Waste disposal levy: requirements for territorial authorities

A levy (currently $20 but increasing) on each tonne of waste sent to municipal landfills is collected from landfill operators.

Half of the money collected through this waste disposal levy is paid to territorial authorities (TAs) quarterly each year. The amount of levy each TA receives is determined by the number of people in each district.

TAs must spend the levy to promote or achieve waste minimisation and in accordance with their waste management and minimisation plans (WMMPs). WMMPs prepared by each territorial authority set out how the levy will be used.

The Ministry has prepared best practice guidelines on how territorial authorities should use Waste Disposal Levy money.

See Waste levy spending: Guidelines for territorial authorities.

TAs currently provide a voluntary report to the Ministry each year describing how the levy has been spent. Cabinet has agreed that this reporting will be compulsory (rather than voluntary) in the future.

Eligibility for waste disposal levy payments

TAs must adopt a Waste management and minimisation plans (WMMPs) and must review their plan every six years. Before adopting or reviewing a WMMP a territorial authority must conduct a waste assessment under section 51 of the Waste Minimisation Act 2008.

If a TA has not adopted or reviewed their WMMP in time they are not eligible to receive levy payments from the Ministry.

TAs may create a joint WMMP with other territorial authorities.

For more information see the guide for territorial authorities.

How each territorial authority's share of the levy money is calculated

A TA's share is calculated using the following formula.

For example

TA's share equals ($65 million divided by 2) muliplied by (territorial authority's poplulation divided by New Zealand's total population).

Notes to equation

  • levy collected is the total levy money collected in respect of the financial year
  • levy refunded is the total levy refunded in respect of the financial year in accordance with regulations made under section 41(1)(k).
  • district’s population is:
    • the population of the district of the TA as shown by the census of population published most recently before the start of the financial year or
    • if the district was constituted or its boundaries were altered after that census was published, the population of the district assessed by the Government Statistician as at the date of the district’s constitution or boundary alteration
  • total population is the total of all districts’ populations.

A TA's share of the levy must be paid to the territorial authority in the prescribed manner and at the prescribed times. This is subject to section 33 of the Waste Minimisation Act 2008.

levy payments as at Jan 22
levy payments as at Jan 22

Data file [Excel, 72 KB]

The spreadsheet shows all payments to each TA.

See news items on spending of waste levy 

Information for territorial authorities – Waste Levy expansion

Timeframe for increased levy funds for TAs

The first stage of the levy rate increase came into on effect 1 July 2021 (an increase in current rates from $10 to $20 per tonne) so from the second half of 2021, TAs will start to see an increase in levy funds they receive.

For the 50 percent share of levy funds that the Ministry distributes to TAs quarterly on a population basis, it will be a few months from when disposal facility sites start to pay at the higher rate until TAs will receive additional funds.

For waste deposited in July, disposal facilities will be invoiced in September and will pay in October, therefore higher levy rates should be reflected in TA payments by Q3 (January).

Guidance on how to determine spend priorities for additional funds

The Ministry doesn’t determine how each TA should spend their allocated levy funds, so each TA must plan for and undertake their own spend activity in accordance with the requirements of the Waste Minimisation Act 2008 (the WMA) and their own Waste Management and Minimisation Plans (WMMPs). The Ministry has Waste Levy Spending Guidelines to assist TAs with this process.

Most WMMPs generally contain some degree of flexibility when it comes to describing how each TA will spend their allocated levy funds. The Ministry recommends that where possible, TAs maximise the use of levy funds on those initiatives which would most benefit from additional funding where the highest impact on waste minimisation will be seen (ie, focusing on the top end of the waste hierarchy and prioritising spend on those initiatives which reduce waste, followed by reuse, then recycling etc).

Examples of activities to spend additional levy funds on could include:

  • expansion of services to enable wider district participation in waste reduction, reuse and recycling initiatives
  • contribution towards waste minimisation component of planning activities for the next waste assessment / WMMP review
  • behaviour change education (i.e. waste minimisation workshops or targeted education on activities such as composting or recycling contamination education)
  • community waste minimisation grants (ensuring a framework is in place for doing so in accordance with section 43 of the WMA)
  • dedicated resource for waste minimisation / WMMP implementation, noting the levy must only be used for staff members time which is associated with waste minimisation and not refuse or activities which do not prevent waste from going to landfill2
  • recycling ‘drives’ or drop off days for harder to recycle and/or commonly dumped items such as batteries / e-waste or whiteware
  • subsidisation for collection of rural recyclables such as baleage wrap
  • working with businesses to implement waste minimisation

As set out in the levy spend guidelines, where spending is not specifically set out in a WMMP, but where additional spend can be tied back to the objectives and methods set out in the WMMP, it is good practice for TAs to be able to demonstrate:

  • the process that has led to decisions on levy spending
  • that this process meets all statutory and internal process requirements, including documenting decisions and sign off at the appropriate level of authority
  • there are clear links between the objectives of the WMMP, levy spending decisions, and what is reported to the Ministry
  • there has been appropriate public consultation on key projects
  • spending is aligned with activity management plans, long-term plan and annual plan budgets. 

Where a TA may wish to spend additional funds on activities which are not in accordance with their WMMP, the TA could consider whether funds should be accrued (if possible in an interest bearing account to maximise opportunity from levy funds), until such time as they are due to review their WMMP. 

If a TA does not wish to accrue funds and wants to amend their objectives and methods in their WMMP, this will require a review of the WMMP in accordance with section 44 of the WMA.

This does not necessarily have to be a full review in accordance with section 50 and 51 and include a new waste assessment, but it needs to have regard to the most recent waste assessment, and use the special consultative procedure set out in section 83 of the Local Government Act 2002 (also seek direction from your council’s own Significance and Engagement Policy on this).

It should be noted however that a full review and waste assessment would still need to be undertaken within six years from the original WMMP, so it may be more efficient (depending on the level of change) to conduct a full review at this time.

Factoring increased funding into long term and annual planning

TAs may wish to forecast their future potential levy funding based on the estimates provided of projected levy revenue.

However the actual levy revenue may differ from projections as it depends on the level of waste deposited which will be affected by a range of factors including:

  • the public’s response to the increase in levy rates
  • the quantity of waste to other landfill types
  • COVID-19.

For example, projected revenue for 21/22: