Stephanie Borys, Host: The Federal Government has finalised a deal that will boost Australia's fuel supplies as the ceasefire in the Middle East remains volatile, so for more details, let's bring in the Assistant Minister for Foreign Affairs and Trade, Matt Thistlethwaite. Thank you for your time this afternoon.
Matt Thistlethwaite, Assistant Minister for Foreign Affairs and Trade: Good afternoon, Stephanie.
Borys: Now, first of all, exactly how is this deal between Export Finance Australia and two Australian suppliers going to work? How much extra fuel are we going to see?
Assistant Minister: Well, the arrangement involves the government underwriting the purchase of fuel contracts by the importers to remove the instability that's existed in the market over recent times. Understandably, there may be some reluctance from purchasers to purchase fuel because of the changes in the spot price. We're going to remove that uncertainty by underwriting those purchases. In doing so, we're guaranteeing supply on those contracts coming into Australia. And that's been the focus of our National Fuel Security Plan, guaranteeing that supply for Australians into the future.
Borys: So, how much extra supply will this deal see Australia receive?
Assistant Minister: Well, it will mean that we'll be able to continue to have normal contracts undertaken by purchases. So, we've got around 30 days’ worth of fuel stocks in Australia, but we're continuing to see shipments arrive. And over the course of the next five weeks, there'll be 50 shipments that will continue to arrive. But as we know, this conflict is going to have a long tail, and the effects will be felt in the international oil market for some time. So, we're doing all we can to stabilise supply through this mechanism, through the negotiations that we have going on with our partners, the Prime Minister’s trip to Singapore today are all aimed at ensuring that supply into the future.
Borys: Ok, well, what about when the first extra shipment comes, could be bought? Is that sort of something that will happen this week, within a few weeks? Like, what sort of timeline are we looking at?
Assistant Minister: Well, it can happen from now on. The system is now in place which will give the companies purchasing the fuel the confidence to do that. They're private contracts, so it will be up to them to make those purchases. But they now have the confidence that they can make those purchases by removing that uncertainty in the market. And I think it's worth recognising that this is a proposal that came from the industry. We thought it was a good idea, and we had a look at it and we worked with Treasury and the Department of Energy to put this scheme in place very quickly and it went through the Parliament last week. So, the purchases can happen from now on.
Borys: And where are the companies expected to buy this fuel from? Obviously, we've all learnt about the fact that Australia gets most of its fuel from countries like Singapore, Malaysia, but I understand that you know, Australia is looking further afield than that too now.
Assistant Minister: Yeah, we're seeking to diversify our suppliers of fuel. So, traditionally our markets have been from Southeast Asia, particularly Singapore, our largest supplier, Japan, Korea, China for aviation fuel. But we're now diversifying into other markets like the United States as well and making purchases there. So, it's all about ensuring that we shore up as much supply as possible over the course of the next few months.
Borys: But when we say as much supply as possible, it sounds like the government's not really putting a figure on how much extra supply will eventuate as a result of this deal?
Assistant Minister: Well, that's up to the purchasers. The government doesn't make the purchases. We're going to underwrite them. But it's the importers that bring the fuel in. They might need to make judgments about contracts that they can fulfil in terms of the amount of fuel that they can sell in the market. Obviously has been increases in demand in certain rural and regional areas, in particular in Australia, that's resulted in some shortages. This system that we're putting in place now, coupled with the National Fuel Coordinator, the work that we're doing with the states and territories should iron out some of those disruptions that we've had in the market.
Borys: Looking overseas now, the cease fire deal was announced yesterday, but we're already seeing the bombing of Lebanon. What are your concerns around how this ceasefire is playing out?
Assistant Minister: Well, the conflict continuing in Lebanon risks the ceasefire falling apart. So, we believe that it's important that Lebanon is part of this. We've been very clear for some months now in condemning Iran's actions through their proxy organisation, Hizballah in Lebanon. And they've been destabilising that area for well over two decades now. So, we want to see Hizballah lay down arms, we want to see Israel cease the hostilities as well and the ceasefire last within the region. I think Australians now want to see this conflict drawn to an end as quickly as possible and fuel supplies, the Strait of Hormuz opening back up and the international energy market returning to normal as quickly as possible.
Borys: Can it even be called a ceasefire at the moment, given what we're seeing occur in Lebanon?
Assistant Minister: Well, from what we understand, the parties agreed to a ceasefire of two weeks, including the opening of the Strait of Hormuz. We welcome that. We see that as an important development. Other international partners that Australia works with have also welcomed that. I think it's our best hope of trying to draw this conflict to a conclusion. Now, no doubt there'll be further negotiations that will go on, Australia won't be party to those. But those negotiations will be crucial in hopefully securing a lasting peace here.
Borys: And what is the government's latest information on the Strait? You know, the ceasefire deal yesterday said that it would be opened. It doesn't look like it's been opened. There are now reports that Iran's asking for the toll to be paid by ships through cryptocurrency. There's so many conflicting reports around. Are you getting much clearer information about what is actually going on?
Assistant Minister: Yeah, there are conflicting reports, not much more than what's been reported in the media because we're not party to the negotiations. However, we do believe that the ceasefire is a good starting point for the next two weeks and we're hopeful that it will bring a negotiated outcome that can mean a permanent ceasefire and the world returning to normal. And the Strait of Hormuz has to be part of that. I think everyone in the world sees that that's crucial to any lasting peace.
Borys: What do you think of the toll proposal? That Iran is wanting ships to pay a toll to pass through the Strait?
Assistant Minister: Well, we think that the international law of the sea needs to be upheld and anything that's inconsistent with that should not apply in this case. So, the law of the sea grants freedom of navigation, particularly for commercial vessels. And whether that's the Pacific Ocean, the Indian Ocean or the Strait of Hormuz, that international law must be upheld.
Borys: Now, in terms of Australia's contribution to the war in the Middle East, we've sent over a surveillance military aircraft. The Prime Minister today confirming that it will stay there longer than the four weeks initially announced. How much longer will ADF members be over there assisting?
Assistant Minister: Well, we're not involved in any offensive capacity there, but we are providing defensive support, particularly to partner nations like the United Arab Emirates through the Wedgetail aircraft and medium range missiles that will remain as long as the safety and security of Australians that are working in the region and rests upon that. So, we'll make sure that we do everything we can to keep Australians safe. There are about 115-odd thousand Australians that generally live and work in that region. And we want to make sure that they're safe and that's why the supply of these assets is contributing to that.
Borys: So, with what you're saying there, it sounds like that deployment could be there for months still?
Assistant Minister: Well, obviously we want to make sure that we keep Australians safe and that's our priority. We're not going to put a timeline on it, obviously. Hopefully the ceasefire holds and that we can get to a resolution of this conflict as quickly as possible, and an asset like that can return to Australia. But while there are Australians there and their safety and security is paramount, we'll make sure that we maintain those assets to protect them.
Borys: Matt Thistlethwaite, thank you for your time this afternoon.
Assistant Minister: Thanks, Stephanie.