COMMITTEES

Senator BELL (New South Wales—One Nation Whip) (18:02): I move: That the following matter be referred to the Rural and Regional Affairs and Transport References Committee for inquiry and report by 15 February 2027: The operation and administration of the Fuel and Fertiliser Security Facility, with particular reference to: (a) the extent to which the facility impacts investment in fertiliser production or importation, processing, storage, transport and distribution; (b) the facility's contribution to national food security, regional economic development and the continuity of essential services; (c) the accountability and effectiveness of financial assistance provided for fertiliser through the facility; and (d) any related matters.

Australian farmers cannot grow food without reliable access to fertiliser. When international supply was disrupted earlier this year, the Commonwealth had a responsibility to make sure Australian farmers could get the fertiliser they needed. I think we all supported that objective here.

The question before us is not whether the government should have cared about fertiliser security—of course they should—but whether the government properly considered what its intervention might do or what consequences could flow from that to the industry and to the market. The proposed inquiry I have before the Senate today is that the operation and administration of the Fuel and Fertiliser Security Facility be looked into.

The question is: has the government properly considered what this intervention has done to the market? Has this actually strengthened Australia's fertiliser security, or have we got a situation where, in an attempt to solve an immediate problem, perhaps we've created a bigger problem down the line. I think that's what we need an inquiry to establish.

The Fuel and Fertiliser Security Facility provided government backed support for additional fertiliser imports during a period of international disruption. On the surface, that sounds pretty straightforward—there is a shortage risk, so the government helps bring more product into the country—but markets are not that simple. Fertiliser supply depends on businesses making decisions months in advance.

They commit capital, they arrange international supply, they organise shipping, storage and transport and they accept the risk that prices and exchange rates will move against them. They do that because they expect to compete in a functioning commercial market. When government suddenly enters the market and takes away some of the risks for selected participants, we need to understand what then happens to everyone else.

This is not an argument against intervention in every circumstance. It's simply an argument for understanding the consequences before we find taxpayers are put on the hook. The first question this inquiry should ask is whether this facility genuinely created additional supply.

We also must ask: did the assistance bring fertiliser into Australia that would not have otherwise arrived, or did it support transactions that might have occurred anyway? Did the government properly account for products already in the country, existing contracts and shipments already on their way? These are fair questions.

These questions matter because the government should not claim success simply because more fertiliser arrived after the facility was announced. We need to know what difference the facility itself actually made, which is why we should be examining how the scheme affected competition. If one participant in the market receives government backed protection against commercial risk while another does not, this can then affect behaviour.

It can affect investment decisions. It can affect stock values. It can affect who is prepared to commit capital early.

It can affect whether businesses remain willing to participate in that market in the future. This is a very real concern. Fertiliser security policy should encourage businesses to secure supply before a shortage becomes critical.

It should encourage investment in storage. It should encourage investment in transport and distribution. It should encourage more competition and more resilience.

It should not create a situation where businesses conclude that acting early with their own money leaves them exposed while waiting for government assistance may be the safer commercial decision. The question is: has that happened? We don't know.

That is exactly why this needs to be looked into and why an inquiry is needed. The government should be able to demonstrate that it considered these risks. It should be able to explain how assistance was allocated.

It should be able to explain what safeguards were used to protect competitive neutrality. It should be able to show that taxpayers received value for the risks they were asked to carry. There is also the question of what benefits actually reached farmers.

Farmers, understandably, want lower fertiliser prices. That's what I want for farmers. But fertiliser prices are often affected by international markets, shipping costs, exchange rates and global supply.

A lot of onshore decisions made by government drive up electricity prices and drive all sorts of businesses that actually assist in the production of fertiliser out of business. But I digress. If prices fell during the operation of the facility, the government cannot simply assume that its intervention was responsible.

The inquiry should establish what happened to prices, what happened internationally at the same time and how much, if any, benefit can reasonably be attributed to the facility. Taxpayers have taken on financial risk, and Australians deserve to know what they received in return. The most important issue goes beyond the immediate operation of the scheme.

There's another issue of Australia's long-term fertiliser security, because we have become heavily dependent on imported fertiliser. That leaves Australian agriculture exposed to events we cannot control. As we've seen, international conflict can disrupt shipping.

Foreign governments can restrict exports. Global prices can rise quickly. Supply chains can fail.

When that happens, Australian farmers are left vulnerable. The answer cannot always be another emergency government intervention. We need to ask why Australia, a country with enormous natural resources and one of the world's major agricultural industries, is so dependent on foreign production for something so fundamental to our food production.

That is the sovereign capability question at the heart of this. Are government policies encouraging Australia to manufacture more fertiliser here, or are they making domestic production more difficult while making imported production comparatively more attractive? That question goes well beyond any single plant or any single company.

It's about the investment environment across the whole of the industry. A business considering fertiliser production in Australia needs confidence. It needs access to affordable and reliable energy.

It needs regulatory certainty. It needs confidence that government policy will not change the commercial environment after billions of dollars have already been committed. It needs to know that government intervention will not unexpectedly change the competitive balance in favour of imported products.

These investment decisions are made over decades, and they cannot be switched on or off according to the political problem of the day. That is not the type of market people can function in. When the Commonwealth designs an emergency measure, it needs to consider much more than the next shipment.

It needs to ask what signal it's sending to future investors. Does the policy encourage sovereign capability? Does the process encourage more storage and processing?

Does it encourage a greater diversity of supply? Does it encourage businesses to take commercial risks before a crisis, or does it reinforce dependence on imported product and government intervention? These are questions the government should have considered before the facility was designed, and I think this inquiry will help the government advise, or perhaps even establish, whether they did do this.

There's a real danger in approaching these issues of national security in our food chains one crisis at a time. Disruption occurs, government intervenes, the immediate pressure eases, and then everyone moves on until the next disruption. That is not resilience.

Real resilience means having the capability before the crisis occurs. It means having multiple suppliers. It means developing our own sovereign capacity to manufacture fuel or fertiliser.

It means having transport and distribution networks that reach all across regional Australia. It means having domestic manufacturing capacity where it's commercially possible. It means having government policy that supports these things rather than undermining them.

That's why we believe that the Senate should be looking at the Fuel and Fertiliser Security Facility as more than an emergency purchasing measure. It should be examining what the facility means for future investment, production, importation, processing, storage, transport and disruption. That is expressed in these terms of reference.

We need to consider whether Australia has the right arrangements for our future emergencies. There may be a role for strategic stockholding. There may be a role for minimum stock requirements.

There may be other market based mechanisms that provide a buffer against disruption. But whatever approach Australia takes, it must not undermine the businesses that keep the ordinary market functioning. Emergency policy must complement the market, not replace it.

The principle should be simple. Government should make Australia stronger after an intervention, not weaker. If taxpayers are used to protect supply, that intervention should leave us with more resilient market.

It should not be reducing competition. It should not discourage investment. It should not punish businesses who may have acted early before a crisis.

It should not make Australia more dependent on imported fertiliser in the future. One Nation wants Australia to be capable of producing more of the essentials we rely on. Food security is not possible without fertiliser security, and fertiliser security cannot simply mean hoping overseas factories keep producing and international shipping lanes remain open.

We need sovereign capability. We need reliable supply chains. We need government decisions that are made with the long-term national interest in mind.

We'll accept the government was right to recognise that international disruption posed a risk to Australian agriculture, but recognising the problem is not the same as designing the right solution. I think we do need to determine whether the government properly considered the consequences of its intervention. Have we genuinely increased supply?

Have we delivered value for the taxpayer? Have we preserved fair competition? Did we strengthen the businesses.

Australia depends upon, or has the opposite occurred? Have we actually made Australia more secure, has the government, through a failure to consider the longer term consequences—as we know, they quite often do—risked making us more dependent and more vulnerable in the future? Those are serious questions and they deserve proper answers.

This is why the inquiry is necessary, and I do hope the Senate will support it.