from Gayle Sloan, CEO 

Waste Levies: The Economic Lever Australia Cannot Ignore 

Australia's waste challenge is not a mystery. We are simply generating too much waste — and expecting the waste and resource recovery sector to solve a problem it did not create. 

Recent commentary, including evidence presented to the NSW Parliamentary Inquiry into Proposed Energy from Waste Facilities, reinforces what our industry has said for years: if Australia is serious about transitioning to a circular economy, responsibility cannot sit solely at the end of the product lifecycle. It must sit with those who design, manufacture, market and profit from products in the first place.

That is why waste levies matter. Too often, the levy is framed as just another cost burden. It is not. A well-designed waste levy is one of the most powerful economic levers governments have to drive behaviour change across the entire materials and product chain.

When levies are set appropriately, they push material up the waste management hierarchy — away from landfill and toward avoidance, reuse, repair, recycling and recovery. When levies are too low, inconsistent between jurisdictions, or disconnected from broader policy settings, landfill remains the cheapest and easiest option.

And right now, in much of Australia, it still is.

The economics are straightforward. It costs significantly more to collect, sort, process and remanufacture materials than it does to bury them. Recovery infrastructure requires advanced technology, skilled labour, energy, market development and long-term investment certainty. Landfill, by comparison, remains the lowest-cost option in many parts of the country — even where landfill gas capture systems are in place.

Since COVID, construction costs alone have increased by more than 30%, alongside major increases in labour, fuel and energy costs. Yet in many jurisdictions, levy rates have not kept pace with those increases — let alone meaningfully acted as a genuine financial incentive to recover materials rather than dispose of them.

The reality is simple: without a strong and consistent levy signal, the market will continue to favour landfill over resource recovery.

That is not a circular economy. It is managed waste growth.

WMRR has consistently advocated for stronger economic and regulatory levers that keep materials circulating in the economy for as long as possible, recognising that everything eventually reaches end-of-life. The waste levy is central to that framework. But it must be designed to drive real behaviour change away from the convenience and complacency of a ‘throw away’ society— not simply raise revenue. 

Last year alone, waste levies generated around $2 billion in revenue!

Levy must also be nationally coherent. Vast differences in settings between states create exactly the wrong incentives: transporting waste across borders to the cheapest landfill destination rather than investing in local recovery infrastructure and markets.

However, levies alone will not solve the problem.

Australia still lacks an integrated national materials policy framework linking product design, manufacturing, consumption and end-of-life management. We do not consistently require products to be designed for durability, repairability, reuse or recyclability. Nor do we adequately support the markets needed to absorb recovered materials at scale.

Instead, the financial burden falls on local government, the waste and resource recovery sector, and ultimately the community. In effect, we continue to subsidise poor product design.

That is one of the biggest structural failures in Australia’s current approach to waste and resource recovery. Those with the greatest ability to influence outcomes — producers and brand owners — often carry the least responsibility for the cost of managing products once they become waste.

If we want real change, accountability must extend across the full lifecycle of materials. That means stronger product stewardship schemes, mandatory design standards where appropriate, minimum recycled content requirements, and procurement policies that genuinely prioritise recycled materials.

These are not radical ideas. They are practical reforms that many other economies are already implementing. But they require national coordination, policy consistency and political courage.

The debate unfolding through the NSW Parliamentary Inquiry highlights the scale of the challenge. Australia does not just have a waste management problem — it has a materials management problem.

And the distinction matters. Because waste policy is also climate policy.

Too much of Australia’s current focus remains on landfill methane and gas capture. While important, that only addresses emissions at the very end of the chain. The much larger opportunity lies upstream — avoiding emissions through material recovery and displaced virgin material production.

WMRR’s forthcoming research highlights this clearly. Recovering one tonne of plastic can avoid up to three tonnes of carbon emissions compared to producing virgin plastic. Similar benefits exist across metals, paper, glass and organics.

Yet policy settings still too often reward landfill management over material recovery. That is backwards.

If Australia is serious about reducing emissions, then resource recovery must be recognised as a climate solution — not simply a waste management service.

Currently we are also seeing growing global pressures reinforcing the urgency of building domestic resilience. Supply chain disruptions, energy price volatility and fuel security concerns have exposed the risks of relying heavily on imported raw materials and products.

A stronger Australian circular economy can help address those vulnerabilities by keeping valuable materials circulating locally for longer.

Using recovered materials more effectively reduces dependence on virgin extraction, lowers energy consumption, supports domestic manufacturing and creates Australian jobs. It drives innovation, strengthens sovereign capability and improves economic resilience.

But none of this happens at scale under business as usual.

If we continue designing products with no regard for end-of-life outcomes, externalising the true cost of waste, and treating the levy as a political liability instead of a strategic tool, Australia will continue generating more waste, more emissions and more lost economic opportunity.

The path forward is so clear.  We need:

•  Waste levies that genuinely drive behaviour change, with transparent reinvestment into recovery infrastructure, market development and innovation.
• Nationally consistent regulatory frameworks that reduce inefficiency, uncertainty and market distortion.
• Stronger product stewardship and circular design requirements that place responsibility where it belongs.
• Mandatory government procurement and recycled content policies that create real demand for recovered materials and give industry confidence to invest.
  

Importantly, governments must also recognise the waste and resource recovery sector for what it is: essential economic infrastructure underpinning Australia’s climate, manufacturing and circular economy ambitions.  

Our sector is not simply “managing rubbish.” It is recovering resources, reducing emissions, supporting local manufacturing and enabling more sustainable supply chains. It is a critical industrial sector that contributes directly to Australia’s environmental and economic resilience.

At WMRR, we recognise these challenges are complex and interconnected. There is no single solution to Australia’s waste challenge. But complexity cannot become an excuse for inaction.  There are clear, evidence-based actions available right now. Effective waste levies are one of them. Used properly, they can shift markets, unlock investment and accelerate Australia’s transition to a circular economy. Used poorly, they become little more than another cost passed through the system without delivering meaningful change.

The difference however is leadership. Governments must be willing to make difficult decisions — to set stronger price signals, hold producers accountable and prioritise long-term national outcomes over short-term political convenience. Industry must continue to innovate, invest and advocate for better systems. And together, we must ensure that the true value of materials is recognised and retained within the economy.

Because waste is not inevitable. Waste is a design flaw. 
 
And until Australia addresses that flaw at its source, we will remain trapped in a cycle of growing waste generation, rising emissions and missed economic opportunity.  

The waste levy is not the entire solution — but it is one of the most important tools available to help break that cycle.

As state budgets and new waste strategies approach, 2026 must be the year governments stop managing waste at the margins and start building the economic framework required for a genuinely circular economy.

END