

In 2019, the Victorian government released its Recycling Victoria report, outlining key changes to help achieve state-wide recycling and resource recovery targets.
Rates were originally set to increase from 1 July 2020, but the fee increase was delayed as part of the Victorian government’s Covid-19 response package.

Landfill levies in Victoria over time (per tonne)

Year2019-20202020-20212021-20222022-2023
Metropolitan Municipal & Industrial Rate$65.90$65.90$105.90$125.90
Rural Municipal Rate$33.03$33.03$52.95$62.95
Rural Industrial Rate$57.76$57.76$93.19$110.79

Waste Levies Around Australia: How Does Victoria Compare?

Full infographic at https://jimsskipbins.com.au/victoria-waste-levy-infographic/

Prior to 1 July 2021, Victoria’s waste levy has been one of the lowest in Australia.

This disparity has encouraged the transport of interstate waste from other states to be landfilled in Victoria.

Only Tasmania’s waste levy is lower, at $20/tonne, while ACT still has no formal waste levy.

Waste levies in Australian states ($/tonne)

StateMetro Waste Levy (per tonne)Regional Waste Levy (per tonne)
Queensland$80$80
New South Wales$147.10$84.70
Australian Capital Teritory
Tasmania$20$20
South Australia$143$143
Western Australia $70$70
Victoria$105.90$52.95 to $93.19

How do people in the waste management sector feel about landfill levies? Almost 80% of people surveyed in the C&D waste industry agree waste levies are effective.

Aiming for Waste Levy Parity in Australia

Victoria’s new waste levy of $105.90 (metropolitan) and $52.95 to $93.19 (municipal/industrial regional) raises the rate closer to NSW’s $147.10 metro / $84.70 regional levy.

While Victoria’s waste levy is still lower, the interstate transport of waste also incurs bulk transport fees, bringing total costs on par with landfilling in New South Wales and removing the financial incentive.

Let’s take a look at some statistics on waste management in Victoria today.

Waste Management & Recycling Statistics in Victoria

How much waste is produced in Victoria?

Victorians produced a total of 13.4 million tonnes of waste in the 2017-18 year.
Out of this total:

  • 8.7 million tonnes were recovered
  • 4.4 million tonnes went to landfill
  • and about 200,000 tonnes were dumped.
    This third category includes litter as well as illegal dumping and stockpiling of waste.
    Resource recovery includes recycling and waste-to-energy recovery.

What percentage of waste is recycled in Victoria?

The resource recovery rate in Victoria – including recycling – is currently 65% (based on 2017-2018 figures).

The Victorian government aims to reach a resource recovery rate of 80%.

This means redirecting at least an additional 2.01 million tonnes from landfill each year.

Future predictions of waste & recycling in Victoria

By 2046, Victoria is predicted to generate 20 million tonnes of waste yearly.

This is an increase of more than 40% compared to today.

Accomplishing an 80% recovery rate would keep 16 million tonnes of waste out of landfill in 2046 alone.

So what are the motivations for raising the landfill levy?

The Purpose of Waste Levies: A Summary

Landfill levies (also known as landfill taxes or waste taxes) aim to:

1.       Make resource recovery and recycling more financially appealing than landfill

Without intervention, landfill is often the cheaper option for waste disposal. By increasing the cost of sending waste to landfill, these waste levies aim to make recycling and resource recovery more financially competitive.

While landfill levies do affect householders, these regulations primarily target industrial and commercial waste generators, who are incentivised to find alternative solutions for their waste.

2.       Address the externalities of landfilling (ie. the hidden costs to society)

Without waste levies or taxes, landfill gate fees are charged based on the direct costs of landfilling.

This may cover the running costs of tip sites, but it doesn’t reflect the wider impact that waste in landfill has on locals and the planet.

These externalities include:

–      The impact of noise, odours and dust on local residents and businesses

–      Greenhouse gas emissions emanating from decomposing waste in landfill  

–      Leaching of chemicals and air pollution from landfill sites

–      The opportunity cost of not recycling resources sent to landfill

–      The opportunity cost of land use on current landfill sites

3.       Raise money to support environmental programs

For many Australian states, their explicit aim in implementing a waste levy is to raise revenue for their environmental and waste management programs.

Depending on individual state policies and decisions, this can include direct waste management causes such as:

–          Investing in waste management infrastructure and technology

–          Grants for the recycling and resource recovery sectors

Many states and countries also provide grants to general environmental programs and climate change action.

Landfill levy funds can also be directed towards mitigating the negative effects of levy hikes, including tackling illegal dumping and stockpiling.

4.       Remove the financial incentive to transport waste across borders to lower levy states  

Raising waste levy rates in line with neighbouring states is an effective way to address a ‘downslope’ flow of waste across state borders. Without these interventions, waste is frequently transported long distances to dispose of at a lower cost, consuming fuel and generating more emissions.

Do Waste Levies Work? The Case for the Landfill Levy in Victoria

Here are some key statistics surrounding the results of waste levies.

The Impact of Waste Levies in Australia: Key Statistic

Waste levies have been identified as a major driver of Australia’s growing recycling rate.

In 2019, the Australian government released these statistics on recycling in Australia:

Year19962019
Carbon emissions16MT of C02-e emissions10MT of C02-e emissions
Recycling rate6%58%
Jobs in the waste & recycling sector30,00056,000

How do people in the waste management sector feel about landfill levies? Almost 80% of people surveyed in the C&D waste industry agree waste levies are effective.

Statistics from South Australia’s Landfill Levy Studies

South Australia increased their waste levy dramatically in 2019 and 2020.

Results from the SA landfill levy hike were analysed thoroughly, providing an effective test case for other Australian states.

Here are the key statistics to know from South Australia’s waste levy:

–          South Australia has the highest waste levy in Australia, at $143/tonne.

–          Studies determined that for every 1% increase in the costs of landfill, landfill volumes decrease by 1.1%.

–          From 2003-4 to 2015-16, resource recovery increased by 21.5% and waste to landfill reduced by 29%.

Where Else in the World are Waste Levies Effective?

–          Waste levies have been applied in 23 EU Member States as well as Switzerland and the United Kingdom.

–          Research has shown that countries with higher landfill taxes have lower landfill rates.

–          By 2030, Europe’s circular economy is predicted to add €900 billion ($AU1.4 trillion) to the economy and create three million jobs.

The Economic Benefits of Waste Levies: The Key Statistics

1.       Waste levies create employment

Studies on the South Australian waste levy noted every 10,000 tonnes of waste creates:

  •           3 jobs if landfilled
  •           9 jobs if recycled

This means levy increases are adding 21,000 full time equivalent jobs to the SA economy by 2030.

2.       Waste levies boost the state economy

By incentivising resource recovery, waste levies help return resources to circulation that would otherwise go to landfill.  

Boosting materials efficiency in Victoria by 5% would add $6.4 billion to the Victorian economy.

3.       Encourages investment in green technology

Higher waste levies boost investment in new resource recovery technologies.

This includes transformative waste approaches such as:

  •           Municipal Solid Waste (MSW) resource recovery: the ability to efficiently sort and recycle regular household waste
  •           Energy from Waste (EfW) generation: converting waste into fuel, energy or heat via incineration

Where does Waste Levy Revenue go in Victoria?

Revenue from waste levies is used to:

  1.       Address the potential consequences of landfill levies (eg. illegal dumping, waste transport or export, stockpiling)
  2.       Invest in resource recovery & waste management infrastructure, including business grants
  3.       Drive market demand for recycled materials

In 2018-2019, Australia’s national landfill levy proceeds were $1.13 billion, and 25% ($282 million) was reinvested into environmental efforts.

Only Victoria, NSW and WA have a dedicated plan on how to divide up waste levy revenue.

As part of the 10-year Recycling Victoria plan, the Victorian government has committed to investing $100 million in the state’s recycling industry.

Questions about Victoria’s landfill levy?

For comment on Victoria’s waste levy increase or Australia’s recycling industry, contact Jim’s Skip Bins. All statistics, facts and figures in this article are sourced from Waste Levies in Victoria.

Find the full infographic here (https://jimsskipbins.com.au/victoria-waste-levy-infographic/)

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