Used Oil Recycling
Environment Australia, 2001
ISBN 0 642 548 188
ISSN 1446 6422
As part of the original Measures for a Better Environment policy statement, the Government provided $60m in transitional assistance to support the implementation of the product stewardship arrangements. This funding was to be provided in four equal tranches of $15m over the financial years 2000-01 to 2003-04.
Transitional Assistance is intended to provide funding for strategic projects which address more fundamental barriers to oil recycling, such as lack of adequate infrastructure or technology. Additionally, the funds are used to cover the operating costs of the entire PSO program - including relevant running costs of EA, the ATO and OSAC - and to underwrite the stewardship benefits in the event of revenue short-falls.
Priority areas identified for project funding include:
The transitional assistance funds may be provided through specific grants or projects, consultancies and/or strategic partnerships for the provision of goods and services.
The 2000-01 grants process was delayed due to the need to establish consolidated guidelines for the entire PSO program, including the levy-benefit arrangements which were not finalised until late in 20003 . Such delays are not expected to occur in future years.
In February 2001, Environment Australia advertised for expressions of interest for projects to be funded under the 2000-01 tranche of transitional assistance funding. In response to that advertisement, 106 funding applications were received. Due to the number, variety and technical nature of the proposals, the assessment process (including Ministerial decision) was not concluded until early July 2001.
There was considerable variety in the proposals, both in the nature of the projects and in the type of applicant. Proponents included industry participants (eg recycling companies), academia, consultants and state and local governments. A breakdown of the proposals is provided in Charts 4.1 and 4.2.
Chart 4.1: Transitional Assistance proposals by project type
Chart 4.2: Transitional Assistance proposals by proponent type
The majority of the industry proposals fell into either 'recycling technology' or collection infrastructure, while local government proposals were mainly 'collection infrastructure'. In a number of cases, there was a degree of overlap between projects submitted by different applicants. There were, for example, similar projects covering different geographical areas, different projects covering the same area, and multiple bids for the development of similar technology.
In total 27 proposals, worth approximately $15 million, were accepted or accepted in-principle (further negotiation with proponents required). This included 16 grants to local governments to construct or upgrade waste oil collection facilities.
The majority of proposals were rejected either because they were outside the scope of the transitional assistance guidelines (eg related to vegetable oils) or because they provided a commercial entity with a substantial commercial advantage over others in the industry (eg plant, equipment, access to supply), without significant public benefit.
Approval has also been given to establish a local government grants sub-program, funded from transitional assistance, for the provision of facilities for waste oil collection. This will target remote and rural councils, allowing each to apply for up to $20,000 for approved projects for waste oil collection facilities. This will potentially commit more than $8 million in transitional assistance funding.
In recognition of the delayed commencement of the program, the Minister for Finance approved a re-phasing of $12.5m from 2000-01 into 2004-05, effectively extending the life of this element of the program for an additional 12 months. The allocations (and adjustments) for the program are shown in Table 4.1.
Table 4.1 Transitional Assistance Funding Allocations ($m)
| 2000-01 | 2001-02 | 2002-03 | 2003-04 | 2004-05 | |
|---|---|---|---|---|---|
| Initial allocation | 15.0 | 15.0 | 15.0 | 15.0 | - |
| Re-phasing | -12.5 | - | - | - | 12.5 |
| Revised allocation | 2.5 | 15.0 | 15.0 | 15.0 | 12.5 |
Actual expenditure for 2000-01 was $1.286m, consisting largely of set-up and operating costs of the administering agencies and of the Advisory Council. A further $1.17 million of unspent funds was rolled into 2004-05 at the end of the financial year.
An explanation of each element of the 2000-01 expenditure follows.
Environment Australia operating costs $349,248
This covers all costs associated with running the PSO, including staff salaries and allowances, consultancies, advertising (eg for tenders) and other related expenses. Aside from staffing, the major costs for 2000-01 related to:
ATO set-up costs $543,993
These are one-off costs associated with equipping the ATO to deliver the PSO. On the Government's agreement to the establishment of the PSO, the ATO assumed responsibility for the set-up and collection of the PSO levy, and the distribution of benefits to recyclers (an entirely new function). As a consequence it was necessary for a number of modifications to be made to ATO operating systems and processes and for new payment systems to be established. Costs were also incurred for the development and printing of registration and claim forms and guides, and the extensive consultations with stakeholders conducted by the ATO during the development phase.
OSAC operating costs $27,835
This includes all costs related to the activities of the 17 member advisory council, including venue hire, sitting fees, air fares and other travel costs and allowances. Associated costs such as printing of documents for the council and equipment hire for meetings are also included. See Chapter 3 for information on OSAC and its activities during 2000-01.
In addition, $834,755 was committed on the local government infrastructure grants (approved in 2000-01 but not paid), the OSAC consultancy project to investigate the fate of the 'missing oil', and ATO operating costs for 2000-01 (including the costs of collecting the levy, processing registrations and claims for benefits, compliance monitoring, client liaison etc).