In Jan 2018, China made the decision to stop accepting and hence importing scarp metal, plastic, paper and chemical waste from foreign countries. In 2015, China imported over 47 million tons of waste (Radio Free Asia, 2018). In the wake of the ban, most developed nations, including the USA, Britain and Australia are struggling to deal with their mounting rubbish and trying to find alternative Asian countries to export their recycling waste (VoA, 2018).
Local recycling companies, such as Visy, stopped accepting recyclable waste, creating uncertainty for 22 Victorian councils. In Queensland, the Ipswich City Council decided to send recycling to landfill, setting a national precedent for other councils to follow (ABC News, 19 Apr 2018). Several councils in NSW have indicated to follow suit and is calling for state subsidies. Victorian councils are getting a once-off $13m from the Victorian Government to help deal with the situation; however the onus is on Victorian councils to develop solutions and renegotiate contracts (ABC News, 23 Feb 2018) from July 1, 2018.
In Victoria, some councils are taking the first opportunity to use this ban as a great excuse to raise rates above future rate caps (which are imposed by the Victorian Government). Since the rate capping policy was legislated in the Victorian Local Government Act in 2015, councils and their peak bodies have been collaborating to openly discredit and undermine this legislated policy that protects local communities from excessive rate hikes, common in the past.
A case of poor governance in responding to the recycling waste management dilemma is Monash Council. The council decided, in a closed Feb meeting, to raise rates, to compensate the additional $1.5 million cost of waste management. Hence no ratepayers would know the issue exist then, not until the Mayor made a news media announcement in both the website (8 Mar) and in a local newspaper article the next day (9 Mar). The closed meeting minutes is only released after a few days after the 27 March meeting and by this time, the Mayor already announced and acted on the decision.
Victorian councils cannot increase rates above legislated capped rates advised by the Victorian LG Minister. They need to apply for capped rates variation to the Essential Service Commission (ESC). The ESC requires councils to follow certain guidelines in their applications, of which an important one relates to their community engagement. Monash Council did not have a community engagement plan, resulting in missing compliance to 3 ESC community engagement criteria in their rates variation application. Consequently Monash Council:
- Had not informed ratepayers of the long term / financial implications, as no long term financial forecasts have been publicly communicated when the decision was first announced in early March. The info is only available on the ESC website, who published it upon receiving Monash council’s rate variation application. There were significant errors in the submission, which had now been corrected. The mistake was revenue items were negative values and expenses were positive, and surplus/deficit were calculated as (-Revenue) minus (+Expense), resulting in significantly large deficits.
- Did not deliver any recent community consultation meeting/forum to understand the constituents’ views and to explain how these views would be included or excluded from the 27 Feb 2018 decision making process. They refer to community engagement activities relating to other matters in the past, to mislead ESC that they consulted their local community to increase rates above future capped level, to fund a renegotiated contract with Visy, as the solution.
- Council did not disclose any information about alternative solutions. The Major announced a “do-nothing” (which implies service cuts) or react to pay the increased cost are not trade-offs. Council has not indicated if it has considered increasing efficiency in administration and service provisioning, such as considered shared infrastructure and service arrangements (eg shared ICT services), or downsizing or deferring or cancelling non essential or low impact services and amenities. The solution Council has chosen is not sustaining. It may be appropriate as an interim short-term solution until a cost-effective and sustainable waste management solution is found, preferably a shared solution with other councils.
As a result, the community had not/poorly been informed of the long term financial implications and the trade-offs Council had considered when it made the decision to increase rates. They were not consulted recently and hence not knowing their views, Council would not be able explain how their views have been considered in the 27th Feb closed meeting. As the meeting was closed, the public would have no opportunity to know anything considered in the decision making.
Case Conclusion: Monash council’s decision to increase rates could have been a valid one, but the lack of transparency and community engagement in the decision making and the Mayor publicly implying “if we don’t get a capping rise from the ESC, we will strike a levy on ratepayers ” have voided such a possibility.
Councils nation wide are not appearing to be working smart and hard to find shareable recycling waste management solutions. It is as if every council is looking for its own solution and expecting handouts from its state governments and ratepayers to fund them. They are not looking where other costs can be cut in the the first instance. The first response of Victorian councils and even their peak bodies, is to increase rates and/or charges – a lazy way out, not mentioning the failure to meet good governance obligations in their decision making.