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Monday, 23 June 2003
Page: 17243

Mr BILLSON (7:15 PM) —It is tough to follow the member for Corio; he is obviously thoroughly prepared for this debate this evening. But I welcome his support of the measure. In essence, the Howard government has introduced some internationally leading reforms with this product stewardship oil framework. We are amending it tonight in recognition of two key areas that need to be considered: consumers of oil, but not oil that needs to be recovered. That is the essence of this amending bill tonight.

I think I caught the member for Corio talking about changing the oil in your car; as all members of the parliament would be aware—and I am sure you are, Madam Deputy Speaker—we have in place a levy regime that recovers a contribution from the consumers of oil to provide a pool of funds to act as an incentive for those who are in the business of recovering that oil and putting it to sensible reuse. That is the broad framework; it is an internationally leading framework that has been recognised overseas as an excellent model for making sure that oil is taken out of the waste stream and does not end up in our ecosystems.

Tonight, though, we are looking at providing some relief from that arrangement so as to take account of two particular areas where oil is a part of production. The intent of the Product Stewardship (Oil) Legislation Amendment Bill (No. 1) 2003 is to grant relief from the product stewardship oil levy for specific uses of multipurpose oil. In this case the oil we are talking about is the oil that is used to bind inks together—those that end up on newsprint and the like—and also the oil that is part of the mould release agent of a metalworking lubricant. That is where the viscosity of the oil is part of metalworking and is consumed in the process, so you do not end up with a whole lot of oil; the oil does not find its way into the waste stream. Therefore, this measure—a sensible measure—is saying, `Let's not impose the levy where there isn't a waste oil to speak of from those two production processes.'

The Product Stewardship (Oil) Act was introduced as part of the Howard government's Measures for a Better Environment, which provided nearly $900 million for initiatives to protect our precious environment. That is $900 million on top of the Natural Heritage Trust, the salinity strategy, the world-leading oceans policy and the formation of the Australian Greenhouse Office. It is little wonder that the Howard government is rightly recognised as the greenest government this nation has ever seen. Senator Lyn Allison from the Democrats has acknowledged that point, and she is right. It is not about chasing the sexiest environmental issue in town and trying to build a constituency based on that. This is about doing the serious work on difficult and, at times, complex environmental issues that may not be the sexiest issues in town.

We know that oil can be very damaging to our ecosystems, particularly to our riparian and marine environments. We know that, if it is not properly cared for, recovered and processed, oil represents a threat. Here we have put in place a measure with an economic instrument—a pricing signal that says to oil users, `You will contribute to the cost of making sure that we recover the oil that you produce, consume and seek to dispose of so that there is a pool of funds to encourage its reuse.'

The government, out of that Measures for a Better Environment package, provided $34.48 million in transitional assistance to provide funding to overcome the market barriers to waste oil recycling, to create and encourage innovative recycling technology, and to build and develop waste oil disposal centres. So it is a sensible, sober, thoughtful and, at the end of the day, very innovative approach to a very real environmental problem. It involves a per litre levy of 5.449c. As I mentioned earlier, this levy is used to fund benefit payments to waste oil recyclers. The benefits are paid in accordance with a six-tier scale that reflects the environmental effects of the various recycling and re-option uses that they are pursuing.

To date, the success of the product stewardship arrangement has been such that $25.5 million of the original $60-odd million transition assistance funds have been freed for reallocation to other urban initiatives, such as Sustainable Cities, where we can look at targeting urban air quality, ozone protection and waste management issues. So there is a positive environmental outcome with good economic consequences that this bill is extending further this evening.

Waste oil recycling has increased by 18 per cent under the product stewardship arrangements. So, for the calendar year 2002-03, a total of over 200 million litres of oil should be collected. Let us think about that: that is 200 million litres of oil that might otherwise find their way into our riparian and marine systems and damage the ecology. Before the commencement of these arrangements about 160 million litres were collected annually, so there is an improvement there. It has also caused the states to work cooperatively with local government and the federal government to proactively recover some of the oils that people might have just stuck down in the backyard. I know that, at the regional waste disposal and recycling centre that I attend, there is a capacity for you to deposit your oil. The people who recover that oil are able to apply for the financial assistance made possible by the product stewardship oil levy.

Since the commencement of the product stewardship arrangements for waste oil in January 2001, it has become evident that some oils included in the oil levy do not create waste oil that can be recycled. So, in keeping with the concept, these single-use oils that are not recyclable are being defined as exempt from the product stewardship oil levy in 2002. That is what this measure is about. Those multiuse oils used in a specific way—either in manufacturing or in another product—that can be recovered are being recovered. But, in this case, we are talking about specific single-use oils that cannot be recovered from the waste oil stream and recycled. They also have the feature of being very low-risk oils to the environment. Therefore, they are outside the original intent of the policy.

It makes sense to exempt these categories of oils from the levy. They have two key features: single use—that is, not able to be recycled—and not posing a risk to the environment. Tonight's amending bill will remove the levy from those oils and create a new category of benefit. The new benefit category is available for specific use and multiuse oils as approved by the Minister for the Environment and Heritage, which is another provision discussed in this bill. It will create a new category, known as category 8, payable at the same rate as the waste oil levy of 5.449c per litre. In essence, there is industry support for this measure. It is taking an impost off some production processes that deliver no environmental gain because, as I mentioned earlier, they are single-use oils—they do not lend themselves to be recycled—and they do not pose a threat to the environment.

The relief from the levy will also be a direct benefit to those who would otherwise be paying it had it not been exempted. I am just looking through some of the notes. It is probably quite evident, Madam Deputy Speaker, that we were not anticipating debating this bill this evening. In essence, this bill has the support of industry and government. It maintains the integrity of the product stewardship oil framework that the government has put in place. It seeks to protect the environment while not needlessly imposing the levy impost on ink manufacturers, publishers and even some people in the explosives industry. I understand they would be beneficiaries from the exemption.

I commend the bill to the House. It is a refinement of an internationally recognised measure that is positive for our environment and that takes oil seriously. It tries to take, wherever possible, oil out of the waste stream so that it does not pose a threat to the environment, and it puts in place funds to provide incentives to those people wishing to recover and recycle the oil, in keeping with the objectives of the government's policy.