Key Points:

A new rubbish tax on households and companies is virtually a certainty as Labour continues its environmental push by working with the Greens on legislation to reduce waste.

The Greens and Labour revealed yesterday they had agreed on changes to a member's bill promoted by Green MP Nandor Tanczos that will result in the price of visiting a rubbish dump going up and an increase in the price of rubbish bags.

It appears Mr Tanczos has secured enough support from other parties to get his revamped bill passed, and he even said he was hopeful of unanimous backing.

Some of the more controversial aspects of the Waste Minimisation (Solids) Bill have been removed under the agreement between the Greens and Labour, including a requirement that all organisations develop a waste minimisation plan.

That proposal had raised concerns around compliance costs.

The renamed Waste Minimisation and Resource Recovery Bill retains a proposed levy on landfill disposal and a plan to push businesses in problem sectors to look at their waste practices.

The tax on rubbish will be charged at a rubbish tip's weighbridge, and would initially be collected by the Ministry for the Environment at a rate of $10 a tonne, rising in later years.

The collected money, estimated to reach $30 million in the first year of the levy, would then be used by local authorities for waste minimisation initiatives, as well as put into a contestable fund that people can apply to for funding for waste minimisation projects.

Mr Tanczos yesterday said the levy amount was "very modest" and he was keen for the charge to be transparent.

"Currently there's a lot of recycling which is not viable because it's so cheap to chuck stuff in a hole in the ground.

"And it's only that cheap because the full environmental costs of doing landfilling are not being charged."

The prospect that Labour could back a rubbish tax was first raised in February when Prime Minister Helen Clark said that sustainability could potentially become part of the country's identity, in the way New Zealand's anti-nuclear position had.

Since then Labour has worked with Mr Tanczos to make his bill more palatable and has now announced its agreement in the same week that key details of major climate change policies will also be revealed.

Environment Minister David Parker yesterday said the rubbish levy was "modest" and over time it should not increase costs in the economy, but shift them. "It moves costs from ratepayers where they are currently falling ... and attaches them to the products," Mr Parker said.

Mr Tanczos estimated the legislation could raise the charge on a rubbish bag by around 10c.

The commercial sector is very much in the firing line of the revamped bill.

Construction companies and manufacturers could be targeted to improve their practices, and there is also hope that recycling of items inside old computers and mobile phones could be made easier.

Under the proposed bill there will be a list of priority products drawn up with the Environment Minister's agreement.

When a product such as an old computer or concrete waste is identified on that list, the relevant "stakeholders" involved will have to come together to draw up a plan to look at whether they can reduce the waste.

For example, a company which took a lot of concrete to a landfill would had to set out targets to divert away from going to rubbish dump, and would be required to meet them.

A manufacturer making biscuits in a plastic tray would come up with a plan to assess whether the packaging could be redesigned or whether waste could be reduced in manufacturing.

Mr Parker said at some building sites concrete and steel were being reused, which proved it could be cost effective.