A bulldozer collects waste

Whether you agree with the levy itself or the approach that is being undertaken, the Queensland Waste Levy comes into effect in March 2019 and represents the biggest change for the industry for a very long time.

Whilst the levy was initially portrayed to combat the volume of trucks transporting waste from NSW into Queensland, it will no doubt provide a great opportunity for the state to embrace recycling and to create opportunities for some organisations to increase revenue whilst others may see it slowly evaporate. There are definite risks for both councils and private operators who own and/ or manage Queensland’s landfill facilities. Nevertheless, these risks can be managed providing that some thought and action is undertaken before the introduction.

Waste Disposal Systems and Landfill Infrastructure

Firstly, waste disposal companies will become revenue collectors for the government. Therefore, the systems (including IT, security and compliance), as well as the landfill infrastructure (such as weighbridges), must be in good order. It is noted that the Queensland Government has provided $5M in grant funding for local authorities to become “levy ready.” Whilst this is welcomed, it will be insufficient to cover every need, thus some infrastructure spend coupled with organisational training will be required to ensure the data is captured and recorded.

It is also noted that the State has advised that agencies will regularly audit waste disposal facilities to ensure levy compliance (to ensure that they are getting their money). A component of this audit will be accurate measurement and reporting of void space so that the change in the volume corresponds with the actual tonnage collected at the site. Thus, the accuracy of data and the systems around it is critical. There is an opportunity for surveying and drone businesses to position themselves to secure work in this field.

Unmanned Bin Stations

Another risk in the levy implementation (for local councils) is unmanned bin stations. Whilst some of these facilities can provide an easy to reach service for rural landholders, every waste manager knows that they can easily become an eyesore and can almost be impossible to keep tidy. The difficulty of management of these bin stations could be further amplified as this will become relatively easy targets for those skip bins or commercial operators that want to avoid paying the levy. This is a significant risk for councils.

Only a more rigid rein of these bin stations or even closure will need to be considered. Having said that, the communication to those affected by the closure of any bin station will need to be carefully managed or an expensive upgrade to a supervised facility is the alternate option. State Government assistance is not going cover every bin station, so Councils need to be aware of their plans post-March 2019.

Transport of Waste

One of the key issues of the waste levy that has not appeared in recent articles is the transport of waste.

This is relevant in two areas:

  • Firstly, for any recycling project to be commercially viable in the longer term, the financial analysis must consider the costs of transporting waste to the facility. I am aware that a regional Queensland Council has been approached by a private company to enquire about taking Council’s waste. However, the deal involves Council transporting its’ waste to the facility (over 100kms in distance) and then the costs of the actual recycling are comparable to the funds saved by not landfilling. Unfortunately, the draft proposal misses the transport point and the viability of the project in Council’s eyes will be marginal at best. This case may be repeated in many regional areas of Queensland. Therefore, it is imperative the cost of the transport of waste is identified in any business case.
  • Secondly, I am not alone in believing that the transporting of waste from NSW into Queensland (albeit at a lower quantity) will still occur. The cost of landfilling in NSW is generally more expensive than in Queensland, plus the price difference between a Sydney/ Newcastle levy will still make it commercially attractive to use the Pacific or New England Highway. This practice will continue to provide waste disposal companies revenue and the Queensland Government levy funds.

Post-Levy Implementation Issues

Finally, any system that is developed and implemented will have some teething problems and I expect there will be some operational and financial matters to be sorted and rectified post-levy implementation. It is important to be aware of the risks and potential opportunities for your organisation.

Keiran Travers is a Director of Harbak and newly formed UTL Utilities. Both companies are providing management advice in relation to the Queensland Waste Levy. UTL Utilities provides infrastructure strategy, procurement, economic modelling and business operational advices in the fields of waste management primarily for the local government sector. Contact Keiran here.