Ted O'Brien (Fairfax, Liberal Party, Shadow Minister for Climate Change and Energy) Share this | Hansard source

I'm happy to rise today to speak on the Excise Tariff Amendment (Product Stewardship for Oil) Bill 2023. From the outset, I'd like to point out that it was a coalition government that devised the Product Stewardship for Oil Scheme and that we continue to support its existence. The relevant act, the Product Stewardship (Oil) Act 2000, was devised by the Howard government. That was primarily because the members of that government had realised that there was a need to encourage more recycling of oil, especially amidst an increasing awareness globally of the highly contaminable nature of oil. Indeed, at the time this scheme commenced operation in 2001, no oil recycling at all was being undertaken in Australia. The department website currently says:

Since then, the amount of oil that Australia collects and recycles has risen from none to over 320 megalitres of base lubricating oil every year. That's more than half the oil sold in Australia each year.

This has been a levy benefits scheme that has worked extremely well for almost all of its history. It has not only significantly increased the incentives for the recycling of used oil in Australia but done so with great effect. It has fostered a sustainable used oil recycling industry, notwithstanding the difficulties that sector endured during the COVID period. It has also lowered the potential for and the various risks associated with many environmental and health problems that might have otherwise resulted from the poor storage and disposal of oil. Additionally, as has been noted in each of the four formal reviews of the scheme, including the most recent one completed by Deloitte in 2020, it has improved industry and community awareness and understanding that oil should not simply be regarded as a waste product. That's a substantial record of achievement.

It's important to add that, when it was established, the architecture of the scheme was carefully designed in such a way as to try to make it, at the very least, self-sustaining. This was so that the scheme, insofar as it remained successful, could continue long into the future without proving to be a financial burden to the federal government. Unfortunately, though, during the past four years, the returns to government from the scheme have been overtaken by the outlays. We understand the latest figure on this is that there has been an average deficit of approximately $34.5 million annually. It's not unreasonable, therefore, for a government to be making the kinds of changes that are reflected in these two bills. The coalition respects that addressing these deficits through a levy rise was identified as one of the three recommendations of the Deloitte report.

In our consultations with stakeholders about the bills, it has become apparent that there are some mixed views about the best means of recovering the loss, including how to most appropriately set the levy rates. Likewise, there are some differing views about how the current government and future governments might best be able to continue to incentivise high-quality oil recycling in Australia whilst also minimising the potential impacts of levy changes on Australian consumers. Overall, though, there is general agreement that the cost recovery arrangements need to be brought back onto a more stable and sustainable financial footing.

Overall, though, there is general agreement that the cost recovery arrangements need to be brought back onto a more stable and sustainable financial footing. Given that these bills were introduced only last Thursday, we will, for now, take at face value the government's claims that the levy increase to 14.2 cents per litre or kilo will return to 139 million to balance—or very nearly balance—the recent losses. Obviously, if the changes in the bill don't deliver the expected outcomes and/or result in unintended consequences, then we will seek to revisit this matter.

For now though, we thank the government for bringing these bills to the parliament. We also thank the various stakeholders with whom we have spoken over many years in this policy area. In relation to these two bills specifically, I thank them for their detailed discussions with us in the very short time since the bills were introduced. Their insights and expertise have been invaluable in helping us analyse this pieces of legislation and to help inform our approach to them.

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