COMMITTEES

Senator BROCKMAN (Western Australia—Deputy President and Chair of Committees) (18:20): Like Senator MacDonald, I very vividly remember standing up in this place a few months ago, and Senator MacDonald and I—I hope I'm not speaking out of turn here—both spoke about the importance of securing adequate fuel and fertiliser for seeding. We put pressure on the government at a time when they were sitting on their hands saying, 'Nothing to see here.' It was only about a month later, when suddenly service stations started running out of fuel, that the government realised that there actually was something to see here, and it was something very, very serious, particularly for our agricultural sector.

Senator Roberts, one lesson you learn in this place is that not all government actions are good actions. Not all government schemes are designed well. Sadly, with this government, you see case after case where schemes that should be doing good for a sector actually end up being destructive, undermining the very sector they are supposedly trying to help.

I have my doubts about that, but let's just put that to one side. There were very serious issues with the potential availability of fertiliser for seeding and post seeding. As a result, the government put significant public funds of $7½ billion to underwrite urea imports.

Later, it came out publicly that the underwriting and support given to the imports of urea went to the three largest companies alone, ignoring the smaller, mostly family owned fertiliser businesses in this country. It is actually those smaller fertiliser businesses that, to a significant degree, have been left to carry the cost of this government intervention, which picked winners.

You hear those on this side often talk about the danger of picking winners. It's not some abstract concept. It's because, if the government singles out three players for special attention in a relatively dynamic market, then that is going to have a distortionary effect on the market.

That is what happened here. That evidence is very clearly available. Sadly, what is not clear is what the government actually paid for, what that money was contracted to do and what it actually did in terms of the deals that were done behind the scenes, because literally almost nothing has been published on this matter.

Almost nothing is publicly available. As far as I can tell, no criteria were ever published. There was no open process.

The consultation that did occur certainly did not occur across the entire industry. It happened with a few of the bigger players. The smaller players in the industry were effectively completely cut out and there was no way for anyone to know in a transparent way what was happening in the market and what this was going to do to the market.

So the level of uncertainty in the market, rather than being decreased—presumably the entire point of the government stepping in in this way was to try and decrease the level of uncertainty, decrease price volatility and help farmers actually understand what the price was going to be—instead did the opposite. It made farmers less certain. It left other purchasers of fertiliser in the market, such as the other suppliers—the mum and dad suppliers, the small business suppliers—completely in the dark as to what the true cost, the market cost, the price and the overhang price were going to be.

The key thing is that, when you've got markets that are being actively intervened in by government but in a completely non-transparent way, everybody loses certainty. There's almost no evidence on the public record. There's $53.6 million that's been booked by an ASX listed company as a government grant that looks like it was tied to this fertiliser underwriting scheme, but we're not actually sure about that.

We therefore don't know how that risk in the marketplace is being apportioned amongst the various players. But we do know that it has now massively distorted the market and undermined the balance sheet of dozens, if not hundreds, of smaller players in the market. This is an extraordinarily important issue that we need to get to the bottom of.

It's certainly something that I know many will be following up at estimates, but I think that the standalone inquiry is warranted. I think this is an example of where government intervention has been poorly designed. It looks like it was actually designed post fact.

I think it is extremely worrying, from a governance point of view, that the resources were effectively allocated and then the scheme was designed. I may be wrong about that, but, again, we're just not being told. We've got almost no information on the public record.

This is not the way to treat the fertiliser industry. This is not the way to treat the Australian farming community. If you're going to intervene, intervene in a transparent way—a way that helps all players, that doesn't pick a few winners and that doesn't massively distort the market for more than a season.

That is what the Labor government has done. The PRESIDENT: The question is that the motion as moved by Senator Bell be agreed to.