It was an announcement that took many Australians by complete surprise – and caught federal MPs on the back foot. In January, China declared it would no longer import waste from other countries for recycling.

To those of us who had no idea we'd been shipping more than 50 per cent of our waste to China, suddenly our recycling bins lost much of their eco-friendly allure. Then we learnt that the recycling industry had been under strain for years as the price for recyclable waste dropped as much as two-thirds. Is the China blockade a death sentence for the 800 or so companies recycling waste in Australia?

"No, but we need a lot more support from Canberra," says Gayle Sloan, CEO at the Waste Management Association of Australia. "We'd been warning the federal government for years that relying on export markets for recyclables is risky and not in the national interest."

Each Australian produces an average of 2.7 tonnes of waste a year, and Sloan says the China shutdown is an opportunity for us to increase the proportion of waste, now about 60 per cent, that is recycled. The dividends from recycling include less landfill, less pollution and new sustainable products. "For every one tonne of waste recycled, we create one job," says Sloan. "Australian recycling companies are highly innovative, turning glass bottles into paving material for roads, for example."

Cutting our waste, says Sloan, will require a whole-of-government approach. "Local government is where the rubber hits the road, with recycling. The states set the regulatory framework, but the federal government has to provide the national financial incentives."

What we want to avoid is the collapse of suburban recycling collections, says Alejandra Laclette, Recycling Label Program Manager with Planet Ark. "I grew up in Mexico, where there is no kerbside recycling system," she says. "So many natural systems in Mexico are degraded by waste – some even close to tourist areas like Cancún."

Planet Ark recently launched a new, easy-to-understand labelling system that shows how to dispose of each piece of a product package. "It's simple, at-a-glance labelling," says Laclette, "and that's what we all need."