NSW Audit Office recommends review of waste levy settings

NSW Audit Office recommends review of waste levy settings

The NSW waste levy has a positive impact on diverting waste from landfill, however, aspects of the EPA’s administration of the levy could be improved, according to a new report from the Audit Office of NSW.

The report examines the effectiveness of the waste levy and grants for waste infrastructure, and while noting the positive effects of the levy, highlights that the list of levied local government areas has not been reviewed since 2014.

“The current rationale for why particular local government areas pay the waste levy and others pay a lower levy or none at all is not as clear and objective as it could be,” the report reads.

Additionally, while levy rates increase each year in line with the consumer price index, the report notes that the EPA has not conducted a review to confirm whether they are set at the optimal level since 2009.

The audit also found that grant administration procedures support the achievement of program objectives, but were not always applied consistently.

“We identified gaps in the application of grant administration procedures. For example, in four of the five programs we examined, there was no direct alignment between program objectives and the NSW Government’s overall waste target,” the audit reads.

“Within the 12 grant rounds we reviewed, three grant rounds provided inconsistent information to applicants and assessment teams.

“Of the ten grant rounds administered by the Environmental Trust, two were missing documentation that recorded the rationale for awarding grants and eight were missing one or more conflict-of-interest declarations.”

The report also highlights that there is currently no formal strategy in NSW to guide waste infrastructure investment.

“The absence of a formal strategy to guide infrastructure investment in NSW limits the ability of the state government to develop a shared understanding between planners, councils and the waste industry about waste infrastructure requirements and priorities,” the audit reads.

Auditor-General Margaret Crawford made six recommendations aimed at ensuring the waste levy is as effective as possible at meeting its objectives, and ensuring funding for waste infrastructure is contributing effectively to recycling and waste diversion targets.

Recommendations include the EPA establishing a schedule for reviewing waste levy settings by June 2021, including regular reviews to ensure the levy is set at the optimal level to achieve its policy objective, and transparent and objective criteria for determining which local government areas are levied.

Crawford also recommends the EPA improve the timeliness of reporting on the environmental outcomes from its waste levy compliance activities.

Additionally, by December 2021, the Department of Planning, Industry and Environment should determine the state’s waste infrastructure needs to inform planning for and funding of waste infrastructure.

The report has been welcomed by Local Government NSW (LGNSW), which says it confirms what councils have been saying for years – that an overhaul of the state’s waste management system is urgently needed.

According to LGNSW President Linda Scott, the report revels that only a third of the revenue raised through the levy is spent on waste and environmental programs, and that there continues to be an absence of a state strategy around waste and recycling management.

“In the absence of a formal state government strategy and funding to save our recycling, NSW risks missing out on opportunities to create a clean, green circular economy in NSW and we risk seeing new employment opportunities lost to other Australian states and territories,” Scott said.

“As hundreds of millions of dollars are collected by the NSW Government each year, councils and communities cannot continue to underwrite the increasing costs associated with our growing recycling crisis, including increased stockpiles of recyclable waste.”

Scott added that LGNSW and councils appreciate the levy’s role in sending a price signal to reduce waste going into landfill, but the funding raised must be directed back for the purpose for which it was collected – recycling and waste avoidance.

“Local governments are leading the way to develop sustainable waste and recycling systems with industry and educating their communities about responsible waste and recycling practices,” she said.

“The Auditor-General’s report has revealed hundreds of millions of dollars in potential funding to develop regional waste plans and build new clean, green infrastructure and create local jobs.

“With looming waste export bans kicking in from January, the NSW Government must act, and must involve councils, which are at the forefront of dealing with waste and recycled materials.”

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