Senate Foreign Affairs, Defence and Trade Legislation Committee [Part 2], , 2:57:31 to 3:02:57
Oversight of the Fuel and Fertilizer Fund, including realized losses, contract values, and industry complaints regarding competition.
Topics: Government spending, Agricultural productivity
Speakers: Senator Matthew Canavan, John Hopkins, Senator Raff Ciccone, Unknown Speaker
All right. I now welcome uh John Hopkins, managing director and chief executive officer of export finance Australian officers of the agency. Good evening.
>> Good evening chair.
>> Good to see you. Now, do you have an opening statement tonight?
>> I do.
>> Is this something that you might be able to table and we can circulate to the committee just interest of time? that's
if that's your preference.
>> We only have half an hour left, so that would be my preference to do that. >> Yeah, unless there was something that you needed to to flesh out >> uh out of your opening statement. >> Yep. Happy to table it and we'll get that circulate. If you get your team to circulate, that's them now. Fantastic. We'll get that circulated. All right, Senator Canavan.
>> Okay. Uh, thank you. I'll try and be quick, very quick given the time. Sorry about that. Uh just had some questions on the fuel and fertilizer fund. Uh what are the um uh what are the realized losses so far under that facility?
>> Senator the loss the cost to the government to date is approximately 250 to $350 million.
>> Okay. What was the the value of contracts in
>> Sorry, sorry, Senator, could you repeat
the question? total value of contracts that we underwrote.
>> So the total value of the facility was total value of the facility as a whole was was 7.5 billion but the amount of contracts that we entered into the maximum value of those was about 2.9 billion.
>> Okay. So the losses have been 10% or so >> significantly less of that um it's a fair loss but okay the things I suppose weren't necessary. There's been a lot of complaints that uh the facility did favor some importers of fertilizer uh compared to others. Have you received those complaints and how have you responded to them?
>> I'm aware I'm aware of the complaints of industry and but again we executed on the facility as per the directions of the department
>> right >> departments that we engaged. >> Did you take any specific action to say the complaints raised by fertilizer Australia? I believe they wrote to Minister Collins on the 4th of May. uh was any action taken subsequent to that?
>> Well, I think I think it's important to note Senator that we are still engaged with companies under the broad opices of the facility. Although the facility is currently paused, there are a number of companies that we are still engaged with. Should the facility be revived again?
>> Okay. All right. Um uh I will put a lot on notice. There's also been complaints it's had impact on competition. Um have you or is anyone else in government looking at those issues?
>> Senator, we engaged uh both with our external legal advisers at the time we were going through the process of delivering under the facility um on competition issues but also um with the AC as did relevant departments throughout the process of delivery under
>> Did did that include um discussions with the AC?
>> It did.
>> Did the AC raise any particular concerns on how the facility was being operated?
The A triple C provided some guidance as to how we should be engaging with companies and we followed that guidance.
>> Uh what what changes did you make as a result of that? >> There was no change required. It was
just guidance and we would already been following that guidance. So we just took
>> Okay. Uh the scheme is now suspended I believe. When was that made and who made the decision to do that?
>> I don't have the I don't have the exact date. It was probably a month or so ago. Senator, we can get you the exact date on notice.
>> Okay. Are you aware that the Ridley group uh in its financial statements have said that um uh and I quote the CFDs, it was referring to the um arrangements um contracted with the government here or the EFA. The CFDs had a favorable market value of 53.6 million at 30th of June 2026. Are you aware of Ridley reporting those results?
>> I'm aware of of that Ridley reporting. Yes.
>> All right. So, does that mean they've made $50 million from a government
Look, that's a matter for Ridley how they report these matters in their accounts. As I said to you, we've outlined what we think the approximate costs are of the facility to government. Ridley has its own separate separate accounting and obligations.
>> Have you done any investigations to see if this facility has led to windfall profits to individual companies and could
>> the facility? Yeah.
>> Yeah. Well, okay. Answer that first.
>> So, so the facility is not designed to provide windfall profits.
>> I know it's not, but have but have you
the the we have been operating the facility in a way that does not provide that that does not provide that opportunity for companies. So whatever companies are doing to create profit is not as a result of the facilities that they have in
>> Ridley says they've they've they've made $50 million out of this but you haven't done any investigation to see whether or not I'm not saying you intended to deliver such a gain but uh you haven't actually looked at to see whether unintentionally some companies have received been full profits. So it's not
my responsibility to look at the accounts of Ridley Senator. That's a matter for them.
>> Well, I would have thought it's it is a responsibility of the government to make sure we don't inadvertently um uh provide windfall profits. Um we'll have questions on notice and I apologize for the time. There's a lot on other issues tonight. Uh I want to ask about an investment I think export finance Australia's made into the emerging Africa and Asia infrastructure fund. Could you tell me a bit about that? I