Explanatory Memorandum
(Circulated by authority of the Minister for the Environment, the Honourable Sussan Ley MP)Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Excise Tariff Amendment Bill 2020
This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The Excise Tariff Act 1921 (the Excise Tariff Act) imposes liability for excise duty on fuels, oils and greases. Excise duty applies to the manufacture in Australia of oils and greases and their synthetic equivalents. Excise-equivalent customs duty similarly applies under the Customs Tariff Act 1995 (the Customs Tariff Act) to the importation of such products. Duty collected on oils and greases under the Excise Tariff Act and the Customs Tariff Act fund benefits paid under the Product Stewardship for Oil Scheme (PSO Scheme) which is established by the Product Stewardship (Oil) Act 2000 (the PSO Act). The PSO Scheme encourages the environmentally sustainable management and re-refining of used lubricant base oils and fluid base oils and greases by providing an incentive for oil and grease recyclers to collect and recycle such used oils and greases in Australia.
The Federal Court's Decision in Caltex Petroleum Pty Ltd v Commissioner of Taxation [2019] FCA 1849 (the Caltex case) gave a broad interpretation of the definition of oils in the PSO Act that included diesel. The effect of the decision was to allow benefit payments for the recycling of goods for which excise and excise-equivalent customs duty had not been imposed under the Excise Tariff Act and Customs Tariff Act as an oil. Another potential consequence of the Caltex case is that the duty collected under the Excise Tariff Act to fund the PSO Scheme could apply to diesel.
The purpose of the Excise Tariff Amendment Bill 2020 (the Excise Tariff Amendment Bill) is to address the issues arising from the Caltex case by amending item 15 of the Schedule to the Excise Tariff Act to narrow the scope of petroleum-based oils and synthetic equivalents for which excise duties are imposed for the purposes of the PSO Scheme to exclude diesel and other fuels. Item 15 was inserted into the Excise Tariff Act for the purpose of levying oils for the PSO Scheme and did not historically include duties on diesel and other fuels. Diesel and other fuels will continue to be subject to excise duty under other items in the Schedule to the Excise Tariff Act.
The Product Stewardship (Oil) Amendment Bill (the PSO Amendment Bill) will address issues arising from the Caltex case by amending the definition of oils in the PSO Act to apply to lubricant oils, fluid oils and other oils and greases manufactured from base oils only to reflect the original intention of the PSO Scheme, which excludes diesel and other fuels.
Human rights implications
The Excise Tariff Amendment Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. This Bill does not engage any of the applicable rights or freedoms.
Conclusion
The Excise Tariff Amendment Bill is compatible with human rights as it does not raise any human rights issues.