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Advice to QLD businesses following Gov policy changes

Waste Recycling Industry Association of Queensland (WRIQ) has released advice following the state Government’s release of QLD’s Energy from Waste Policy and its decision to defer the landfill waste levy.

Mark Smith, WRIQ CEO said the QLD Government has had to make tough decisions in the wake of Covid19 and that’s included deferral of the landfill levy.

“Responding to this we’ve put advice together with the support of one of Australia’s leading law firms, Minter Ellison, so our members are supported to adapt to this recent announcement,” he said.

The association, in collaboration with Minter Ellison, has released a two page alert for its members following the state Government’s new developments that will impact landfill operators across QLD.

“I don’t want to see rogue operators exploiting the situation and one of the ways industry and government can reduce this is both of us playing a role in communicating about expectations and changes and that’s what we’ve done with this advice,” Mark said.

In its advice to WRIQ members, the alert states that the announcement of a six-month deferment to the waste levy increase that was set to begin on July 1 2020, may also impact on the entities who use landfill facilities, depending on how their payment arrangements with landfill operators are structured.

WRIQ advised members that the amounts for the waste levy are set out in Schedule 1 of the Waste Reduction and Recycling Regulation 2011 for the foreseeable financial years until 2022.

“The waste levy will therefore remain at $75 per tonne for general waste, $105 per tonne for category 2 regulated waste, and $155 per tonne for category 1 regulated waste, until 31 December 2020,” the alert to WRIQ members states.

It was initially proposed $5 per tonne increases across all categories of waste, effective 1 July in each financial year, however the effect of the Government’s proposed change will be to defer the increase for the 2020-21 financial year to commence on 1 January 2021.

WRIQ advises members to consider proposing a variation to the contract, or consider whether ‘change of law’ clauses apply.

WRIQ advice to members

One reason for landfill operators to review their contractual arrangements in light of the deferral is because of the requirement under section 72K of the WRR Act that in order to claim ‘bad debt credits’ back from the State, should your customers become insolvent in the future and not pay, the ‘service delivery charge’ excluding GST imposed on the insolvent customer must not have been more than the waste levy at the relevant time, the alert stated.

The association said members need to take necessary steps for a manual override for six month and any misrepresentations in standard documentation should be corrected when the deferral occurs.

In its advice to local governments, WRIQ said they will need to factor this in to any budgetary decisions made on the assumption of an increased levy, and ensure that any representations made about the amount of the levy in relevant materials provided to ratepayers, including on all websites are correct.

Smith said industry feedback is welcome and he is encouraging any business operating in Queensland’s waste and resource recovery sector to take part in its regulator survey.

“This information collected provides us an evidence base to encourage better alignment with government processes and commercial realities around a number of factors including proposed changes to landfill pricing the notification period given to businesses,” he said.

WRIQ has also received advice from the QLD Minister for Environment, Leeanne Enoch, and the association is taking steps to organise more detailed explanation of the policy to its members.

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Industry responds to QLD waste levy deferment

The Queensland Government has announced a six-month deferment to the waste levy increase that was set to begin on July 1 2020.

The levy has been deferred for six months due to the impact of COVID-19 on businesses operating within the waste sector in QLD.

The announcement has been welcomed by the Waste Management and Resource Recovery Association of Australia (WMRR), whilst Waste Recycling Industry Association Queensland (WRIQ) stated in a members notice that the timing of the landfill level deferral is disappointing.

The six-month deferment will see the waste levy remain at $75 per tonne for general waste, and $105 and $125 per tonne for regulated wastes until 31 December 2020.

QLD joins the ranks of NSW and Victoria, being the first state movers in providing some form of levy relief, the former by way of deferring waste levy payments for the foreseeable future and the latter deferring its 1 July 2020 levy increase to 1 January 2021. WA’s waste levy has also been frozen for the 2020-21 year.

The move has been praised by the WMRR and CEO Gayle Sloan has credited the QLD government “proactivity in deferring the levy increase and the Department of Environment and Science is to be commended for listening to, and considering, the very real concerns of the industry”.

“As industry continues to face financial and operational challenges related to the pandemic, WMRR is encouraged to see jurisdictions taking a commonsense approach towards costs and regulatory pressures placed on our essential industry,” Sloan said.

“In deferring the levy increase, operators and their customers may have some financial respite while continuing to focus on the job at hand, which is keeping our services operating while ensuring the safety of our staff and community.”

Sloan stated that the WMRR has recommended that only the first proposed levy increment in 2020 be deferred to provide relief to operators and their customers facing financial challenges and all later increments should continue as planned in order to safeguard ongoing investments that will build the  industry.

WRIQ CEO, Mark Smith, received advice from DES on the Government’s decision to defer proposed landfill levy price increases last Friday evening on May 29, and believes the decision will impact QLD businesses and clients differently within the industry.

“This 11th hour notification is disappointing, as it provides our members and industry with minimal time to adapt and notify their supply chain of pricing impacts,” Smith said.

In response, WRIQ is collating general legal advice with WRIQ partner, Minter Ellison, to form advice and resources for its members, set to be available on Thursday June 4.

“The market works best when there is market certainty. Changing market conditions 4 weeks out from proposed increases will impact businesses differently. However in the age of Covid I recognise government need to make decisions that are best suited for the whole of Queensland,” Smith said.

He added that Post Covid, WRIQ would like to sit down with Government to determine a minimum timeframe in the event of future pricing changes.

“I respect that changes to landfill levies need to run a particular process but businesses also need to run to notify their clients and customers of the pricing changing. It would be great to bring both these processes into alignment,” he said.

The WMRR is also encouraging all future engagements with state governments.

“It is WMRR’s hope that SA will not continue to turn a blind eye to industry’s concerns and will follow in its neighbours’ footsteps by offering levy relief to operators,” Sloan said.

Last year the SA government implemented a 40 per cent levy increase, which Sloan stated was a shock announcement “with no industry consultation whatsoever and continues to place significant strain on existing projects and operations”.

“Now is the time to ease these financial pressures on operators so that we can maintain a viable industry and importantly, assist in the rebuilding of a post-COVID economy,” she said.

According to advice from DES to landfill operators, business systems and processes need to be reviewed to ensure the QLD deferral is incorporated.

“Your current levy obligations remain, including waste measurement and recording, monthly data returns and monthly invoice payments, so continue these as-normal,” the DES advised to landfill operators.

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