Recycling may become an essential service like water and energy, with Victoria's environment minister ordering a review.
The trouble-plagued industry, which has had numerous fires and site shutdowns, will be examined by the Essential Services Commission.
"We know that more needs to be done to lift the standards of our recycling system," Environment Minister Lily D'Ambrosio told reporters on Sunday.
The terms of reference will be finalised in coming weeks but Ms D'Ambrosio said she expected the commission to get on with the review as soon as possible.
But the opposition has accused the government of just sitting on $500 million collected through the landfill levy and dragging its feet on solving the issue which was thrown into crisis when China stopped accepting foreign materials.
"They have not got a long term solution already mapped out," opposition spokesman Nick Wakeling told reporters.
"They've known about this crisis for two years, so their response two years down the track is they now wanting to send it off to another organisation to do an investigation."
Victoria will spend nearly $35 million over three years to fix its recycling and waste woes.
The money was included in last month's state budget and follows large factory fires involving waste stockpiles at Coolaroo, West Footscray and Campbellfield, and China's ban on foreign waste which meant kerbside recycling went to landfill in some council areas.
Included in the funding is a $14.3 million for recycling industry development to enhance Victoria's domestic re-manufacturing capabilities, targeting processing infrastructure for priority materials such as paper, cardboard and plastics.
Another $13.8 million will be spent to lure new entrants into the Victorian recycling market.
Ms D'Ambrosio also confirmed on Sunday the Department of Environment, Land, Water and Planning was reviewing the best practice use guidelines of weedkiller Roundup following three landmark US court rulings against the manufacturer over cancer cases.
