House of Representatives

Second Reading Speech

Dr KEMP (Goldstein - Minister for the Environment and Heritage)

I move -

That this bill be now read a second time.

The Product Stewardship (Oil) Legislation Amendment Bill (No. 1) 2003 contains amendments to the Product Stewardship (Oil) Act 2000, with consequential amendments to the Product Grants and Benefits Administration Act 2000, to exempt certain oils or uses of oils, which are outside the original policy intent of the product stewardship arrangements for oil, from payment of the levy.

The Product Stewardship (Oil) Act was introduced as part of the Howard government's Measures for a Better Environment package in 2000. The product stewardship scheme for waste oil is designed to ensure the environmentally sustainable management and re-refining of waste oil, and involves a per litre levy of 5.449c on oil that is used to fund volume based benefit payments for waste oil recycling and reuse. Benefits are paid according to a six-tier scale that reflects the environmental impacts of various recycling and reuse options.

Since the commencement of the product stewardship arrangements for waste oil in January 2001 it has become apparent that some oils, and some particular uses of oil, captured by the oil levy do not create a recyclable waste oil stream and represent only low levels of risk to the environment. These oils are outside the original policy intent of the product stewardship arrangements for oil, and therefore should not be subject to the oil levy.

Exemptions from the oil levy for single use oils that fit this category - food grade white oil, polyglycol brake fluids and aromatic process oils - came into effect on 15 April 2002. These products have characteristics that are distinguishable from other oil products, and as such they have been clearly defined as exempt under the Customs Tariff Amendment Act (No. 2) 2002 and the Excise Tariff Amendment Act (No. 1) 2002, passed by parliament on 14 November 2002.

The intent of the bill is to provide a mechanism for the granting of relief from the oil levy for specific users or uses of multipurpose oil that do not create a recyclable waste oil and represent only low levels of risk to the environment. Oils such as those used in the manufacture of printing inks have been identified in this category. These multipurpose oils have not been defined as exempt under the Customs Tariff Amendment Act (No. 2) 2002 and the Excise Tariff Amendment Act (No. 1) 2002, as some uses of these oils create waste that can be recycled. To maintain the policy intent of the product stewardship arrangements, in this instance it is necessary to identify both the oil product and its specific use as exempt.

The amendments in the bill will allow for levy relief for specific users or uses of multipurpose oil through the creation of an additional category of benefit under the Product Stewardship (Oil) Act 2000. The new benefit category will be paid at the same rate as the levy for specific users or uses of particular oil as declared by the Minister for the Environment and Heritage by Gazette notice.

These amendments preserve the original intent of the product stewardship arrangements for waste oil, which is to reduce the environmental damage caused by the inappropriate disposal of waste oil by supporting economic recycling options for waste oil. I present the explanatory memorandum to the bill.

Debate (on motion by Mr Rudd) adjourned.