'Tax on construction': Industry claims new homes will cost more under waste levy

The Palaszczuk government announced the $70 per tonne waste levy earlier this year, in an attempt to stem the flood of New South Wales trucks coming across the border to dump thousands of tonnes of rubbish in Queensland landfills.

Until then, Queensland was the only mainland state without a waste levy, after Campbell Newman's LNP government scrapped the former $35 a tonne levy in 2012.

Premier Annastacia Palaszczuk has insisted households will not bear the cost of the waste levy, with councils to receive a 105 per cent rebate on their waste.

But Master Builders Queensland deputy CEO Paul Bidwell said the waste levy would add $1000 to the cost of building the average new home.

"The levy is nothing but a tax on construction," Mr Bidwell told a parliamentary committee considering the bill in Ipswich on Thursday afternoon.

Mr Bidwell said construction waste from new homes was unlikely to be recycled, particularly in regional areas, and would be dumped in landfill at a higher cost and passed on to consumers.

"We wanted all the revenue to go to developing recycling facilities, particularly in regional Queensland," he said.

Mr Bidwell said interstate waste arriving in Queensland was a problem but the levy was a "blunt instrument".

Garry Sharman, from the Housing Industry Association, estimated the levy would add $1500 to the cost of building a two-storey detached house.

"This levy will have impacts on housing affordability," he said.

"They're [the construction industry] not going to absorb it - they're going to pass it on."

Luke Hannan, from the Local Government Association of Queensland, said its analysis found the waste levy would cost councils about $12 million for key services, such as sewerage, road maintenance and facilities.

"That will equate to about $10 per household," he said.

"Ultimately it's going to be each council's position and discretion on how they can best afford it, but it may flow onto the ratepayers."

However, parliamentary committee chair Duncan Pegg was critical of the LGAQ's research, which was not available publicly and had not been provided to the councils involved or the committee.

Mount Isa Mayor Joyce McCulloch questioned why her council was included in the waste levy zone while Goondiwindi - which was closer to the NSW border - was exempt.

Cr McCulloch said Mount Isa had no issues with interstate dumping and the waste levy would cost her council $2.5 million each year.

"All we can see is an extra rate going out to our community and our community is already doing it very, very tough," she said.

"We would love to see recycling ... But we just cannot, it's not financially viable for such a small community and the volume of waste that is created."

Environment Minister Leeanne Enoch said $32 million was allocated in this year's budget for advance payments to councils, with $5 million for a grants program to help councils to improve waste infrastructure at disposal facilities.

"The only way this will cost households more is if councils don't use the advanced payment as it is intended," she said.

"Ratepayers will be expecting their local councils to have the integrity to do the right thing.

"Our legislation requires that each local government must use the advance payment to make sure there is no direct impact on households."

However, the LGAQ argued its analysis showed the state government funding would only cover up to 70 per cent of councils' costs.

Opposition environment spokesman David Crisafulli slammed the waste levy, while arguing only 10 per cent of the $1.3 billion it was expected to raise over four years would go to environmental initiatives.

But Mr Crisafulli would not outline whether the LNP would scrap the levy.

"I'm not going to let the government off the hook. It's two years and a little bit until the next election," he said.

"In two years' time, you can hold us to account. We'll go to the public and say 'this is our view on the tax'."