Ken O'Dowd (Flynn, National Party) Share this | Hansard source

I would like to join my colleague the member for Barton to talk about this legislation and to give it the thumbs up. We are here to talk about the Excise Tariff Amendment (Product Stewardship for Oil) Bill 2014 and the Customs Tariff Amendment (Product Stewardship for Oil) Bill 2014. These bills amend the Excise Tariff Act 1921 and the Customs Tariff Act 1995 to restore the PSO scheme to being budget neutral. The scheme has got out of hand of late and is $10 million in deficit. What we are proposing in this legislation will bring the scheme back to being budget neutral over the forward estimates by increasing the levy payable by oil producers and importers for petroleum products, oils and greases and their synthetic equivalents, to move the price to 8.5 centres per litre on oil or kilogram of grease. The current scheme offers a subsidy for the proper recycling of used oil—that is, companies into re-refining of oils get a subsidy of about 50 centres a litre. This is currently funded by the 5.449c per litre or kilogram but that is not enough. This legislation proposes that we increase the 5.449c per litre to 8.5c. As I said before, that will make the budget neutral and no money will change hands at the end of the day. So the importers of the oil will pay for the re-refining of the lubes, which have great benefit, as I will mention down the track. That is what this bill is all about.

Why do we support this scheme and why did we come up with this bill? Three hundred and fifty million litres of waste oil is created every day in Australia. The full recycling of used lubes requires a very substantial industrial and market investment by companies willing to put up the hard funds to build re-refineries. The 50c a litre incentive is needed to make the full recycling of these lubes a viable business operation. It is good for the environment and it is sustainable because we are using more and more oil in Australia. Recycling used oil has many environmental advantages. Used motor oil contains various contaminants including lead, cadmium, chromium, arsenic, dioxins, benzene and polycyclic aromatics. These are hazardous to humans, plants, animals, fish and shellfish.

Oil scum on water reduces the health of plants. It kills fish, frogs and any animal that breaths on the water surface. If we can rid ourselves of as much bad surface oil, the better we are going to live. One litre of oil will contaminate about one million litres of water. That is why it is such a hazard and that is why it is so important that we have a clean-up operation. Every tonne of burnt oil in Australia releases more than three tonnes of carbon dioxide or its equivalent. That is why recycling of used oil is so important for our environment and health. Through recycling, used oil can be cleaned by removing all the impurities. It refines the oil back to its original state and the oil can be used again and again, put back into the engines of tractors, trucks and earthmoving equipment. When it is used, the impurities drop out of the oil and it is time for an oil change. That is where this program comes into its full force. Then the trucks go out to the different collection points around the nation and pick up this waste oil, bring it back to the re-refineries and go through the process again. As I said, that can be repeated many times. Oil is not destroyed in any way, shape or form in an engine. It is the impurities, the additives, that go into the oil to make grease—and oil, originally. With all this thickening and hardening of an oil it becomes grease. That is how grease is made. There are a lot of impurities and other chemicals in that oil to make it a grease, a heavy oil or a light oil, depending on what you want. I can speak from some experience on this because I was a fuel distributor, and I have sold a lot of oil in my day.

What is good news for central Queensland, Queensland and the rest of Australia is a company called Southern Oil. They are in the members for Riverina's country in Wagga Wagga. They do a tremendous job across the nation. They built a plant, and it was only open in March of this year, at a cost of about $55 million. It is a huge plant. It is well designed. You could eat your lunch off the floor of the plant; it is a very cleanly operated plant. It is a credit to that company, Southern Oil in partnership with J.J. Richards. They call the plant in Gladstone the Northern Oil Refinery. In the member for Riverina's seat it is called Southern Oil. Whatever it is called, it is a company that is owned by the same guys, and they do a fantastic job. The plant in Gladstone can process a million litres of waste oil every year. That is 30 per cent of the Australian waste lube oil. It provides significant environmental benefits, as I mentioned before. It employs about 45 permanents in Gladstone and five or six other contract type people who run around in trucks and pick up the oil. It is a great asset for Gladstone and a great asset for Queensland.

Previous to re-refining oil, some terrible things happened in the old days. Mainly it was burnt off in refineries and things of that nature. Some of it was—and of course we all realise it now—simply thrown on the ground. They actually used to settle down the sand on racetracks with waste oil. That practice, as of now, has been wiped out for very good reasons, so we do not use waste oil on racetracks anymore. So the incentive to recycle oil is getting stronger and stronger.

I have just got to commend this bill. It is a wonderful bill. It will do a lot for looking after our waste oil, not putting it into the furnaces, not throwing it on the ground. Oil is getting very precious. There is less and less oil. We can have gas. We can have coal-fired power stations. We can have all sorts of other different energy—wind and solar—but you cannot run an engine on those sorts of energy supplies. It has to be oil. They say, 'Oils ain't oils, mate.' But that is what they need. The oil as it comes out of this refinery is as clear as crystal. It is a beautiful product, actually, when you see it in its raw state. I commend this bill to the House.

See this speech in context