LIKE A SLOW-motion car crash, the unfolding crisis in the waste and recycling industry is looking worse by the minute for Local Government, particularly in Victoria.
Visy Industries’ decision to impose a gate fee on the processing of recyclable materials is now established fact, and number of Victorian councils have been crunching the numbers to try to get a clearer picture of the financial implications.
The Horsham Rural City Council says the gate fee “will result in a processing cost increase of over $100 per tonne” – and that if the Visy fee rises further there “will [be a doubling of] the operating cost of Council’s recycling collection service”.
Because their revenue-raising ability is constrained by the state’s rates-cap regime, Victorian councils facing a cost hike of that magnitude will have little alternative but to cut services to residents and ratepayers.
The outlook in other states is not quite so problematic because most councils there have been paying contractors to process kerbside pick-ups rather than receiving payments for pick-ups, as was the case in Victoria.
However, it’s clear the depressed market for recyclables – caused in part by the Chinese government’s decision to ban imports of paper and plastics with a contamination rate of more than 0.5 percent – will be with us for some time.
And that has long-term strategic, financial and environmental implications for Local Government – as well as for the Commonwealth, states and territories.
Waste management policies and objectives will have to be revised, beginning with a greater emphasis on ensuring lower contamination rates of recyclables.
Levies and fees will need to be adjusted to reflect the full financial and environmental costs involved of waste disposal, and a serious discussion needs to be had round repatriating these levies direct to councils – which, after, all are in the waste management frontline.
With far fewer options for exporting recyclables, governments, including us, will have to encourage more domestic reprocessing – the so-called circular economy approach. Along with stronger product stewardship requirements, incentives will have to be provided to kick-start new resource recovery businesses.
Already this is happening in my home state of South Australia, where a waste and resource recovery industry plan was recently announced. Grants are also being offered to SA councils and businesses who get involved in projects to develop new ways to boost the acceptance of recycled-content products.
The closure of China as a destination for recyclables means we in Local Government face some difficult decisions. Provided we’re supported by industry and the other tiers of government, however, there’s no reason why Local Government cannot meet and overcome the challenges involved in reviving the market for processing recyclables.
Waste plastics are already being made into bollards and park furniture. Tyres and glass can be used in spray seal and asphalt. Food waste is being turned into compost. Paper and cardboard are perfectly recyclable. It may be that the solution to finding value for recyclables is in our own hands. Does your Procurement Policy encourage reuse and recycling? Is it effective?
Because if we are not buying these products, or insisting on them in our supply contract specifications, how can we expect others to?
David O'Loughlin
President