LGAs uncertain on carbon tax impacts

Local government associations have mixed reactions to how the federal government’s carbon tax will affect the cost of landfill waste.

Municipal Association of Victoria president, Bill McArthur said there remain many unanswered questions about how prices should be set, despite councils appreciated Australian Government support.

No other sector had been asked to get out the “crystal ball” and set prices from 1 July that take account of 40 or more years of carbon emissions liability, Mr McArthur said.

Mr McArthur said councils would have little control over price increases set off by landfill operators and would need to pass these on to rate payers who fund council services.

“While unfunded gas capture could help reduce landfill methane emissions an carbon price exposure, the cost of this technology appears to be left to councils and rate payers,” Mr McArthur said.

He said setting prices based on estimated four decades of waste emissions and any future carbon price liability those emissions may attract is no easy task.

However, the Local Government Association of South Australia (LGSA) said the carbon price may have less impact on councils than some predictions.

The impact will not be known until around 2014, according to the LGSA.

LGSA president Kym McHugh said the cost of taking domestic rubbish to a landfill is the “biggest uncertainty” with the impact being “significantly different” between otherwise similar councils.

“We will pay more for electricity, some fuel, and building and construction materials – like everyone else,” Mr McHugh said.

He said the exact impact on these costs is not known, but “reasonable estimates” can be made.

 According to Mr McHugh, some costs have come in above budget estimates and some below, a budgets are considered decisions based on information known at the time, “but the impact on landfill is quite complex”.

“There are only three landfill sites: Integrated Waste Services at Dublin, Transpacific Industries site at Inkerman and the Southern Region Waste Resource Facility at Pedler Creek which are above the threshold,” Mr McHugh said.

He said if a council takes waste elsewhere, there is no carbon price – “at least until a review in 2015”.

For the three large sites, the carbon price would be payable for waste eposited after 1 July 2012, but only as that waste emitted greenhouse gases over about 30 to 40 years, Mr McHugh said.

He said there is a government standard regime which is agreed on how to calculate those emissions, which says that domestic waste does not start emitting greenhouse gases until the second year.

“So no carbon price will be payable until late 2014, or even early 2015,” Mr McHugh said.

The Local Government Association of Queensland (LGAQ) offered an alternate perspective on the carbon tax impact on large amounts of waste left from natural disasters.

According to the LGAQ, the federal government agreed to address a consequence of its carbon tax system that would have seen councils paying the tax if natural disasters left the with large amounts of emissions producing waste.

LGAQ chief executive Greg Hallam said the government had agreed to change the reporting methodology required to assess the carbon tax liability of landfills.

Natural disasters such as cyclones and floods would have affected councils remain under the tax threshold, Mr Hallam said.

“That means small councils like Cassowary Coast Regional Council will not be hit by carbon tax simply because their communities were unfortunate enough to be in the path of a cyclone,” Mr Hallam said.

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