By Adam Coleman

The Productivity Commission has concluded its report into waste generation and resource efficiency in which it has criticised the use of landfill levies to achieve waste diversion targets and raise revenue.

The report argues that landfill levies send the wrong price signals to users and increase the incentive to illegally dump waste.

“Levies might encourage waste diversion from landfills and achievement of targets, but unless based on the environmental and social externalities of the landfill, will send the wrong price signals to users,” the report says.

“It’s a free kick for state governments to raise revenue with the pretence that they are helping the environment,” said Waste Management Association of Australia chair – landfill division, Sam Bateman.

“[The levy] doesn’t benefit the environment. It provides funds for waste reduction which should be funded by the state government from their general revenue. If they believe that waste reduction is a significant benefit for the community they should pay for it,” he said.

Rather than the use of landfill levies, the Productivity Commission recommends regulation that reduces environmental and other external costs to acceptable levels, along with better enforcement.

The Local Government and Shires Associations of NSW has expressed concern that under existing waste levy guidelines in NSW, only $300 million of the $730 million to be collected by State Treasury between 2005 and 2011 will be returned for city and country waste reduction projects.

The waste levy for Sydney, Hunter, Illawarra and Central Coast councils will increase in $6 annual increments to reach approximately $56 per tonne by 2011, under the current regulations.

Councils are asking for another $100 million per year to be committed for waste education programs, garden and household collection and processing, and eradicating hazardous materials, such as asbestos.