House debates

Tuesday, 25 August 2020

Bills

Product Stewardship (Oil) Amendment Bill 2020, Excise Tariff Amendment Bill 2020; Second Reading

12:11 pm

Photo of Josh WilsonJosh Wilson (Fremantle, Australian Labor Party, Shadow Assistant Minister for the Environment) Share this | Hansard source

I'm glad to speak in continuation in support of the Product Stewardship (Oil) Amendment Bill 2020, the Excise Tariff Amendment Bill 2020 and the amendment that's been moved in my name.

These bills deal with the Product Stewardship for Oil Scheme. There are two pieces of legislation that give effect to that scheme. It's a scheme designed to see non-combustible oils recycled. If that didn't occur, those oils would be at risk of contaminating the environment. They present a risk to the environment and to human health to some degree, so it's right that we have product stewardship arrangements in place that encourage producers to take responsibility for those oils. Since it was introduced in 2011 by the former Labor government, it's been a very effective scheme. Prior to that time, there was effectively no recycling of non-combustible oils. It's now the case that some 320 megalitres of oil get recycled and properly disposed of each year. That's about half of the total volume of such oil, so it's a very good community, environment and public health outcome.

The reason we are dealing with these bills is that a deficiency has emerged in the scheme and in the legislation that gives effect to the scheme. That became apparent last year when Caltex, soon to be Ampol, decided to see if it could receive a benefit payment under the scheme that it hadn't previously received. In fact, no similar entity had previously sought the kind of benefit that Caltex was interested in pursuing. The scheme works as a levy and benefit payment combination. There's a levy that is applied to all of the relevant oils, and then, when you, as a producer, achieve the proper recycling of the relevant oils, you can claim the benefit payment. So the scheme washes its own face, as some say.

In this case, Caltex believed that a definitional looseness within the legislation might allow them to claim the benefit payment for diesel. They use this diesel to clean pipes and tanks of crude oil. They then put the diesel through a cleansing process and are able to make it reach the Australian standards that allow it to be sold as fuel. It doesn't have the levy applied to it, ordinarily, so it's clearly outside the scope of this scheme. But they came to the view that the law wasn't drafted sufficiently tightly to exclude them from the benefit payment, and they sought that benefit payment. They were initially rebuffed by the Australian tax office, as we might expect. They then pursued it in the courts. The Federal Court found that there was this loophole, and so they received $8 million—$8 million of Commonwealth money; $8 million of taxpayers' money—that is, on any analysis, outside of the intention and purpose of that scheme. Whether there was any opportunity for the Commonwealth to recoup that money is not entirely clear. The government has advice that suggests it couldn't do that, even by the amendments that we are considering in this legislation. I think that's a great shame. I know that my colleague and friend the member for Mackellar will be making a contribution in the debate. He has an interest, in his role as the Chair of the Standing Committee on Tax and Revenue—and just a general interest, I'm sure. The fact that $8 million of revenue has been lost from the Commonwealth in this instance should be a matter of interest and concern to everyone. I assume that he will speak about that.

I want to briefly raise the issue of the approach that Caltex Ampol have taken. I'm not sure why they pursued this benefit payment. Nothing in the briefings or the material that has been shared by the government in relation to these bills makes it clear why they did that. That company would know that it's not the purpose for which the scheme was established. They'd never previously sought a benefit payment. Other companies have not sought that payment. Caltex apparently support the change we are making here to ensure that this doesn't happen again, but they made no submission to the Senate inquiry into these bills. So, unless something very strange is going on, it's pretty clear that the Caltex Ampol business model doesn't depend on this benefit payment, and they mustn't believe it's a payment they deserve going forward. Why did they seek it in the first place? We don't know. It seems the answer is that they thought that they could, that some clever person—or clever-clever person—figured out that this was a loophole that they might be able to exploit. We know the Federal Court found that they're legally entitled to the payment. They are legally entitled to it, but does that make it right? I'm not sure that it does.

I think most people in Australia understand the distinction between the letter and the spirit of the law. Most of us understand that there might be something you can get away with for your own benefit but you wouldn't do that if it was to the detriment of the community as a whole. In this case, it seems that Caltex Ampol have come to the view that they can help themselves to $8 million of taxpayers' money through a legal manoeuvre that is clearly outside the sensible public purpose of the law in question. That's what we have to fix with these bills. I've not heard anything that explains why Caltex thought this was a justified course of action. I've not heard anything that explains how using a loophole to get $8 million of taxpayers' money is consistent with the spirit of the law in question, which is designed to achieve the effective recycling of what would otherwise be toxic, environmentally harmful oil. I'm not sure how Caltex's course of action is in keeping with corporate social responsibility or with the Australian sense of fairness.

On its website, Caltex lists five key corporate values, and the fifth one is:

Never stop caring

Act with integrity, constantly challenge each other to be better and always be safe.

I'm not sure how much integrity there is to be found in exploiting a loophole to enrich yourself at the expense of the Commonwealth. The company also describes itself as 'proudly Australian'. It says:

We're a business that's proudly Australian and our commitment has never been more focused on playing a leading part in our country's future.

I'm not sure how comfortably the conduct we're addressing with the passage of this legislation sits with that sentiment. Eight million dollars is a lot of money. It might not seem like a lot of money when you're a $10 billion corporation. I can tell you that, in the world of public and community services and related funding, it's a lot of money. On that basis, I do believe that Caltex Ampol should reflect on their conduct. If there's something I'm missing, something the government is missing, that explains why exploiting a loophole to help yourself to $8 million that you've never before received—and none of the other companies in the fuel-refining and retail business have ever sought or received—is a form of honourable conduct, then I guess that's for Caltex Ampol to explain. They haven't so far, and it doesn't look like that.

I'd make the general point that we—all of us, especially in this place—need to be very careful that we don't go along with a kind of moral whitewashing when it comes to corporate conduct that seems highly technical and occurs through clever accounting ploys and legal manoeuvres but is, in effect, not any different from an individual realising that they can get something they don't need, that they don't really merit, at the expense of the community's best interests and with the loss of its commonwealth.

In another area of Australian life, if a person found a loophole in a legal definition so they could claim single-parent payments when they weren't a single parent or a disability payment when they didn't have a disability, we wouldn't be sanguine about that. We wouldn't say, 'That's clever; good on you for figuring that out and going down that path.' I'm pretty sure I know how that would be treated in the mainstream media. So I do hope Caltex Ampol gives this matter some further consideration and provides an explanation, if there is one. If there's a good reason why they sought and received the payment, they should say so. If there isn't a good reason, and the only reason is that they thought there was a tricky legal loophole they could exploit to the tune of $8 million, I really hope that the company leadership would consider doing something different now, doing what I would regard as the right thing now.

Eight million dollars is a lot of money, when it comes to funding our healthcare needs, our aged-care needs, our recovery from bushfires, our efforts to do more to address homelessness and domestic violence, especially in the circumstances we currently face. If Caltex Ampol isn't convinced about the rightness of seeking and receiving that benefit payment—I'm not talking about the legality; I'm talking about the rightness of it—I'm sure there are courses of conduct open to them that would put that right. There are a lot of organisations in Australia that could benefit from a show of corporate responsibility, that would be quite different from what Caltex seems to have done to date. In my view, and I'm confident it would be the public's view, any company that took such a course would be thanked for that. It would be to their credit.

In conclusion, Labor supports these amendments bills. They're necessary to ensure that the product stewardship scheme, in relation to the recycling and proper disposal of oils, works as it was intended to work and to prevent the recurrence of a significant loss of taxpayers' money that, on the facts, as we understand them, probably shouldn't have occurred in the first place.

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