Explanatory Memorandum
(Circulated by authority of the Minister for the Environment and Heritage, The Honourable Dr David Kemp, MP)General outline and financial impact statement
General outline
The Customs Tariff Amendment (Product Stewardship for Waste Oil) Act 2000 and the Excise Tariff Amendment (Product Stewardship for Waste Oil) Act 2000 impose a levy on certain petroleum based oils and greases and their synthetic equivalents to fund the development of a recycling program for waste oil - the Product Stewardship Arrangements for Waste Oil (the PSO).
The intention of the PSO is to reduce the environmental impact of waste oil by imposing a levy on virgin oils and lubricants. The levy is used to fund a benefit scheme designed to encourage the recycling of waste oils. Benefits are paid on a six-tiered differentiated scale, with differing benefit rates for various waste oil recycling activities.
Multi-use oils that are used in a specific way, either in the manufacture of another product, or in a process, that does not create a recyclable waste oil stream, and is considered to present a low level of risk to the environment, are outside the original policy intent of the product stewardship arrangements for waste oil. This Bill provides the mechanism for exempting such oils from the levy.
To effect this exemption, a new category of benefit (to be known as the category 8 benefit) under the Product Stewardship (Oil) Act 2000 will be paid, at the same rate as the levy, for uses of oil as approved by the Minister for the Environment and Heritage by Gazette notice.
The purpose of this Bill is to amend the Product Stewardship (Oil) Act 2000 to:
- •
- Provide an effective exemption for certain multi-use oils and uses of multi-use oils from the Product Stewardship (Oil) levy;
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- Introduce a mechanism which will allow the Minister for the Environment and Heritage to approve the uses of certain oils as eligible for the category 8 benefit; and
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- Implement consequential amendments to the Product Grants and Benefits Administration Act 2000 to enable category 8 claimants to register for PSO benefits.
Financial impact statement
In 2001-02 Product Stewardship (Oil) levy revenue was $25 million, with $8.2 million in benefits paid to oil recyclers. Benefit payments are expected to increase as claims against category 1 (re-refined base oils) come on line.
The cost to the Government of providing an effective exemption for certain oils and uses of oils from the Product Stewardship (Oil) levy will be small. Based on industry estimates, the cost of providing levy relief for uses of oil likely to qualify for exemptions would be less than 5% of total PSO levy revenues, or $1.25 million per annum.
Notes on clauses
Clause 1 - Short Title - Product Stewardship (Oil) Legislation Amendment Act (No. 1) 2003
Clause 2 - Commencement
Item 1 of the table in this clause specifies that sections 1 to 3 and anything in the Act not covered elsewhere in the table will commence on the day on which the Act receives the Royal Assent.
Item 2 of the table in this clause specifies the date and time of commencement of each of the two Schedules contained in the Bill.
Schedule 1 - will commence on a single day to be fixed by proclamation, subject to subsection (3) of Clause 2.
Schedule 2 - will commence on a single day to be fixed by proclamation, subject to subsection (3) of Clause 2.
Clause 3 - Schedule(s)
This clause is the formal enabling provision for the Schedule to the Bill, providing that each Act specified in the Schedule is amended or repealed in accordance with the applicable items of that Schedule. The clause also provides that other items of the Schedules have effect according to their own terms.
Summary of amendments
Schedule 1 - Amendments to the Product Stewardship (Oil) Act 2000
Schedule 1 provides the mechanism to exempt certain oils from the Product Stewardship Oil (PSO) levy imposed by the Customs Tariff and the Excise Tariff.
This item provides a definition for gazetted oil.
This item provides a definition for gazetted use. A gazetted use, in relation to gazetted oil, will be declared by the Minister for the Environment and Heritage, through notice in the Commonwealth Gazette, to be eligible for a 'category 8' benefit payment.
This item provides that the registration requirements in section 8(2) refer specifically to an entitlement to 'a product stewardship (oil) benefit for the sale or consumption of recycled oil that you have recycled in Australia'.
Item 4 - At the end of section 8
This item provides that if an individual or company makes a claim for 'category 8' benefits after the introduction into Parliament of the Product Stewardship (Oil) Legislation Amendment Act (No. 1) 2003, but before they are registered with the Australian Taxation Office to make such a claim, the claim will be taken to have been made immediately after they are registered.
This item clarifies that entitlement to a benefit under subsection 9(2) refers specifically to 'a product stewardship (oil) benefit for the sale or consumption of recycled oil that you have recycled in Australia'.
Item 6 - At the end of section 9
This item defines a specific entitlement to a benefit for the consumption in Australia of gazetted oil for a gazetted use. It also limits that entitlement to a period after the introduction into Parliament of the Bill for the Product Stewardship (Oil) Legislation Amendment Act (No. 1) 2003.
This item provides that any entitlement to a benefit, either in relation to the sale or consumption of recycled oil, or the consumption of gazetted oil for a gazetted use, will be worked out in accordance with the regulations.
This item modifies subsection 10(2) to refer specifically to the sale or consumption of recycled oil.
Item 9 - After subsection 10(2)
As an addition to subsection 10(2), this item provides that the volume, quality and particulars of use of gazetted oil may be considered when determining the amount of benefit payable in accordance with the regulations in any claim period. The item stipulates similar conditions for calculating the benefit payable for gazetted oil as those for recycled oil.
This item provides a definition of recycled oil that allows the inclusion of 'gazetted oil obtained through recycling', in order that such a definition may be considered under the regulations when a determination is made as to eligibility for a benefit.
This item provides clarification that a benefit 'in respect of the sale or consumption of recycled oil, or of gazetted oil for a gazetted use' may be a nil amount.
Subsection 10(4) provides that before the Governor-General makes a regulation in relation to an entitlement to a product stewardship (oil) benefit, the Minister must consider:
- (a)
- the total amount that it is estimated will be collected under relevant items in the Customs Tariff Act 1995 and the Excise Tariff Act 1921 in the relevant period; and
- (b)
- any relevant environmental matters related to the recycling of oils.
Item 12 provides that, in addition to considering any relevant environmental matters relating to the recycling of oil, the Minister must also consider any relevant environmental matters relating to the use of gazetted oil.
Schedule 2 - Amendments to the Product Grants and Benefits Administration Act 2000
Schedule 2 makes consequential amendments to the Product Grants and Benefits Administration Act 2000 in order to provide for the difference in registration requirements between category 1-7 benefits and the new category 8 benefit under the PSO scheme.
In order to be eligible to claim PSO benefits for categories 1-7, an individual or company is required by Paragraph 9(3A)(a) to be licensed under the Excise Act 1901, along with demonstrating compliance with relevant Commonwealth, State or Territory recycling legislation, or Codes of Practice.
Item 1 creates an instrument to allow differentiated registration requirements for categories 1-7 and category 8 benefits. Claimants seeking eligibility for category 8 benefits only will be required to complete a simplified registration process. The item also replaces a requirement for claimants to be licensed under section 34 of the Excise Act 1901, which is now a redundant reference, with a requirement to be licensed to manufacture excisable goods under Part IV of the Excise Act 1901.
This modification to Paragraph 9(3A)(b) provides that unless an individual or company wishes to be registered only to be eligible to receive category 8 benefits, registration in any other case (for category 1-7 benefits) requires demonstration of compliance with relevant Commonwealth, State or Territory recycling legislation, or Codes of Practice.
Item 3 - Transitional provision
This item is a transitional provision. It provides that any existing registration for product stewardship (oil) benefits (categories 1-7) in force before the commencement of Schedules 1 and 2 of the Bill will be automatically extended to include registration for eligibility to receive category 8 benefits.