The City of Melbourne has backed a campaign from the Municipal Association of Victoria calling for the introduction of a state-wide Container Deposit Scheme.
Lord Mayor Sally Capp said a Container Deposit Scheme would help reduce plastic and glass being sent to landfill.
"The recycling system is broken and we need to harness community and industry support to fix it," the Lord Mayor said.
"We need to reward individuals and community groups who are doing the right thing when it comes to recycling. It's time to provide an incentive for people who collect bottles and cans and give back to the community."
The City of Melbourne has joined other Victorian Councils such as the City of Frankston, the City of Darebin, and the City of Port Phillip in calling for a the Victorian Government to introduce container deposit legislation into parliament.
Chair of the City of Melbourne's Environment Portfolio, Cr Cathy Oke said Victoria and Tasmania are the only Australian states yet to commit to a scheme.
"South Australian first introduced their scheme in 1977, leading the nation on waste management. They currently offer a 10 cent deposit and refund on beverage containers," Cr Oke said.
"Introducing a similar scheme in Victoria would help reduce litter while providing a commodity that could be used by our local industry."
The scheme could include manually operated or automated 'reverse vending machines' that would give credit for each item deposited.
"Victorians are looking for answers to the waste crisis so it's time we helped people do their bit to help create a stronger recycling sector," Cr Oke said.
"Along with reducing litter, the scheme would ensure the beverage supplier industry takes greater responsibility for packaging, and rewards individuals, community groups, sporting clubs and charities for picking up littered beverage containers."
Following SKM's decision to no longer accept our recyclable materials, the City of Melbourne has been forced to send 45 tonnes of recycling to landfill each day. SKM sorts 50 per cent of Victoria's kerbside recycling - close to 300,000 tonnes a year.
More than $500 million of landfill levy income collected by Victorian Councils is available in the State Government's Sustainability Fund and could be invested to increase capacity in the local recycling sector.
"We need the State Government to unlock the funds Councils have collected from landfill levies and invest in new technologies to transform our waste and resource recovery sector," Cr Oke said.
"We need Government procurement targets like the steel industry to build Australia's domestic recycling industry."
"The City of Melbourne will also look at increasing the amount of recycled products that we use in our infrastructure projects. Instead of having our glass bottles and plastic thrown in to landfill, they could be used to help build new roads, footpaths, bikeways and playground equipment."
