Thursday, 14 May 2020
Product Stewardship (Oil) Amendment Bill 2020; Second Reading
That this bill be now read a second time.
The Product Stewardship (Oil) Act 2000 establishes the Product Stewardship for Oil Scheme to encourage the environmentally sustainable management, recycling and reuse of used oil in Australia.
The scheme offers a benefit payment to oil recyclers as an incentive to increase the volume of used oil collected and recycled in Australia.
The Product Stewardship for Oil Scheme was intended to be self-funding by offsetting the benefit payments using revenue collected through the Excise Tariff Act 1921 and Customs Tariff Act 1995 from refineries and oil importers.
The Federal Court's decision in Caltex Petroleum Pty Ltd v Commissioner of Taxation  FCA 1849 gave a broad interpretation of the definition of oils in the Product Stewardship (Oil) Act that included diesel.
This decision allowed for the payment of benefits for re-refined diesel for which no excise or excise-equivalent duty had been imposed. Another potential consequence of the Caltex case is that duty collected under the Excise Tariff Act to fund the scheme could apply to diesel.
The Product Stewardship (Oil) Amendment Bill 2020 will clarify the kinds of oils eligible for benefits under the Product Stewardship for Oil Scheme. It will amend the definition to cover lubricant oils, fluid oils and other oils and grease manufactured from base oils only and will explicitly exclude fuels such as diesel. This is consistent with how the scheme has been administered since it was established. For flexibility, it will also provide a power to prescribe other exclusions by regulations.
Amendments will also be made to the Excise Tariff Act 1921 to exclude diesel and other goods ordinarily used as fuels from the excise tariff item that applies to oil and grease. This will ensure consistency between the Product Stewardship (Oil) Act and the Excise Tariff Act in relation to the oils that are levied for the purposes of the scheme and, once recycled, can receive benefit payments under the scheme.
I commend the bill to the House.