The Government will spend $40 million from its Provincial Growth Fund on crowd-sourcing ideas to reduce the amount of plastic waste in New Zealand.

This comes as the Government's plastic bag ban officially comes into force today.

Regional Economic Development Minister Shane Jones said the funding would be used to invest in projects that convert waste into materials and products useful to businesses and consumers.

He said the volume of waste going to landfills has increased by 20 per cent since 2008 – "it is time we increased our support for ways of reducing this flow of material".

A high proportion of this waste, particularly recyclable plastic, had other uses and could be converted into new products, he said.

Jones has tasked officials with seeking out investment-ready proposals of "significant scale" in regional locations, but close to main urban centres as that is where much of the plastic waste is generated.

Projects that can get under way by 2020 will be a priority.

The Provincial Growth Fund will invest in a range of approaches, as long as they have further value to businesses and consumers.

The initiatives will need to create more jobs in regional New Zealand as well, and will need to have the potential to be scaled up or replicated in other locations over time.

For years, New Zealand has been sending its waste offshore, Associate Environment Minister Eugenie Sage said.

But countries, such as China, have started refusing to take New Zealand's waste. Sage said that was "the wake-up call we need".

"Tonnes of plastic, fibre, organic materials, e-waste and construction materials are currently going to landfill as waste.

"If more materials are recovered and re-used here in New Zealand, we can help our economy shift from its current 'take, make and waste' approach to one that designs waste out of production."

Speaking to RNZ National this morning, Sage said the Government has more work planned around getting rid of waste plastics.

She said within the next few months, the Government would put out a consultation document on the criteria for moving to regulated products stewardship.

"That's where manufacturers, retailers and consumers all take more responsibility for the products and what happens to them at the end of their life."

She said the Government was also looking to extend the landfill levy.

At the moment, it only applies to 10 per cent of landfills – "we want to apply that much more widely and increase it".

She said that would generate revenue that would be recycled back to help councils and businesses to minimise waste.