The graph below shows the cost at a Perth landfill, and the minimum wage per hour.
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| Landfill and labour costs - Perth, Western Australia |
The graph shows a jump in landfill costs for 2010 coinciding with a jump in the landfill fee per how of labour. In 2000, each tonne of waste was equivalent to three hours of minimum wage labour. In 2012 it has jumped to over 6.5 hours on a landfill fee of about $110/tonne.
In Sydney, the Eastern Creek landfill charges twice this gate fee, making a tonne of waste equivalent to over 13 hours of labour. And trends around Australia (except, perhaps, Queensland) are for landfill costs to increase much faster than the cost of labour.
What does this mean?
In short, it means that the innovators in waste management can afford to invest labour to reduce waste to landfill. This will be difficult for established operators to acknowledge, as they are hamstrung by their existing operations.
As discussed in my post marginal thinking and waste, existing operators are all but forced to frame the problem in terms of how to marginally improve on what they have. Which is bulk handling systems that minimise labour at the expense of waste to landfill.
The field is wide open for new players to enter this market.
It would probably be useful to establish what happened in 2009 to cause the main jump in landfill costs. Will that disparity continue, or more importantly, will it widen further?
ReplyDeleteIt may be worthwhile comparing this to basic recycled commodity prices such as scrap steel.
There was a defined event in 2009 - landfill levy went from $7/tonne to $28/tonne. That was a one-off, though there is a fair chance it will happen again. Once a government gets a taste of higher taxes through landfill levy, it is very difficult to let go. In NSW the levy is something like $95/tonne.
DeleteThat's not necessarily a bad thing. Government needs to get its taxes from somewhere, and I'd rather they came from things we don't like (like landfill) than things we do (like jobs via payroll tax)