House debates

Thursday, 25 May 2023

Bills

Excise Tariff Amendment (Product Stewardship for Oil) Bill 2023; Second Reading

9:19 am

Photo of Tanya PlibersekTanya Plibersek (Sydney, Australian Labor Party, Minister for the Environment and Water) Share this | Hansard source

I move:

That this bill be now read a second time.

This bill is one of two bills to bring the Product Stewardship for Oil Scheme out of deficit and return it to fiscal neutrality as was always intended.

This bill would amend the Excise Tariff Act 1921 to increase the rate of excise duty payable on the import of relevant products from 8.5c cents per litre or kilogram to 14.2c per litre or kilogram.

This is an important scheme which ensures our waste oil is recycled into new products, such as base oil that can be used to make car engine oil.

Over its operational life waste oil can pick up hazardous by-products including lead, cadmium, chromium and arsenic. Waste oil can damage our environment and health if it's not properly managed.

Used oil, burnt at low temperatures, releases hazardous particles that can get into people's lungs and harm their health.

Under the Product Stewardship for Oil Scheme, 5.5 billion litres of recycled oil have been produced from waste oil. This is enough to fill Parliament House more than seven times over.

It is a levy-benefit scheme where levies are paid on the importation or production of oils and their synthetic substitutes. Levies fund benefits paid to oil re-refiners ensuring the financial responsibility to manage waste oil is borne by those who benefit from its use.

By encouraging the recycling of waste oil we see the circular economy in action. Waste engine oil is collected and recycled, meaning it has a second life serving as engine oil again.

Since 2016 the scheme has fallen into deficit, levy collections have not been sufficient to cover the cost of benefit payments. This has meant that taxpayers have been covering the difference.

In 2020, the need to raise the levy to address the deficit was highlighted in an independent review of the scheme.

The passage of this bill will see this long-running deficit remedied. No longer will taxpayers pay for the scheme's shortfall.

This is not only fair but will also have only a very small impact on oil users, with the cost of an oil change for a passenger car increasing in price by approximately 28.5c for the average car.

Debate adjourned.

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