Have your say on proposed amendments to waste legislation

The levy is charged on waste disposed of at prescribed facilities, and the fees collected are ring-fenced for spending on specific waste and environmental matters. Currently, 50 per cent of the levy is allocated to central government. The remaining 50 per cent is allocated to territorial authorities based on population – meaning Auckland and Christchurch get a significant amount of the levy funding, while authorities with smaller populations receive much less.

In 2024, targeted amendments were made to the levy provisions in the WMA, to enable the central government to spend its portion of the levy on a wider range of waste and environmental activities. The amendments also increased levy rates incrementally, from July 2024 to July 2027, which will generate more levy revenue over time.

The Secretary currently has no decision-making framework or criteria in the WMA for funding activities that reduce environmental harm or increase environmental benefits.

Under the current legislation, the Minister must review the effectiveness of the levy at least every three years. The review assesses how effective the levy has been in:

• reducing waste disposed of
• increasing reuse, recycling and recovery of waste.

Some current levy administration provisions are complex and inefficient, including those related to levy waivers, levy exemptions, reuse of material at disposal facilities, and stockpiling. The relevant current provisions are outlined alongside the detailed proposals below, under Other levy-related improvements.

Levy allocation and use

We propose changing how the levy funds are distributed to territorial authorities. Instead of the current population-based approach, the new method would use a combination of a base flat rate (20 per cent) and a population-based calculation (80 per cent).

Our aim is an appropriate balance – a fairer distribution among territorial authorities that still provides for the scale and scope of waste-related matters that larger population centres face. Table 1 below provides an outline of how this would have affected some territorial authorities for the 2023/24 financial year. Although the larger councils will receive less levy funding, current projections suggest the levy will increase over time because of increases in levy rates. This means the larger territorial authorities will receive more levy funding than at present, even with a 20 per cent flat rate.

Table 1: Example of the impact of a 20 per cent flat rate incorporated levy for some territorial authorities (2023/24 financial year)

Our proposals include widening the use of the levy for local government, to support a broader range of environmental outcomes that match the new spending parameters for central government. In addition to activities that promote or achieve waste minimisation, in accordance with, and as set out in, a territorial authority’s waste management and minimisation plan (WMMP), options for wider uses for the levy funding include:

• costs associated with managing emergency waste
• activities that provide for the remediation of contaminated sites and vulnerable landfills
• CME of mismanaged waste
• activities that reduce environmental harm or increase environmental benefits.

In relation to spending levy revenue on activities that reduce environmental harm or increase environmental benefits, a decision-making framework for central government and territorial authorities could help increase clarity about what activities could be funded and how funding decisions should be made.

We also propose removing the levy exclusion for waste-to-energy processes. The current exclusion of waste-to-energy from the levy creates a market distortion, because landfill disposal is subject to an additional cost that does not apply to waste-to-energy technologies. Both methods are considered forms of waste disposal in the waste hierarchy, although recovery of energy from waste comes before final disposal. All waste-to-energy facilities could be made subject to a levy (if regulations are put in place that define a type of waste-to-energy facility as a disposal facility and sets a levy rate for them). Existing levy-setting regulations could be used in future to determine the levy payable by different types of waste-to-energy facilities.

Levy review

We propose that the matters the Minister should consider when reviewing the effectiveness of the levy should mirror the scope of the WMA (as outlined in the purpose) and the parameters for levy spend.

We propose changing the timeframe of the levy review from the current three-yearly requirement to at least every five years. This is to ensure the review includes assessment of all aspects of the revised legislation for effectiveness in achieving the desired outcomes.

Other levy-related improvements

Waste disposal levy waivers

Waivers and exemptions for levy payments under the WMA are only available in ‘exceptional circumstances’, or if considered reasonable in relation to waste from the remediation of a contaminated site.

We propose enabling the Secretary to waive the requirement for an operator to pay any amount of levy in specified circumstances (that is, an emergency event, biosecurity response, or remediation of a contaminated site). The proposed change would:

• simplify the processing of waiver applications
• improve the transparency of when a levy waiver may occur
• provide clarity for stakeholders and the decision-maker.

The Secretary would need to be satisfied the specified circumstances justify the waiver. This would replace the current requirement that there are ‘exceptional circumstances’.

We propose limiting the waiver requirement to situations in which:

• there is or has been an emergency (eg, a state of emergency or transition period has been declared under the Civil Defence Emergency Management Act 2002)
• biosecurity responses have been undertaken under Part 7 of the Biosecurity Act 1993.

In addition, we seek feedback on whether the waiver requirements for waste from the remediation of a contaminated site also need clarifying with specific eligibility criteria. We seek suggestions on what the criteria could be.

Waste disposal levy exemptions

Currently, the WMA requires the Minister to be satisfied that ‘exceptional circumstances’ exist before recommending that regulations be made that exempt any disposal facility or class of disposal facility from the levy; or exempt a specific type, volume or weight of any waste from the levy.

The term ‘exceptional circumstances’ is not defined in the WMA – rather, it is interpreted at the discretion of the decision-maker. The power to make levy exemption regulations currently applies when circumstances cannot be foreseen, for example in response to an emergency event.

We consider levy exemptions are more suitable for addressing national issues with a widespread application that are not exceptional circumstances, such as an exemption that applies to a class of disposal facility or a type of waste stream. We propose that the Minister must consider specific criteria before making such a recommendation and seek suggestions on what the criteria could be.

At present, there is no time limit applied to levy exemptions through regulations. We propose that levy exemptions should apply for a maximum of five years, after which they must be reviewed or allowed to expire. We also propose that the Minister should be permitted to impose conditions on the exemption and be required to follow the same procedures before considering other waste regulations (such as obtaining and considering the advice of the Waste Advisory Board).

Reuse of material at disposal facilities

Some disposal facility operators reuse materials disposed of on site for disposal facility management activities, such as:

• using soil as cover material
• using concrete in the construction of disposal facility infrastructure (like roads).

Where this activity meets the definition of reuse or recycling, these materials may not be subject to levy payments.

This common practice has the benefit of promoting the reuse and recycling of existing materials over the extraction and use of virgin natural materials. The disadvantage, however, is facilities may have an incentive to reuse materials in excessive quantities, which can worsen waste and environmental outcomes and reduce levy revenue.

We propose to clarify when the levy should be imposed on waste disposed of at a disposal facility, to ensure waste reused on site is operationally necessary and reasonable (eg, to comply with a consent condition).

Stockpiling

Under the current legislation, stockpiling can occur, but waste stockpiled for more than six months is subject to the levy. As with the reuse of materials onsite, stockpiling has advantages and disadvantages. The tools we propose to improve the existing stockpiling controls, include:

• amending the current stockpiling extension approval system to include limits, conditions and offence provisions
• changing the stockpile calculation process to track the throughput of materials
• introducing a stockpile volume threshold limit
• improving the data collection, record-keeping and reporting provisions to increase transparency and traceability of material entering and leaving a site
• defining or amending the terms ‘diverted material’ (defined in the current Part 3 of the WMA), ‘accumulation’ and ‘stockpiling’ in the legislation.