Senate Rural and Regional Affairs and Transport Legislation Committee, , 1:34:22 to 1:40:08
Discussion on whether the facility provided a competitive advantage to specific companies and an examination of financial gains reported by participants like Ridley.
Topics: Food security, Government spending
Speakers: Sarah Burr, Senator Paul Scarr, Matt Lowe, Unknown Speaker, Interjection
That that and that was adopted that that guideline was adopted in terms of that one pre-approved company bidding for
each shipment. Um, I believe so, but I'd um have to take that on notice just to confirm.
>> Can you take that on notice? >> So, back in May, we were told that this scheme wouldn't give any company a competitive advantage as I understood the evidence.
>> Yes.
>> If you're trenching, to use your term, Mr. low and if only one pre-approved Australian company could bid on each supported shipment, is it nec isn't it necessarily the case that that company is given a competitive advantage over other companies?
>> So I think this is where the um the principle of additionality um comes into into play here.
>> Sorry, what do you mean by that?
So what we needed to be convinced by and the principle by which the facility was set up was that there were ship shipments and still the majority of shipments that were occurring into Australia. I'm uh hasten to add um were happening on commercial terms and I think my colleague Ms. Burr will have have some figures around how many shipments were still happening outside
ask for it, but I'm I'm just focused on this issue.
>> Sure. So, additionality was about um I guess uh making the case that the shipments that the facil that the companies wish to take possession on would be uh were in addition to those that they could otherwise gain on commercial terms on the international
Could I also add there um the um uh design around um retrospective shipments as well? So I wouldn't categorize it necessarily as a queue of companies um or or or that kind of thing. There were tanches of referrals. That's correct. Um but because of um the uh retrospectivity um element of the design of the um price risk support mechanism, it meant that even if a company may have um joined signed up to the facility later, um they were still able to identify shipments um from a particular date onwards, meaning that they weren't there was no like first mover advantage. Um they were still eligible for support for a retrospective shipment.
>> Okay. Well, look, I note that um Ridley released its annual results. Are you aware of that?
>> Yes.
>> Have you seen how they've booked
>> Yes.
>> a $53.6 million favorable gain on contracts for difference under the program?
>> I I wouldn't say that they've necessarily flagged it as favorable. Um I think their um presentation to their investors um identified it um as um the four contracts for difference as um let Um I believe they characterized it as having no impact on their um 2026 financial year earnings. um and that um any um returns from uh the uh facility supported shipments would be an offset to their otherwise high-c cost URA stocks in the 2027 financial year.
>> Uh I I think it's the case they said you couldn't look at it in terms of their underlying earnings because it's a one-off. Isn't that correct?
>> I think if any of those specifics you'd have to take to the company directly.
>> Okay. All right. Uh, does the department know the total cost of the contracts to
>> Yes. Um, however, for those specifics, you you'd really have to speak to Export Finance Australia, um, as the administrators of the facility.
>> And do you have access to the contract terms?
>> Uh, yes,
>> you do. So, can you provide those to us on notice?
>> No. Um, you'd have to request those from Export Finance Australia. Um there'd be quite uh commercially sensitive elements to those.
>> Okay. Uh I've got a few more questions here I've been provided. Why was the facility not open to all importers that met the published criteria? Daiser advised in May that additional importers should be able to take part through an open non-exclusive process. Did the department agree? And why were importers who had passed DAFF and DASA eligibility check still waiting for access on 10 June? Will the department provide its correspondence with importers that deemed it inel ineligible?
>> Uh I I don't um in terms of um the characterization of the process, I wouldn't say that it was limited or closed or anything like that. Um any um eligible importer was able to speak to us and and seek referral to Export Finance Australia to participate in the facility. Um in terms of um uh the the second part of your question, I believe the um companies in question have since been referred to um referred to EFA for um potential participation in their negotiating terms at the moment.
>> Okay. Uh did you assess the losses to importers and resellers who were not included? So industry has estimated that uh there's a um estimated loss to importers and resellers who were not included of between 20 million and 25 million. Have you conducted your own analysis in that regard?