How will Skip Bin Prices be impacted by Carbon Tax

Skip bin services and their prices will be effected by a number of changes that are likely to happen on the 1st of July 2012.  Most states now have waste levies in place that were implemented and imposed on on skip bin businesses long before the Federal government thought about bringing in an ETS or a Carbon Tax.  The Waste levies generally increase each year on the 1st of July by a fixed amount plus a rise for the CPI, both of which causes the cost of waste disposal to rise and price of skip bins to increase.

Even though we are less than 2-months away from the introduction of the Carbon Tax there seems to be little or no information about the price of waste disposal it likely to increase and effect the price of skip bins.  This should be little or no surprise because even though the state government levy increases are based on a well understood formula these do not get communicated to most waste and skip bin business until after the 1st of July, even though the information has been available for months beforehand.

The carbon price will be fixed for the first 3 years, starting at $23 per tonne of carbon (CO2) (generated or emitted). After the initial 3-years the carbon tax will be replaced  by an ETS (Emissions Trading System) that will  determined the price of carbon emissions by the market. The Carbon Tax is being imposed on only the largest 250 to 300 carbon emitters although the tax is likely to be passed on in the form of increased prices (including higher skip bin prices).  Given the disposals industries (the land fill operators) history of giving advance notice of price increases on tipping due to the known increases in state landfill levies it seems unlikely that the skip hire industry is likely notified of their increased priced until the first or second week of July 2012.

So until the the beginning of July it is unlikely that anyone will know what the real impact of the carbon tax on the price of skip bins will be.  The only things we do know is that the waste disposal companies (or landfill owners) are telling everyone who will listen that prices will go up not only as a result of the carbon tax, the state government waste levies but also the removal of the diesel fuel rebate, and this is likely to significantly increase the price of skip bin services.  In some states the increases maybe mitigated by some of the state governments removing their levies or delaying increases by a year, but again it really only serves to create more uncertainty about the price of waste disposal and skip bin prices until the beginning of the new financial year.