Major reform into recycling would help alleviate an approaching "crisis" while creating local jobs, says Local Government NSW.
From January 2021 more waste material will be kept in Australia.
It will start with a ban on the export of unprocessed glass, followed by mixed plastics in July of that year and then whole used tyres in December.
By July 2024, single resin/polymer plastics, as well as mixed paper and cardboard will also stop being processed overseas.
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The LGNSW Save Our Recycling campaign has been pushing for 100 per cent of the NSW government's waste levy to be reinvested into sustainable waste management initiatives in NSW.
The organisation is also calling for more recycling facilities and education campaigns to promote waste avoidance.
LGNSW president Linda Scott said the amount of waste people were generating was increasing, while recycling and waste diversion rates were stagnating.
"We are facing a looming waste and recycling crisis and new government funding for recycling initiatives and reprocessing facilities is needed now," Cr Scott said.
LGNSW has a four step plan for the NSW government: provide more funding to councils for priority infrastructure, increase the procurement of Australian made recycled goods, deliver education campaigns across the state and introduce producer responsibility schemes for problematic materials.
"This four-point plan is designed to ensure recycling that would have previously been shipped offshore can be dealt with at home, with the added benefit of creating jobs and boosting local economies," Cr Scott said.
Only 18 per cent of the annual $800 million from the waste levy is reinvested into waste management.