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Queensland Economic Advocacy Solutions

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Reasons why Queensland's Commercial Waste Levy failed and would fail again

No doubt last night’s Four Corners program and revelations that over one million tonnes of southern waste are being dumped in Queensland landfill sites will again be used to argue for the introduction of a Commercial Waste Levy.

I wish to highlight the reasons why the Waste Reduction and Recycling Act or the Commercial Waste Levy failed. I know as I worked closely with the Department of Environment and Heritage Protection in the development of the reforms across 2010 and 2011, and in the build up to the 2012 State Election whereby its removal was adopted by the LNP as an election policy.

While Queensland businesses were supportive of the aim to reduce waste and increase the re-use and recycling of resources, they strongly opposed the introduction of the Commercial Waste Levy.  Reasons why were important and included:

  • Very poor consultation on the Bill with no RIS prepared.  The State Government essentially made up its mind that it would be introduced and bulldozed its way in introducing it. 
  • The levy threatened business viability as many did not have the financial capacity to absorb additional waste costs nor did they have the resources to make changes to their waste practices and systems. With minimal capacity to pass costs onto customers the additional cost affected profitability and viability.
  • Outside of South-East Queensland mature waste markets and opportunities for recycling and reuse were limited meaning the levy effectively acted as a tax on all business waste as there was no capacity to recycle in many regional Queensland LGAs.
  • The starting price of $35 per tonne was considered too high in light of the significant transition required by industry and the waste sector. Most other jurisdictions when introducing similar legislation did so with a significantly lower transitionary price ($5).
  • Business waste reporting requirements were onerous and significantly increased red tape and the regulatory burden.
  • Money collected went into consolidated revenue with significant leakage and only a small portion used to improve recycling initiatives with monies instead divvied out to green interest groups or used elsewhere in the State Budget.
  • The largest area of concern and hostility was that the Waste Levy unfairly targeted the business community.  The exclusion of municipal/household waste from the levy not only unfairly taxed businesses but also created a number of complexities within the legislation which significantly further increased red tape for business and the waste industry. 

There was no reason other than for political purposes to exclude household waste from the levy, especially when the overall objective of the Act was to reduce waste to landfill and the household sector was and is Queensland’s largest growing contributor of waste. Commercial and Industrial waste at the time contributed only 26 per cent of waste sent to landfill while households contributed 40 per cent.  This trend continues to today.

Going forward any move to re-introduce the Commercial Waste Levy will deliver significant and difficult problems to the State Government.  These include:

  1. I am a strong believer of learning lessons from the past. Accordingly all of the above will need to be addressed otherwise the same fate will apply.
  1. The State Government is on record as promising to not increase or introduce any new tax, fee or charge.  Re-introducing a Commercial Waste Levy would break that promise.  However this promise only applies to this term of Government so we could potentially see it included as an election policy as we head to the polls later this year or early next year.
  1. Thirdly when the levy was abolished the reduction in commercial waste fees to commercial and industrial (C&I) users was never refunded or taken off the customer bill as the commercial waste industry gouged the cost from users despite its removal.  If it were to be re-introduced businesses would essentially be hit two times over.

I agree something needs to be done to reduce the amount of waste coming from southern states, but the reintroduction of a commercial waste levy is not the answer.  It is separate issue that warrants a separate policy solution and I am surprised we haven’t landed one as yet.  The Gold Coast’s solution of imposing a 200 per tonne fee for out-of-city businesses to dump at its landfill is a no brainer in my view.

I support efforts to reduce Queensland waste and landfill, however we need to ensure the right balance between protecting the environment and protecting Queensland jobs and the economy.  In my experience in dealing with businesses of all types and sizes across the length and breadth of this State, empower them with knowledge and expertise on what they can do to minimise their footprint on the environment.

Why? Doing the right thing by the environment typically means using less water, less electricity, reducing wastage and recycling wherever possible.  All of these actions save businesses serious dollars.  Businesses do not have to hug trees or want to save the whales they simply have to apply good commercial practices and they will either knowingly or unwittingly be doing the right thing for our planet. 

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