The NSW Independent Pricing and Regulatory Tribunal (IPART) is seeking feedback on its recently released discussion paper on domestic waste management (DWM) charges levied by local councils.
According to the discussion paper, IPART’s preliminary analysis indicates that DWM charges may not be delivering good value for ratepayers, and there may be challenges for local councils in purchasing and pricing these services.
“In the past we have decided not to regulate changes in DWM charges. Going forward, we need to consider whether this approach remains appropriate,” the paper reads.
“At this stage, we consider that caution is needed and prescriptive regulation may not be appropriate.
“But, there may be other ways to improve transparency and share best practice guidance to help local councils and ratepayers get good quality services at cost-reflective prices.”
IPART’s analysis indicates that, in general, DWM charges appear to be increasing faster than the rate peg and inflation.
IPART also observed that some councils appear to be in surplus for DWM services, as annual revenue from DWM charges exceed expenditure on providing services, and that some councils appear to be allocating ‘overhead expenses’ that contribute more than half of total DWM costs.
Through feedback from relevant stakeholders, IPART will seek to identify opportunities for greater transparency for customers and councils.
IPART is particularly interested in whether charges reflect the reasonable and efficient costs of providing waste services, while meeting environmental and legislative requirements.
If more oversight is appropriate, IPART will consider a range of potential options including less intrusive regulation such as developing a set of pricing principals, and reporting to enable comparison of like services across similar councils.
IPART may also consider regulating price increases through setting maximum percentage variations for some or all DWM charges.
“If regulatory intervention and/or oversight of DWM charges is required, our preliminary position is to favour a relatively less prescriptive, more targeted approach that focuses on information and guidance,” the paper reads.
“This would minimise unnecessary regulatory cost and burden, such as the need for an Office of Local Government to audit the basis for each council’s DWM charges.”
Consultation closes 6 October.