With as little as a year left before their landfill sites are at capacity, some NSW councils are complaining that the State Government is collecting landfill waste levies from them without reinvesting in recycling facilities.

Key points: State governments nationally collect $1.5 billion in levies on waste that goes to landfill

State governments nationally collect $1.5 billion in levies on waste that goes to landfill Queensland reinvests 70 per cent of its levies in recycling initiatives

Queensland reinvests 70 per cent of its levies in recycling initiatives Local councils are calling on NSW State Government to reinvest levy money back into waste management

Sally Townley sits on the Coffs Harbour Council on the New South Wales north coast.

"Our landfill is going to be full in between one and three years and we don't have another site ready, so that is also a massive looming problem for us here," she told the ABC's AM program.

Dr Townley said the situation was at crisis stage.

"In Coffs Harbour, the waste that we are generating each year has quadrupled in the last decade.

"So people are buying more, using more, throwing more things away.

"We're basically drowning in our own waste."

Councils cannot send their recycling overseas anymore because China and other countries are refusing to take it.

In some cases it is simply being stockpiled.

Where do waste levy funds go? It depends

The pressure is on for Australia to be able to recycle more of its own waste.

The recycling industry says there are funds to develop domestic capacity, with state governments collecting $1.5 billion in levies on waste that goes to landfill.

Pete Shmigel, chief executive of the Australian Council of Recycling (ACOR), said it was essential that Australia developed a domestic capacity to make new products out of recycled material.

"At the end of the day, you're not recycling until you make a new product out of the material that we all put out on our kerbs."

Queensland now reinvests 70 per cent of its levy into recycling initiatives.

But Local Government New South Wales president Linda Scott said in her state, most of the levy went to consolidated revenue.

Sorry, this audio has expired NSW under pressure to invest more in recycling - AM

"We've launched our Save Our Recycling campaign in the lead-up to the New South Wales state election calling on the State Government to reinvest the New South Wales Waste Levy — last year totalling over $720 million — back into the management of waste in New South Wales."

A spokesman for New South Wales Environment Minister Gabrielle Upton said the state's recycling rate was one of the highest in the country.

The Government has committed more than $800 million to waste management and recycling over nine years through the Waste Less, Recycle More initiative, which is the largest program of its kind in Australia.

But Ms Scott told AM that amount was a projection over multiple years.

"We know last year the State Government collected $727 million in one year from the waste levy," she said.

"Of that, $300 million was from local governments, and yet only 18 per cent was returned to local government for the management of waste."

New South Wales is refining how it measures recycling performance, but there's concern the state hasn't released an annual report on domestic waste levels in three years.

"Having a statewide policy and statewide monitoring of the waste stream would certainly support the great efforts that New South Wales councils are already undertaking," Ms Scott said.

Mr Shmigel believes improving the recycling sector would be a win on many fronts.

"Surveys done by ACOR show that 88 per cent of the Australian community support investment in recycling," he said.

"I would have thought that given that community support, given the jobs that recycling generates in places like regional towns, and given the environmental benefits of keeping things out of landfill, this is an area where our political class can act decisively in the upcoming election season."