The hike will cover the cost of sending more recycling to landfill, because the material can no longer be shipped to China.

Warrnambool City Council says its waste charges could increase by $40 to $50.

Mayor Robert Anderson said there would be an impact to the council’s budget.

“Changes in the global market for recyclable materials will have an impact on households in the next financial year,” he said. “It could be in the order of $40 to $50 per household to ensure we reduce the amount of waste going into landfill.”

The council is calling on the state government to use its cash reserve from the landfill levy to help solve the crisis.

“The Warrnambool community pays about $250,000 annually to the state Government through the tip tax,” Cr Anderson said.

“And across the region we have paid millions to successive state government’s through the tip tax which has so far collected in excess of $450 million”.

The Municipal Association of Victoria CEO Rob Spence said rural councils had been the most directly affected.

“A number of rural councils are already having to consider costly short-term arrangements in order for their recycling services to continue beyond this week,” he said.

The MAV also said the state government’s landfill levy income should be “urgently allocated” as a solution to the crisis.