Monday, July 16, 2012

Queensland wasted: doing the sums for Trouty

At his facebook page the MP for Barron River, Michael Trout, has delivered a diatribe against the recently removed waste levy. The $35/tonne levy was introduced only last December for commercial and industrial waste and has now been abolished as part of the cost of living measures.

Trouty certainly hasn't held back with the hyperbole when it comes to supposed impacts on construction and inflation:
"The waste levy effectively brought the economy in the construction industry to a grinding halt."  (Note: The opposite of ABS Qld construction stats for March quarter)
"The Labor government were blinkered to the devastating negative onflowing repercussions of this ridiculous tax."
"Around town, the construction industry died." and "There was so much red tape and green tape and protocol, the industry was lost in a cloud of fear."
"This levy drove inflation." (Really? Oh dear!)
Queensland is now the only state without some kind of similar waste levy scheme. South of the border the Liberal Gov't in NSW has just hiked their waste levy to $44/tonne and up to $95/tonne in Sydney. The NSW levy was first introduced by the Fahey Liberal Gov't back in 1993. NSW is also currently undertaking a review of their levy by KPMG.

There was a cost benefit analysis of the levy prior to implementation which was quite compelling and worth the time to read for a more balanced perspective. The purpose of the levy scheme is to address the market failure from negative externalities by promoting recycling and reduced landfill, with the study indicating a net benefit to the community. Queensland is a high waste state and a poor performer among the states with waste recycling rates approximately a third of comparable rates in NSW.

Potential issues identified in the cost benefit analysis included illegal dumping and business impacts such as on skip operators. The analysis includes case studies of impacts for typical businessses.

It is not at all clear that complete removal of the levy was smart policy rather than consideration of reform or adjustment to the scheme, such as the levy rate structure, to address any issues.

I'm also not sure what it is with our local members and percentages. Previously it was the King Parrot who seemed to thnk that if three components of your rates each increase 5% then you add them all together and that makes a 15% increase. Now there is this from Michael Trout:
"His is a typical example. Previously paying approx. $130 + GST, for 8 cu m load, after Dec 1, he paid $550 plus GST for exactly the same load. That’s a massive 423% increase in one foul (sic) swoop."
Not quite. Apart from relevance of cu m to a tonnage levy lets do the sums for Trouty. The percentage increase relates to the CHANGE in the fee so: ((550-130)/130)x100 = a mere 323%. This is Year 9 level at mathsteacher.com.au and is also well explained at mathsisfun. There is also an online calculator so you don't even have to think.

Never mind, what's a hundred percent or so between business mates!





 


 Graph: Construction work done, Chain volume measures, trend estimates, Queensland and Western Australia

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