Draft Report - Review of Domestic Waste Management Charges - 13 December 2021

IPART is currently reviewing local government domestic waste management (DWM) annual charges. IPART’s delegated function requires it to determine each year whether or not to set a maximum percentage by which councils can increase their DWM annual charges (a waste peg). We released our Draft Report in December 2021, seeking submissions from the community, ratepayers, local councils, and other interested stakeholders.

We would like to thank everyone for engaging with us through making submissions and participating in the review to date. Your feedback is valuable to us and will be a key input in making our decisions and recommendations for our Final Report.

We received 80 submissions in response to the Draft Report and have published all non-confidential submissions. Submissions were made by individual councils, council organisations, NSW Government agencies, peak body organisations, ratepayers and waste and allied industry organisations.

We have heard that the majority of stakeholders do not support our Draft Report proposal to publish an indicative ‘benchmark’ waste peg and report on councils’ performance against the benchmark. Stakeholders raised concerns that an indicative ‘benchmark’ waste peg does not reflect the diversity of councils and could create a disincentive to provide appropriate waste management in line with the NSW’s Government Waste and Sustainable Materials Strategy 2041 (NSW waste strategy). Stakeholders also raised concerns about the underlying methodology and data used to calculate the indicative ‘benchmark’ waste peg.

We recognise that councils are currently facing a number of challenges and uncertainty in the DWM sector, particularly as they transition towards a circular economy in line with the NSW waste strategy.

We have carefully reconsidered our approach moving forward with this review. We agree that, at this time, it is not in the best interests of ratepayers and councils to implement a waste peg.

Instead, we agree and recognise that it is NSW Office of Local Government’s (OLG) role to address many of the issues identified throughout our review. We are supportive of and welcome OLG’s recommended regulatory approach that OLG:

• provide further guidance to councils by updating its Rating and Revenue Raising Manual
• identify and investigate ‘outlier’ councils.

We agree that, at this stage, this is the best way forward to protect ratepayers and ensure councils have sufficient revenue to meet the efficient costs of providing waste services, given IPART’s and OLG’s respective regulatory roles.

To allow OLG to undertake these functions, we recognise that greater transparency of DWM costs and charges will be needed. More transparency will also help to better inform and empower the public and improve future regulation of DWM charges.

IPART is happy to assist and support OLG in planning, developing and implementing changes to improve transparency and regulation of DWM annual charges going forward. IPART will rely on OLG to exercise OLG’s functions, and we anticipate that we will make future decisions on DWM annual charges in that context.

We have written to OLG indicating this, and have published the letter to OLG on our website.

We do not plan to hold a public hearing prior to the release of the Final Report

Given the extensive feedback from stakeholders and information we have collected through the multiple consultation opportunities during this review, we have decided not to hold a further public hearing as originally planned. We acknowledge that OLG may, as part of its ongoing role, engage in further consultation with stakeholders about DWM annual charges.

We plan to publish our Final Report soon

We are currently preparing our Final Report and intend to publish it in October 2022. We will consider all feedback when making our final decisions on local government DWM annual charges.