Allegra Spender (Wentworth, Independent) Share this | Hansard source

When markets seize in moments of heightened risk, there is a clear and legitimate role for government to step in and stabilise outcomes in the national interest. That is why I support the use of Export Finance Australia's deal-making powers to secure fuel supplies from international markets. Australia imports around 90 per cent of its liquid fuels, so, amidst global uncertainty, risk mitigation is essential to maintain supply continuity.

The Export Finance and Insurance Corporation Amendment (Strategic Reserve) Bill 2026 provides Export Finance Australia with new powers to enter into contracts for the purchase and sale of fuel and critical minerals for domestic availability. In doing so, EFA can underwrite fuel purchases during periods of volatility. It also provides a mechanism to establish the $1.2 billion Critical Minerals Strategic Reserve. This is a broadening of the EFA'S remit, but one that leverages existing capability.

Although EFA will participate in commercial transactions, this bill does not ensure a public return or guarantee sovereign capability. It does not control fuel prices or prioritise who gets fuel. It does not define what is critical, enabling this to change with circumstances. It does not specify a cost. Exposure to losses will be assessed on a deal-by-deal basis, with the Minister for Trade and Tourism able to direct EFA to act through the National Interest Account. This is a broad bill with some broad powers, so I support a review. It's currently scheduled for 2029. I would see value in bringing that in earlier.

This bill sits alongside a number of sensible steps already taken by the government. Right now, locally, there is a significant demand shock alongside the supply shock the world is facing. Fuel is continuing to arrive, with cargoes at or higher than levels originally contracted and with around 30 days of forward visibility in the system. But, as people worry about availability and respond to a price shock which they cannot necessarily afford, many have filled up early and stored additional fuel. That means more fuel is sitting in car tanks and jerry cans and less is available at service stations. While we do have aggregate supply holding, this is why there are shortages in petrol stations across the country, including in my electorate in the middle of Sydney. That is why public confidence matters so much.

So I welcome the public and up-to-date National Fuel Security Plan announced today. Other announcements following National Cabinet, like the temporary halving of the fuel excise and the elimination of the heavy vehicle road user charge, are popular but will add a $2.55 billion expense to a budget that is already under significant strain. I was particularly supportive of the elimination of the heavy vehicle user charge. I think that is important. But we do need to consider how we manage this. That is why I believe we should implement an urgent windfall tax on war-driven profits in the gas industry. War should not be a windfall. The $40 billion in additional LNG export revenue during the 2022 price spike was not the result of innovation or productivity. It was a consequence of Russia's invasion of Ukraine. Other jurisdictions acted. The European Union raised 26 billion euros through a temporary levy on extraordinary profits. A targeted, temporary tax relief on supernormal war-driven revenues would strengthen the government's fiscal position without undermining long-term investment. It would provide the fiscal space to enable targeted support for households.

I think this is really important because I take the concerns about sovereign risk and investment certainty really, really seriously. I think about this in relation to how we create an environment where we can attract investment into this country and we can give investors certainty that their investments will pay off in the way that they expect them to. But there should be an exception for war. I don't think this is unreasonable. When there is a war, when it changes the game, it is appropriate to reflect that in our laws. I think it is up to the government to act, this time, in a way that it didn't in 2022 and put in an appropriate series of changes; for instance, adding a sliding scale based on how high the price of gas gets, related just to the war. You could actually bring in significant revenue but also do it in a way that doesn't hamper investment, which I think is critical.

I also think that right now we need to move beyond short-term responses and towards preparation for the next time we have a similar kind of attack on global supply chains. If we look at fuel, and energy in particular, Australia is in a stronger position than many countries. While we import most of our liquid fuels, we are a net energy exporter, with net exports equivalent to 67 per cent of production in 2023-24. Countries we import liquid fuels from, such as Japan and South Korea, depend on our gas and coal exports. That gives Australia strategic leverage in securing supply, but we cannot insulate ourselves from global prices. Those costs will flow through supply chains and into the cost of living. We are better positioned than we were in 2022, particularly because of progress on electrification, but we are not as prepared as we should be.

First, we need to build a detailed assessment of energy system supply chain risks aligned with stockpiles and sovereign capability. That capability should be disciplined; guided by a resource endowment; and used only where fuel switching, stockpiling and friendshoring are insufficient. Fertiliser meets those tests; refined fuels likely do not. We do need to make sure that we do have longer-term positions in place to give us greater resilience. We know that stockpiling is expensive. Returning to our IEA compliance, holding 90 days of fuel reserves could cost around $20 billion, but fuel security is a form of national insurance and that cost should be shared.

That brings me to my second point. We must reform fuel tax credits. Large diesel users currently receive around $10 billion annually in credits. If the government cannot afford its stockholding obligations—if it's already investing billions of dollars in holding these stockholdings in Australia—it makes little sense to return this sum each year to fuel-dependent users. It dampens the incentive to switch to cleaner domestic energy sources and prolongs our reliance on imported fuels.

Third, over time, we do need to reduce our dependence on liquid fuels altogether. Electrification is not just climate policy; it is also energy security policy. Those Australians who feel most secure right now are those with rooftop solar, batteries and electric vehicles. Renewable energy does not depend on global shipping lanes or geopolitical chokepoints. The economics are clear: renewables get cheaper each year, while remaining fossil fuel resources are deeper, more complicated to extract, more expensive and more vulnerable to global shocks. And those fossil fuels are finite.

Geoscience Australia estimates that our crude oil reserves will last around seven years at current production rates. Seven years. For those people saying that the answer is, 'Drill, baby, drill,' just be aware that it's seven years of resilience that this has. The answer to our future fuel resilience or our sovereign capabilities is not just more liquid fuel extraction here. Even if subcommercial resources were developed, it could sustain less than a decade of consumption. Renewables, by contrast, are effectively inexhaustible, so calls of, 'Drill, baby, drill,' are not a serious response to an immediate crisis. Even known reserves take around five years to bring online.

These are the challenges here. This is where the government has, I think, exhibited a lack of real drive in trying to support electrification. I'm going to use the example of electric trucks and freight. This is an area where we are still extremely dependent, particularly on diesel. Other countries around the world move much more freight than we do. We as a country, because of our size, move a lot of freight on roads, but the truth is that we haven't got the systems in place to electrify our trucks as fast as other countries have. We don't have the coordination between the states. We haven't agreed on how we're going to work across the trucking industry and the energy sector in terms of the appropriate rollout of recharging stations. This does require a degree of coordination and does require a degree of focus, and I don't believe that the government has shown this, particularly in the sense of electric trucking. I believe that one of the lessons from this particular crisis should be to not leave this another 10-odd years.

Fourth, I think we need to address the structural deficit because, in difficult times, you need to be able to pull on your reserves. When you've got 10 years of deficit, as we currently do, your ability to be flexible and support people as needed is reduced. With high inflation, persistent deficits projected for the next decade and debt approaching $1 trillion, there is limited fiscal space to respond to this crisis, let alone the next. We must make room for disciplined decisions, review spending and ensure programs deliver real value for Australians.

Finally, let me turn briefly to critical minerals, which this bill also contemplates. I recognise the opportunity in this sector, but I do not see the urgency of attaching it to an emergency bill. The government has committed significant funding to critical minerals, including the $5 billion Critical Minerals Facility and a production tax incentive expected to cost around $7 billion over 10 years. But important questions remain. First, on its impact, a strategic reserve will only strengthen resilience if we build downstream capability in Australia and can process minerals in high-value products, not just extract them. Second, there's the public return. Critical minerals are finite resources owned by the Australian people. If public funds are supporting industry development, then the public must receive a fair share of the benefits. Otherwise, we risk repeating the experience of gas, where significant profits are generated but the public return is limited and reform is politically difficult. We need to get the balance right from the start. That means stable, durable and predictable tax settings and structural reform to ensure Australians share in the upside from their natural resources and the risk they take in industry development.

This is work I will continue to develop, including through a forthcoming white paper, because, ultimately, energy security, economic resilience and fiscal responsibility are not separate challenges. They are deeply interconnected, and it is our responsibility to address them with seriousness, discipline and fairness. This work is urgent now, but better preparation for the next crisis should be as urgent, for a forward-looking government.

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