Explanatory Memorandum
(Circulated by authority of the Minister for the Environment and Heritage, Senator the Hon Robert Murray Hill)Excise Tariff Amendment (Product Stewardship for Waste Oil) Bill
Outline
5.1 The purpose of this Bill is to enact amendments to the Excise Tariff Act 1995 which are consequential to the Product Stewardship (Oil) Bill to enable collection of an excise-style levy on relevant domestically produced oils and their synthetic equivalents. Customs Tariff legislation is also being amended to achieve this standardisation.
Context of reform
5.2 On 28 May 1999 the Prime Minister announced an agreement between the Government and the Democrats on key tax reform proposals. Included in the agreement was funding for a "comprehensive product stewardship" arrangement for oil recycling.
Summary of new law
5.3 Under the existing taxation regime oils are subject to wholesale sales tax (WST), but not subject to excise. On 1 July 2000 WST will be removed in line with the implementation of the Goods and Services Tax.
5.4 Excise legislation is being amended to provide for an excise style levy on lubricating oil. This levy will fund payments to eligible companies recycling waste oil in environmentally appropriate ways. Payments will be provided for by the Product Stewardship (Oil) Bill 2000 .
| New Law | Previous Law |
|---|---|
| Petroleum based oils (including lubricant base oils; prepared lubricant additives containing carrier oil; lubricants for engines, gear sets, pumps and bearings; greases; hydraulic fluids; brake fluids, transmissions oils; and transformer and heat transfer oils); and their synthetic equivalents including recycled oils incur an excise duty of $0.05 per litre | Oils did not attract an excise but instead incurred wholesale sales tax of 22%. |
Detailed explanation of new law
5.5 For the purposes of this legislation, "oils" are defined as:
- a)
- petroleum-based oils (including lubricant base oils; prepared lubricant additives containing carrier oils; lubricants for engines, gear sets, pumps and bearings; greases; hydraulic fluids; brake fluids, transmissions oils; and transformer and heat transfer oils);
- b)
- their synthetic equivalents;
and including recycled oils.
5.6 Item 15 of the Schedule defines those oils that are subject to the new excise. Most oils will be levied, because most oils have the potential to be a danger to the environment if disposed of inappropriately.
5.7 Recycled oils which are recycled for use again as oil are subject to the excise, as they pose a potential environmental threat once re-used as oils.
5.8 Paragraph 11(d) of the heading to Item 11 has been altered to exclude those products that now fall to Item 15. The heading of sub-item 11(I) has also been amended to specifically exclude those products that now fall to Item 15.
5.9 This Act commences on the day of Royal Assent with one exception Schedule 1 commences on commencement of Part 2 of the Product Stewardship (Oil) Act 2000 .